# Tivo Reports Results for the Fourth Quarter



## bradleys (Oct 31, 2007)

Tivo Reports Results for the Fourth Quarter and Fiscal Year Ended January 31, 2014

-- Record full year Service & Technology revenues, Net Income, and Adjusted AEBITDA in Fiscal Year 2014

-- Continued acceleration in MSO additions; record 313,000 cable MSO subscriptions added in the fourth quarter

-- Positive TiVo-Owned quarterly net additions for first time in six years; driven by 41% year-over-year growth in TiVo-Owned gross additions and lowest absolute churn in almost eight years

-- Total Tivo Reports Results for the Fourth Quarter and Fiscal Year Ended January 31, 2014 TiVo subscriptions now at approximately 4.2 million, up 34% year-over-year

-- Comcast plans to expand our successful integration of Xfinity On Demand to their entire footprint

-- Record Service & Technology revenues of $84.0 million in the fourth quarter, an increase of 28% year over-year

-- Fourth quarter Adjusted EBITDA was $19.6 million, exceeding guidance

-- Fourth quarter Net Income was $710,000; which included a $4.8 million non-cash charge

-- Acquired Digitalsmiths, further accelerating TiVo's evolution to a device and user interface independent cloud-base Software-as-a-Service, yielding a significant market opportunity for TiVo

-- Announced increase of $100 million to stock repurchase authorization; Intent to repurchase $100 million in first quarter Fiscal Year 2015 in addition to the $20 million repurchased during the fourth quarter of Fiscal Year 2014

http://www.marketwatch.com/story/ti...nuary-31-2014-2014-02-26?reflink=MW_news_stmp


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## Grakthis (Oct 4, 2006)

Wow. That's kind of incredible. Sort of makes all of these previous "but TiVo isn't profitable!" posts people has made moot.


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## CrispyCritter (Feb 28, 2001)

Grakthis said:


> Wow. That's kind of incredible. Sort of makes all of these previous "but TiVo isn't profitable!" posts people has made moot.


And why is that? Because they made $710,000 this quarter?

Except for legal settlements, they are still losing substantial amounts of money every quarter. I've forgotten exactly how much, but 10-20 million of their "service" revenue is purely legal settlement with folks like Verizon.

Hardware revenues of $22 million, hardware costs of $23 million - they're still losing money on their hardware, but they are doing much better than they used to.

So what posts are "moot"?


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## Dan203 (Apr 17, 2000)

So the Roamio must have been a big hit. Based on what I've seen here on the forums (purely anecdotal I know) there seem to be a lot of people jumping from an old S3/TiVo HD to a Roamio.


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## waynomo (Nov 9, 2002)

I guess it also explains the TiVo Advisory Panel offer at least to some extent. Not sure how much that impacted sales of units. I know it made the difference in my case.


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## HarperVision (May 14, 2007)

Dan203 said:


> So the Roamio must have been a big hit. Based on what I've seen here on the forums (purely anecdotal I know) there seem to be a lot of people jumping from an old S3/TiVo HD to a Roamio.


 There also seems like a lot of people jumping over from other providers like DirecTV, like myself.


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## tarheelblue32 (Jan 13, 2014)

HarperVision said:


> There also seems like a lot of people jumping over from other providers like DirecTV, like myself.


Or people like me dumping their crappy TWC DVR for a far superior device. And after seeing how superior the Roamio was to the TWC DVR, I decided to replace my 2 TWC cable boxes with Minis. Paying the greedy cable companies outrageous prices to rent their cheap, inferior equipment was just unacceptable to me any longer. Glad that TiVo seems to be turning the corner financially.


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## TheOneKEA (Oct 18, 2012)

Is there any information available on which Comcast markets will receive Xfinity VOD support for TiVo next? I'm still waiting for the rest of Maryland to be supported and I know that no one at Comcast tech support will know what I'm talkimg about if I ask...


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## cherry ghost (Sep 13, 2005)

TheOneKEA said:


> Is there any information available on which Comcast markets will receive Xfinity VOD support for TiVo next? I'm still waiting for the rest of Maryland to be supported and I know that no one at Comcast tech support will know what I'm talkimg about if I ask...


http://www.tivocommunity.com/tivo-vb/showthread.php?t=515078


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## JosephB (Nov 19, 2010)

CrispyCritter said:


> And why is that? Because they made $710,000 this quarter?
> 
> Except for legal settlements, they are still losing substantial amounts of money every quarter. I've forgotten exactly how much, but 10-20 million of their "service" revenue is purely legal settlement with folks like Verizon.
> 
> ...


1/23 deficit, when they use contracts to make up that deficit, isn't that bad on the hardware side. I would've expected them to be losing more than that on hardware.


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## tarheelblue32 (Jan 13, 2014)

JosephB said:


> 1/23 deficit, when they use contracts to make up that deficit, isn't that bad on the hardware side. I would've expected them to be losing more than that on hardware.


I agree, that's pretty good considered they work on the razor blade model (i.e. give the razor away for free and charge for the blades). And the costs to make the hardware should only go down for them over the next few years, while they are likely to keep the retail prices about the same as they are now.


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## CrispyCritter (Feb 28, 2001)

JosephB said:


> 1/23 deficit, when they use contracts to make up that deficit, isn't that bad on the hardware side. I would've expected them to be losing more than that on hardware.


Yes, it's very reasonable now. But note that means hardware is still not paying anything towards any of the other expenses of the company (R&D, advertising, administrative). Hardware break-even has been their goal for several years, and they have just about reached it.


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## sbiller (May 10, 2002)

CrispyCritter said:


> Yes, it's very reasonable now. But note that means hardware is still not paying anything towards any of the other expenses of the company (R&D, advertising, administrative). Hardware break-even has been their goal for several years, and they have just about reached it.


From TiVo's quarterly report, you need to break out MSOs'-related hardware revenue and associated cost of hardware revenue from TiVo-Owned (retail) hardware revenue and cost of hardware revenue.

For the 49k new retail subscribers added from a combination of DVRs and Mini's, we know that TiVo subsidized $3.846 million or an average of $78.49 per new subscriber. Based on the TiVo-Owned retail revenue of $13,513 million, we know that TiVo collected $197.29 on average for each of the 49,000 new subscribers. The bottom-line is that the average new retail box cost TiVo $275.78.

I believe that the TiVo Mini is subsidized and the base Roamio is subsidized. I think the Roamio Plus is about break-even and the Roamio Pro is slightly above break even.


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## sbiller (May 10, 2002)

For those interested, I've posted more details here --> http://investordiscussionboard.com/boards/tivo/q4-retail-hardware-revenues


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## Bigg (Oct 31, 2003)

I'm confused. Everybody seems to have a different take on this. It sounds like the TiVo side of the business is losing money, but the patent trolling operation is making money (obviously)?

