# Dish/Echostar announce settlement of patent dispute!



## snedecor (Jun 27, 2001)

Looks like Charlie got off cheap...

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TiVo, DISH Network and EchoStar Announce Half-Billion Dollar Settlement of Patent Litigation

ALVISO, CA and ENGLEWOOD, CO, May 02, 2011 (MARKETWIRE via COMTEX) --

TiVo Inc. (NASDAQ: TIVO), DISH Network Corporation (NASDAQ: DISH), and EchoStar Corporation (NASDAQ: SATS) announced today that they have settled all of their ongoing patent litigation.

Under the terms of the settlement, DISH Network and EchoStar agreed to pay TiVo $500 million, including an initial payment of $300 million with the remaining $200 million distributed in six equal annual installments between 2012 and 2017. TiVo, DISH Network and EchoStar agreed to dismiss all pending litigation between the companies with prejudice and to dissolve all injunctions against DISH Network and EchoStar.

The parties also granted certain patent licenses to each other. TiVo granted DISH Network a license under its Time Warp patent (US Pat. No. 6,233,389) and certain related patents, for the remaining life of those patents. TiVo also granted EchoStar a license under the same '389 patent and certain related patents, for the remaining life of those patents, to design and make certain DVR-enabled products solely for DISH Network and two international customers. EchoStar granted TiVo a license under certain DVR-related patents for TiVo-branded, co-branded and ingredient-branded products.

"We have tremendous respect for TiVo's management, and we have always said that regardless of the outcome of the case, there were many ways that we could work together with TiVo," said Charlie Ergen, Chairman and CEO of DISH Network. "The results of TiVo's formidable intellectual property enforcement program speak for themselves, and consequently, we are pleased to put this litigation behind us and move forward. Additionally, we believe that our agreement with TiVo provides us a competitive advantage as one of the few multichannel operators with rights to operate under TiVo's Time Warp patent, which ultimately will allow us to enhance the performance of our award-winning DVRs. We look forward to continuing to offer DISH Network customers the most choices in video service."

"We are extremely pleased to reach an agreement with DISH Network and EchoStar which recognizes the value of our intellectual property," said Tom Rogers, president and CEO of TiVo. "The compensation from this settlement, including the resulting reduction in legal expenditures, puts TiVo in an enviable financial and strategic position. This settlement, which brings the total compensation paid by DISH Network for use of TiVo's '389 patent family to over $600 million, demonstrates the significant return afforded to our shareholders by diligent enforcement of TiVo's intellectual property rights. Those efforts will aggressively continue with other parties."

In addition, TiVo will play a role in helping DISH Network promote the Blockbuster digital video service. Ergen added, "We are excited to work with TiVo to help develop our Blockbuster video service. Resolving the patent infringement case allows us to further engage with TiVo on a variety of exciting strategic initiatives, like Blockbuster, where we are uniquely positioned to collaborate."

About TiVo Inc. Founded in 1997, TiVo Inc. (NASDAQ: TIVO) developed the first commercially available digital video recorder (DVR). TiVo offers the TiVo service and TiVo DVRs directly to consumers online at www.tivo.com and through third-party retailers. TiVo also distributes its technology and services through solutions tailored for cable, satellite, and broadcasting companies. Since its founding, TiVo has evolved into the ultimate single solution media center by combining its patented DVR technologies and universal cable box capabilities with the ability to aggregate, search, and deliver millions of pieces of broadband, cable, and broadcast content directly to the television. An economical, one-stop-shop for in-home entertainment, TiVo's intuitive functionality and ease of use puts viewers in control by enabling them to effortlessly navigate the best digital entertainment content available through one box, with one remote, and one user interface, delivering the most dynamic user experience on the market today. TiVo also continues to weave itself into the fabric of the media industry by providing interactive advertising solutions and audience research and measurement ratings services to the television industry. www.tivo.com

TiVo and the TiVo Logo are trademarks or registered trademarks of TiVo Inc. or its subsidiaries worldwide. Copyright 2011 TiVo Inc. All rights reserved. All other trademarks are the property of their respective owners.

About DISH Network DISH Network Corporation (NASDAQ: DISH), through its subsidiary DISH Network L.L.C., provides more than 14.19 million satellite TV customers, as of March 31, 2011, with the highest quality programming and technology with the most choices at the best value, including HD Free for Life. Subscribers enjoy industry-leading customer satisfaction, the largest high definition line-up with more than 200 national HD channels, the most international channels, and award-winning HD and DVR technology. DISH Network Corporation is a Fortune 200 company. Visit www.dish.com.

