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TiVo, perhaps the company best known for digital video recording (DVR) technology, is currently locked in a battle for survival. As most satellite and cable companies have started offering DVR services, TiVo’s market share has steadily dwindled to occupy only 8 percent of the 38 million DVR users in the United States. While the use of TiVo hardware in particular has significantly decreased, the company’s hopes lie in licensing its patented technology to other providers. Recently, the company has been involved in litigation that may prove vital to its ability to compete with satellite and cable companies.
In 2006, TiVo sued and prevailed against one of its rivals, Dish Network. TiVo claimed the defendant’s EchoStar boxes infringed on TiVo’s patented “time-warp” technology patent, which allows the user to record one show while viewing another. As a result of that suit, TiVo collected more than $100 million in damages, and the district court ordered Dish Network to stop use of its nearly four million EchoStar boxes.
However, Dish Network has not yet shut down any of its boxes. Instead, the company invested $2 million, fifteen engineers, and 8,000 man-hours to develop a software “design-around” of TiVo’s patent, which is now used by all EchoStar boxes.
In 2009, a district court found Dish Network’s new software to be insufficiently different and again ordered the company to stop use of its EuroStar boxes. The court also required the company to pay $200 million for contempt.
Dish Network appealed the decision before a three-judge panel and lost. However, both parties reargued the case before an en banc panel of judges from the court of appeals on November 9, 2010. A decision is expected by the end of the year.
But TiVo has another weapon in its arsenal. In October of this year, the U.S. Patent and Trademark Office reaffirmed TiVo’s patent for its “time-warp” technology. However, despite this ruling, the court of appeals may still find that Dish Network’s “design-around” software for EchoStar is sufficiently different from TiVo’s technology. If decided so, TiVo’s future looks bleak indeed.
– Meredith Lawrence
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