Fresh Off Victory Over Dish, TiVo Sues AT&T, Verizon
from the can't-compete?-litigate! dept
Why bother competing in the market when you can just sue everyone else? That appears to be TiVo’s big strategy these days. Just a month after winning a big court victory over EchoStar/Dish over a patent that the USPTO is not really sure it should have issued, TiVo has moved on to sue both AT&T and Verizon in a nearly identical lawsuit. And, of course, you know exactly how the negotiations on this one start. TiVo will point to the headlines about the millions the the court has told Dish to pay. Whatever happened to the good old days when companies competed in the marketplace rather than in court? TiVo is a great and innovative product, no doubt. While not really the first such product, it did a great job convincing the market of the value of DVRs. But then others innovated as well, sometimes making their product even better. That’s called competition and it should drive everyone to make better products. It appears TiVo would rather that the competitors be kept out of the market, rather than bothering to innovate in the market.
Filed Under: dvrs, patents
Companies: at&t, echostar, tivo, verizon
Comments on “Fresh Off Victory Over Dish, TiVo Sues AT&T, Verizon”
Who is the innovator here? Let’s look at some numbers.
In 2008, TiVo’s total operating revenue was $272M. They spent $59M on R&D (per Marketwatch). Their revenue-to-R&D ratio is 4.6:1.
Also in 2008, Echostar’s total operating revenue was $2.15B ($2150M). They spent $40M on R&D (also per Marketwatch). Their revenue-to-R&D ratio is 53:1.
So Echostar is 10 times as big, but spends two thirds of what TiVo does on R&D. For every dollar that TiVo earns in revenue, 21 cents goes to R&D. For every dollar that Echostar earns in revenue, 1.9 cents goes to R&D.
This is wholly consistent with the situation: TiVo spends a lot of money to develop, market, and improve a product that is revolutionary enough that “TiVo” is used as a verb to indicate the generic act of recording something onto a DVR device of any make. Then, Echostar comes along, copies the device, makes a few incremental tweaks, and sells it without paying TiVo anything. They have gotten nearly all of the benefit of TiVo’s work, research, and marketing, but paid nothing for it.
That certainly is competition, of a sort. It’s the same kind of competition that exists in a 100 meter dash, when one of the competitors gets to start at the 90 meter mark.
Shame on TiVo for developing something that was more revolutionary than evolutionary. The smart play would have been to copy someone else’s work wholesale and then improve it by 2%. That way, they could have avoided these nasty legal hassles, since they wouldn’t have to worry about recouping a massive R&D budget.
That’s the way to encourage real innovation.
Re: Re:
I’m sorry. You prefer that TiVo be the only one allowed to offer its product on the market?
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Mike, it is the same mistake you make over and over again, confusing imitation with innovation.
TiVo is an innovative product, a market that didn’t exist before they got there with their very unique and very desirable product. They did the innovation to get there.
The others? Well, while imitation is the greatest form of flattery, it is also the greatest way to drive the innovators out of business, or at least to take a major part of their market.
You really need to spend some time and learn the difference, because the confusion is leading you down all sorts of mental dead ends.
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Where would the consumer be if only one company could make a DVR? Would we still have $1,000 DVRs?
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I hate to nitpick a good fight but your argument that TiVo is “innovative” isn’t really that true. Or at least its not that amazingly innovative. Basically all they did was take the premise of a VCR and apply modern technology to it to make it easier for the consumer. They were the first to actually *do* it sure, but they invented nothing actually NEW. They just applied exsisting technologies together.
Don’t get me wrong, it’s a great product. But it hardly warrants the judgment that was passed down. Imagine if Xerox was still the only company that could make copy machines…
Re: Re: Re: Re:
No, Tivo didn’t create a market that didn’t exist before. Tivo wasn’t the first DVR product. All those ideas already existed. The only thing Tivo did uniquely was identifying similar (you may also like…) shows to record.
It just so happens that Tivo had the prettiest package and better marketing than those that came before it.
Beyond that, I’m not sure what your point is. Innovation always comes in increments and never from ethereal genesis.
Re: Re: Re: Re:
The others? Well, while imitation is the greatest form of flattery, it is also the greatest way to drive the innovators out of business, or at least to take a major part of their market.
What would the electronics world be like today if this logic had been applied to things like the VCR, or the computer, or the DVD player?
