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."

Comments

Nothing to see here.

[Tackhead]

Nothing to see here... delete recording? (Y/N)

/someone had to say it

Was anyone else surprised...

[Josh teh Jenius]

...to learn that TiVo hadn't turned a profit yet? I was.

Are there any other popular gadgets (besides blackberry) caught up in stuff like this?

Re:Was anyone else surprised...

[Serapth]

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.

Re:Was anyone else surprised...

[Misch]

Are there any other popular gadgets (besides blackberry) caught up in stuff like this?

Satellite radio.

Of course, they'll pry my Sirius tuner from my cold dead hands. Of course, if they're prying the tuner from my cold dead hands, then I'll have died in my car, and I don't want to think about why that would happen...

Re:Was anyone else surprised...

[Irish_Samurai]

Tivo has one thing that all it's competitors can't buy: brand recognition.

I dunno, my OnDemand is pretty damn Comcastic.

Re:Was anyone else surprised...

[Zontar_Thing_From_Ve]

No, im not at all shocked Tivo hasnt turned a profit.

Nor am I. Despite what Slashdotters might think, most people don't own a TIVO. My brother is the only person I know who owns one.

I'm technologically adept. I work in IT. Friends and family ask me all the time to help them with computer problems. Why don't I own a TIVO? Simple. I refuse to pay the monthly premium. I don't care if it's 1 cent. I refuse to pay any monthly charge for what is essentially a VCR. I have a PC in my spare bedroom/office that has a Hauppauge TV card it and I use it as a TIVO. I pay nothing to use it. When TIVO comes out with a model that requires no monthly surcharge, then I might think about. A lot of people I know have told me that as long as there is a monthly charge for using TIVO, they'll never buy one. The point is not the size of the charge, it's that it exists at all. For my dad, a TIVO would be great, but he is still OK with his ancient VCR. How on earth do I convince him that it's worth his while to pay a monthly charge to use TIVO when he can use his VCR all he wants for no monthly charge? I have to admit that also more than one person has expressed fear of buying a TIVO and then being stuck with an unusable device should TIVO go bankrupt, which is a real possibility. If you have a VCR made by the Defunct Cheap Chinese Electronic Company, who is now bankrupt but the VCR still works, no problem. My understanding of TIVO is that it is unusable if you don't pay the monthly fee. As long as the device works like that, I'll never own one.

The surprise for me is not that TIVO has never turned a profit. The surprise for me is that they are still in business.

Re:Was anyone else surprised...

[Steve Hamlin]

(1) How on earth do I convince [my dad] that it's worth his while to pay a monthly charge to use TIVO when he can use his VCR all he wants for no monthly charge?

(2) My understanding of TIVO is that it is unusable if you don't pay the monthly fee.

---

Tell him it is a $200 VCR that stores 60 hours without tapes. Fast forward and rewind are incredibly fast.

If he wishes, for $10/month, he can subscribe to a very detailed and feature-rich TV guide service that allows him to program the device in very useful ways, in a manner that "VCR+Plus" could only dream of. Maybe he's interested in that, maybe not.

A TiVo works like a VCR if you don't have a subscription - you need to tell it what channel to records, and when to start and stop. But it doesn't stop working altogether and turn into a paperweight.

---

Offtopic-for sale: If you or anyone is interested, I have a TiVo Series 1 (30hr?) sitting in a closet for low price + shipping. No IR blaster or remote, but it works.

Let them die, for many reasons

[dada21]

I had the first Tivo of anyone I knew -- the day I first heard about it I picked one up. It was a great device for its time, but the recent Tivos I've experienced have no shown much improvement. It is my belief that patents stifle innovation, and they allow the patents holders to stick with the status quo longer than open competition would allow. There can be innovation without patents (PDF warning).

For Tivo to say that their livelihood is in a delicate position because of this patent is ridiculous. If they had protected this patent and EchoStar was never able to compete, all it would mean is that Tivo would have left their prices higher than the market would expect, and they'd still not do much to innovate and invent.

In order to bring a product to market, one must look at all sorts of requirements. Marketing, fast competition, consumer need, consumer affordability, and longevity. Not every product will succeed, and many will fail. The great part about failure is that, on a whole, consumers win out in the long run as other people innovate on top of the failure and release a product or service that is financially viable. Nowhere in the system is a patent system necessary, because there will always be people who want to make a product at a lower cost, even at no cost. Look at MythTV for proof, there, as well as any open source success story.

