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Life or Death for Tivo
CUShane writes "The Washington Post is running an article on the patent case between Tivo and EchoStar regarding Tivo's DVR technology. The article states that Tivo has a better than 70% chance of winning, while a loss would basically doom the company. Is there a possibility that the patent system is working right in this case?" From the article: "TiVo attorney Morgan Chu has been arguing in court that TiVo's inability to turn a profit, despite the popularity of its product, is partially because of EchoStar's infringing on its patent. TiVo co-founder Michael Ramsay testified that he showed EchoStar executives the TiVo product and pursued a licensing deal with them, but that a deal was never struck even though EchoStar began selling its own DVRs that used technology very similar to TiVo's."
Fuck.
With.
My.
TiVo.
Obliteracy: Words with explosions
No, im not at all shocked Tivo hasnt turned a profit. Actually its one of those companies that came out of the dot com boom, but somehow didnt die. It started with great technology and no viable business plan. However with billions in venture capital backing it, it followed the grow big quick strategy. Downside being, they were taking a pretty serious hit for each unit sold.
So now that Tivo is an established brand they needed to retool there strategy from growth, to making money. Sadly sofar, they havent faired that well in the transition. Not to mention the number of competitors they have now they didnt (really) have then, Media Center, Myth TV, OnDemand Cable, etc...
I wouldnt be suprised to hear that Tivo REALLY needs to win this lawsuit, just for the funds it could bring in. Which is a shame as tech wise, tivo is a nice product. Just as a business plan... I wouldnt have touched it with a ten foot pole. Had they gone the Sceintific Atlanta (sp?) route and been a direct hardware provider to the major providers I could see them being a much more viable company today. But they fought tooth and nail to keep their own branding instead of being rebadged as a providers product and that decision is coming to bite them in the ass.
I know we all love TiVo and all, but it looks like their patent is on simultaneously watching and recording TV.
You know, like you used to do when you watched one channel and had your VCR record another.
Or like when you watch streaming media in your web browser and it continues to buffer even when you hit "pause".
Basically, this is yet another stupid IP patent (is there another kind?), even if we like the company trying to enforce it.
Dewey, what part of this looks like authorities should be involved?
This is true, but judges will specifically tell juries not to do this. They specifically instruct juries to decide the case on the merits of the evidence and NOT on the merit of the law. Lawyers are often forbidden to tell juries of their nullification power. Potential jurors who know about those rights will be removed from the jury. The court goes to great lengths to prevent juries from doing this, and even if the jury DOES do this, the case just ends up in the appeals court, where you need ANOTHER jury to nullify, and that's not likely.
"I have never won a debate with an ignorant person." -Ali ibn Abi Talib
Your positions sounds like someone who has never had an innovative idea that you tried to market AND as someone who wants to use other people's ideas freely.
If you have ever gone to big companies with a big innovation that you need them to fund or license, then you would know that patents are vital to your protection. Secrecy only travels so far. How do you market a concept without sharing it?
If you want to convince me that Tivo's patent is too broad and should not be eligible for a patent, I'll listen and I may agree. But the anti-innovation crowd tends to think everything should be free because ideas cannot be owned. Raise the red flag and tell me that I can't own my property either because the earth is owned by all of us. It's anti-capitalistic b.s.
Download your stolen movies and mp3s. Steal technology from little guys trying to carve a niche. Tell yourself that patents stiffle innovation.
Then, when you have your big idea, come crying to someone else about Microsoft stealing it without paying you.
According to TFA, they hold a patent on watching one show and recording another at the same time?
I dunno about you guys, but I've had a VCR that could do that since before anyone had come up with the name "TiVo".
really? You had a VCR that lets you watch one tape while recording another show to same tape? I do not think there was a single device with single media that allowed you to do this until tivo.
-Em
RelevantElephants: A Somatic WebComic...
The problem people are having with patents is that:
a) nearly all of them are too broad
b) nearly all of them are trivial
c) there's no sense of proportion
And my guess is that you're speaking as someone whose ideas have never been squashed by an obviously bogus patent.