If the subsidy is $78.49 on average, what is it on a Roamio/Premiere, where the service is $400-$500? $78.49 to lose out of a $150 service charge on a Mini is a heck of a lot different than losing it out of the $500 service on the Roamio/Premiere...

What a bunch of confusing accounting. They should just sell them with a single pricetag, although advertising a price of $500 less than the box actually costs is always a nice marketing trick. And there's always the few mathematically challenged suckers who have the monthly plan...


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## CrispyCritter (Feb 28, 2001)

Bigg said:


> They should just sell them with a single pricetag, although advertising a price of $500 less than the box actually costs is always a nice marketing trick.


As has been explained a good number of times, that would mean the price would have to be raised considerably higher, if TiVo wants to get the same revenue as now. TiVo gets 100% of the service part of the price, while Best Buy, etc, all make 40% or more of their list price on the hardware. Selling though Best Buy at a single pricetag means that Best Buy is expecting 40% on the part that is now pure TiVo income.


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## sbiller (May 10, 2002)

Bigg said:


> I'm confused. Everybody seems to have a different take on this. It sounds like the TiVo side of the business is losing money, but the patent trolling operation is making money (obviously)?
> 
> If the subsidy is $78.49 on average, what is it on a Roamio/Premiere, where the service is $400-$500? $78.49 to lose out of a $150 service charge on a Mini is a heck of a lot different than losing it out of the $500 service on the Roamio/Premiere...
> 
> What a bunch of confusing accounting. They should just sell them with a single pricetag, although advertising a price of $500 less than the box actually costs is always a nice marketing trick. And there's always the few mathematically challenged suckers who have the monthly plan...


The service revenue is completely separate from the cost of hardware plus the quarterly cost of marketing (SAC = (S&M + Hardware Subsidy) / Gross adds). If TiVo sells a lifetime subscription for $499, the cash hits the TiVo balance sheet immediately while the service revenue is amortized over 66 months at $7.56/mo. So from a TiVo perspective this sub starts contributing profit to the bottom-line after 26 months of service. From a cash flow perspective, the lifetime sub is positive immediately, however Wall Street generally cares about the income statement (i.e., quarterly EPS) more than cash flow.


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## JosephB (Nov 19, 2010)

Bigg said:


> I'm confused. Everybody seems to have a different take on this. It sounds like the TiVo side of the business is losing money, but the patent trolling operation is making money (obviously)?


I wouldn't consider what TiVo does "patent trolling". TiVo actually sells a product that is protected by their patents. Most people consider patent trolls to be companies who buy up patents and do not make any products.


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## tarheelblue32 (Jan 13, 2014)

JosephB said:


> I wouldn't consider what TiVo does "patent trolling". TiVo actually sells a product that is protected by their patents. Most people consider patent trolls to be companies who buy up patents and do not make any products.


I completely agree. I'm not a patent expert, but just imagine if TiVo's patents were such that, if they had been respected, TiVo was the only DVR available on the market. Just imagine how much money TiVo might be making if they were the only DVR option, and that is how you arrive at these large patent settlement amounts. TiVo deserves the money it is getting from patent litigation.


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## ufo4sale (Apr 21, 2001)

tarheelblue32 said:


> I completely agree. I'm not a patent expert, but just imagine if TiVo's patents were such that, if they had been respected, TiVo was the only DVR available on the market. Just imagine how much money TiVo might be making if they were the only DVR option, and that is how you arrive at these large patent settlement amounts. TiVo deserves the money it is getting from patent litigation.


Couldn't agree with you more.


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## en sabur nur (Oct 30, 2007)

JosephB said:


> I wouldn't consider what TiVo does "patent trolling". TiVo actually sells a product that is protected by their patents. Most people consider patent trolls to be companies who buy up patents and do not make any products.


Thanks for explaining that. I've heard comments about Tivo "patent trolling" many times. Usually coming from people who don't like Tivo's business model and/or prices. But Tivo was doing what any patent owner, especially one that is selling products in the marketplace, using those patents, was supposed to do. The large and very profitable corporations that infringed on those patents knew that Tivo owned those patents, they could have easily afforded to license them from Tivo, but they decided to infringe on them anyway. I believe they thought they could get away with it because Tivo is a small company and probably didn't have the resources to fight a long, legal fight. In the end things worked out the way they were supposed to.


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## Bigg (Oct 31, 2003)

CrispyCritter said:


> As has been explained a good number of times, that would mean the price would have to be raised considerably higher, if TiVo wants to get the same revenue as now. TiVo gets 100% of the service part of the price, while Best Buy, etc, all make 40% or more of their list price on the hardware. Selling though Best Buy at a single pricetag means that Best Buy is expecting 40% on the part that is now pure TiVo income.


Yeah, that's true. I didn't think of that.



JosephB said:


> I wouldn't consider what TiVo does "patent trolling". TiVo actually sells a product that is protected by their patents. Most people consider patent trolls to be companies who buy up patents and do not make any products.


I can see you point, that the only way you can get around TiVo being a patent trolling operation is if you define patent trolls strictly as a company that has absolutely no product. However, TiVo has a product AND a semi-related patent trolling operation, so I would say that part of the business is exactly like a patent troll.



en sabur nur said:


> Thanks for explaining that. I've heard comments about Tivo "patent trolling" many times. Usually coming from people who don't like Tivo's business model and/or prices. But Tivo was doing what any patent owner, especially one that is selling products in the marketplace, using those patents, was supposed to do. The large and very profitable corporations that infringed on those patents knew that Tivo owned those patents, they could have easily afforded to license them from Tivo, but they decided to infringe on them anyway. I believe they thought they could get away with it because Tivo is a small company and probably didn't have the resources to fight a long, legal fight. In the end things worked out the way they were supposed to.


No. They went trolling. It's ridiculous that the courts found their patents valid. A patent for writing a file to disk and pulling it back, which is all TiVo does, is ridiculous. There's nothing particularly unique about their hardware, even the original S1 was just a slow computer with different I/O boards compared to a computer (composite/RCA vs. VGA and minijack, and IR vs. PS/2, plus a hardware MPEG-2 encoder board). TiVo has done a lot over the years to refine their software, which is copyrightable, but nothing in fundamentally unique about what they are doing. Filing patents as a defensive technique so that no one else could try to patent the same stuff that they did was a good move, but using them offensively just shows how much of a failure that US patent system is, and how dishonest TiVo is.


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## tarheelblue32 (Jan 13, 2014)

Bigg said:


> It's ridiculous that the courts found their patents valid.


I don't think any court ever found any such thing. TiVo and the companies they sued settled before trial, so there was never any legal finding on the validity of their patents. Still, I doubt the companies they sued would have settled for hundreds of millions of dollars if their lawyers didn't think there was a good chance that their patents had merit.



Bigg said:


> A patent for writing a file to disk and pulling it back, which is all TiVo does, is ridiculous. There's nothing particularly unique about their hardware


There are different kinds of patents. A very common type of patent is a "use patent" or an "improvement patent".