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Mike, you coudn’t be more wrong on this one. TiVo CAN’T compete. Satellite services refuse to pay them when they can steal their technology instead. Cable companies have delayed and crippled CableCard to the point of not mattering.
How could TiVo compete? The monopoly gatekeepers do not have to let them and they don’t. DirecTV and Comcast have deals with TiVo as a (quite reasonable) licensing fee. The rest just stole that which was quite novel when TiVo invented it.
“They need to compete.” What a joke! They have been shut out by the gatekeepers from even having a chance!
Re: Re:
“revolutionary enough that “TiVo” is used as a verb to indicate the generic act of recording something onto a DVR device of any make.”
Does it mean that?
I checked..
“Tivoization is the creation of a system that incorporates software under the terms of a copyleft software license, but uses hardware to prevent users from running modified versions of the software on that hardware. ” (Wikipedia)
So Tivo aren’t above taking other peoples work and using underhand methods to undermine the intentions of those who created that work.
Like so many companies they have a double standard defending their own “rights” to the n’th degree – whilst trampling on the rights of others.
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“..revolutionary enough that “TiVo” is used as a verb to indicate the generic act of recording something onto a DVR device..”
You don’t have the word “record” in your country ?
We have TiVos here and to be quite honest it may be great, but I don’t want one. If you can patent “categorising shows and automatically recording them based on user selected criteria” which is my (limited) understanding of what one does .. does that mean when I tell my partner to record any scifi shows that she’s breaching their patent ? Get off it. A TiVo is a HD in a box with some capable software. When you boil it down to that, it just becomes “an external HD”..
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“You don’t have the word “record” in your country ?”
I was just thinking that. I have never heard anyone talk about Tivoing something. I’ve heard of Googling something I’ve even heard of DVRing something, but mostly it’s “I’m going to record that”.
I don’t think TiVo did anything inventive by taking something me and my dad have been doing for years before TiVo and making it a set top box. Innovative maybe, worthy of a patent, hell no.
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Dr Strange:
Your revenue-to-R&D comparisons are meaningless. Tivo only makes DVRs; it’s appropriate for them to invest a high percentage of their revenues in R&D. Echostar is primarily a service company (they provide satellite TV service). They have huge revenues but they also have huge costs (licensing content to distribute, maintaining satellite and ground station hardware etc). You do know that revenue is not the same as profit right? Considering what a small part of their operations DVRs are, their R&D spending level seems entirely appropriate to me.
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Dr. Strange basically stated that:
Company A spends more than company B on their R&D,
therefore Company B infringed upon company A.
Wow – that proves it !
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Your statement about R&D is so far off i can’t even begin to mention how wrong it is. I work for dishnetwork and know what happened with the TiVo situation. Because of the lawsuit a few OLD and i mean old recivers from like 10 years ago had to be taken out of service from the lawsuit. Since then dish doesn’t even use that same technology. Ecostar has designed and redone everything. There is nothing in the recievers that are SO CALLED Tivo design. The reason Ecostars R&D is so cheap they have very smart people and know how to build good equipment. They actually design a box send it to local offices and let us play with it and inform them of glitches and improvements. Get real world feedback, instead of spending insane amount of money on bench testing and “Simulations”.
TiVo doesn’t have 2 room from one box design. They don’t have 99.99999999999999% of dish technology. The only thing they really want is to pantent the “pause live TV” Concept, a DVR is just a digial VCR with no tapes. If you comment about stuff know your facts and technology.
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Seriously.
Quote …
“So Echostar is 10 times as big, but spends two thirds of what TiVo does on R&D. For every dollar that TiVo earns in revenue, 21 cents goes to R&D. For every dollar that Echostar earns in revenue, 1.9 cents goes to R&D.”
Echostar owns a huge infrastructure including +12 satellites, the rocket to push them, uplink centers and on an on. You have to subtract that cost and r&d from the equation before introducing the DVR cost.
Honestly, Tivo has rolled over and become to SCO of the DVR world.
Sarcasm is the lowest form of humour
You have to expect other people to rip off, slightly amend and sell off bastardised copies of any successful invention.
It’s part of what perpetuates an evolution in technology and the market. The point is, that is usually the point in which a company reviews it’s product and attempts to improve upon it.
Who gives a shit who came up with it? If everyone who made a product followed this method of defense we’d still be living with Beta-max and black and white archaic tv screens.
Sarcastic Prick
People seem to be missing the point…
It’s a similar scenario to Apple trying to drive out all the other MP3 Players on the market because they thought of it first.