The problem we have with a, is that patents cover too much. Even a vaguely similar idea gets covered, and you wind up paying money to someone who had nothing to do with your innovation.
The problem with b is, you come up with some simple product that no one is marketing, and start selling it, only to have the patent holder come knocking for a piece of your action, and surprise surprise the patent office has granted a patent on your idea, even though it was so obvious you wouldn't have even considered patenting it yourself. Furthermore, there's no allowance for independent invention, so even if you got to your idea completely on your own, if you got there a day late that idea belongs to someone else.
The problem with c is, even if the patent covers only a tiny portion of your device, you can be extorted for basically everything. It doesn't come to that, but the patent holder typically will pick up more than a 'fair' share of the profits.
All in all, the patent system is so broken right now, we would be better off without it entirely. Which is not to say that some middle ground position might not be even better.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
There's a lot of talk about patents and I don't like much of it. It's very ideologically driven with little regard for the facts.
The field of economics believes that people respond to incentives. By giving someone a patent on something, you are ensuring that, for a limited time, they are able to secure most of the "social benefit" of that invention less the "social cost" of developing and producing it. For example, let's say that Tivo spent $100 million "inventing" their product - assuming they were truly innovative and that this is an actual invention. Then let's say that it costs $200 to build a Tivo - the cost of the hardware, marketing, labour used in assembly, shipping, the works. Clearly, Tivo can't sell units for $200 and turn a profit - in fact, they can't sell them for $201 and turn a profit unless they sell over 100 million units (which would cover the R&D).
Now, let's say that there aren't copyright laws for a second and that I can load Tivo software on a box I make (which costs me $200 to make) and start selling them. I can sell at a price a lot less than Tivo can because I don't have to recoup R&D costs of $100 million. This is why software patents are a little more tricky. In the real world, I would have to develop an alternative to the Tivo software which would cost me money, but probably less than the $100 million it cost Tivo since I would be duplicating an already existing piece of software which is substantially easier to do.
Looking at more mechanical things, one can easily see how they work and duplicate the design and the "inventing" company goes out of business - sort of.
There are a lot of people who argue that being first to market is enough of an advantage. An economist wouldn't. Yes, being first to market will provide one's company with a good amount of the social benefit of an invention, but not all of it (patents don't give you all either, but more) and so there is less incentive to invent and less invention than is socially beneficial happens.
I hate to use caps, but I must stress this: WITHOUT PATENTS, THERE IS LESS INVENTION THAN THERE SHOULD BE.
So patents do help correct for that market failure, but they also have detrimental effects. The one that bothers me the most is that patents give a monopoly. For the non-economists, monopolies charge higher prices and deliver fewer units because it is more profitable for them to sell fewer at a higher price. Basically, if I can make a pen that everyone wants and I have a patent on it, I might have a choice of selling 1 million units at $10 per pen or 5 million units at $1 per pen - by selling less units, I get double the money! This won't happen in a competitive market because with more firms selling, it becomes more profitable to sell more units because the more the firms, the fewer of those $10 buyers we each get.
Of course, the natural outgrowth of this monopoly pricing is questioning whether companies are able to capture more money than the social benefit through this system because of above market pricing. Maybe.
Then we get into the "standing on top of giants" problem. Patents mean that you can't stand on giants for a period of time (I actually don't know the exact amount of time, but I think it's about 20 years). So patents retard one's ability to build on the inventions of yesterday.
So, patents encourage and discourage innovation, but is that why the majority of people are in favor of them? No. People see them as fair. People have an "I created this, it's mine" mentality. If you invented something, would you want other people ripping it off? If you wrote a song, would you like others passing it off as theirs - or worse, that their version was better? Ideally, you probably would - it would encourage the type of amazing developments that we see with things like the Creative Commons, but you probably won't feel that way and I don't believe in trying to convert people to different philosophies.
