Suing For Patent Infringement No Replacement For Actually Building A Real Business

from the more-focus-on-executing,-less-on-suing dept

Mon, Nov 30th 2009 3:57am — Mike Masnick

TiVo has been spending a lot of effort suing others for patent infringement, but apparently not very much on actually improving their own services and giving customers a reason to buy them over the competition. So while it may be winning some of its patent lawsuits, it hasn't helped much for the business, which is rapidly bleeding customers and losing marketshare. TiVo basically created this market and owned it for years -- but then got complacent. Now, since it can't compete, it's gone to a litigation strategy. Perhaps it should have focused more on providing value and competing rather than suing.

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Filed Under: business, dvr, infringement, patents
Companies: tivo

31 Comments

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Ima Fish (profile), 30 Nov 2009 @ 4:33am

"TiVo basically created this market and owned it for years -- but then got complacent"

You can't blame it all on TiVo. Back when nearly everyone watched TV with regular good old fashion analog cable TV, it was easy for TiVo to get into everyone's living room.

But now that most people are using proprietary digital cable and satellite services, TiVo is basically screwed. TiVo can only service people watching TV on those services at the discretion of the carrier. And let's face it, the carrier would rather rent/lease its own product.

With today's proprietary technology, the VCR never would have succeeded because it would have been impossible to sell one that worked in most homes. That's the same problem TiVo faces.
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Anonymous Coward, 30 Nov 2009 @ 4:53am

One thing you have to realize is that cable companies have a government sanctioned monopoly on the infrastructure and if they give others an advantage, like Digital Atlanta, that's almost a government sanctioned advantage because that advantage is government sanctioned. I don't think it's really fair for Tivo if they're not allowed to use the same menus that digital Atlanta and others use and the government should allow them to and should force any required information to use those menus to be open platform (by menus I mean the ones that tell which shows are on what channel and when). Either that OR they should open up the infrastructure to competition, sure one cable company may not subcontract with TiVO but others will. I think it's ultimately the cable companies that are behaving anti competitively by singling out TiVo. I don't have a TiVO but that's mostly because I get menus with my digital Atlanta and TiVo would have to go online or something to access those menus that allow me to record things by show (instead of time blocks). It's practically a government enforced advantage against TiVo.
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Anonymous Coward, 30 Nov 2009 @ 4:58am

Re:
Exactly my point (the one I made in post 2). I agree, it's not really TiVo's fault and I don't mind TiVo winning their patent suits to the extent it's not their fault. This is another example of the absolute failure of our patent system to serve those who actually innovate and instead to ONLY serve the existing status quo, the existing rich and the powerful. Our current system allows the existing status quo to parasite off of those who innovate (ie: TiVo) and then to turn around and single them out of the market. Face it, our patent system is a failure, it's designed solely for the existing rich and the powerful, it is not and was never about defending those who actually innovate.
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Anonymous Coward, 30 Nov 2009 @ 5:02am

ok your post has two things i'd like to comment on.

the first thing is the 'can't compete'. right, so tivo is having a hard time competing against DVR's that infringe on its patents. this is what patents were made for.

second, have you ever used a tivo? they are still leaps and bounds above any cable DVR system. and with the additions of netflix and amazon are really great set-top boxes.
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NullOp, 30 Nov 2009 @ 5:28am

Tivo
Tivo may have become complacent and lost their edge in the market. If other companies are infringing on their patents Tivo certainly should defend them as it may be the last thing they have to sell that someone wants to buy. In general, however, no company should try to exist by litigation alone.
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Anonymous Coward, 30 Nov 2009 @ 5:43am

Re:
I am puzzled as to how "cable companies have a government sanctioned monopoly on the infrastructure"? I can choose from three cable television and two satellite dish providers where I live. That hardly seems like a "monopoly" no matter how you define it.
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Ima Fish (profile), 30 Nov 2009 @ 5:50am

Re: Re:
What he means is that in the old days the infrastructure used by cable companies was open. And that meant that anyone could build a device to connect to it. That's one of the reasons why VCRs took off, because they were essentially plug and play. You simply plugged them into your cable TV coax, then to your TV, and it simply worked.