About EchoStar Corporation EchoStar Corporation (NASDAQ: SATS), provides equipment sales, digital broadcast operations, and satellite services that enhance today's digital TV lifestyle, including products from Sling Media, Inc., a wholly owned subsidiary. Headquartered in Englewood, Colo., EchoStar has more than 25 years of experience designing, developing and distributing award-winning television set-top boxes and related products for pay television providers and is creating hardware and service solutions for cable, Telco, IPTV and satellite TV companies. EchoStar includes a network of 10 digital broadcast centers and leased fiber optic capacity. EchoStar also delivers satellite services through 10 satellites and related FCC licenses. For more information, please visit www.EchoStar.com.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements by TiVo, DISH Network, and EchoStar relate to, among other things, TiVo's future aggressive enforcement of its intellectual property against other parties and the promotion and marketing of the Blockbuster digital video service by TiVo and DISH Network as well as other possible strategic initiatives between TiVo and DISH Network in the future. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include delays in development, competitive service offerings and lack of market acceptance, as well as the other potential factors described under "Risk Factors" in each company's public reports filed with the Securities and Exchange Commission, including each company's most recent annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Each company cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. Each company disclaims any obligation to update these forward-looking statements.

SOURCE: TiVo


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## ghuido (May 9, 2007)

Here is one from Endgadget

http://www.engadget.com/2011/05/02/dish-network-will-pay-tivo-500-million-to-settle-dvr-lawsuit/

Looks like a total of $700 Million. $500 million upfront. That fills up TIVO war chest. Lets hope they invest in improving the Premiere and not more litigation on other Companies.


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## parzec (Jun 21, 2002)

I thought it was $300 Millions upfront with $200 Million paid out over time.


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## aaronwt (Jan 31, 2002)

So did Dsih buying Blockbuster become a catalyst for this in some way? Since Blockbuster is available on Series 3 and Series 4 TiVos.


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## morac (Mar 14, 2003)

While TiVo did get some money out of this (minus whatever lawyer fees they've been paying for the last 8 years), it doesn't really feel like a win for TiVo since it's a one time boost.

Most likely most of it will be pooled into funding the other pending law suits with the remaining to keep the company afloat since subscriber revenue is way down.


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## rifleman69 (Jan 6, 2005)

TiVo lost out, they realized they couldn't afford to go much longer with Charlie's stall tactics and settled for much less.


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## Bierboy (Jun 12, 2004)

Aren't the patents some kind of victory for TiVo?


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## Mike Pfeifer (Mar 17, 2011)

There's been a few job ads on twitter from Tivo recently, so hopefully it means they are investing in the advancement of the company and its products now.


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## rainwater (Sep 21, 2004)

morac said:


> While TiVo did get some money out of this (minus whatever lawyer fees they've been paying for the last 8 years), it doesn't really feel like a win for TiVo since it's a one time boost.
> 
> Most likely most of it will be pooled into funding the other pending law suits with the remaining to keep the company afloat since subscriber revenue is way down.


TiVo got validation of their patents with Dish/Echostar forced to do a cross patent deal. This will help TiVo in the long run if they pursue this against other manufacturers.


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## morac (Mar 14, 2003)

Bierboy said:


> Aren't the patents some kind of victory for TiVo?


Kind of. TiVo is basically getting $300 million in damages for DISH's use of TiVo's patents up till now (that was awarded previously as part of the law suit) and $200 from DISH until they expire in 2017. That's about $33.3 million a year or approximately $1.75 per DISH subscriber per year. But in return, TiVo will basically give DISH free advertising.

From what I can tell from the press releases here's what TiVo and DISH each get.

TiVo gets:
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$500 million ($300 million up front and remaining $200 over course of the next 6 years)
Use of DISH's patents (whatever those are as they aren't listed)

DISH gets:
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Use of TiVo's Timewarp patent plus related patents
Advertising as TiVo will promote the Blockbuster digital video service (via gold stars I guess)


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## morac (Mar 14, 2003)

rainwater said:


> TiVo got validation of their patents with Dish/Echostar forced to do a cross patent deal. This will help TiVo in the long run if they pursue this against other manufacturers.


Well TiVo's patents have been validated a number of times during the course of the law suit already so that really had nothing to do with the settlement. It was the recent ruling that Dish violated the injunction that likely pushed the settlement. Since Dish and TiVo settled, the suit never went to conclusion so it was never determined how many of Dish's DVRs actually violated the patent. I remember reading it would cost Dish around $500 million to replace all the existing violating DVRs (not including the $300 million they owed TiVo) so Dish actually ended up making out better by settling with TiVo.

As for pursuing other manufacturers, TiVo's patents expire in 2018. If the other law suits draw out as long as the TiVo/Dish one, the patent will actually expire before they conclude. Assuming they don't settle, the other companies may end up paying damages, but they won't end up paying licensing fees. Also remember Microsoft is counter-suing TiVo so the two might just agree to settle with a cross license agreement.


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## orangeboy (Apr 19, 2004)

To me, it seems this settlement is an anticlimactic end to a long, drawn out process.


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## morac (Mar 14, 2003)

orangeboy said:


> To me, it seems this settlement is an anticlimactic end to a long, drawn out process.


What kind of ending were you hoping for? A fight to the death between Ergen and Rogers?


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## orangeboy (Apr 19, 2004)

I don't know if I have an answer to that. $500 million is certainly a lot of money, but I thought the number would be higher.