In the end, we mig
Companies are starting to offer DVR technology in other devices now. LG has it in a television and a DVD recorder. There are plenty of Windows Media Center PCs being sold these days, etc.
The problem with Tivo is the subscription service. First, the cost, second the fact that you need a phone line. It's inconvenient, and the subscription fee is a hidden cost for buyers. I even had Tivo with my DirecTV service in my old house, and I had to pay an extra $5.95 for it. That's ridiculous.
They ought to figure out a way to make it work just like a standard VCR easily and foolproof, and then license the technology to anybody and everybody who wants to build it into their existing devices. TV's could have a DVR built in for an extra $100. Why not?
The fact that they haven't realized this yet is evidence that their business acumen isn't very innovative.
Dear TiVo,
You and I have had a good year together. But we just aren't meant to be together. You are too overbearing and clingy. You have a lot of good qualities to offer to somebody else in this world, and they'll love you for it, but your ability to somehow predict that I *need* to watch every episode of Saved By The Bell is a bit creepy to me, and we are spending way too much time together.
You won't be easy to leave, dearest TiVo, and I'll certainly think about you those late nights that I come home and want to watch the 9th inning of that game I missed. But I think it's for the best. I've come to the conclusion that I'm better off without you, so this is the end of the line.
-s
Until you've labored for years to create something truly innovative and received a cease-and-desist letter claiming that you've infringed someone's ill-gotten patent, you have no legs to stand on. I've been through this. I've seen these guys' bogus patent claims, and determined that they wouldn't stand up in court. But, I'm sorry to say, I didn't have the $10 million needed to defend myself in litigation against them (that's the average cost of this type of legal proceeding, you know), so I folded.
Many hours of my life went down the toilet because of the patent system, and the world never got to see what I was about to unleash upon it. Perhaps that's all for the better. Perhaps my invention sucked. But we'll never know, will we, because the market never got to cast a vote on this one. Instead, poorly informed and overworked beauracrats in the government's Idea Regulatory Board (the USPTO) handed out monopolies over ideas like they were candy.
The patent system is FUBAR.
If that's the case and an ill informed writer isn't making a mistake or misusing the English language then TiVo's case is a lot more valid. They would not be saying that no one is allowed to record one show while letting you watch another. Instead they would be saying that you can't do it through this particular method which they developed.
Of course that assumes the writer has his facts correct, isn't making a grammatical mistake, and the technology involved isn't extremely broad in definition.
Now, now. There's no need to be unpleasant.
Is there a possibility that the patent system is working right in this case?
You see, that's presupposing that it has a non-broken mode of operation. I (and I suspect the GP would agree with me) do not agree that this is the case. Modern patents, particularly software patents it would seem, are more about creating unearned monopolies to protect failing business models than looking out for the little guy.
Imagine a marketplace where a gang of traders have hired a bunch of thugs to stop outsiders from setting up stalls and competeing with them. It's a bad thing: bad for trade, bad for prices, bad for the local economy and bad for the travelling merchant who get beaten and robbed.
The thing is, every once in a while the visitor might turn up with enough guard to win a battle and make a bit of money. That doesn't mean the system is working; it just means that for once, the long odds came up and the underdog got away without losing his shirt.
Don't let THEM immanentize the Eschaton!
I'm a fan of your posts, but what this specific one fails to cover is the fact that there *does* exist a place for patents in the world today. As usual, the answer is a middle ground between you and the grandparent.
The place for patents is this: New ideas, really new ideas, take time to materialize. If I were to say "I have an idea", it may take 4 or 5 years worth of research, testing, development, more testing, and then at the end, I have to hire a designer to make it look pretty, a manufacturer to ramp up production, a distributer to get it to the public, and a marketing person to push the idea to whoever.
A patent system encourages people to take risks - to eat ramen and live in a 1 bedroom efficiency, spending every waking hour coding / soldering / testing / brainstorming, because they can be reasonably assured that once their product gets to market, they'll have a reasonable amount of time to earn money to compensate them for the time they spent in R&D.