"When you're looking for patentable innovations, be sure to consider improvements made to existing products. This class of patents -- called improvement inventions -- are issued frequently. Improvement patents can add something to an existing product, incorporate new technology into an old product, or find a new use for an existing product.

Improvement Patents:
Most patents granted today are improvement patents. These patents protect the differences between a new product and previously existing products and services of the same kind. Improvement patents can be further broken down into "addition" or "substitution" inventions.

Addition inventions. An addition invention adds something to what came before. The Gillette Mach3 razor, for example, had three blades where previous razors had two.

Substitution inventions. Jeff Bezos, substituted the "one-click" purchasing feature for the prior virtual shopping cart model -- a substitution invention.

Improvement patents can be valuable. Do not underestimate the value of improvement patents. In their book, Innovation: The Five Disciplines for Creating What Customers Want, authors Curtis R. Carlson and William W. Wilmot write that 'smaller innovations can be extremely important, especially as one builds upon another."

http://www.nolo.com/legal-encyclopedia/improvement-patents-new-use-patents-30250.html


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## CrispyCritter (Feb 28, 2001)

tarheelblue32 said:


> I don't think any court ever found any such thing. TiVo and the companies they sued settled before trial, so there was never any legal finding on the validity of their patents. Still, I doubt the companies they sued would have settled for hundreds of millions of dollars if their lawyers didn't think there was a good chance that their patents had merit.


I agree with the rest of your post, but Echostar (DISH) vs TiVo was the first court battle, and it went through the entire trial process, including finding the patent(s) valid and a jury finding DISH had infringed. It was appealed up and down the court system (even to the Supreme Court (twice I believe)) and DISH lost all its battles. The other legal settlements all came after that, when the TiVo patent was firmly established.


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## nrc (Nov 17, 1999)

Bigg said:


> No. They went trolling. It's ridiculous that the courts found their patents valid. A patent for writing a file to disk and pulling it back, which is all TiVo does, is ridiculous.


You've just demonstrated that you really have no idea what you're talking about on this topic.


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## bradleys (Oct 31, 2007)

Bigg will find any opportunity to take a thread off track with his patent troll garbage.

Don't feed him, it is exactly what he wants...


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## steve614 (May 1, 2006)

Bigg said:


> No. They went trolling. It's ridiculous that the courts found their patents valid. A patent for writing a file to disk and pulling it back, which is all TiVo does, is ridiculous.


How do you know it's not more complicated than that? 
For example, it's possible that TiVo came up with an algorithm that makes writing and retrieving media files to a hard drive more efficient. That in turn makes their DVR faster than what any of their competitors can do.
You don't think something like that would be worth a patent?



> *There's nothing particularly unique about their hardware*, even the original S1 was just a slow computer with different I/O boards compared to a computer (composite/RCA vs. VGA and minijack, and IR vs. PS/2, plus a hardware MPEG-2 encoder board).


Are you sure? Do you have a background in digital electronics technology? 
If you did, you'd know that there are many ways to configure an electronic circuit board to do what you want and you wouldn't be making such a statement.
BTW, does TiVo even have any hardware patents?



> TiVo has done a lot over the years to refine their software, which is copyrightable, but nothing in fundamentally unique about what they are doing.


Again, how do you know this? I suppose you have degree in computer programming, too? 



> Filing patents as a defensive technique so that no one else could try to patent the same stuff that they did was a good move, but using them offensively just shows how much of a failure that US patent system is, and how dishonest TiVo is.


And you wouldn't do the same thing if you had a patent on something? You'd just let your competitors walk all over you? 
For some reason, I doubt that would happen.



bradleys said:


> Bigg will find any opportunity to take a thread off track with his patent troll garbage.
> 
> Don't feed him, it is exactly what he wants...


Sorry, I couldn't resist.


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## Grakthis (Oct 4, 2006)

CrispyCritter said:


> And why is that? Because they made $710,000 this quarter?
> 
> Except for legal settlements, they are still losing substantial amounts of money every quarter. I've forgotten exactly how much, but 10-20 million of their "service" revenue is purely legal settlement with folks like Verizon.
> 
> ...


So, you don't know how to read an earnings statement. That's OK. Most people don't. Why would you? Literally, the only reason I know how, is because I have an MBA. Otherwise, this stuff would be gibberish to me!

Their EBITDA means "Earnings before interest, taxes, depreciation and amortization."

Depreciation is phantom money.. it's money they lost because something they bought lost value. You use it to write off loses from something losing value... like, an M&A, or a patent, or something. Amortization is the loss of value due to something wearing out. It's virtually identical to depreciation, but in general, the distinction is that something is amortized on a fixed schedule (like, I buy a truck, and over 20 years I amortize the value of that truck, knowing in 20 years I have to buy a new truck). Whereas depreciation is unexpected or market based (I bought another company for 100M but the company turned out to be worth more like 50M in assets and I messed up, so i write off 50M of it as a loss).

What this means is that TiVo had, in reality, 19.6M in net income before they paid out taxes and interest on loans. Their actual revenue generating activities generated 19.6M in revenues.

That's a lot of revenues for TiVo. Well above expectations. Enough so that Tivo announced a large stock buy back (which is a show of them having a lot of extra income... companies do not buy back stocks if they are tight on cash).

Many software focused companies lose money on hardware. Losing money on hardware is not relevant.


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## Grakthis (Oct 4, 2006)

Using patents to attack other companies is not "dishonest." Our patent system is absolutely broken, but it's not "dishonest" to work within the system as we have it. Anyone suggesting otherwise is basically arguing that you should handicap yourself voluntarily out of some kind of "ethics." And such a person should learn what a publicly traded company is and what fiduciary duty means.

edit: if a court found for TiVo then they were not, by definition, patent trolling. They won in court. There are people posting in here who do not know what words mean and those people should stop posting words they do not understand.


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## CrispyCritter (Feb 28, 2001)

Grakthis said:


> So, you don't know how to read an earnings statement.
> ...
> What this means is that TiVo had, in reality, 19.6M in net income before they paid out taxes and interest on loans. Their actual revenue generating activities generated 19.6M in revenues.
> 
> That's a lot of revenues for TiVo. Well above expectations. Enough so that Tivo announced a large stock buy back (which is a show of them having a lot of extra income... companies do not buy back stocks if they are tight on cash).


I assure you I know how to read an earnings statement. Gratuitously insulting stranger's knowledge while not knowing anything about them is likely to reflect badly on you.