Their product may have been innovative, but it doesn’t mean there aren’t other ways of doing it – Apple updated and re-invented their product to stay ahead of the game, TiVo should be doing the same thing
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You are making the same mistake that Mike makes on this issue: There is more than two solutions.
The only two solutions ever discussed on techdirt are:
1) socialistic everyone owns it have a nice day
2) damned patent holders driving everyone out of business
There is a third choice, the one that happens every day, all over the world.
3) interested companies can license the technology / rights and keep on going.
Always assuming there are only 2 choices / states in this argument is like confusing innovation with imitation. It is a common error on Techdirt that makes many of the discussions useless.
RE
I’m not making any mistakes.
If the company was liscensing the product and carrying on their merry way then fine. But they arent, and TiVo are doing the stupid thing.
Granted there are always other options, my point is, why aren’t TiVo exploring them?
I don’t think that people should work for free. The world works on money and they deserve that for their efforts, I just think the current system makes no sense.
Re: RE
TiVo isn’t exploring them right now because they are in litigation, which will effectively create either licenses or infringing devices that are removed from the market.
Had the companies in question come to TiVo and made a reasonable offer, I am sure that some sort of business arrangement could be made. They didn’t so TiVo is left with few choices.
It’s a techdirt special, always paint a patent holder as greedy, rather than painting the infringers as the freeloaders they are. This case is very particular too, because the devices are exactly “me too!” products, entirely inspired by and based on the success of TiVo.
Re: Re: RE
“It’s a techdirt special, always paint a patent holder as greedy, rather than painting the infringers as the freeloaders they are”
With as much as you post here, you should know by now that Techdirt doesn’t think that. They just happen to write about what’s news worthy, the patent trolls.
“This case is very particular too, because the devices are exactly “me too!” products, entirely inspired by and based on the success of TiVo.”
TiVo made it popular, they didn’t make it first. Just like Apple made the MP3 player popular, they didn’t make it first.
The Tivo patent is bogus.
They know it.
They want to hurry before it is rejected
Moooooo
TIVO
You don’t like it, don’t buy it. Your money talks.
In the Tivo vs Echostar case if you did your research you would find that Echostar was in talks with Tivo to license it for their use, however instead Echostar reverse engineered the development Tivo they had in direct violation of their contract with Tivo.
This wasn’t imitation this was theft.
Too late?
Can Sony/Philips/VCRplus sue TiVo for patent infringement? (Can anyone sue the USPTO for idiocy?)
ahh, New Zealand…
where the standard solution is Still [last i checked] to simply stick a blank video cassette in the VCR [usually called a ‘video player’] and record stuff as it plays…
assuming you even still bother watching anything worth recording on TV rather than just buying the DVDs/downloading it in the first place, or rigging up a TV tuner card in your computer and saving things that way.
I’m not even sure if a TiVo equivalent is actually Sold here.. I’ve certainly never seen one advertised.
admittedly this is all a bit tangential, i suppose.
Do it yourself and save!
http://www.byopvr.com/
“Why TiVo when you can FreeVo?”
I ended up building my own (using the above site for some ideas). Worked great for a while. Unfortunately the hardware I used wasn’t up to the task; but if anything, it just proved to myself that it was possible putting together the right components (a computer, hard drive, TV tuner card — all of which existed long before TiVo) and the right software to manage it (MythTV, FreeVo).
Woohoo – someone else brought up the apple doodad, it’s the same exact thing I tells ya!
I reverse engineered a Ham and Cheese Sandwhich the other day, but decided to use Whole-grain bread instead of white, Cured Ham instead of processed and Red Leicester instead of Cheddar. In my opinion it was a tastier sandwhich, but it was both totally and not even slightly the same as the original…sue me
Competitors aren't even close
I’ve used two different cable company DVR’s (one standard and one HD), the Dish Network DVR and a standard Tivo and I can tell you that although they all record shows and let you pause TV, the similarities end there.
Tivo is the “ipod Touch” of the DVR world and the others are all “ipod shuffles” by comparison. Tivo integrates into your home network and lets you move video files back and forth for viewing on your PC or on your TV, lets you play online games, download podcasts and video “Tivocasts”, and a few hundred other features that the other DVR manufacturers don’t even try to emulate.