How many times must it be said that patents don't foster creation, they disrupt it. A monopoly is a monopoly, and the worst examples of monopoly are those that exist solely by using the force of government to back them up. In fact, I truly believe that no monopoly can exist without the myriad of government favoritistic laws and regulations that prevent the open competition that is created when restrictions are removed.

Think not of Tivo, think of the consumer that wins out in the end. This is all that matters in a market -- you should not enter a market without having an understanding of what it takes to survive, succeed and surpass your competition. If you think you can win by removing competition from the picture, you're ignoring the basic ideals of freedom that we're supposed to hold so close to our hearts.

I truly believe it is time for Tivo to close up shop. In the next 10 years, the DVR/PVR idea will be gone -- integrated into every bit of electronics we use, up to even cell phones. As bandwidth increases and costs decrease, the need to use a DVR/PVR will be reduced to those who just want to have the data in their home. Tivo (and EchoStar) will find themselves useless fast enough if they think this is a growing market.

Re:Let them die, for many reasons

[garcia]

I had the first Tivo of anyone I knew -- the day I first heard about it I picked one up. It was a great device for its time, but the recent Tivos I've experienced have no shown much improvement.

I'm no fan of Tivo (the company) but the Tivo device itself is great. I own both a Series 2 and a DirecTivo. I don't personally see a need for all the things that MythTV does (while tying up a fairly high-end (for me) piece of useable hardware). My DirecTivo records my shows, without much interaction, and lets me watch one while it records two more.

A good majority of the users out there (that Tivo attracts over MythTV installations) are using a Tivo because they couldn't give a two flying fucks about "additional uses" that other DVRs offer. On a side note, I'm a fairly competent computer user but I still can't justify another computer purchase just to hook it up to my TV to burn DVDs of TV shows and have a weather report while playing MAME. YMMV.

Re:Let them die, for many reasons

[dada21]

You're right about the need for a simple box to time-shift recordings digitally. Yet Tivo is a huge barrier to entry for many low-budget manufacturers. A very close friend of mine is a "famous" importer of Chinese and Taiwanese goods, and he's shown me (in his home), a cheap-brand DVD player with an integrated DVR. The thing worked wonders, and I believe he said the cost would be under $39 to the consumer if it could get through all the patents it violated. I believe it would be even cheaper if the import tariffs were less, too.

With that, think of all the money consumers would save over the coercion-enhanced Tivo and other DVRs. The money you save not padding their pockets means more money you can spend on other things you want -- meaning more jobs created rather than profits enhanced artificially by government force.

Re:Let them die, for many reasons

[glindsey]

I've had a TiVo for nearly as long as you've stated, and I believe that the percentage of people who "just want to have the data in their home" is far higher than most people estimate. I don't want giant media corporations telling me when and where I can watch things; I want to possess the data so I can view it whenever and wherever I desire. Likewise, consider the number of people who purchase DVDs of television series, many of which are still rerunning in syndication today; people do this because they want their own copy.

On the other hand, consider "personal" video recorders that store the content upstream, at the provider's location. They choose when and which content is available. They choose whether you can fast-forward through commercials in it. They choose how many times you can view it, or how long it is available. And, of course, if you cancel your subscription, you lose it all.

No thank you.

Re:Let them die, for many reasons

[dvnelson72]

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.

Re:Let them die, for many reasons

[dada21]

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.

The opposite is true. For the past 10 years or so I've positioned myself in the Chicago consulting market as the guy who gives away ideas -- many of them. I find that I'd rather have others put the ideas into action so that I can profit from the final product. Google my name (Adam Dada) and you'll find a few magazines I've been quoted in, usually promoting my old main skill: pushing corporations to try new things and regard all competition as healthy.

Some of my businesses have failed, mostly because of irresponsibility. Why should Tivo patent their ideas when I couldn't in most of my businesses? When I opened retail stores, should I have a "protection" over others from copying my store layout and products at a cheaper price? When a plumber enters a market, should his new found technique to fix a leak faster and cheaper be limited only to him? I believe in letting people use their labor as they see fit -- even if it means they're selling themselves too cheaply.

