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TiVo: Cisco and pals could owe us BILLIONS over DVR patents

Check this, Apple - A patent battle over actual technology

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Since 2004, Faultline has been championing the idea that someone must have invented the DVR, and that it is a genuine invention, not a set of software patents like the flimsy patents filed by Apple, which we do not believe will ever stand up to scrutiny.

And if TiVo genuinely does own those patents, which the last three court cases seem to attest, then the largest makers of DVRs in the world – notably Motorola, Cisco, Pace and Technicolor, not to mention Huawei – Samsung, Humax and NDS and perhaps a few others, could all be in the firing line.

Now we know that a number of these have bought patents licences at various times in their DVR working lives – certainly Sony did and we think one subsidiary or Technicolor – but the others have always been sitting there, a dish for TiVo to have served cold, once it had established beyond any reasonable doubt that its inventions were good.

Now it has hinted in a court filing, reporting on by Bloomberg, as it sought to have both the Cisco and Motorola trials held together, that it expects these cases to be worth many times more than those against operators Dish, AT&T and Verizon. "We could be owed billions of dollars," its filings say. It said it reached this conclusion based on the prior settlements and how many devices were involved.

Right now TiVo has to sue companies that are headquartered in the US where its patents have been proven, and it needs to sue companies that have a reach outside of the US, and beyond the operators that it has already succeeded against. NDS did a DVR to displace the original TiVo at DirecTV, but never had a licence. But TiVo never sued it because it got most of its money from DirecTV.

However NDS went on to use its XTV DVR design all over the world, and after being acquired by Cisco that means that the company is more easily tied down by a US court, since its HQ assets are based there. If we were advising any set top maker around the world we‘d tell their lawyers to beat a path to TiVo‘s door and settle, because once it has tied up all the US cases, it will come after external business to the US, and we suspect that includes Pace and Samsung.

Right now coverage has immediately focused on the irony of Google taking over Motorola for its patents and inheriting a patent-infringement lawsuit as a result. Many analysts have suggested that Google will sell the Motorola Home unit as soon as it can, but not while this suit is hanging over it, and now the severity of the case against it is now better understood, there will be no buyers lining up for it, not until it is resolved.

"Motorola‘s massive production of infringing DVRs dwarfs the numbers of accused products at issue in TiVo‘s previous cases," TiVo said in a filing this week in federal court in Marshall, Texas.

TiVo has dealt with Comcast and DirecTV as customers for years, and so these should be out of the equation, and Dish, AT&T and Verizon have now all settled, but that leaves whoever made set tops for Time Warner Cable, which is also a defendant in each of these two cases. An injunction will be sought by TiVo early in the trial to prevent Motorola selling any more DVRs.

It is not clear whether or not the two cases will be merged at this time, as the Motorola case has counter claims and is more advanced, but it has still never showed in its share price.

So far TiVo settlements have topped $1bn, with $600m awarded from Dish Network, $215m from AT&T and $250m from Verizon. We fail to see how RoVi continues to have the belief of everyone that its patents are globally valued and therefore in its share price, when European courts have thrown them out, while TiVo‘s now established patents assume no value in the TiVo share price.

One way out for Google is perhaps to sell the Motorola Home unit, by splitting the set top part out and giving it away to TiVo and taking a patent license in the process, and then selling off the cable modem termination systems and other cable equipment side to another player, such as Cisco or Arris.

Copyright © 2012, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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