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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."
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?
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.
Your analogy is busted. Someone asking how to use the hardware they purchased independant of the service is different than asking how to get the Tivo service from Tivo the company without paying.