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?

Just coming up with an idea is not enough to bring it to market. Bringing an idea to market requires many people to implement all sorts of labors to finalize a product. If you can't do it cheaper and faster than the next guy, your idea is likely not ready to be brought to market. Look at all the ridiculous patents on every cell phone that comes out -- every one has a new patent pending. Yet all cell phones are basically alike, so these patents only seem to prevent new people from entering the market.

I've gone to very big companies (again, some can be found through googling me) with ideas, and many of them continue to hire my company to introduce something new to a given market, especially large but stagnant ones. You'd be amazed at how many CEOs will listen to a great idea even if it means their competition will quickly copy it. You'd also be amazed at how many MBAs hate new ideas with new competition -- I believe this is part of the problem. Business school graduates believe in the textbook, entrepreneurs believe in hard work and strong customer service. In the end, having a product means nothing if the customer can not use it to save them money or time over the price they paid.

Then, when you have your big idea, come crying to someone else about Microsoft stealing it without paying you.

Actually, I used run an idea website that has had numerous inventions "stolen" from it and I'm more than happy about it because I can profit from the creations. I must e-mail Google twice a month with a new idea for them to use (not that they have even listened necessarily), and I work hard to get my ideas out without attributing my name to them. I just want emerging markets to take advantage of, leave the coding and technology developing to those who have the desire to bring ideas to fruition. An idea is worthless without all the other parts: marketing, manufacturing, support, production, warehousing, analysis, customer sales, etc. Every piece of the puzzle is more important than the idea itself.

Re:Let them die, for many reasons

[Surt]

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.

Re:Let them die, for many reasons

[dada21]

It isn't my advice, in fact I openly say I am against it for myself. The reason I posted about it is because of the numerous e-mails I receive every day regarding it -- and people seem too lazy to go out and search for real advice on the topic.

In the years I've been in business, everyone who has worked for me has had the opportunity to start their own business. This is because I push my employees to go off on their own (and have even financed many of their startups). I've had my share of success and failure, so I felt it was a good topic to write about, given that some of my bigger failures are very public knowledge, and many of my successes have been kept too close to my chest -- something I realized is counter-productive in raising my billable rate.

The more I share, the more I am worth, the more people can rely on some unique perspectives of an anarcho-capitalist entrepreneur.

Re:Let them die, for many reasons

[avdp]

I believe that you saw the device, I just don't believe the friend of yours that told you $39.

My wife used to work for a famous Taiwanese computer maker that has almost all its manufacturing in China. It's not quite that cheap to make a computer, even a low end ones (and a DVR is essentially a computer - it's got almost all the same components - and not really a low end one at that). Even if you forget about all the licensing costs, R&D, fixed overhead, distribution and marketing costs (which I am sure were not in that $39 price tag either) you won't get a DVR out the door in China for $39. Maybe some day, but not today, and certainly not yesterday.

Re:Let them die, for many reasons

[Tony Hoyle]

You forget we have *nothing* with tivo functionality here.

Freeview DVRs? No season passes at all. Manual record only.

Sky+? Limited season passes to certain channels only. No ability to handle conflicts (it simply deletes the season pass if there's a conflict). EPG only 7 days ahead, and if a series doesn't occur that week it again deletes the season pass. Not able to watch programmes unless you're a *current* subscriber. No suggestions, No wishlists. Automatically deletes box office movies.. I could go on.

I may have to get Sky+ since Tivo don't look like producing an HD version this century (or indeed updating their UK version at all). I'm not looking forward to it *at all*.

Re:Let them die, for many reasons

[zerocool^]

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

We call that "Forum Shopping"

[TubeSteak]

That TiVo sued EchoStar in tiny Marshall, Texas, was no accident, said Bradford Lyerla, intellectual property attorney and partner with Marshall, Gerstein & Borun, a specialty firm in Chicago. Juries there, Lyerla said, find in favor of the plaintiffs in patent trials about 80% of the time.
...
"TiVo has a great jury story," Lyerla said. "If TiVo loses, it could be the end of them. That creates greater sympathy on the part of the jury."

The patent system has nothing to do with this.