Nowadays each provider, Comcast, Charter, Dish, etc, owns its own proprietary infrastructure. The fact that you can choose between multiple proprietary infrastructures does not change the fact that a company such as TiVo is screwed. Even if there are 1000 providers each with its own proprietary infrastructure, TiVo would still be locked out.

But not only is TiVo locked out, so is the next great living room invention. Any hardware manufacturer has to get permission from each and every proprietary TV provider in order to get into everyone's living room.
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slim, 30 Nov 2009 @ 5:53am

Duh
Maybe it's because most American's don't live where you do. Most have exactly one choice of cable companies and satellite dish packages are more expensive, especially if you want your local channels too.
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Anonymous Coward, 30 Nov 2009 @ 6:23am

Stupid cable companies
There is a reason I keep my service the way it is. I do not want to rent (at an outrageously high price) the crappiest DVR made lowest possible bidder with zero upgrade options or expansions.

I know my cable company will force me 'their' digital box but the advantage of 'knowing' digital electronics I am already hard at work to subvert their money grabbing system. I have a prototype computer that can capture all incoming digital signals and convert them all at once and feed them out on the regular 2-199 channels (some manual channel mapping) while maintaining HDTV visual and audio. That way I do not need no stupid 'box' at a $5 monthly rental charge for each of my 6 TVs (extra for a HD box) and I can also get the computer to act as a DVR and avoid the extra $25 a month my cable company wants for their 100 GB recorder (extra monthly fees for up to 160 GB recorder). In theory it could work with Tivo.

Once that signal is delivered to my house I can do what I please with it - and I will.
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JustMe (profile), 30 Nov 2009 @ 6:41am

Cold Dead Hands
We **LOVE*** the TiVos in our house.

Not really contributing to the discussion here. Just voicing support for a company that make a fine product.
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fogbugzd, 30 Nov 2009 @ 6:58am

I was going to buy a Tivo for christmas
I was going to buy a Tivo for my wife this year. I currently use a linux box as a PVR, but Tivo's nice clean interface would be a good thing for her. However, I could not stomach the monthly charge. Basically, Tivo is charging $12 per month (or is it $12.95?) to provide scheduling. This information is available for free on the Internet. On top of that, Tivo also sells information it collects to advertisers. I would be more likely to buy a Tivo if they charged an extra $150 for their hardware and then provided a free lifetime service. I know they do provide lifetime service for a set fee, but the "lifetime" service exceeds the warranty service on the unit itself.

Heck, they could probably even make money by providing the scheduling service for free to other manufacturers. They could use it as an advertising channel and collect data from a broader group of clients.
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Anonymous Coward, 30 Nov 2009 @ 7:05am

CableCard fiasco killed Tivo
The biggest issue with Tivo or any other 3rd party cable box is CableCards, http://en.wikipedia.org/wiki/CableCARD. Even with my own box like Tivo I cannot get the program guide or programming that requires two-way communication between the Tivo and Cable provider. The cable industry has done more to hurt Tivo with cablecards than Tivo has done to itself by suing.
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Anonymous Coward, 30 Nov 2009 @ 7:55am

Re: Re:
"I can choose from three cable television and two satellite dish providers where I live."

and where do you live?
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nasch (profile), 30 Nov 2009 @ 8:00am

Re:
so tivo is having a hard time competing against DVR's that infringe on its patents. this is what patents were made for.

No, patents are made to spur progress. Limiting competition is the means by which this is intended to happen, but not the goal.
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Anonymous Coward, 30 Nov 2009 @ 9:27am

Re:
But now that most people are using proprietary digital cable and satellite services, TiVo is basically screwed. TiVo can only service people watching TV on those services at the discretion of the carrier. And let's face it, the carrier would rather rent/lease its own product.

Incorrect. The Cable Industry adopted a standards-based decryption module called a Cable Card.

