# Cisco sues Tivo



## Welshdog (Jan 4, 2005)

Interesting:

http://blogs.barrons.com/techtraderdaily/2012/06/01/cisco-sues-tivo-for-refusing-to-license-patents-says-reuters/?mod=yahoobarrons

Don't really see that Cisco has a point here. Of course it is the U.S. legal system we are talking about so who knows?


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## lillevig (Dec 7, 2010)

Interesting ploy but I'm with you: where does it say that any company has to license it's patents to some other company? Then again, I think I have some Cisco stock so, GO Cisco!


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## aadam101 (Jul 15, 2002)

I really hope Cisco loses this. What is the incentive to have patents if a court can tell you what to do with them?


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## MichaelK (Jan 10, 2002)

lately I've been reading  a bit that there's some sort of legal concept of 'necessary patents'. And that companies that hold them need to license them fairly. 

The context I've seen mostly seems to be Motorola holding back stuff from MS and others in europe. So not sure if that's an American legal concept or just EU. (think these "essential patents" of late are necessary to build a cell phone and/or to stream video) 

(I think the concept is that if you couldn't possibly make a DVR without a license from TiVo then the concept would apply. TiVo hasn't lost in court yet so I guess one might be able to say that you couldn't do it- but from the comments here it seems it is possible otherwise)


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## MichaelK (Jan 10, 2002)

googles and read some more- looks like i was wrong above.

sounds like the gist is Cisco is arguing that tivo keeps "wrongly" suing cisco's customers. The implication is that the customers wrongly settle with TiVo. So Cisco wants a court to rule that their boxes dont infringe on TiVo's patents (either by declaring them void or by saying that Cisco does otherwise) so Cisco can stop Tivo from suing other customers.

At least that's what the articles seemed to be saying...


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## ThreeSoFar (May 24, 2002)

Also: Cisco may be considering buying TiVo. They've made some boneheaded acquisitions in the last few years.


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## Worf (Sep 15, 2000)

MichaelK said:


> lately I've been reading a bit that there's some sort of legal concept of 'necessary patents'. And that companies that hold them need to license them fairly.
> 
> The context I've seen mostly seems to be Motorola holding back stuff from MS and others in europe. So not sure if that's an American legal concept or just EU. (think these "essential patents" of late are necessary to build a cell phone and/or to stream video)
> 
> (I think the concept is that if you couldn't possibly make a DVR without a license from TiVo then the concept would apply. TiVo hasn't lost in court yet so I guess one might be able to say that you couldn't do it- but from the comments here it seems it is possible otherwise)


Sort of.

Motorola's patents are part of a standard created by the 3GPP. In other words, to implement a cell phone, you *must* license the patents as they're an integral part of the standard. Because of this, Motorola has agreed they will license those patents to anyone who asks under Fair, Reasonable And Non-Discriminatory (FRAND) terms. If Motorola did not agree to this, the standard would be created so that Motorola's patents will not be required. Since it's in Motorola's interest to have their patents in the spec, they agree to these terms.

Likewise, all patents involved in standards are under this - as it's impossible to implement the standard without violating the patent. Other standards include Ethernet, Wi-Fi, DOCSIS, DSL, DDR (memory).

That's what essential patents are - you cannot comply with the standard without those patents, so you must be able to license those patents.

TiVo's patents however aren't part of a standard. They may be necessary in order to implement a DVR, but since there's no standard, TiVo's not under any obligation to license patents to anyone. It's what led to the TiVo/ReplayTV patent lawsuits a decade ago, that ended by both companies cross-licensing each other's patents (since both companies realize that they need each other's patents).

Even FRAND patents can have issues over the meaning of the words.

I think Cisco's problem is that they're not willing to pay what TiVo wants - they probably were paying it and are now looking for a way to eliminate a BOM cost.


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## Drewster (Oct 26, 2000)

Wouldn't Cisco's patents have come from the Scientific Atlantic acquisition?

ETA: I guess it depends on the patents in question. Cisco has a LOT of patents.