This story is entirely about the jury. A jury can decide a case any which way they like, no matter what the law says (see jury nullification)

+1 to Tivo for manipulating the system.

Re:We call that "Forum Shopping"

[stlhawkeye]

This story is entirely about the jury. A jury can decide a case any which way they like, no matter what the law says (see jury nullification [umkc.edu])

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.

Re:We call that "Forum Shopping"

[jbf]

+5, Wrong.

FRCP Rule 50(a)(1): If during a trial by jury a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue, the court may determine the issue against that party and may grant a motion for judgment as a matter of law against that party with respect to a claim or defense that cannot under the controlling law be maintained or defeated without a favorable finding on that issue.

In civil trials, the judge can overrule the jury when the lawyer moves for JMOL.

Re:We call that "Forum Shopping"

[mzwaterski]

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.

Appeals courts only have appellate jurisdiction and, thus, only judge the appealed trial. There is no additional finding of fact unless the case is remanded for some reason back to a court with original jurisdiction. Usually there are no juries involved in appeals, instead there is a panel of judges. See this for a good explanation: http://en.wikipedia.org/wiki/United_States_court_o f_appeals

Re:We call that "Forum Shopping"

[nickname225]

I am an attorney - and this issue of Jury nullification is not entirely true. It's true that in U.S. Criminal cases (where double jeopardy applies) a jury can effectively nullify a law with a finding of not guilty. In civil cases, it's not so easy. A judge in a civil case can overturn a jury finding and render a Judgment notwithstanding the Verdict (JNOV in Lawyerspeak). It's exactly what it sounds like - the jury can find for one party and the judge can decide that the jury is wrong and find for the other side. It's not done too commonly - and judges don't have a completely free hand - the standard is something like "No reasonable jury could reach this verdict". Of course, it's reviewable on appeal - and in the U.S. we are hesitant to over rule a jury - but if the jury just ignores the law a judge will not stand by.

Patent Solution -- 3 year limit

[Deeper Thought]

I propose we shorten the lifetime of technology patents to 3 years, non-renewable.
20 years is crazy!

What is the duration in other countries?

This page The Optimal Lifetime of a Patent is interesting. They say the lifetime should vary based on a cost/benefit analysis. I would guess that the "optimal term" is closer to 3 years than 20 years for most computer/electronics patents.

Nope, IP patents are still dumb.

[Just Some Guy]

Is there a possibility that the patent system is working right in this case?

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.

Re:Nope, IP patents are still dumb.

[rockhome]

I think that you are missing a giant nuance that, in fact, makes what TiVo does novel.

Certainly, with a VCR, you could record something on one channel and watch another, but you weren't watching it via the VCR, you were watching it via the TV as the VCR was not applying a carrier signal to its output. With a VCR, you were also unable to setup the VCR to record and then, at any time during the recording, rewind and watch from an arbitrary point. You could only view the recording after the recording was finished.

As far as streaming media is concerned, streaming media is a host to host connection that does not, in general, allow you to store the media as a usual feature. Further, when rewinding or advancing a streaming file, the application must, again in general, re-buffer the stream to the point where you wish to resume. With the TiVo, one can simply rewind and advance, there is no re-buffering because the recording is kept in place.

The novelty of TiVo is that it is the first commercially succesful product that allows one to watch a program and rewind and advance that program as the recording occurs. There is no consumer analog to this technology. Certainly, commercial broadcasters use something tangentially equivalent for replays and "5-second delays", but there has never been something readily available that would allow you to record like a VCR and allow you to move arround in the recording as it happened.

So this isn't IP nonsense. It is an actual technology, implemented from an idea that no one else, apparently, has brought to market.

Re:I Think This Can Be Summed Up In Five Words

[Anonymous Coward]

TiVo is great (based on my experience back when I was a DirecTV subscriber and used a DirecTiVo box, which I understand aren't made anymore), but they have charged too much for the service (providing tv listings) necessary for their software to function. It feels like you are renting their boxes rather than actually owning them. And while on paper that looks like a good business model, in practice it doesn't do very well unless they aren't really providing a significant service (updating the TiVo's tv listings isn't a significant enough service to justify the monthly fee).

I don't think it helps that Sony is involved in their decision making (unless that has changed).

Re:I Think This Can Be Summed Up In Five Words

[LunaticTippy]

You just supplied the perfect defense for echostar.