The problem is that The Cable Industry also has a huge leasing business built around Cable Boxes. This helps them to show on their books a larger investment in Capital Expenditures, and cash flow based on those CapEx investments. Because of the sheer size of this market, Cable Providers can also negotiate larger discounts on lower-quality, TiVo IP infringing hardware.

Fast Forward to Customer experience, and you'll see that a customer generally isn't excited about buying a $500 piece of hardware when they can lease something from the cable company for $5 a month.

It's possible that TiVo can offer a device for, say $400 wholesale, plus the cost of de-encryption modules, add another $100. Whereas, a company like Motorola can sell a complete device for, say $250 wholesale.

So what's the problem? Possibly the Cable Industry won't license de-encryption technology. This would have the ability to drive down the costs of their DVRs. In response, TiVo sues the companies that create knockoffs using thier DVR IP.
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tivo users are idiots, 30 Nov 2009 @ 9:31am

once you run out of space ....
buy another tivo or DRMed hard drives?
ugh you twits are stupid
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Anonymous Coward, 30 Nov 2009 @ 10:56am

Re: Re:
Interesting. Maybe TiVo should consider buying a stake in Motorola's Set Top Box unit.

Another idea may be for Motorola to spin off the STB business and allow TiVo to acquire the CableCard business along with their IP.

To add, MOT wants $4B for their STB business, and TiVo is roughly valued at $1B. Combine the two, this could be a real interesting 3-way merger.

Considering Google's recent interest in providing ads on TiVo, perhaps they would be the marriage partner. Could Google acquire both? If not, they should explore, at minimum, a percentage investment into MOT's set top business, essentially buy out their CableCard manufacturing and all related IP licensing rights. Now that may create a real interesting opportunity.

As I run with the proposed scenario in my mind, it's actually worth exploring much further. Wow. This could be a real sexy opportunity for involved parties.
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Anonymous Coward, 30 Nov 2009 @ 11:35am

Re: Re:
CableCards are completely broken. The cable industry has dragged its feet and done everything possible to make CableCards not work (at least not to get all of the features one would want). Besides, in my area I have to rent the cablecard, same price as the cable company DVR. Why would I spend more money to get a Tivo that has less capability than the cable company DVR? And I have to pay the cable company to come out and 'install' the cablecard too.

Lack of full cable integration/lack of real usable cable integration is what is holding back Tivo. Cablecards are a fine idea but truely poor in practice.
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Anonymous Coward, 30 Nov 2009 @ 1:08pm

Re: Re:
so tivo is having a hard time competing against DVR's that infringe on its patents. this is what patents were made for.

No, patents are made to spur progress. Limiting competition is the means by which this is intended to happen, but not the goal.

_
right. Tivo makes new ground by innovation and gets rewarded for that innovation by a patent, which has a limited life span.

the problem here isn't that other DVR's exist. The problme is that the cable companies are providing them heavily subsidized to the users WITH features that infringe on Tivo's patents.

the patent was designed to spur progress by protecting the inventor from having his ideas stolen.

how can a company like Tivo compete with Comcast offering a DVR as a part of the package? most users don't even know that a Tivo will work (if they know what it is). is this competition even fair? it is if the Tivo is a better machine. more people will know/hear/buy the better product. but if they cannot protect the parts that are better with a patent (again, the purpose of the patent) then there is no competition. comcast will just infringe and run the market.

and they probably compete the same way that netscape competed. which means, like I.E., we (the consumer) are going to lose again.
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Lawrence D'Oliveiro, 30 Nov 2009 @ 3:18pm

Re: Patents vs Innovation
nasch wrote:

...patents are made to spur progress. Limiting competition is the means by which this is intended to happen ...

Except that doesn’t work. Innovation is spurred by competition, so naturally limiting competition cannot spur innovation.
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Anonymous Coward, 30 Nov 2009 @ 7:37pm

Re: Re:
"The problem is that The Cable Industry also has a huge leasing business built around Cable Boxes. This helps them to show on their books a larger investment in Capital Expenditures, and cash flow based on those CapEx investments. Because of the sheer size of this market, Cable Providers can also negotiate larger discounts on lower-quality, TiVo IP infringing hardware."