I recently upgraded to HD TV and am making do with the cable company’s HD DVR until I can save up and buy a new Tivo HD XL and it’s miserable dealing with how slow and klunky the user interface is. There is no way to conveniently skip commercials, you have to fast forward and then punch play before the show starts because the response time is so slow.
Worst yet, there is no way on the cable company box to tell it what channels I receive so the guide shows me dozens of channels I can’t watch, but with my Tivo I can tell it which channels I can get and which channels I don’t want to see listed (QVC, Lifetime Movie Network, etc.). With the cable company box I have to setup a list of favorite channels, then press Guide – Guide – Select – Select – Select to view a list of the channels I want to watch. That sure is convenient. The Favorites button on the remote doesn’t bring up the favorites guide – no, it changes to the next available “favorite” channel. I suppose that might be handy if I was a channel surfer who determined what was on by cycling through all the channels – but I have digital cable with a guide – why would I want to do that?
Where is the suit pending?
Why, Marshall, Texas, of course! The TiVo folks have to be able to visit the pet bull named after them.
Um...lets try that again...
“Mike, you coudn’t be more wrong on this one. TiVo CAN’T compete. Satellite services refuse to pay them when they can steal their technology instead. Cable companies have delayed and crippled CableCard to the point of not mattering.
How could TiVo compete? The monopoly gatekeepers do not have to let them and they don’t. DirecTV and Comcast have deals with TiVo as a (quite reasonable) licensing fee. The rest just stole that which was quite novel when TiVo invented it.
“They need to compete.” What a joke! They have been shut out by the gatekeepers from even having a chance!”
You cant steal an idea. You cant patent an idea. Digitally recording video was around LONG before TIVO. Putting it into a box is only a refinement of the VCR, except you use a hard drive instead of tape, and you have a nice menu to pick things from. BOTH of these are prior art. Digital program guides were around before TIVO, since at least the beginning of DBS satellite TV (circa 1995, TIVO came out in 1998). Adding a “record” option to this guide and stuffing the bits on a hard drive are not unique, and hardly “innovation” of the scale you are trying to foist. I had a TV capture card for my PC back in 1996 that did almost everything a TIVO did, just maybe not as easy or as in self-contained package. This is an OBVIOUS evolution of these ideas, not some whole-cloth, “WOW – thats COMPLETELY original!” concept.
Re: Um...lets try that again...
RD,back to your meds.
Look at all the ignorance
I have a couple of questions for all of you that are whining about Tivo actually having the gall to enforce their legal rights. Do you have any property rights of your own? Ever had a patent? No? Then you probably don’t know what it’s like to have your hard work ripped off. Tivo invested heavily in developing and patenting the DVR. They did everything according to the rules. Dish, on the other hand, ripped off their invention and refused to license. If you read the case, you’ll see that Dish did all sorts of other nasty things to prevent justice from being carried out, like misleading the judges and ignoring the injunction. But if you’d prefer to remain ignorant, carry on.
As to the argument of ‘why don’t they just compete instead of suing’? When someone can simply copy your product, and therefore freeload on all the money you spent to develop it, then they have an ADVANTAGE. When they also control customers, and can bundle the stolen technology with their current stuff, you CAN’T compete. You’re locked out. If any of you actually go to the trouble of inventing something, patenting it, and then seeing it ripped off by a company like Dish, then you deserve to be heard. Until then, you probaby want to stay quiet on any ‘Tivo is a troll’ talk, for fear of embarrassing yourself further. Just a thought.
Crummy article.
Really can’t believe how poor this article is. Tivo invented the DVR, nothing existed before them. They created the market, the technology, and sold it to us. They patented pretty much the entire process. Other companies came along and didn’t license it, and now are being sued. It is that simple. You can argue they weren’t the first, that they just took the next logical step of the VCR, or anything else, but you would be 100% wrong for every excuse you can come up with. Tivo is one of those companies that deserves to rule the market. They created it.
Re: Crummy article.
LG is the first company to put out a DVR, so no, Tivo is not the first, nice try though.
stop the shilling!!!
“can’t-compete?-litigate!”
that gives me an idea for a new motto for Microsoft and their patent deform, legalize theft pals…
“can’t compete? steal!!!!”
Whatever happened to the good old days when companies competed in the marketplace rather than in court?
Lawyers and law schools are what happened. Since then every law school in the world has ejaculated millions of lawyers upon us and, do whatever they can to look after their own.
VRP
Tivo is a waste anyway
I can do anything tivo and more for free on my media center .
tivo is already dead, they just do not know it yet.