Just some of your erroneous statements:
1. The majority of TiVo's EBITDA net income is not due to taxes and interest, as you directly stated above. It's due to accounting for their stock compensation of employees, which they will have to pay eventually.
2. Their revenue was not "well above expectations". It was in the upper range of expectations before they took an extra 4.5 million additional charge for their TRA acquisition. That moved it towards the lower end.
3. TiVo has over 1 BILLION dollars in cash and short-term funds. They have not been tight on cash for years. All of this money is litigation proceeds. They had no substantial extra income this quarter. Their service revenue went up by only $750 thousand dollars over last year at this time.
4. Their new re-purchase plans for stock are not due to suddenly becoming wealthy; they are just looking for the best places to put their billion dollars.
5. A substantial portion of their service and technology revenue is actually litigation proceeds. They are recognizing some $20 million per quarter of money that they have already received (and is in the bank) as revenue, and will until 2018. This income is not "actual revenue generating activities"
6. TiVO plays substantial games with their accounting; they always have. They've had to since they were basically supported by their stock price for years - that was their only source of new money they used to keep the company afloat. Their inventory control has been quite interesting at times, and the use of litigation revenues (in item 5) that they've already received but are only gradually recognizing are apparently just there to convince investors that the basic tivo business is profitable, even though it's not yet.

Despite the deserved praise for Roamio and Mini, and all of the extra purchases we see here, and all of the deals TiVo has made to make sure subs were not dropped ($99 for lifetime for old TiVos when buying a new one, for example), they only went from 960K retail subs to 966K retail subs. It's clear the core retail business, that we in this forum are interested in, is not the source of growth that TiVo needs. And the cable company news was very good this past year, but not enough to make TiVo profitable if you don't count the litigation contributions.


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## mattack (Apr 9, 2001)

tarheelblue32 said:


> ...TiVo was the only DVR available on the market.


Wait, didn't ReplayTV actually beat Tivo to the market by a little bit?



Bigg said:


> No. They went trolling. It's ridiculous that the courts found their patents valid. A patent for writing a file to disk and pulling it back, which is all TiVo does, is ridiculous.


It sounds like you find the very existence of patents to be reprehensible. Fine, that's your opinion.

You seem to be missing that Tivo's patents are (AFAIK) about the *user interface* portion of it, the one in question being "watch a show while it is being recorded". While that is fairly obvious in retrospect, nobody else had done it before.


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## Bigg (Oct 31, 2003)

tarheelblue32 said:


> I don't think any court ever found any such thing. TiVo and the companies they sued settled before trial, so there was never any legal finding on the validity of their patents. Still, I doubt the companies they sued would have settled for hundreds of millions of dollars if their lawyers didn't think there was a good chance that their patents had merit.


It's too bad. I would have loved to have seen TiVo lose in court on those. Although if TiVo went bankrupt in the process, that would have sucked, as we wouldn't have TiVos today.



steve614 said:


> How do you know it's not more complicated than that?
> For example, it's possible that TiVo came up with an algorithm that makes writing and retrieving media files to a hard drive more efficient. That in turn makes their DVR faster than what any of their competitors can do.
> You don't think something like that would be worth a patent?


The whole concept of software patents is ridiculous. That's the domain of copyright, and anyone else can go reverse-engineer it. Also, it's not rocket science to encode video, dump it off to a hard drive, and pull it back. It wasn't in 1999, and it isn't today.



Grakthis said:


> Using patents to attack other companies is not "dishonest." Our patent system is absolutely broken, but it's not "dishonest" to work within the system as we have it. Anyone suggesting otherwise is basically arguing that you should handicap yourself voluntarily out of some kind of "ethics." And such a person should learn what a publicly traded company is and what fiduciary duty means.
> 
> edit: if a court found for TiVo then they were not, by definition, patent trolling. They won in court. There are people posting in here who do not know what words mean and those people should stop posting words they do not understand.


I have no issue with TiVo using patents defensively so that no one else can patent the stuff, but it is ridiculous to just go after other companies and try to extort them just because they are way bigger. Although admittedly, TiVo is far less shady about patents than a lot of the companies that are full-blown patent trolls and don't actually ship a product.


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## HarperVision (May 14, 2007)

mattack said:


> Wait, didn't ReplayTV actually beat Tivo to the market by a little bit?


 Yes, they did.


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## Grakthis (Oct 4, 2006)

CrispyCritter said:


> I assure you I know how to read an earnings statement. Gratuitously insulting stranger's knowledge while not knowing anything about them is likely to reflect badly on you.


Woah woah woah, buttercup, at the absolute worst most uncharitable reading, I condescended to you. At no point did I INSULT you. If you want to take offense to my observation of an obvious fact (in a somewhat condescending tone) then by all means, go for it. But calling the post INSULTING is gibberish.



> Just some of your erroneous statements:
> 1. The majority of TiVo's EBITDA net income is not due to taxes and interest, as you directly stated above.


Didn't say that. Cite? You won't... cause you never do. But I'll give you the benefit of trying.



> 2. Their revenue was not "well above expectations". It was in the upper range of expectations before they took an extra 4.5 million additional charge for their TRA acquisition. That moved it towards the lower end.


So, hey, i dug deeper, and I did find some analysts who had the high end of their revenues in that range. So you were right! I'll go ahead and accept "at the high end of the expected range" as a valid adjustment to my post that doesn't in any way change what I said.

Their earnings, however, did exceed even the most GENEROUS of expectations.



> 3. TiVo has over 1 BILLION dollars in cash and short-term funds. They have not been tight on cash for years. All of this money is litigation proceeds. They had no substantial extra income this quarter. Their service revenue went up by only $750 thousand dollars over last year at this time.


All true. What point d you think you're making?



> 4. Their new re-purchase plans for stock are not due to suddenly becoming wealthy; they are just looking for the best places to put their billion dollars.


Cite? The obvious explanation is they are profitable, so they are spending money. You are claiming insider knowledge, so of course, you have a citation?



> 5. A substantial portion of their service and technology revenue is actually litigation proceeds. They are recognizing some $20 million per quarter of money that they have already received (and is in the bank) as revenue, and will until 2018. This income is not "actual revenue generating activities"


Irrelevant. It's recurring recognized revenues. I'm not sure what point you think you're making.



> 6. TiVO plays substantial games with their accounting; they always have. They've had to since they were basically supported by their stock price for years - that was their only source of new money they used to keep the company afloat. Their inventory control has been quite interesting at times, and the use of litigation revenues (in item 5) that they've already received but are only gradually recognizing are apparently just there to convince investors that the basic tivo business is profitable, even though it's not yet.


Again, irrelevant. It's recurring revenues generated by the company. You're pointing out things that are completely and totally irrelevant to the discussion we're having.

"They only have revenues because they got money!" - a true but irrelevant thing CC might post next!



> Despite the deserved praise for Roamio and Mini, and all of the extra purchases we see here, and all of the deals TiVo has made to make sure subs were not dropped ($99 for lifetime for old TiVos when buying a new one, for example), they only went from 960K retail subs to 966K retail subs. It's clear the core retail business, that we in this forum are interested in, is not the source of growth that TiVo needs. And the cable company news was very good this past year, but not enough to make TiVo profitable if you don't count the litigation contributions.


"Despite their subs being up, their revenues being up, their profits being up, and literally every single financial measure being up, I'm going to pretend some of their revenues don't count, because it's the only way I can make my point without admitting I was wrong and slinking away." - CrispyCritter, 2014.

