If the US Patent and Trademark Office really believes that TiVo did not invent the Digital Video Recorder, then we’d all like to know who did? And since its earliest legal defense of the invention was in 2001, and it has survived several such actions since, you’ll excuse us for believing that the demise of TiVo is vastly exaggerated.
And why has it taken almost ten years for the USPTO to suddenly decide that it was an obvious invention, especially given that the DVR single handedly revolutionized the broadcasting industry and yet now threatens its entire revenue model, with the disintegration of advertising revenues since they are fast forwarded through on most DVRs.
If TiVo didn’t invent it, then who did? If it was Replay TV, well where is it? Bankrupt of course. Who else might have invented it? Sony? Motorola? Neither were that inventive at that particular point in time.
And if the DVR was an ‘obvious’ invention based on what has already been invented, then we don’t hold much hope for things like gesture control and multitouch in the iPhone, because these are based also on software and ideas. The latest USPTO ruling is a bit like saying VHS was an obvious invention as soon as we had reel to reel tapes.
So how does the news affect TiVo that the USPTO has issued a ‘final office action’ which maintained its rejection of software claims In TiVo’s original Time-Warp patent? The short answer is ‘Not at all,’ or ‘at least not yet’ and there are many reasons for this.
The first of these is that TiVo was told in the past that its patent was not valid, and later in the process, at appeal, the patent was re-instated. And it will be again in our humble opinion. We are not familiar with the detailed mechanism of each level of review, but TiVo is and it’s been here before.
The second is that the ‘en banc review’ legal action with Dish is highly likely to be complete before any such appeal can be held, and it is likely to also go in favor of TiVo, just as it did before. So that court will have to rule based on TiVo still owning the patent.
But the third reason is that TiVo can just as easily go back to the drawing board and use another of its more advanced patents to sue Dish. It now has around 200 separate patents and if Dish does not use any of them in one or more of its DVR products we’d be shocked. In order for TiVo to be put out of the licensing business (and remember that would not put it out of business) 200 patents would have to be overturned and the entire concept of the DVR, something almost as complex as the mobile phone, would have to deemed to be ‘obvious.’
All it does is put off the inevitable and make other potential licensors put off their decisions to work with TiVo. It’s certainly harmful, yes, but not lethal. Oh yes and it leads to investors emailing me in the middle of the night gleefully stating that ‘Tivo is Dead.’
We’re not sure why Faultline should care, but it just seems odd that when something which is now so universal comes from a company that is barely rewarded for it, just because the infringers are large potential customers, way bigger than it is, there is a feeling that it will not be able to defend its inventions. When a big company like Apple takes other children’s sweets in the playground, it laughs at $100 million rebukes. Same for Qualcomm. Consumers still believe that Apple has invented everything and that Qualcomm really deep down did invent everything good in cellular chips despite successful legal interventions.
And the US FTC tends to leap into action where these giant companies are concerned and either backs their plays or slaps them down ‘ but it does it quickly. The uncertainty over TiVo has been going on for so long that it has about 100 companies around the world copying its technology and it cannot even get enough support in the US, to fund chasing them.
Dish issued this statement at the news. ‘We are pleased the Patent and Trademark Office issued a Final Office Action maintaining its rejection of the software claims of TiVo’s patent. These software claims are the same claims that EchoStar was found to have infringed in the contempt ruling now pending for en banc review by the Federal Circuit. In the Final Office Action, three examiners of the PTO considered TiVo’s response and, in a detailed 32-page decision, finally concluded that the software claims were unpatentable in view of two prior art references.’
TiVo in turn said, ‘While TiVo is disappointed with this recent PTO office action, this is just one of several steps in the review process. We will continue to work with the PTO to explain the validity of the claims under review. It is important to note that TiVo received a ‘final action’ holding several claims invalid during EchoStar’s first reexamination request at this juncture, only to have the PTO ultimately uphold the validity of all claims of the patent.’
Neither the en banc review or any appeal of the reexamination are likely to be settled during 2010. But TiVo will continue to look to grow out of its native US, and this decision has the potential to damage licensing negotiations across Europe, or at least slow them down or make Tivo settle for less. Our view will continue to be that TiVo is worth every penny, and remains the only company likely to innovate at the DVR level in advertising, audience measurement and search and without that, TV would remain in the doldrums.