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## SullyND (Dec 30, 2004)

Kind of interesting given the primary manufacturer of hardware for the Virgin TiVo.


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## Mars Rocket (Mar 24, 2000)

SullyND said:


> Kind of interesting given the primary manufacturer of hardware for the Virgin TiVo.


Philips?


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## SullyND (Dec 30, 2004)

Mars Rocket said:


> Philips?


Hint: Whose logo is that in the middle:


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## Johncv (Jun 11, 2002)

SullyND said:


> Hint: Whose logo is that in the middle:


I cant make out the logo, but Philips was brought in by VM because Cisco could not keep up with the demand. Also, I think there another box builder in EU that also is building Tivo boxes.

I think Cisco suing now because more cable companies are using TiVo. Comcast allowing VOD on the TiVo now put Comcast in a better bargain deal with Cisco. Comcast can now demand to pay less money for each crappy Cisco box and if Cisco tune Comcast down then Comcast will just replace them with Tivo boxes. This would be a big win for TiVo.

Also, everything points to Verizon losing their law sues against TiVo. Speculation is that unlike AT&T, Verizon is more likely to offer TiVo boxes instead of then writing a big payout to TiVo.

I think Cisco running scared.


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## SullyND (Dec 30, 2004)

Does Comcast use SA/Cisco hardware? I've primarily seen moto. AFAIK the Virgin units are Cisco and Samsung.


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## Johncv (Jun 11, 2002)

SullyND said:


> Does Comcast use SA/Cisco hardware? I've primarily seen moto. AFAIK the Virgin units are Cisco and Samsung.


Yes, it could be Samsung, not that it really matter who build the box. It would have to be built to Virgins and TiVos spec.

It one cool looking box, wish Virgin could buy out Cox and/or Comcast.


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## Johncv (Jun 11, 2002)

SullyND said:


> Does Comcast use SA/Cisco hardware? I've primarily seen moto. AFAIK the Virgin units are Cisco and Samsung.


I have to add Google now own Mot DVR division and they dont want it. Last I read Google is trying find a buyer for the Mot DVR division. If no buyer is found, Google will probably just close down the DVR division.


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## Johncv (Jun 11, 2002)

SullyND said:


> Kind of interesting given the primary manufacturer of hardware for the Virgin TiVo.


I think that also part of the law sues, Cisco want to license TiVo patents, but TiVo will only license the patents if the boxes are built to TiVos spec, with TiVos software running the box.


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## ajwees41 (May 7, 2006)

Johncv said:


> I have to add Google now own Mot DVR division and they dont want it. Last I read Google is trying find a buyer for the Mot DVR division. If no buyer is found, Google will probably just close down the DVR division.


it's more then the dvr it's the whole set top division.


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## aadam101 (Jul 15, 2002)

Johncv said:


> I have to add Google now own Mot DVR division and they dont want it. Last I read Google is trying find a buyer for the Mot DVR division. If no buyer is found, Google will probably just close down the DVR division.


Why? I would think this would be a fantastic business for Google. They have been trying to get into living rooms for a very long time and haven't done very well. Motorola is already in the living rooms of millions of households. Do they think they have little chance of designing the box they want because of the cable companies?


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## MichaelK (Jan 10, 2002)

SullyND said:


> Does Comcast use SA/Cisco hardware? I've primarily seen moto. AFAIK the Virgin units are Cisco and Samsung.


depends on the headend.

Not sure if they "prefer" moto or not but the gist i get is they cobbled together tons of systems and it's cost prohibitive to switch from one vendor to another. So if it was a SA system it stays SA (now cisco) and if it's moto it stays moto (now google i guess?)


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## MichaelK (Jan 10, 2002)

aadam101 said:


> Why? I would think this would be a fantastic business for Google. They have been trying to get into living rooms for a very long time and haven't done very well. Motorola is already in the living rooms of millions of households. Do they think they have little chance of designing the box they want because of the cable companies?


there's all sorts of speculation on the net- general gist is they really only want the patents and might keep them but will sell off the hardware. But Also there's newer guesses that they might wind up keeping it.