There, now I'm being insulting instead of just condescending. You're welcome.


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## Grakthis (Oct 4, 2006)

Bigg said:


> I have no issue with TiVo using patents defensively so that no one else can patent the stuff, but it is ridiculous to just go after other companies and try to extort them just because they are way bigger. Although admittedly, TiVo is far less shady about patents than a lot of the companies that are full-blown patent trolls and don't actually ship a product.


I am going to go ahead and 100% agree with you that software patents are ridiculous, and the way our industry is setup for software patents is awful and ridiculous.

But I am going to stop you right here. It doesn't matter if that system is ridiculous and awful. It doesn't matter if it's market warping and morally corrupt.

It's the system. TiVo is not extorting anyone... this is like saying TiVo is extorting customers by charging for their product. It's the system in which they operate. They are playing by the rules of that system. If they were a patent troll, they would be suing (without a product, or with a weak product) in order to get settlements because the settlement is cheaper than actually fighting the lawsuit. That's how patent trolls work.

TiVo is a company using their patents to generate revenues. Which is the system we have created and in which they operate.

I hate that system. But blaming TiVo for that system is just right-out.


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## CrispyCritter (Feb 28, 2001)

Grakthis said:


> "Despite their subs being up, their revenues being up, their profits being up, and literally every single financial measure being up, I'm going to pretend some of their revenues don't count, because it's the only way I can make my point without admitting I was wrong and slinking away." - CrispyCritter, 2014.
> 
> There, now I'm being insulting instead of just condescending. You're welcome.


That's not insulting, that's just an utter and outright lie.

That seems to be the only way you can argue your points.

All of this is because I pointed out that TiVo isn't profitable, except for the legal settlements. If you take out the litigation, TiVo is losing between $40 million and $50 million a year in adjusted EBITDA.

Their core business does not make money and basically never has.

As far as your points - I quoted your statements.

This was an expected quarter as far as revenue goes, contrary to what you have claimed. TiVo had guided revenue at $83 to $85 million; they reported $84 million. It was certainly a solid quarter, but nothing was new at all.

I asked you before, what previous posts are "moot" because of this quarter?


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## Grakthis (Oct 4, 2006)

CrispyCritter said:


> That's not insulting, that's just an utter and outright lie.


No, it's an accurate summation of what you said.



> All of this is because I pointed out that TiVo isn't profitable, except for the legal settlements. If you take out the litigation, TiVo is losing between $40 million and $50 million a year in adjusted EBITDA.


So, rather than take anything you've said so far at face value and assume you looked it up, I decided to dig into the earnings statement and verify your claims... and unsurprisingly, it turns out you're saying things that are not true.

They actually had net positive cash flow from operations and a net increase in cash on hand. Both of which indicate profitable operations for Q4.

But wait, it gets better!

They had 0 dollars in litigation proceeds for Q4. So, you're just making things up about litigation proceeds. The had them in 2013, but not Q4 of 2013. So they did not in any way contribute to the Q4 earnings, which is what we're discussing.

So, I mean, i could go through and look up the rest of the numbers you're claiming, but I am pretty sure once I read the actual accounting data, I'll discover those numbers are all wrong too.



> I asked you before, what previous posts are "moot" because of this quarter?


I'm not going to query the forum digging for the posts. You either know what posts I am talking about, and therefore I am talking to you, or you don't know what posts I am talking about, and so you don't care, so go away?


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## CrispyCritter (Feb 28, 2001)

Grakthis said:


> So, rather than take anything you've said so far at face value and assume you looked it up, I decided to dig into the earnings statement and verify your claims... and unsurprisingly, it turns out you're saying things that are not true.
> 
> They actually had net positive cash flow from operations and a net increase in cash on hand. Both of which indicate profitable operations for Q4.
> 
> ...


Again, you don't have the faintest idea of what you are talking about.

I already answered your question in items 5 and 6 of my previous post. Expanding: TiVo is taking litigation settlement money that they have already received from Motorla/Google and possibly others, and recognizing it gradually over a period of 5 years as technology revenue. You did read those items, didn't you?

Here's a quote from TiVo CFO early last fall (so slightly out-of-date) in an industrial relations talk, talking about when the core business would be profitable (without the litigation settlements):


> Naveen Chopra - Chief Financial Officer, Senior Vice President
> 
> Well, there is a lot of different ways to think about that. I guess one way that I thought about that question is, if you look at the ARPUs of our service provider business being the mass distribution part of our business they are running around a buck point today, which means every million subscribers or so is worth about $14 million to us on an annual basis, all right.
> 
> ...


As far as the posts, I read most of the posts here and I remember no posts that were made moot by the quarter's results. I don't believe your claim which is why I objected to it.


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## HarperVision (May 14, 2007)

Seriously? :/


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## Grakthis (Oct 4, 2006)

CrispyCritter said:


> I already answered your question in items 5 and 6 of my previous post. Expanding: TiVo is taking litigation settlement money that they have already received from Motorla/Google and possibly others, and recognizing it gradually over a period of 5 years as technology revenue. You did read those items, didn't you?


I'm googling like mad, combing through earnings statements and press releases, and I can find NOTHING to substantiate this claim. Yes, i saw where you made the claim, but I cannot validate your claim.

TiVo is taking litigation proceeds and reporting them accurately. What makes you so sure that they are taking SOME of their litigation proceeds and classifying them as technology revenues?

In fact, I just found an article from their Q3 earnings statement that talks about the Verizon settlement being recognized as litigation revenues.

I can find absolutely NOTHING to substantiate your claim, and while I am not an accountant, I see no reason why that would be valid under GAAP.

So, cite? You've yet to cite anything I asked you to cite. Maybe this will be the first time!



> Here's a quote from TiVo CFO early last fall (so slightly out-of-date) in an industrial relations talk, talking about when the core business would be profitable (without the litigation settlements)


Irrelevant to this discussion. A prediction the CFO made last year has nothing to do with this year.

TiVo was profitable in Q3 because of litigation proceeds. For sure. TiVo was profitable in Q4 WITHOUT them. And until you can find me a citation that they are hiding litigation proceeds in their technology revenues number, I'm going to run with that assumption.

But it's mostly irrelevant anyways, because they CAN'T report pro-rated litigation proceeds as CASH revenues, and their cash flow was a net positive for the quarter, which still proves my point.



> As far as the posts, I read most of the posts here and I remember no posts that were made moot by the quarter's results. I don't believe your claim which is why I objected to it.


Then you haven't read enough posts. Read more. Multiple posts have pointed to TiVo's lack of profitability as proof that prices are not too high, or that advertising is justified, etc. This takes wind out of those sails. If TiVo is profitable, then we can start to question "does TiVo really need to do this stuff?"


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## Grakthis (Oct 4, 2006)

And if we're going to quote C-level guys, here's one for you from the Q3 earnings call.

