Microsoft Sues TiVo, Casts Doubt On Patents As a Business Model


Microsoft (s MSFT) has launched a lawsuit against TiVo (s TIVO), alleging that the DVR maker is infringing on patents related to the display of programmable information and the sale and delivery of videos, according to a report from Bloomberg. Microsoft’s lawsuit is widely seen as a move to defend AT&T (s t) in a related lawsuit filed by TiVo last August when it sued the telco as well as Verizon (s VZ) in an attempt to force them to license its DVR patents.

This isn’t the first time TiVo has engaged in such lawsuits. The company has been in a long legal fight with satellite TV providers DISH (s DISH) and EchoStar (s SATS) about DVR patents, and judges have so far sided with TiVo. Most recently, a court awarded TiVo $200 million. However, the U.S. Patent Office has cast doubts as to whether TiVo should have been awarded patents for time-shifting in the first place — something that is surely going to come up again in Microsoft’s lawsuit against the DVR maker.

Microsoft, of course, has a vested interest in the outcome of TiVo’s lawsuit against AT&T, whose U-verse service is based on Microsoft’s Mediaroom solution. Mediaroom is essentially a media center with online access and DVR capabilities that Microsoft supplies to telcos to support their broadband offerings, and any legal precedence against AT&T would force other potential Mediaroom customers to license TiVo’s technology as well. Furthermore, AT&T has insisted on Microsoft picking up the tab if TiVo prevails in court.

TiVo said in a statement released today that Microsoft’s lawsuit wasn’t any sign that its claims against AT&T are unfounded. “Rather these actions are part of a legal strategy to defend AT&T,” adding that the company remained confident that AT&T will be found liable.

For TiVo, there’s a lot at stake with these lawsuits. The company has been bleeding subscribers lately, losing as many as 314,000 in the quarter ending Oct. 31st. TiVo has been more successful at striking patent licensing agreements with cable operators, as well as DirecTV (S dtv). TiVo’s legal victories against DISH have certainly helped the company to strike some of those agreements. However, the case against DISH has been going on since 2004, and one has to wonder how long a dispute fueled by Microsoft’s war chest would last.

The irony of this conflict is that TiVo recently complained in a comment to the FCC that cable companies are stifling innovation by restricting the use of set-top boxes. Maybe it’s time that TiVo starts spending fewer days in court and more days to actually innovate itself?



“Maybe it’s time that TiVo starts spending fewer days in court and more days to actually innovate itself?”

What’s the incentive when Dish ATT and MS can rip off your intellectual property without any repercussions? I know I wouldn’t so so inclined to put anything new out into the market knowing that all the other guy had to have that a “large war chest” to steal it.


The PVR represents the natural consequences of creating a VCR out of a computer. It doesn’t take a genius, or access to Tivo’s “intellectual property” to clone their work and do better. The fact that Tivo doesn’t seem able to compete in the marketplace is no excuse to give them a monopoly on a silver platter.

The incentive for Tivo to improve their product is to be better than something cobbled together by hobbyists.

Their product needs to be compelling to consumers. Given their very big lead, this really should not have been a problem for them with or without patents. The fact that they seem unwilling to improve their products in order to stay competitive is also not an excuse to hand them a monopoly on a silver platter.

Basing your business model on patent litigation still leaves you with the problem that someone else might do THAT better.


Except that their product was (and is) better than what everyone else is doing. All the CableCo’s did was copy Tivo’s stuff, offer it to their subs as a “no hassle” alternative and make getting a TiVo to work with with their system either impossible, or almost. TiVo still has the best DVR software and hardware combination in the biz, but who wants to deal with getting a cable card installed? That’s why they are leaking subscribers. Why do you think so many DirecTv customers are begging for a new TiVo box after all these years? It’s because the DTV box is rubbish. Dish is the only one who comes close … and guess what, they cheated.

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