Tivo owners are very loyal/rabid about Tivo. I worked at echostar during a bad time in my life, and got dozens of calls about our PVR. Everyone was disappointed or angry that it wasn't a tivo, they wanted tivo, why wasn't it like tivo, etc.

Echostar just needs to play a few hundred of these calls to prove that their PVR is nothing. like. tivo.

If you think the whole Mac/PC beef is religious in nature, try the Tivo/anything else one.

Re:I Think This Can Be Summed Up In Five Words

[slughead]

Dont.Fuck.With.My.TiVo.

Actually, TiVo is suing someone else for patent infringement. So.. your tivo is fucking with others.

Tivo has yet to turn a profit and they think this will make a difference? I don't get it.

"Similar" isn't patant theft

[Efialtis]

I could create a bicycle using my own patented technology...but that wouldn't give me the right to sue every company making bicycles because they are "similar"...

One would have to use my technology to make the case...

Or every car namufacturer would be in violation of eachother's patents...

Why are people so stupid?

Re:Wait, so what was the patent?

[Em Ellel]

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

Re:I Think This Can Be Summed Up In Five Words

[Anonymous Coward]

Just my 2 cents...
"Lifetime subscription" isn't a feature, is a payment/subscription model
"Fast forward 30 seconds" has never been an official feature, and is in NO way "gone"...(try Select-Play-Select-3-0-Select sometime)
Indefinite retention: only a few, rare programs (aside from technical glitches)

So what feature have you lost? I'd like to know.

Re:I Think This Can Be Summed Up In Five Words

[Digital Pizza]

If you think the whole Mac/PC beef is religious in nature, try the Tivo/anything else one.

Ain't that the truth.

Go to an online TiVo forum and ask about feeding your TiVo listings from XMLTV rather than subscribing. Bask in the hostility.

Here's a hint: google for "oztivo", "tivocanada", and "service emulator". Learn perl. Then lament the fact that you'd be sued and lynched if you ever told anyone how you did it.

(This is all hypothetical, of course.)

Patents, Fairness and Innovation

[saterdaies]

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

Re:Patents, Fairness and Innovation

[cpt kangarooski]

The field of economics believes that people respond to incentives.

This is my chief argument against software and business method patents. In these fields, which are just incredibly dynamic, I don't think that the patents actually do provide an incentive. Inventors would tend to create the same inventions anyway. A patent doesn't increase the value of an invention, but it does concentrate what value is there. I think that the unconcentrated value of inventions in these fields is currently high enough to provide enough of an incentive for invention, publication, and bringing to market. More incentive would be superfluous, and come at a significant cost. These costs should be avoided where they don't actually yield a commensurately greater benefit for the public.

In time, perhaps, these fields will slow down and the added incentives will become useful. For the time being though, I don't think that the pace of inventiveness in either field would slow down one bit if patents were unavailable.

People have an "I created this, it's mine" mentality.

Yeah, that's an obstacle that really needs to be overcome. Patents and copyrights are utilitarian. The issue is what implementation, if any, yields the greatest public benefit. In patents, the benefit can be broken down into parts: encouraging invention, encouraging publication, encouraging coming to market, having the most minimal encumberance on the public possible. Generally you end up trading the last two in order to encourage the first three.

Re:Patents, Fairness and Innovation

[Illbay]

WITHOUT PATENTS, THERE IS LESS INVENTION THAN THERE SHOULD BE.

The problem isn't "patents"--we've had them in the U.S. since colonial days; h*ll, they're mentioned in the Constitution.

The problem is that EVERYTHING nowadays, every notion, every vague idea, is considered "patentable."

We all laughed back in the 80s, when Apple threatened to sue any and everyone who infringed their idiotic "look and feel."

The joke has long since soured.

Re:I Think This Can Be Summed Up In Five Words

[hawkbug]

You're right - I don't think Tivo should be trying to make money based of a subscription model, I think they should price them higher and compete on features. Anybody can download a program guide into Myth for free right now, Tivo should just adopt the same plan and sell better-featured hardware at a higher cost. I know I'd pay it.

Tivo is Dead

[sheldon]

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.