I can't see them shutting it down- someone will pay something for the business even if it's just for the hardware. Pace comes to mind- they seem to pick up whatever scraps that moto and SA/cisco allow them to eat.


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## Johncv (Jun 11, 2002)

aadam101 said:


> Why? I would think this would be a fantastic business for Google. They have been trying to get into living rooms for a very long time and haven't done very well. Motorola is already in the living rooms of millions of households. Do they think they have little chance of designing the box they want because of the cable companies?


From what I understand is that there not enough profit from the Mot DVR division to justify it. Google brought Mot for their cell phone patens.


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## replaytv (Feb 21, 2011)

"Cisco wants the patents that TiVo has alleged against Cisco to be voided." I don't understand that statement that was in the original article.


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## Drewster (Oct 26, 2000)

replaytv said:


> "Cisco wants the patents that TiVo has alleged against Cisco to be voided." I don't understand that statement that was in the original article.


Barron's does a very bad job of summarizing a Reuters article:
http://www.reuters.com/article/2012/06/01/us-tivo-cisco-lawsuit-idUSBRE85010320120601



> (Reuters) - Cisco Systems Inc has filed a lawsuit to void four TiVo Inc patents related to digital video recorders, escalating a battle over who has the right to profit from sales of the popular machines.


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## steve614 (May 1, 2006)

IOW, Cisco wants TiVos patents to be declared a standard so that they will be forced to offer them to other entities? (For a fee, of course.)

If that's the case, then screw 'em. TiVo owns/came up with the patents, so they should be able to do with them as they see fit.

If I came up with an idea for a new light bulb that will last 25 years, should I be forced to share the idea with all light bulb manufacturers, or should I have a choice in who I work with?

Probably a bad analogy but I hope you get my point.


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## magnus (Nov 12, 2004)

It looks like Tivo is suing Cisco right back.

http://techlaw.justia.com/2012/06/04/tivo-patent-lawsuit-accuses-cisco-of-rocky-horror-like-infringement/


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## nrc (Nov 17, 1999)

Which I'm sure Cisco is happy about since it was their goal to force TiVo to attack them directly instead of going after their customers one by one. I wonder why Google has not used this tactic to counter Microsoft's attacks on Android customers.


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## Drewster (Oct 26, 2000)

The Android handset builders have all(?) taken licenses. There's nothing for Google to fight.


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## nrc (Nov 17, 1999)

Drewster said:


> The Android handset builders have all(?) taken licenses. There's nothing for Google to fight.


If Google knows the patents being asserted they could still pre-emptively bring a suit against Microsoft to have them voided. That may be the catch, Barnes & Noble's initial response to Micosoft's strong arm tactics illustrated how Microsoft is playing a shell game with the patents allegedly being infringed.


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## royfernandez (Apr 18, 2012)

"


lillevig said:


> Interesting ploy but I'm with you: where does it say that any company has to license it's patents to some other company? Then again, I think I have some Cisco stock so, GO Cisco!


Up by 0.18 (1.12%) Good luck 



> ""Absent a declaration of invalidity and/or non-infringement, TiVo will continue to wrongfully allege that Cisco DVRs and Cisco's customers infringe the TiVo patents, and thereby cause Cisco irreparable injury and damage""


Wonder where this is going. Maybe, Cisco is planning to acquire TiVo 

Right?"


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## MichaelK (Jan 10, 2002)

royfernandez said:


> ...
> 
> Wonder where this is going. Maybe, Cisco is planning to acquire TiVo
> 
> Right?"


The more I think about it I believe Cisco just wants TiVo to give them a license (thereby shielding Ciscos customers) . Even if its at the same rate as everyone else its a better deal that Cisco has a license then each of their customers needing to get one. Ignoring the annoyance to their customers theres always the chance the captive customer will go rouge and actually make a deal with TiVo if they have to interact with TiVo.

Seems so far Tivo sues the pay tv provider and not the STB maker. So far all this suing (or threats of suing) has forced the larger providers to either pay A) tivo the license fee directly (dish or ATT) or B) switch to TiVo (crickets chirping) or C) do some sort of license while also working with TiVo to let it be an option (Directv, Comcast, Cox, etc).