&#8220;As a result of the progress we have made toward our operational goals, we expect to be profitable next quarter on an Adjusted EBITDA basis excluding litigation spend,&#8221; Rogers says.

BOOM.


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## Loach (Jan 11, 2013)

Grakthis said:


> So, you don't know how to read an earnings statement. That's OK. Most people don't. Why would you? Literally, the only reason I know how, is because I have an MBA. Otherwise, this stuff would be gibberish to me!
> 
> Their EBITDA means "Earnings before interest, taxes, depreciation and amortization."
> 
> ...


I'm a CPA. I write financial statements for a living, so I can't let this post go by without correcting it. Depreciation is not at all how you described it. It is a mechanism by which the cost of tangible property is spread over its expected useful life. Example: if a company buys a server for $100k cash and they expect its useful life to be 4 years with an ending salvage value of zero, they recognize $25k per year of depreciation expense over those 4 years.

Amortization is the same concept applied to intangible assets (usually the value that was assigned to intangible assets that were acquired in business combinations). For example, if Tivo bought a company, they may have assigned some portion of the purchase price to the value of a patent that came with the company, and amortize that value into expense over the remaining term that the patent is expected to be useful.

Write-offs of assets that have "lost value" as you describe in your post are called impairment charges. They are not recorded as depreciation or amortization expense. They usually show up as a separate line in the income statement and/or cash flow statement. Actually Tivo had some of this but broke it out in their cash flow statement, but not in their income statement. It was $4.75 million for the fiscal year (they didn't present a quarterly cash flow statement).


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## Loach (Jan 11, 2013)

Grakthis said:


> I'm googling like mad, combing through earnings statements and press releases, and I can find NOTHING to substantiate this claim. Yes, i saw where you made the claim, but I cannot validate your claim.
> 
> TiVo is taking litigation proceeds and reporting them accurately. What makes you so sure that they are taking SOME of their litigation proceeds and classifying them as technology revenues?
> 
> ...


There are 2 pieces to the settlements. The award for past infringement has been recorded as litigation proceeds. The payments for future licensing are being amortized into income as Technology revenues over time. Check out their most recent Form 10-Q and scroll down to p. 27 where Technology revenue is discussed.


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## Loach (Jan 11, 2013)

Grakthis said:


> And if we're going to quote C-level guys, here's one for you from the Q3 earnings call.
> 
> As a result of the progress we have made toward our operational goals, we expect to be profitable next quarter on an Adjusted EBITDA basis excluding litigation spend, Rogers says.
> 
> BOOM.


Litigation spend is not litigation revenue.


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## sbiller (May 10, 2002)

FWIW, TiVo's pro-forma loss if we exclude litigation license revenue in the most recent quarter was approximately (41mn) or a loss of (0.34) per share. In Q3 it was (29.2mn).


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## Loach (Jan 11, 2013)

Grakthis said:


> TiVo was profitable in Q3 because of litigation proceeds. For sure. TiVo was profitable in Q4 WITHOUT them. And until you can find me a citation that they are hiding litigation proceeds in their technology revenues number, I'm going to run with that assumption.
> 
> But it's mostly irrelevant anyways, because they CAN'T report pro-rated litigation proceeds as CASH revenues, and their cash flow was a net positive for the quarter, which still proves my point.


They were not profitable in Q4 without their Techology revenues, which consist mostly of licensing revenues resulting from their settlements with EchoStar, AT&T, Verizon, Cisco, Motorola, etc. I can't tell from their earnings release exactly how much was license royalties during Q4, but in Q3 it was $43 million per their 10-Q.


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## sbiller (May 10, 2002)

Loach said:


> They were not profitable in Q4 without their Techology revenues, which consist mostly of licensing revenues resulting from their settlements with EchoStar, AT&T, Verizon, Cisco, Motorola, etc. I can't tell from their earnings release exactly how much was license royalties during Q4, but in Q3 it was $43 million per their 10-Q.


Q4 Litigation License Revenue - Recorded as Technology Revenue

Dish - $11,082
AT&T - ~ $6,100
Verizon - ~ 6,291
Moto/Arris/Cisco/Google - $18,296
Total = $41,769


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## Bigg (Oct 31, 2003)

Grakthis said:


> I am going to go ahead and 100% agree with you that software patents are ridiculous, and the way our industry is setup for software patents is awful and ridiculous.
> 
> But I am going to stop you right here. It doesn't matter if that system is ridiculous and awful. It doesn't matter if it's market warping and morally corrupt.
> 
> ...


You do have a point. However, I would have love to have seen TiVo fight the patents in court. They sound like software patents, although some of them may have been hardware-related, which would be even less of a leg to stand on.


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## CrispyCritter (Feb 28, 2001)

Bigg said:


> You do have a point. However, I would have love to have seen TiVo fight the patents in court. They sound like software patents, although some of them may have been hardware-related, which would be even less of a leg to stand on.


As I said an an earlier post in this thread (#24), TiVo did fight them in court with Dish/Echostar and won (including multiple extensive appeals). Otherwise none of these other folks would have settled with them.


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## CrispyCritter (Feb 28, 2001)

Grakthis said:


> So, cite? You've yet to cite anything I asked you to cite. Maybe this will be the first time!


Have enough other folks chimed in?

My cite would be to a "seeking alpha" article I read a while back. Unfortunately, it seems to have migrated behind their paywall now, unless someone has another link to it. I can cite posts that discuss the article and issues (sbiller was very active in those discussions) but not the article itself. Do you want the indirect cites at this point?


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## Dan203 (Apr 17, 2000)

HarperVision said:


> mattack said:
> 
> 
> > Wait, didn't ReplayTV actually beat Tivo to the market by a little bit?
> ...


No they didn't.

According to Wikipedia ReplayTV released in April 1999 and TiVo released on March 31st 1999.


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## JosephB (Nov 19, 2010)

Bigg said:


> Yeah, that's true. I didn't think of that.
> 
> I can see you point, that the only way you can get around TiVo being a patent trolling operation is if you define patent trolls strictly as a company that has absolutely no product. However, TiVo has a product AND a semi-related patent trolling operation, so I would say that part of the business is exactly like a patent troll.
> 
> No. They went trolling. It's ridiculous that the courts found their patents valid. A patent for writing a file to disk and pulling it back, which is all TiVo does, is ridiculous. There's nothing particularly unique about their hardware, even the original S1 was just a slow computer with different I/O boards compared to a computer (composite/RCA vs. VGA and minijack, and IR vs. PS/2, plus a hardware MPEG-2 encoder board). TiVo has done a lot over the years to refine their software, which is copyrightable, but nothing in fundamentally unique about what they are doing. Filing patents as a defensive technique so that no one else could try to patent the same stuff that they did was a good move, but using them offensively just shows how much of a failure that US patent system is, and how dishonest TiVo is.


