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Injunction Against EchoStar Blocked
bestinshow writes "ExtremeTech has the news that a judge has blocked the injunction against Echostar Communications selling its PVRs." From the article: "The ruling was the latest in an ongoing battle between TiVo, one of earliest companies to design personal video recorders, now called digital video recorders or DVRS. 'As a result of the stay EchoStar can continue to sell, and provide to consumers, all of its digital video recorder models,' EchoStar added. 'We continue to believe the Texas decision was wrong, and should be reversed on appeal. We also continue to work on modifications to our new DVRs, and to our DVRs in the field, intended to avoid future alleged infringement.'"
Does that mean that EchoStar can rest assured that their recorders will work indefinitely, or should they continue worrying that the blocking of the ruling can be reversed?
From friends who have one, I hear TiVo is a great product - far better than anything offered by Dish, DirecTV or cable companies and I'd hate to see them go out of business because of this. Additionally, Echostar seems to have played some dirty pool in getting their own DVR out the gate by peeking at a TiVo that was left behind during negotiations between TiVo and Echostar for licensing DVRs. But at the same time, I don't think that TiVo should have such a broad patent on this technology. In this case, it seems they're using their patent defensively simply to stay alive in a market that can quickly and easily be taken away from them by the satellite and cable companies that provide the content transport.
This is a philosophically painful case for me because I want to root for TiVo because they have a superior product, but not for patents. And I want to root for Echostar because I have one of their DVRs and would hate to lose it's functionality. I also don't want to root for TiVo because a win for them will negatively impact Dish customers who through no fault of their own are being punished for Echostar's behavior. That's like Microsoft users being forced to remove the Quicktime player from all Windows installations because of some industrial espionage they did against Apple (just by way of example -- it didn't really happen).
...and that's the way the cookie crumbles.
Consumers win, consumers lose... all of this is irrelevant, the truth is that we have a sh*tty patent system that's vague enough to have two judges give 2 different verdicts on the same case.
In all cases I believe that it is wrong to make EchoStar stop its service immediately, and to remotely disable the current consumers. Consumers that have already paid shouldn't be the ones to bear the consequences. But then again, the consumers' interest is the least of the worries of those concerned...
Tivo came out with a GREAT product which was well marketed. However, it really was just the next technological step - apparently other companies were working on the same thing at the same time.
Tivo enjoyed great profits from their launch, but what they want now is a lock on the market for what was essentially a small up-front investment.
Tivo's current systems are generally superior to most of the competition. Their problem is that they are EXPENSIVE. The cable companies realized that DVRs sell service, so like cell phones they give them away in exchange for monthly contracts. Tivo is selling $400 cell phones in a market where most people expect them to be free (even if a bit more junky). This is why Tivo is losing market share fast.
While I'd love to see Tivo win, the fact is that their original product wasn't that innovative. Others were working on the same sorts of things, but Tivo executed better. That should earn them some bucks, but not royalties for 17 years. Plus, Tivo's up-front expenses were not that high - probably not more than a few 10's of millions of dollars - they were almost certainly fully recovered with a healthy profit.
Patents should exist where they are needed to allow companies to make healthy profits on risky ideas. However, that is all they are needed for - if a company is able to make a healthy profit without a patent, then one is not necessary. Patent lifetimes should probably be tweaked by industry as well - in industries where we expect a high level of expense to ensure quality (such as pharmaceuticals) we should probably grant longer patents (or lower the safety standards to reduce up-front costs). In an industry like toothbrush designs they should probably be shorter. Software patents should probably only last a year or two - as softare is not capital-intensive and a two year head start is plenty to make a profit.
In general patents should exist for the benefit of society - to encourage companies to come up with innovative products. That benefits everyone. However, if a company is willing to do R&D with the promise of a 200% payback we shouldn't be offering them 20,000%.