Much of the problem is also that TiVo is not allowed to have access to the program guide. TiVo's don't really cost more than the DVR's from cable companies but to use the program guide on a TiVo you must hook it up to the Internet and pay them and that's an inconvenience. The DVR's from the cable companies pick up the program guide from the cable lines. This isn't an issue of economies of scale, TiVo would also enjoy economies of scale for their product.
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Anonymous Coward, 30 Nov 2009 @ 7:46pm

Re: Re: Re:
The reason why it doesn't work is because Comcast makes it economically non-viable.

How:
Don't offer a TiVo-based product to customers.
Don't make a product that is non-infringing on TiVo-based IP available.
Ensure that TiVo can't offer an out-of-the-box product that works 100% without additional hardware.

Amazing how the *real* marketplace works, huh?
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Anonymous Coward, 30 Nov 2009 @ 8:08pm

Re: Re:
"It's possible that TiVo can offer a device for, say $400 wholesale, plus the cost of de-encryption modules"

Even if this is true the problem is still a lack of competition. With competition some other provider would be allowed to compete by offering more non encrypted program guides and programs that TiVo wouldn't need expensive hardware to support.
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Anonymous Coward, 30 Nov 2009 @ 8:10pm

Re: Re: Re:
Much of the problem is also that TiVo is not allowed to have access to the program guide. TiVo's don't really cost more than the DVR's from cable companies but to use the program guide on a TiVo you must hook it up to the Internet and pay them and that's an inconvenience. The DVR's from the cable companies pick up the program guide from the cable lines. This isn't an issue of economies of scale, TiVo would also enjoy economies of scale for their product.

Yup. That's a problem addressed with CableCard 2.0 which has not been released to production yet.

My suggestion is to write a letter requesting a refund/replacement of your cablecard to:

CableLabs
858 Coal Creek Cir
Louisville, CO 80027

(303) 661-9100

For their bang up job of creating a fantastically field-upgradable standard.
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Anonymous Coward, 30 Nov 2009 @ 8:40pm

Re: Re: Re: Re:
The government ought to abolish them.
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Anonymous Coward, 30 Nov 2009 @ 8:52pm

Re: Re: Re: Re: Re:
wait, n/m
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Anonymous Coward, 1 Dec 2009 @ 5:45am

Re: Duh
Really about the satellite dish packages? Satellite where I live is about half the price of cable for similar packages. Where the heck do you live?
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Anonymous Coward, 1 Dec 2009 @ 5:46am

Re: Re: Re:
Indiana
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Anonymous Coward, 1 Dec 2009 @ 5:49am

Re: Re: Re:
Oops, one of the "cable" providers actually provide satellite television. So my choices are Dish, Comcast, Verizon, and AT&T/Directv. There may be one more. Someone I worked with claims there is another cable company but I have yet to check.
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Anonymous Coward, 1 Dec 2009 @ 5:52am

Re: Re: Patents vs Innovation
Innovation is spurred by competition...

However, invention is not necessarily spurred by competition. Further, as has been noted in multiple posts on this web site, unlimited competition does not necessarily provide for the optimal societal outcome. Note that Mike recently posted an article recently that noted the optimum ratio of of creating to copying/imitating/"innovating" is 7:3. Without intellectual property it is possible that creation will decrease significantly, particularly in the area of invention, which would necessarily lead to less than an optimal ratio of creating/inventin to copying and imitating.
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Lawrence D'Oliveiro, 1 Dec 2009 @ 3:38pm

Re: Patents vs Innovation
However, invention is not necessarily spurred by competition.

Invention is not innovation.

Further, as has been noted in multiple posts on this web site, unlimited competition does not necessarily provide for the optimal societal outcome.

And what “optimal societal outcome” do patents achieve?

Without intellectual property it is possible that creation will decrease significantly, particularly in the area of invention, which would necessarily lead to less than an optimal ratio of creating/inventin to copying and imitating.

Historical evidence shows otherwise. Humans have been creative and inventive throughout their entire history, whereas the concepts of “intellectual property” only date back a few centuries at most.
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