Without a patent system, the same person could take the same risks, do the same things, and bring their product to market, and someone could go "What a great idea, let's do EXACTLY that", and copy the product. And lo and behold, they can do it cheaper. Why? Because the first guy is selling it at (cost)+(profit margin)+(compensation for R&D), while the copycat can sell at (cost)+(profit margin). The innovator is now out of business because someone is offering a cheaper version of the product he spent 4 years perfecting and producing.
Now, the down side is that the current patent system goes so far beyond the pale that it's a joke. Rather than, say, 5-7 years (which is an eternity in technological terms) for a company to make back money on something they invent, the patents last at least 25 years, and most of the time longer (due to extentions, paperwork, and errata).
The way it should work is that people should be encouraged and confident when they decide to invent something. They should be able to patent it, and when the patent expires in a few years, and cheap copies show up, the inventor can drop the (compensation for R&D) from the pricing equation, and suddenly "the origional" is on a level playing field with the copycats, and who wouldn't buy a Toshiba over a Matsakataishanana for the same price?
~Will
sig?
your experience with Tivo is outdated. The ability to tell an un-subscribed Tivo to "record Channel 11 from 8PM to 9:30PM on Tuesday, 4/4/2006" was possible with the older Series 1 units, but is not available in the (still years old, just not *as* old as Series 1) Series 2 units.
Almost no one gives ReplayTV any credit. They had a far better product than Tivo or anyone at the time.....I guess it's the old Beta vs. VHS....The first Replay units cost way too much but they changed everything.
Now with HDTV on cable/Sat (OTA is too hard to deal with) I'm stuck (for now) with the Motorola box on Comacst, and with my D-VHS I can record the HDTV movies at 15-30G per tape. The Motorola DVR does work most of the time execpt when I have to reboot it because it locked up. Nothing works as well as the old ReplayTV 3000 units (I still have two running)!
It's like I'm back in the stone age again. My "cable ready" TV does not work and I'm using video tape (unless I want to compress the hell out of HDTV).
ReplayTV says they have a new software solution for the PC soon...sounds like another HTPC setup.
This all proves no one can survive with just great technology, you have to have good marketing and deals with the bigboys (the reason Tivo is almost dead without EchoStar, and ReplayTV is basicly dead).
As the other poster already said, it does turn into a paperweight if you don't pay the fees.
My bad - the one I have (early Series 1) does work without a subscription (the other poster indicated this only works for early Series 1's). Sorry for the bad info.
The fees are not $10/month like you said, but $13/month subject to go up any time TiVo has a whim.
Apologies, again. I threw that in as something close, and didn't figure most people who could afford a TiVo ($) to watch cable television ($50+/month) would care about $36/yr.
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$13/month is total BS for the service of letting me download TV listings. It's more than having a print TV guide mailed to me every week...Before you [say it is] a wonderful service well worth the price, consider this...[strained example about the value of TiVo vs. the value of water/sewer]
TiVo is the same thing. You might say the convenience is worth the $13 monthly fee...
Precisely - I might say that, and so do TiVo's 4.5 million subscribers. You don't. So you don't subscribe. That doesn't mean no one else sees value in the deal. "You" don't equal "Everyone".
I just wish they'd die faster so the market would be more open for a real set top DVR.
I think you just proved my point - they have a big piece of the market (and somehow are preventing competitors from gaining traction as quick as you'd like) precisely because people see value in their offerings. That certainly may change in the future, but that doesn't mean it's not true now.
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Before you spew some garbage about...
Even if you're happy paying your addiction money...
Jeez, easy there, fella.
(1) I have a TiVo that I didn't buy, never used, nor paid a subscription for.
(2) Ever hear of disagreeing without being disagreeable? It's only a discussion about Tivo, for fuck's sake. I realize you are awfully passionate about a company that seems to do you no harm, but how about not insulting anyone who has a different point of view?