Actually, they aren't trolling. They are protecting their patents. If TiVo is a patent troll then under your definition every single patent case ever in the history of patents has been a patent troll. It's not an "official" definition or term, but you're way off base compared to 99% of the industry in the definition of that term.

And, TiVo's patents are quite a bit more complicated than "save a file to disk and retrieve it". Quite to the contrary of your point, the trick play patent is incredibly unique. No one had ever though to have a buffer of live TV recording continuously regardless if you were "recording" the show or not.


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## HarperVision (May 14, 2007)

Dan203 said:


> No they didn't. According to Wikipedia ReplayTV released in April 1999 and TiVo released on March 31st 1999.


. Oh wow really? That's not how I remember it, but I don't have anything to back that up. Maybe they "officially" launched and released on a small scale but Replay was more large and accessible when they did?


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## Dan203 (Apr 17, 2000)

HarperVision said:


> . Oh wow really? That's not how I remember it, but I don't have anything to back that up. Maybe they "officially" launched and released on a small scale but Replay was more large and accessible when they did?


I don't know, was before my time too. It was probably a marketing ploy. TiVo probably knew ReplayTV was launching in April so they released on March 31st just so they could be the "first". From what I remember both units were hard to get, and super expensive until late 1999/early 2000.


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## Dan203 (Apr 17, 2000)

JosephB said:


> Actually, they aren't trolling. They are protecting their patents. If TiVo is a patent troll then under your definition every single patent case ever in the history of patents has been a patent troll. It's not an "official" definition or term, but you're way off base compared to 99% of the industry in the definition of that term.


I've always heard the term patent troll applied to companies that make no physical product, they just buy patents so they can sue companies that are infringing and/or collect license fees from those companies. TiVo makes a physical product that actually uses their patent, so they really don't fit the definition at all.


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## bradleys (Oct 31, 2007)

Dan203 said:


> I've always heard the term patent troll applied to companies that make no physical product, they just buy patents so they can sue companies that are infringing and/or collect license fees from those companies. TiVo makes a physical product that actually uses their patent, so they really don't fit the definition at all.


Correct, and often the patents are so broad they are indefensible in the way they are being used. The Trolls go after smaller start-up companies that cannot afford to defend themselves. So they pay the troll a fee / or a share of the start-up in order for them to move forward. (Thus a troll allowing you to cross a bridge)

Patent trolling is a major problem in the tech industry and we desperately need reforms to protect the small companies just starting out. But to call TiVo, a true creator of a technical solution, who is simply defending its patents against larger well-funded companies a patent Troll is ridiculous and I wish people would stop responding to Bigg and others when they brings it up.

He has been given the definition; he is a smart guy and knows what it means. He just loves to see you guys spin in your chairs trying to defend it.


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## Bigg (Oct 31, 2003)

JosephB said:


> Actually, they aren't trolling. They are protecting their patents. If TiVo is a patent troll then under your definition every single patent case ever in the history of patents has been a patent troll. It's not an "official" definition or term, but you're way off base compared to 99% of the industry in the definition of that term.


True, most patent trolls don't have any product. At least TiVo has a product to go along with their baseless and obnoxious lawsuits. Most companies that have engaged in patent lawsuits were, in effect, trolling, even the likes of Apple and Samsung. However, many of them were doing it as part of the much bigger game of patents, which closely approximates the tactics of nuclear war. Build a big enough patent library, and since it's basically impossible to do anything with violating a bunch of nonsensical and obscure patents, as long as you have enough patents to sue the living bejesus out of anyone who sues you, no one will sue you. Great system we have.



> And, TiVo's patents are quite a bit more complicated than "save a file to disk and retrieve it". Quite to the contrary of your point, the trick play patent is incredibly unique. No one had ever though to have a buffer of live TV recording continuously regardless if you were "recording" the show or not.


OMG! You have to read back from a different point in the file! Rocket science! OMG, it's a computer doing something 24/7 that's kind of like the 7 second delay machine that broadcasters use. Rocket science!


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## bradleys (Oct 31, 2007)

> True, most patent trolls don't have any product. At least TiVo has a product to go along with their baseless and obnoxious lawsuits. Most companies that have engaged in patent lawsuits were, in effect, trolling, even the likes of Apple and Samsung. However, many of them were doing it as part of the much bigger game of patents, which closely approximates the tactics of nuclear war. Build a big enough patent library, and since it's basically impossible to do anything with violating a bunch of nonsensical and obscure patents, as long as you have enough patents to sue the living bejesus out of anyone who sues you, no one will sue you. Great system we have.


The problem Bigg, is you are using a very specific term for something you don't like; the patent and protection of software as an intellectual property.

I get it, a company implements common technical language in a new logical way to perform a unique task and then patents the process. Under the laws in place today, that company has some patent protections on that idea (for a period of time).

It is how our patent system has worked for a couple of hundred years. It is designed to protect the small enterprises with new ideas from the large well funded predators.

Unfortunately what we have now are large well funded predators (generally backed by major law firms) buying patents as a tool to extort money from smaller and weaker companies.

*THAT IS TROLLING*

What Apple is doing, what TiVo did, what Google does is not Trolling. You may not like it, it may even need to change but it is NOT TROLLING.



> *Patent troll*
> From Wikipedia, the free encyclopedia
> 
> _A patent troll, also called a patent assertion entity (PAE), is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question, thus engaging in economic rent-seeking. Related, less pejorative terms include patent holding company (PHC) and non-practicing entity (NPE). Generally not considered patent trolls are NPEs such as university research laboratories, development firms that offer their patented technologies to licensees in advance, and licensing agents that offer enforcement and negotiation services on behalf of patent owners.[1]_
> ...


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## Dan203 (Apr 17, 2000)

No matter how obvious the idea may be now all that matters is how obvious it was at the time it was filed. And since no one had previously done it, it wasn't that obvious. There are plenty of other patents for even simpler ideas that seem even more obvious that are also patented. Like Netflix has a patent on the numbered queue. Amazon has a patent for one click ordering. And Twitter owns a patent for "pull down to refresh" on mobile apps. Things that just seem so simple and obvious to us now weren't when the patent was filed.

While I know you disagree with software patents as a whole, in a world where they are allowed TiVo's is no worse then any other.


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## Arcady (Oct 14, 2004)

I thought TiVo stock talk was out of bounds on this forum. Are we just ignoring the rules now?


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## Bigg (Oct 31, 2003)

bradleys said:


> The problem Bigg, is you are using a very specific term for something you don't like; the patent and protection of software as an intellectual property.


The problem is that at some point, the patents get so ridiculous that no one can do anything without violating 50 patents. This is the case with cell phones, which is why we have gotten to the concept of patent portfolios as a metaphor for nuclear war.



> Unfortunately what we have now are large well funded predators (generally backed by major law firms) buying patents as a tool to extort money from smaller and weaker companies.