TiVo probably would prefer B but the lawsuits don't seem to wind up there. Next best thing is C for TiVo. With option A being their worst move for TiVo since it doesnt get TiVo into any more homes.

If you are a STB maker like Cisco you want to avoid B and C and will probably put up with paying a license fee like in option A if that needs to be.

Its much better for Cisco to ensure the license only is the outcome- so thats why I figure they sued tivo to try and get a license themselves, then the TiVo license applies to all the providers that Cisco sells to so theres no possibility of a provider making a deal with TiVo for option B or C. No chance of someone already dealing with Cisco to look elsewhere


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## CuriousMark (Jan 13, 2005)

TiVo wants to license for a monthly royalty for each DVR in use. I suspect the Cisco's of this world want a one time license fee as part of the box sale. The business models for licensing between a hardware and service provider are very different. Somehow that also has to figure into all this.


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## MichaelK (Jan 10, 2002)

CuriousMark said:


> TiVo wants to license for a monthly royalty for each DVR in use. I suspect the Cisco's of this world want a one time license fee as part of the box sale. The business models for licensing between a hardware and service provider are very different. Somehow that also has to figure into all this.


You think tivo Just wants to be a licensing company?

I think they want to get their boxes into the most homes possible so they can not be just a DVR provider (who's patents all expire in a few years) but rather can get into advertising, audience measurement, eCommerce, and the like.

If they just exist to get patent licensing fees for the next few years then they are spending an awful lot of money on doing things besides just paying lawyers.


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## CuriousMark (Jan 13, 2005)

MichaelK said:


> You think tivo Just wants to be a licensing company?
> 
> I think they want to get their boxes into the most homes possible so they can not be just a DVR provider (who's patents all expire in a few years) but rather can get into advertising, audience measurement, eCommerce, and the like.
> 
> If they just exist to get patent licensing fees for the next few years then they are spending an awful lot of money on doing things besides just paying lawyers.


Of course not.

I just wanted to add one more reason to your list further above about why TiVo and Cisco may not have reached a licensing agreement. That added reason certainly would not exist in a vacuum. All your points are ones I agree with.


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## morac (Mar 14, 2003)

The Register wrote up a pretty good analysis of the situation:

http://www.theregister.co.uk/2012/06/13/cisco_sue_countersue_tivo_dvr_patent/


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## markart (Apr 18, 2012)

My vote is for Cisco. One cannot expect any company to license its patents for other companies? That deal is quite unfair. Hen forth Cisco is pretty correct in suing TiVo.


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## Johncv (Jun 11, 2002)

markart said:


> My vote is for Cisco. One cannot expect any company to license its patents for other companies? That deal is quite unfair. Hen forth Cisco is pretty correct in suing TiVo.


Your joking?? TiVo has the right to license their patents to anyone at any price they choose.


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## BobCamp1 (May 15, 2002)

Johncv said:


> Your joking?? TiVo has the right to license their patents to anyone at any price they choose.


Actually, surprisingly, that's not clear at all. Such actions may be deemed a violation of anti-trust laws. There's no law explicitly stating this and there's very little case law on this.

You can refuse to license to everyone, but it's not clear if you can refuse to license to one specific company if you've already given a license to others. You can set whatever price you want, but it's also not clear if you can charge wildly varying prices between the various companies.

This has been done in other industries in the past to shut out one specific company from an industry, but it never lasts long and they have almost always settled out of court. But getting together to shut out one company is collusion, which is generally illegal, but it's not clear if this specific method is collusion or not.


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## morac (Mar 14, 2003)

BobCamp1 said:


> Actually, surprisingly, that's not clear at all. Such actions may be deemed a violation of anti-trust laws. There's no law explicitly stating this and there's very little case law on this.
> 
> You can refuse to license to everyone, but it's not clear if you can refuse to license to one specific company if you've already given a license to others. You can set whatever price you want, but it's also not clear if you can charge wildly varying prices between the various companies.
> 
> This has been done in other industries in the past to shut out one specific company from an industry, but it never lasts long and they have almost always settled out of court. But getting together to shut out one company is collusion, which is generally illegal, but it's not clear if this specific method is collusion or not.


