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TiVo Inc. Message Board

  • benstevens75 benstevens75 May 5, 2011 1:56 PM Flag

    CEO Says Cases Against AT&T, Verizon Are Even Stronger Than in Dish Suit

    TiVo's Rogers: Dish Settlement Sends 'Very Clear Signal' To Others

    CEO Says Cases Against AT&T, Verizon Are Even Stronger Than in Dish Suit
    By Todd Spangler -- Multichannel News, May 5, 2011

    After more than seven years of legal wrangling, TiVo this week reached a $500 million settlement with Dish Network and EchoStar over a key DVR patent.

    TiVo president and CEO Tom Rogers spoke with Multichannel News technology editor Todd Spangler about the deal and the DVR company's next moves.

    Multichannel News: Was the Dish settlement in line with your expectations?

    If we had continued to litigate, and won on infringement as we expected we would, there would have been potentially more money there. Based on the performance of the stock, the market was expecting more money. [TiVo shares closed at $9.33 per share Wednesday, after trading as high as $10.60 on May 2 when the settlement was announced.] But when we looked at the process in terms of how the court laid that out, it could have been two to three more years of additional litigation.

    We said, Look, this is one patent and one defendant. We have an enormous portfolio of intellectual property -- we have ways of enforcing this against others. We've established the precedent and taken away any question of whether there is value in this patent. But to be able to take this particular case and nail it for that amount of money was the right thing to do.

    MCN: Who is TiVo going to sue next?

    TR: Well, we have some major pending litigation [involving AT&T, Verizon, Microsoft and Motorola Mobility]. Beyond that we can't comment.

    MCN: Do you believe the Dish settlement gives TiVo more negotiating leverage?

    TR: Well, I think you know the answer to that question. This was by far the toughest litigant out there, who plays the game of litigation like nobody else in the business does. [Dish CEO Charlie Ergen] just finished a round with us where he was ordered to pay $90 million, and he could have continued with his delay tactics. And against that backdrop, he decided to pay $500 million.

    MCN: Are you in talks with either Verizon or AT&T about licensing deals?

    TR: I really can't discuss those cases, but I will tell you they're on a schedule. The cases will go forward to claims instruction this spring, and later in the fall go to trial. We have a couple of key patents we did not have at the time we sued Dish. We feel that as strong as the Time Warp patent was our hand is even stronger relative to those cases.

    MCN: What's the status of negotiations with Time Warner Cable and Cablevision?

    TR: I'll just say in general we have discussions with all levels of players in the cable industry. We have a few ways we can have companies engage with us. We have a pretty flexible model in ways that companies can work with us.

    MCN: Will the payments from Dish and other patent-licensing fees be enough to tide you over until your service provider customers start moving the needle? TiVo is still losing subscribers [with a net loss of 556,000 subscribers in 2010].

    TR: Look, in terms of financial resources to play out our hand, and to show true subscriber growth -- yes, we have more than enough financial wherewithal to show that. That's one of the critical things here: If anybody thought there was a risk that we would not have the financial wherewithal going forward, that has been totally removed. That was one of the big question marks here that is gone.

    The issue now is, how long will it take for the subscriber rollout [of TiVo's operator partners] to really convince people that we have an enviable trajectory here? We haven't done that because it involves sharing sub information of our underlying partners. As it comes into focus, there's an awful lot of value being created that isn't being shown yet.

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