It's not just that. There are so many bizarre patents out there for relatively simple things, especially in the mobile area that it is literally impossible to make a modern smartphone, even if you have a large portfolio, without violating someone else's patent. So they all build big portfolios enough that they overlap each other, and create the thread of MAD, just like in nuclear war, and thus, they can keep making phone. Apple and Samsung are the two biggest players in the cold war in tech patents. Microsoft, Google, and others also have large portfolios that can be used to threaten MAD if companies try to sue them for their inevitable patent violations.

TiVo is in a bit of a different situation. They own a few patents that other companies will inevitably violate, but the other companies don't have enough patents in TiVo's specific product area to threaten MAD and keep TiVo at bay, so TiVo sued them for what amounts to extortion.



Dan203 said:


> No matter how obvious the idea may be now all that matters is how obvious it was at the time it was filed. And since no one had previously done it, it wasn't that obvious. There are plenty of other patents for even simpler ideas that seem even more obvious that are also patented. Like Netflix has a patent on the numbered queue. Amazon has a patent for one click ordering. And Twitter owns a patent for "pull down to refresh" on mobile apps. Things that just seem so simple and obvious to us now weren't when the patent was filed.
> 
> While I know you disagree with software patents as a whole, in a world where they are allowed TiVo's is no worse then any other.


But the question is whether they can actually stand up to scrutiny. I would venture to say that most of those can't.


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## bradleys (Oct 31, 2007)

Bigg said:


> The problem is that at some point, the patents get so ridiculous that no one can do anything without violating 50 patents. This is the case with cell phones, which is why we have gotten to the concept of patent portfolios as a metaphor for nuclear war.


It doesn't change the fact that you are using the term *incorrectly!*

I am sure many people said the same thing after James Watt patented the steam engine, after all, he was just boiling water!!!!

Especially since it was actually invented by Heron in Ancient Egypt.



> But the question is whether they can actually stand up to scrutiny. I would venture to say that most of those can't.


TiVo has proven that their patents can indeed stand the test of scrutiny. They won every case and every appeal - ultimately putting all comers on notice that they would defend their intellectual property.

And yes TiVo won, in all of their court cases... The settlements started after all the appeals failed and is an integral part of our legal system.


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## Bigg (Oct 31, 2003)

bradleys said:


> It doesn't change the fact that you are using the term *incorrectly!*


If you want to be strict about the word usage, then we need a word for a company that's doing the same thing, but also has a product that they are selling.

Just because they are selling a product doesn't make throwing around baseless patent lawsuits for extortion OK.


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## Dan203 (Apr 17, 2000)

But they're not doing it for extortion. They're doing it to protect a product they are selling. And in the case of Dish a little bit of revenge. Dish ripped them off. They had TiVo develop a prototype Dish DVR, they borrowed it, reverse engineered it and then told TiVo "never mind, we made our own". TiVo couldn't get them for straight up theft so they went after them the only way they could, with patents.


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## bradleys (Oct 31, 2007)

Bigg said:


> Just because they are selling a product doesn't make throwing around baseless patent lawsuits for extortion OK.


If they were baseless they wouldn't have won case after case, if they were baseless these large, super funded companies wouldn't have dropped one after the next.


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## steve614 (May 1, 2006)

Dan203 said:


> But they're not doing it for extortion. They're doing it to protect a product they are selling. And in the case of Dish a little bit of revenge. Dish ripped them off. They had TiVo develop a prototype Dish DVR, they borrowed it, reverse engineered it and then told TiVo "never mind, we made our own". TiVo couldn't get them for straight up theft so they went after them the only way they could, with patents.


Yeah, I think the Dish fiasco made TiVo gun shy and that's why they're so aggressive.


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## Bigg (Oct 31, 2003)

Dan203 said:


> But they're not doing it for extortion. They're doing it to protect a product they are selling. And in the case of Dish a little bit of revenge. Dish ripped them off. They had TiVo develop a prototype Dish DVR, they borrowed it, reverse engineered it and then told TiVo "never mind, we made our own". TiVo couldn't get them for straight up theft so they went after them the only way they could, with patents.


Yup, for revenge. Not for a legitimate claim that DISH stole anything.


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## tarheelblue32 (Jan 13, 2014)

Bigg said:


> Yup, for revenge. Not for a legitimate claim that DISH stole anything.


If they didn't have a legitimate claim against DISH, then they would have lost the patent lawsuit.


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## Bigg (Oct 31, 2003)

tarheelblue32 said:


> If they didn't have a legitimate claim against DISH, then they would have lost the patent lawsuit.


There's all kinds of suits that go through that shouldn't.


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## JosephB (Nov 19, 2010)

Bigg said:


> If you want to be strict about the word usage, then we need a word for a company that's doing the same thing, but also has a product that they are selling.
> 
> Just because they are selling a product doesn't make throwing around baseless patent lawsuits for extortion OK.


But it's not baseless. They have a patent, they are using the system as it is designed. I guess you're basically for eliminating all patents altogether?

There are some really, really bad "process" patents out there that get abused by patent trolls, but the TiVo patents cover a real product, not obvious business processes. It sounds like you don't know what the TiVo patents actually cover.


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## Bigg (Oct 31, 2003)

JosephB said:


> But it's not baseless. They have a patent, they are using the system as it is designed. I guess you're basically for eliminating all patents altogether?
> 
> There are some really, really bad "process" patents out there that get abused by patent trolls, but the TiVo patents cover a real product, not obvious business processes. It sounds like you don't know what the TiVo patents actually cover.


They cover some BS about recording video to a disk and spitting it back. Not rocket science, that's for sure.


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## steve614 (May 1, 2006)

Bigg said:


> They cover some BS about recording video to a disk and spitting it back. Not rocket science, that's for sure.




If it was that simple, TiVo wouldn't have been granted the patent. 
It may not be rocket science, but it is a process that no one else was doing at the time.
And process is the key word. It's not just about "recording video to a disk and spitting it back", it's the process used in accomplishing that task.
The patent doesn't stop anyone else from recording video to a disk and spitting it back (obviously, or there wouldn't be any other DVRs on the market), it's to stop anyone from using that particular method.


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## gonzotek (Sep 24, 2004)

Bigg said:


> They cover some BS about recording video to a disk and spitting it back. Not rocket science, that's for sure.


We had geo-sync'd satellites operational in 1963, a man on the moon by 1969, and Voyager 1 was launched in 1977. If DVRs were such a simple and obvious set of processes, then why hadn't they been invented before 1999? What I'm saying is that rocket science is easier than creating a profitable stand-alone DVR


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## JosephB (Nov 19, 2010)

Bigg said:


> They cover some BS about recording video to a disk and spitting it back. Not rocket science, that's for sure.


It was so obvious and simple that they were abundant before TiVo came about, right?

1) what TiVo does is significantly more than just recording video to a disk and spitting it back. 
2) simplicity does not mean something isn't patentable 
3) it's been litigated over and over, by people who are smarter than you (and me) so it's obvious these patents are valid and are not trolling.


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