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TiVo: AT&T and Verizon Won't Strike a Deal

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
8/27/2009
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TiVo Inc. (Nasdaq: TIVO)'s litigation strategy involving its patent portfolio is pretty simple: If you're a major multichannel service provider and refuse to do a deal with the DVR specialist, you risk getting your pants sued off.

In the wake of its protracted legal skirmish with Dish Network LLC (Nasdaq: DISH) and EchoStar Corp. LLC (Nasdaq: SATS), TiVo is now taking aim at Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T), suing those telcos over claims they're infringing on three TiVo patents: 6,233,389 B1 ("Multimedia Time Warping System"), 7,529,465 B2 ("System for Time Shifting Multimedia Content Streams"), and 7,493,015 B1 ("Automatic Playback Overshoot Correction System").

TiVo filed the complaints in the U.S. District Court, Eastern District of Texas, which is the same court that hammered Dish and EchoStar. (See TiVo Suit Targets AT&T & Verizon.)

While TiVo's battle with Dish centers primarily on software and the Time Warping patent, these new allegations against Verizon and AT&T also address some hardware-related claims.

During Wednesday's second-quarter earnings call, TiVo CEO Tom Rogers said litigation was the only option at his company's disposal after it became clear Verizon and AT&T had no intention to strike deals that would give them access to TiVo's intellectual property. (See TiVo Posts Q2.)

He claimed TiVo made multiple attempts to come to a commercial arrangement with AT&T and Verizon, but "they were not reached."

"Unfortunately there are multichannel operators that compete with us through the unauthorized use of our intellectual property," Rogers said, noting that TiVo is seeking undisclosed financial damages for alleged infringement and a permanent injunction -- a similar situation to that sought in the ongoing TiVo-Dish DVR patent battle. (See TiVo-Dish DVR Slugfest Rages On , Another Round to Charlie Ergen & Co?, and TiVo Wants Ergen to Dish Out $1B .)

By comparison, DirecTV Group Inc. (NYSE: DTV), Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , and RCN Corp. , which are all playing ball with TiVo through licenses and distribution deals, have managed to avoid TiVo's litigious fury. (See RCN Makes TiVo Its Dominant DVR and Cox Tees Up TiVo Test Bed .)

On Wednesday's call, several analysts quizzed Rogers on why TiVo proceeded with a suit against AT&T and Verizon before its case with Dish and EchoStar is finally resolved. Dish and EchoStar are appealing the case, and a court hearing on that matter isn't expected to take place until this November. Rogers said only that "we believe that this action at this time makes sense."

He was also asked why Time Warner Cable Inc. (NYSE: TWC), which still has no deals with TiVo yet, and set-top makers such as Motorola Inc. (NYSE: MOT) and Cisco Systems Inc. (Nasdaq: CSCO), have not been targeted by TiVo's legal team.

Rogers said TiVo "has had ongoing conversations with Time Warner… There are many ways to craft an arrangement that is beneficial to us and the cable operator." But he declined to comment further on TiVo's possible litigation strategies involving set-top makers, other than to stress that TiVo's strategic "focus" has been to pursue relationships with multichannel distributors.

Both AT&T and Verizon declined to comment on the TiVo lawsuits.

Verizon has about 2.5 million FiOS TV subs, while AT&T has about 1.6 million U-verse video customers.

— Jeff Baumgartner, Site Editor, Cable Digital News




Interested in learning more on this topic? Then come to TelcoTV 2009, the telecom industry’s premier event for the exploration of a comprehensive entertainment convergence strategy, to be staged in Orlando, Fla., November 10-12. For more information, or to register, click here.


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DCITDave
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DCITDave,
User Rank: Light Beer
12/5/2012 | 3:57:50 PM
re: TiVo: AT&T and Verizon Won't Strike a Deal
Why isn't anyone suing Moto? They make the boxes.
Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 3:57:49 PM
re: TiVo: AT&T and Verizon Won't Strike a Deal


Or Cisco, or Pace, or Thomson, or Digeo, or Microsoft, or ADB, or NDS, or OpenTV...anyone else that makes DVRs or dvr software...


As the story points out toward the bottom, Rogers was asked about that yesterday, and he didn't give a satisfactory answer...just that he and TiVo aren't commenting "on litigation strategy as it related to specific parties."  Beyond that he said, TiVo's "focus" is to pursue relationships (and lawsuits, evidently) with multichannel distributors.


But that tells me that TiVo's at least leaving that door open. Jeff

Duh!
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Duh!,
User Rank: Light Sabre
12/5/2012 | 3:57:48 PM
re: TiVo: AT&T and Verizon Won't Strike a Deal


Does MOT have any patents that they might claim against TiVo?

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 3:57:45 PM
re: TiVo: AT&T and Verizon Won't Strike a Deal


That's a good question. Will have dig around on that..and see if AT&T and VZ have any patents that might shield them from  TiVo's suits.

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 3:57:44 PM
re: TiVo: AT&T and Verizon Won't Strike a Deal


Although TiVo isn't specifically revealing why it's not throwing the book at Motorola and/or Cisco and instead focusing on service providers, I wonder if TiVo is taking that approach to help protect Comcast, one of its coveted customers. And that could also apply to Time Warner Cable, a big Cisco shop, that TiVo wants to score some biz with...


If TiVo were to go after Motorola, wouldn't that then put all of Moto's cable MSO customers, including Comcast, also at risk..unless they (the set-top vendors) specifically indemnified the MSOs against that?


Then again, TiVo may just be saving that Ace for later, giving it a few years of lawsuit-driven revenues to pursue...


 

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