Re:Tivo is Dead

[LordKronos]

With the exception the Series 1 units (and even then, I think it might only be a subset of Series 1 units), a TiVo without the service is essentially a doorstop. No manual recordings allowed.

Re:Not "right"

[Bacon Bits]

The only problems I have with the patent system are:
1) Software patents. In order for software patents to not grossly stiffle innovation, they need to have a maximum lifespan of 2 years. 100 years ago,
2) Inappropriate patents. Only significantly innovative products should receive patents. Alternately, a "lesser" patent should exist for minor derivative changes with a 1-2 year duration.

The USPTO is over 200 years old (first patent was in 1790). At that time, a 10 to 20 year monopoly on a novel invention was not a bad idea, since a single invention could often go a hundred years and have no derivative works. Shortly after the end of the second world war, it became common to see derivative works withing 5 years. The patent system, intended to promote innovation through guaranteed profit, now has a 70 year history of stiffling it.

Re:I Think This Can Be Summed Up In Five Words

[LunaticTippy]

Smart. It's always a good policy to lurk for awhile to avoid those sticky issues.

I have started seeing hints of unhappiness about tivo from the fanbase. I'd say Tivo's ipod-like clamp on loyalty is loosening. Your theoretical knowledge might become fashionable should customers decide Tivo's gone bad. Then it becomes necessary to continue using the hardware.

Consistency

[jdavidb]

No, I don't think that Tivo should be allowed to restrict other people from using the same idea of recording television to a hard drive and all that entails, even if I do happen to think that Tivo has the best and coolest implementation, and even if I am worried that they might go belly up if they are not granted such special monopolistic privileges. :(

I am nothing, if not consistent.

Dear TiVo

[frenchs]

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

Re:I Think This Can Be Summed Up In Five Words

[vslashg]

If you think the whole Mac/PC beef is religious in nature, try the Tivo/anything else one.

Ain't that the truth.

Go to an online TiVo forum and ask about feeding your TiVo listings from XMLTV rather than subscribing. Bask in the hostility.

While I certainly agree many TiVo fans have an religious attachment to their DVRs, I don't think your suggestion really demonstrates this.

Here's an analogy: Go to the fansite of a struggling AAA baseball team, and enter the forums. Ask the fans there for the best way to sneak into the ballpark. You'll get hostility there, too, not because the fans are fanatical, but because they're pissed you've come to their fansite to solicit information on ways to rip off the their team.

I don't know if you're referring to the largest of the TiVo forum sites, but that site has red, highlighted text at the front of each forum where you might want to discuss TiVo service theft, saying in no uncertain terms that their forums are not the appropriate place to discuss it. So if you tried it there, then the community would be pissed at you not only about your chutzpah, but also about your sub-AOL-user levels of netiquette.

A particular greedy CEO better call DirecTV today,

[LibertineR]

If he ever hopes to retire a wealthy man. DirecTV offered that bastard big money, and he turned his nose up at it, even though his company HAS NEVER MADE A DIME OF PROFIT, thinking that he could be all things to all people. Never mind that TiVo sucked on early cable systems, and anyone who tried to use that IR thingy wished they hadnt. Those of us who got our TiVos through DirecTV are the only ones who ever experienced what TiVo could really be, because our recording never had to be converted from digital to analog, unlike the rest of you out there with your sucky DVRs. We got the TiVo interface, the best picture, and could have had even more if not for the greedy bastards at TiVo who thought that their product alone would make them rich.

Stupid management always kills cool products. They priced the orignal service way beyond what most people were willing to pay, while DirecTV users got the unit for $99 and $5 a month! What are you NON DirecTV folks paying for the inferior analog-recorded service that you get?

I hope TiVo loses and has to take LESS money from DirecTV the second time around for their insolence, because if they win the case it is bad for the consumer.

The patent in question

[angle_slam]

I hate the way the news media covers cases like this because they never do something simple, like tell you what patent number is at issue. So this is a mere educated guess, but I think the patent in question is 6,233,389.

