I’ve been covering the TiVo/DISH/EchoStar patent infringement case for years. (With varying degree of interest.) And it looks like we’re that much closer to a conclusion given today’s ruling/affirmation by the United States Court of Appeals for the Federal Circuit:

Appellants (collectively, “EchoStar”) appeal from the district court’s decision finding them in contempt of the court’s permanent injunction order. TiVo Inc. v. Dish Network Corp., 640 F. Supp. 2d 853 (E.D. Tex. 2009). Because we find that the district court did not abuse its discretion in imposing sanctions against EchoStar, we affirm the finding of contempt.

The Premiere may not have moved the needle, but there’s nothing like the prospect of (large sums of) cold, hard cash to whip the investors into a frenzy:

Yes, TiVo should be receiving (additional) cash from DISH and/or EchoStar. And, yes, it looks like a number of DISH DVRs will be disabled. Davis Freeberg and I are still sifting through the ruling to get a better sense of what this ultimately means and if DISH/Echo has any moves left. I’d also keep an eye on Engadget’s resident legal eagle for a more thorough analysis.

The US patent office must have unpaused their hard drives because, hot on the heels of winning a patent related to closed captions on a DVR, TiVo has been awarded another patent at the heart of the DVR experience. With the application having been originally filed in October of 1999, it took the USPTO over ten years to review and finally approve their ultimate request… And on February 16th, TiVo was given the legal exclusive on what looks like “season pass” prioritization, conflict resolution, and recording.

For those unfamiliar with how a DVR works, part of their magic is the ability to you record shows in the future without having to worry about when they’er on. Back in the ole VCR days, we’d manually instruct our gadget the time and channel we wanted to record. But TiVo and other DVRs automagically keep track of this information and records our programs whenever they’re scheduled to run. Because the TV studios tend to schedule all of their good programming at the same time (I’m looking at you Thursday night), there are often conflicts between what you’d like to record and the number of TV tuners available to do it.

To resolve, or at least reduce, these issues, TiVo created their Season Pass manager to prioritize which shows get recorded and which ones don’t. This helps to make sure that I always get to watch Survivor and CSI, even if it means that I sometimes have to skip Community.

From patent 7,665,111,

The invention correlates an input schedule that tracks the free and occupied time slots for each input source with a space schedule that tracks all currently recorded programs and the programs that have been scheduled to be recorded in the future, to schedule new programs to record and resolve recording conflicts. A program is recorded if at all times between when the recording would be initiated and when it expires, sufficient space is available to hold it. Programs scheduled for recording based on inferred preferences automatically lose all conflict decisions. All scheduling conflicts are resolved as early as possible. Schedule conflicts resulting from the recording of aggregate objects are resolved using the preference weighting of the programs involved. A background scheduler attempts to schedule each preferred program in turn until the list of preferred programs is exhausted or no further opportunity to record is available. A preferred program is scheduled if and only if there are no conflicts with other scheduled programs.

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TiVo doesn’t yet know if their injunction against DISH DVRs will hold in court, but that hasn’t stopped them from expanding their patent portfolio. In a remarkable filing with the USPTO, TiVo appears to have now won an important patent for analyzing and displaying closed caption and meta data to DVR customers. That appears to encompass enhanced TV services, including a “clip and sling” type technology and could eventually allow TiVo users to automatically remove commercials from time shifted programs.

According to patent 7,661,121, TiVo now owns the right to use existing closed caption and Enhanced Television (ETV) signaling data to create an interactive experience for their customers. ETV data is the metadata that content owners embed into their programming. It’s been used by CableLabs and is part of the fundamental architecture behind big cable’s sinking “Canoe” DVR advertising venture. While I would suspect that the cable companies also have patents related to how ETV data can be utilized, it will undoubtedly be another series of rapids that the long delayed project will have to maneuver through.

While the abstract for TiVo’s latest patent is a little vague, devling into the details you start to understand why they’d try to seize this particular piece of intellectual property. Essentially, the patent allows TiVo to sync closed captioning (and metadata) from broadcast programs recorded on a DVR and then display that data in an interactive format. This data can be as simple as a menu or closed captioned text or can be as advanced as digital video and sound effects.

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The plot thickens… After taking a pound of flesh from DISH Network (with more to come?), TiVo was looking for a repeat time shifting patent infringement performance from Verizon and AT&T. But AT&T isn’t quietly acquiescing to a licensing settlement. As Microsoft, who provides the Mediaroom DVR experience to AT&T’s U-verse customers, has just filed suit against TiVo for patent infringement of their own related to:

a system that displays programmable information and a secure method for buying and delivering video programs.