Read the ARS link I posted. The government can only order licensing if a patent is part of a standard (for example 802.11g). That's called FRAND. TiVo doesn't fall under that category, but Cisco is suing to treat TiVo's patent as a standard. If Cisco wins, then TiVo would have to license their patents to all takers for a much lower price than what they can get currently.


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## PotentiallyCoherent (Jul 25, 2002)

markart said:


> My vote is for Cisco. One cannot expect any company to license its patents for other companies? That deal is quite unfair. Hen forth Cisco is pretty correct in suing TiVo.


Really? You should be forced to license your property? What if a bedroom in your house looks tasty to me?


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## Johncv (Jun 11, 2002)

PotentiallyCoherent said:


> Really? You should be forced to license your property? What if a bedroom in your house looks tasty to me?


I agree let all get together and have the court force Martart to rent the house to us for a party each month for $1.00 a month. 

I think Cisco went to TiVo to license the patents. I bet the exchange went like this:

Cisco: Hay TiVo we want to license your patents.

TiVo: Sure pay us $x.xx per month for any boxes you currently have in use and any new boxes you make.

Cisco: Oh gee that a lot money.

TiVo: Also any new boxes you build have to be to our spec and use our software.

Cisco: No way were going to sue you.


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## LoREvanescence (Jun 19, 2007)

morac said:


> The Register wrote up a pretty good analysis of the situation:
> 
> http://www.theregister.co.uk/2012/06/13/cisco_sue_countersue_tivo_dvr_patent/


That was a good read. Thanks for the link:up:


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## aaronwt (Jan 31, 2002)

morac said:


> The Register wrote up a pretty good analysis of the situation:
> 
> http://www.theregister.co.uk/2012/06/13/cisco_sue_countersue_tivo_dvr_patent/


Does TiVo still have the "poison pill" in place to prevent hostile takeovers?


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## morac (Mar 14, 2003)

aaronwt said:


> Does TiVo still have the "poison pill" in place to prevent hostile takeovers?


Last I had read, it was supposed to expire once the suit with Dish ended. I haven't heard anything about it since then, so it may not be in place.


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## BobCamp1 (May 15, 2002)

morac said:


> Read the ARS link I posted. The government can only order licensing if a patent is part of a standard (for example 802.11g). That's called FRAND. TiVo doesn't fall under that category, but Cisco is suing to treat TiVo's patent as a standard. If Cisco wins, then TiVo would have to license their patents to all takers for a much lower price than what they can get currently.


I read the article before seeing this thread actually. I'm not talking about FRAND at all. It's the last sentence in this statement I disagree with:

"Apart from naming three other core TiVo patents, the other part of Cisco's claim is that TiVo is not playing fair in its licensing attempts, and is charging too much for its patents. Historically that's not credible."

Actually Cisco has a case here if they can prove what I said in my previous post. Tivo needs to maintain fair pricing across all companies it's licensing with. It's an uphill battle for sure, mainly because most companies won't tell you what they're paying.

I also disagree with the second half of this statement:

"In the end NDS took a long time to get a DVR to work and TiVo never quite lost its hold at DirecTV."

It did take a long time, but today Tivo is simply a niche product at DirecTV.

The article is also wrong in a few other areas. DirecTV is offering Tivo service just because it's part of the licensing agreement. They don't really want to. Also, neither DirecTV nor Verizon DVRs record suggestions or have advanced searches, yet their customers aren't really complaining about it.

I agree with the main point of the article. Cisco is just stalling until it acquires NDS, which will give it better leverage when dealing with Tivo.

Tivo had better tread carefully. It'd be a shame if Cisco cable-cards suddenly developed a compatibility flaw that prevented them from working with Tivos.


