Rich Fiscus
2 Dec 2007 0:41
TiVo scored a victory last week when the U.S. Patent and Trademark Office issued a ruling that the company's "time warp" patent is valid. This is the basic issue being argued in a case that's been in court since 2004, when TiVo sued satellite television provider and satellite receiver manufacturer EchoStar. TiVo won the initial courtroom battle, a decision EchoStar has been appealing ever since.
The patent is a crucial piece of TiVo's business model. While TiVo has been losing market share to cable and satellite providers' DVRs, they've continued to be profitable, partly because of the "time warp" patent, which covers devices that can pause, rewind, and fast forward live TV. With the rapid increase in DVR usage over the last couple of years this has been instrumental in TiVo surviving their slip from DVR dominance.
The patent office's judgement isn't the last word on the subject though. And even TiVo fans might not be well served if it's upheld. In fact many people feel this patent is a good example of what's wrong with the U.S. patent system today. Many products developed in the past may have been greatly hindered by patents this broad. For example, how would a patent for a carriage that can propel itself with horses have affected the development of the automobile? Likewise, a patent for a mechanical clock (box that displays the time) would be equivalent to a digital watch (also a box that displays the time) under modern patent law application.
Even if they lose the battle to keep their patent, TiVo isn't necessarily done for. Feeling the heat from competing DVR's, TiVo has branched out into the marketing world by collecting viewing information from their customers' DVRs with the help of TV ratings giant Nielsen.
However, TiVo executives don't appear to be worried about the case's outcome. A statement from TiVo said "This decision by the PTO is final and not appealable by EchoStar. Today's decision by the PTO brings us another step closer to ending EchoStar's continued infringement, and we are hopeful that the United States Court of Appeals for the Federal Circuit will uphold the district court judgment of patent infringement."
Source: InformationWeek