It’ll be interesting to see how these two cases play out. Although, it’s likely the public won’t actually see much of anything. As I suspect TiVo, AT&T, and Microsoft will choose to skip the time and expense of protracted courtroom battles, with uncertain outcomes, by cross licensing each others intellectual property. And then moving on. Which leaves Verizon.

Photo by Zandir

TiVo’s quarterly call was a bit more dramatic than usual. While they continue to lose customers and innovate at a very unhurried pace, TiVo seeks a repeat DISH Network performance in going after AT&T (T) and Verizon (VZ) for infringement. Basically, TiVo’s current business model appears to be ad sales and patent trolling.

Unlike TiVo’s successful David v Goliath battle with DISH/EchoStar (SATS), things may play out a bit differently this time. First, there’s likely no smoking gun. Based on the evidence presented, it sounds like DISH may have helped themselves to an early TiVo prototype which was subsequently reverse engineered. Second, digital video recording technology may not be as patentable as TiVo would like. (Not to mention, it’s possible Judge Folsom and the Eastern District Court could run out of patience with TiVo’s community stunts and their own nationwide reputation. Then again, maybe not – these cases keep them in the spotlight and are good for the local economy.) Lastly, given the language in yesterday’s call, TiVo may just be looking to force AT&T and Verizon into some sort of licensing deal.

Another difference this time around, is that the defendants are relying heavily on third party tech. Verizon has constructed their own FiOS TV DVR software, but currently runs on Motorola hardware. AT&T’s set-top box platform is also Motorola, but the U-Verse software is largely Microsoft (MSFT). So it’ll be interesting to see how Moto and Mister Softee, plus others such as Broadcom, could be pulled into the fray. As an observer, and given TiVo’s pressure to license, I hope their contracts with DirecTV (DTV) and Comcast (CMCSA) are called into evidence.

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Normally, when perusing the various legal briefs and news coverage out of the epic and ongoing TiVo v DISH/EchoStar DVR patent dispute, my eyes glaze over (see: Boredom in the Courtroom). Today’s a bit different. A ZNF reader who’s been tracking this case, and who I presume to be a shareholder, forwarded DISH’s latest filing (7/13, PACER). The document in and of itself isn’t so interesting to the casual observer. However, it does reveal some astonishing content from within TiVo’s recent sealed motion (6/27) of sanctions for contempt of the permanent injunction:

TiVo’s response on the issue of judicial economy is that the sanctions hearing set for later this month will be short because each side was allowed only 30 minutes for argument. This simplistic retort ignores the substantial work for this Court — reviewing briefing, case law, and complicated financial evidence — that will be required for consideration of TiVo’s motion, which seeks nearly $1 billion in contempt sanctions.

There’s really not much to say other than: That’s a sh*tload of money. (While I’m having NTP flashbacks, TiVo actually has a product, business partners, and customers.) One thing’s for sure, if TiVo expects to see this kind of cash award, they’re going to need to buy a few more cows.

Click screencaps to enlarge:

It’s been several years since TiVo initiated their patent lawsuit against DISH Network, but we’re finally reaching the endgame of what has been an epic chess match between the two companies. Between the he said/she said arguments that have played out in the press to the endless legal maneuvers by both camps, it has been a long and brutal battle for both. As a TiVo shareholder, I’ve certainly found the long delays especially frustrating.

In the latest development in this high stakes game, TiVo appears to have pinned Dish in a dangerous checkmate situation. With appeals quickly running out, Dish’s options are becoming increasingly limited. While things look pretty dire for Dish, they may try to play one more dangerous gambit before the game is up:

I believe DISH might try to buy TiVo.

While looking through my traffic logs, I came across a very interesting visitor. (pic above) In 2006, I wrote an article referencing a “poison pill” TiVo implemented in 2001. Since Google loves bloggers so much, my story somehow ended up near the top of the page for the search term TiVo poison pill. Given recent analyst chatter that TiVo could be an M&A target, I’m not surprised that people would be interested in taking a closer look at the nuts and bolts behind the agreement, but I was surprised at where my visitor was browsing from.

While there’s no way for me to know who exactly it was, someone at EchoStar’s corporate HQ’s spent nearly 25 minutes researching an article that I wrote on the topic. Their outclick took them to the legal document that contains all of the nitty gritty details on how the pill actually works. Now, there could be any number of explanations for why someone at Echostar would be interested in TiVo’s anti-takeover provisions, but the most likely one is that they’re interested in making some kind of play at TiVo.

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