Here's claim 1:

1. A process for the simultaneous storage and play back of multimedia data, comprising the steps of:
accepting television (TV) broadcast signals, wherein said TV signals are based on a multitude of standards, including, but not limited to, National Television Standards Committee (NTSC) broadcast, PAL broadcast, satellite transmission, DSS, DBS, or ATSC;
tuning said TV signals to a specific program;
providing at least one Input Section, wherein said Input Section converts said specific program to an Moving Pictures Experts Group (MPEG) formatted stream for internal transfer and manipulation;
providing a Media Switch, wherein said Media Switch parses said MPEG stream, said MPEG stream is separated into its video and audio components;
storing said video and audio components on a storage device;
providing at least one Output Section, wherein said Output Section extracts said video and audio components from said storage device;
wherein said Output Section assembles said video and audio components into an MPEG stream;
wherein said Output Section sends said MPEG stream to a decoder;
wherein said decoder converts said MPEG stream into TV output signals;
wherein said decoder delivers said TV output signals to a TV receiver; and
accepting control commands from a user, wherein said control commands are sent through the system and affect the flow of said MPEG stream.

Re:I Think This Can Be Summed Up In Five Words

[Anonymous Coward]

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.

Never had an innovative idea

[cheesedog]

Your position sounds like someone who has never had their innovative idea squashed by greedy patent holders who have gained illegitimate "rights" to overly-broad and obvious chunks of the idea space.

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.

Re:Wait, so what was the patent?

[esampson]

According to the article they are suing because EchoStar is using the technology TiVo patented to let you watch one show while recording another, not the simple fact that they can do so.

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.

Re:Not "right"

[NickFortune]

Here's some emphasis, since you seem to have some difficulty understanding the point.

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.

Re:I Think This Can Be Summed Up In Five Words

[Dare nMc]

> not until I can copy the timeshifted show to my (Linux) PC, PocketPC. or a CD or DVD

I agree, however you should have said supported, not can, you can:

http://armory.nicewarrior.org/projects/vstream-cli ent/
http://sourceforge.net/projects/tivo-vlc
http://www.videolan.org/vlc/

Re:I Think This Can Be Summed Up In Five Words

[cayenne8]

"...but they have charged too much for the service (providing tv listings) necessary for their software to function."

You know...I've wondered why someone hasn't yet figured out the format Tivo uses for their scheduling (I thought they had) and just offer their own scheduling service, and undercut Tivo in price for it.

Re:What about ReplayTV?

[Andrew Lindh]

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).

Re:I Think This Can Be Summed Up In Five Words

[TimothyJones]

I've had TiVo since it first showed up and was sold at ridiculous price. Upgraded to DirecTiVo when it became available for the increased recording quality. Since then, I'm sorry, no new TiVo box for me if only for the reasons listed in parent.

To me TiVo is now falling victim to its own stupidity which is locking themselves up with DirecTV instead of trying to simply standardize their "invention" same as DVD and VCR before it. I like the product but I feel no sympathy for TiVo, may they die a rotten death. Which is in fact a pity because if it wasn't for TiVo's time-shifting and my now old box's ability to do a 30-sec skip, I would pretty much toss my TV out the window. But TiVo has done absolutely nothing in recent years to make itself better. Features are being removed to please content providers and software is a pathetic nagware. So instead of buying (can you still?) a new TiVo box or other Sat DVR now, my next project is making my own HTPC with DVR, the way I like it. Yes it will end up much more expensive and due to double compressions, PQ may come down a bit, but I'm tired of the current out-the-box, fuck-the-customer products. TiVo should have simply concentrated on providing a DVR solution that could be implemented by anyone from OEM to Joe Sixpack on his HTPC. License the technology and watch the money flow. Instead a crop of other such solutions pops up and TiVo is left crying like an old whore that no one finds attractive anymore.

In attempts to generate revolving door of revenue, TiVo and others like them try to come up with some locked down standards that although (initially) cool, innovative and desireable, ultimately are doomed to failure. People may buy in and stay even for a pretty long while (partly because of original invenstment and/or lack of alternatives), but when they finally leave, they leave for good. Others may well infringe on TiVo's ideas, they may even have a case against EchoStar, but I hope they lose (too bad it would mean ES win but oh well). All these morons file IP lawsuits in recent years simply to generate some revenue which is dwindling or non-existent even due to their own greed and ineptitude.

Diversification works not only for consumers, it does work for providers and manufacturers, TOO! Get with the program.

You are not everyone

[Steve Hamlin]

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.

---

$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.

---

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?