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## aaronwt (Jan 31, 2002)

BobCamp1 said:


> .............Tivo had better tread carefully. It'd be a shame if Cisco cable-cards suddenly developed a compatibility flaw that prevented them from working with TiVos.


They have to adhere to a standard. That sounds more like big trouble for Cisco if that happened.


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## BobCamp1 (May 15, 2002)

aaronwt said:


> They have to adhere to a standard. That sounds more like big trouble for Cisco if that happened.


By the time that's figured out, the lawsuits will have been settled for a long time. Besides, the CableCard standard is a joke. If it were any decent, you wouldn't have all these compatibility problems. It's difficult to tell if the standards are not being adhered to or if they are poorly written. Actually, maybe Cisco doesn't have to do anything to sabotage CableCards.

If Tivo is already having trouble with Cisco CableCards, this lawsuit gives Cisco even less incentive to fix those problems. They could be "working on it" for a very, very long time.

Cisco could also suddenly have trouble producing cable cards, and Verizon might suddenly have trouble finding them as well, and wouldn't that be a shame.

FYI, Tivo is doing the same exact thing with Motorola and Time Warner Cable. It's called "biting the hands that feed them."


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## MichaelK (Jan 10, 2002)

BobCamp1 said:


> .... Tivo needs to maintain fair pricing across all companies it's licensing with. It's an uphill battle for sure, mainly because most companies won't tell you what they're paying.
> ....


not a lawyer so i have to ask- what is the basis of that? Who (or what law/regulation/bit of the constitution) says you ever have to sell anyone anything at any price? If private country clubs can still refuse to allow woman to join then why does Tivo have to license a patent under "fair" terms?

And who decides what "fair" means?

I was always under the impression that you can charge anyone anything you want and as long as the price variations aren't because someone is in a protected class then so be it. Is that not the case?

For example, a developer can not charge a minority more to buy a house to try and keep minorities out of the sub-division. But if the first 10 houses happen to sell for 100k there's nothing that says the builder can't sell the last one for 200k. Or am i missing something?

If not then how does an airline charge someone who buys a ticket $99 and the guy sitting next to them paid $400?

(and obviously there's outliers like forming a monopoly and things like that- but TiVo is far from some dominant force making money hand over fist that those things apply- no?)


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## BobCamp1 (May 15, 2002)

MichaelK said:


> not a lawyer so i have to ask- what is the basis of that? Who (or what law/regulation/bit of the constitution) says you ever have to sell anyone anything at any price? If private country clubs can still refuse to allow woman to join then why does Tivo have to license a patent under "fair" terms?
> 
> And who decides what "fair" means?
> 
> ...


I'm not a lawyer either, but I've been directly involved in two patent lawsuits.

The Sherman Antitrust Act keeps patent owners in check. Since Tivo owns the patent, they have been granted a monopoly on that specific technology. This monopoly is granted certain protections under patent laws. These protections allow a patent holder to do some things that would otherwise not be allowed under the Antitrust Act. Some of those things are clear because they are explicitly defined by the laws themselves and case law, but some things aren't as clear.

The two specific items I mentioned in the other posts aren't currently clear. Can you charge one company a royalty fee of $1/unit and another company $10,000/unit? Can you refuse to give a license to just one specific company while allowing their competitors to flourish? Aren't you then essentially dictating which companies will be allowed to compete with you? Or are you simply extorting that other company?

Patents have been used in the past to exclude or get rid of specific companies from certain markets. Usually two or three companies own almost all of the IPR needed to implement a technology. (DVRs are no exception. DirecTV, Microsoft, and Tivo own most of the IPR needed for that.) So it is quite easy for them to get together and decide exactly who gets to compete with them. Except collusion is still illegal, even when patents are involved.

Who decides what is fair and reasonable? A judge and a jury. Patents and lawsuits go together like peanut butter and jelly. I've co-written three patents and have had two lawsuits.

Your airline and housing examples aren't the same as patent misuse, as those situations are covered under a different set of laws along with the Antitrust Act. I'll just repeat that a judge and jury generally decides what is fair, so if you don't like the price you paid you can always sue them.


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