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## rainwater (Sep 21, 2004)

orangeboy said:


> I don't know if I have an answer to that. $500 million is certainly a lot of money, but I thought the number would be higher.


Part of that deal is the licensing of Dish/Echostar's patents which certainly has value for TiVo. You can't just look at the cash value in this deal.


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## orangeboy (Apr 19, 2004)

rainwater said:


> Part of that deal is the licensing of Dish/Echostar's patents which certainly has value for TiVo. You can't just look at the cash value in this deal.


I just listened to the conference call that discusses the settlement, and the patents that TiVo is (now) licensed for relate only to Dish's DVR "elements". They may indeed hold _some_ value, but not nearly as much as Dish's Sling technology. I did learn however that Dish will be licensing the Time Warp (and family) patents for all current and future DVRs. I was under the impression that the license would only be for those DVRs that infringed.


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## trip1eX (Apr 2, 2005)

It's ~50% of Tivo's market cap.


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## stevel (Aug 23, 2000)

The license simply means that TiVo won't sue Dish for infringement, not that Dish will deliberately include any TiVo technology in their DVRs. This is a very common sort of agreement between companies.


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## Dan203 (Apr 17, 2000)

I'm just glad it's over. Hopefully this means TiVo will get back to actually writing software instead of spending all their money on lawyers.

Dan


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## nrc (Nov 17, 1999)

Given how much TiVo's position appeared weakened by the latest ruling this seems like a pretty good outcome for TiVo. They were at risk of getting very little additional return on their litigation the way things stood. Instead they got a substantial cash settlement, a cross-licensing deal, and they're free to pursue their other cases with no further concerns from Dish.


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## magnus (Nov 12, 2004)

Did Tivo get any of the sling-loaded patents? That would be nice.


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## morac (Mar 14, 2003)

Dan203 said:


> I'm just glad it's over. Hopefully this means TiVo will get back to actually writing software instead of spending all their money on lawyers.
> 
> Dan


Technically it's not over. There's 4 other law suits pending, two with TiVo as the plaintif (against AT&T and Verizon) and two as the defendant (against Microsoft and Motorola). Unless all five parties settle, this is just the beginning.


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## orangeboy (Apr 19, 2004)

magnus said:


> Did Tivo get any of the sling-loaded patents? That would be nice.


http://www.tivocommunity.com/tivo-vb/showthread.php?p=8501243#post8501243


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## orangeboy (Apr 19, 2004)

Tom Rogers said on the conference call that Ergan planned to appeal to the Supreme Court for review of this En Banc decision, essentially dragging it out another couple/few years. TiVo didn't want that to happen...


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## Series3Sub (Mar 14, 2010)

orangeboy said:


> Tom Rogers said on the conference call that Ergan planned to appeal to the Supreme Court for review of this En Banc decision, essentially dragging it out another couple/few years. TiVo didn't want that to happen...


That's the key. Ergen's strategy did work. The one time chump change for Dish payments (and one-time payments to TiVo during the entire legal process) is EXACTLY the kind of settlement Ergan was looking for, much like the TV Guide/Gemstar settlement. Ergan didn't want montly payment that would go on and on and have to renegotiate and forced to a higher per month fee to TiVo--or else! Charlie got out of this CHEAP! As one poster stated, it does seem anticlimactic. A lousy $500 million ONE-TIME payment and another $200 spread out over years. Things really were bad at TiVo to take this life support settlement. This is certainly NOT the kind of money, nor the kind of steady stream of license fees payments Rogers was boasting for the last several years. Rogers not wanting to take the time to go to the Supreme Court (not that they would actually hear it, but maybe they would) while Charlie has all the time and MONEY in the world. TiVo could have vindicated itself and probably would have WON a Supreme Court decision making its patents bullet proof. TiVo would have gone out of business before the first brief to the Supreme Court.

While this is really good news in the short-term for TiVo, it really is a come-down from what was supposed to have been, and now the other defendants will take the road traveled by Charlie against TiVo, unless TiVo comes to its senses and inks modest licensing deals as they did with Dish. Most companies the size of the remaining defendants really will pay money for TiVo to go away, but this discount settlement has set a precedent in the minds of AT&T, et al. as to how $$ they are willing to settle.

As a point of history: several years ago TV Guide/Gemstar sued Dish, DirecTV, TiVo, Time/Warner, and ALL the other cable companies claiming they all infringed on its patents for EPG. The suit against Dish was heard first. Dish prevailed, but a higher court ruled that due to errors, the entire case would have to be re-tried. less than a week later Dish and TV Guide/Gemstar settle for about the same amount TiVo is getting. In the settlement Dish had to have a TV Guide bug on the EPG, but Dish also got use of TV Guide/Gemstar patents, and all future TV Guide "technology." That was all in the one-time payment of about $500 million. Ergan did state at the time Dish was going to use the new patents and technology it rights to use to enhance Dish EPG's.

The point is that as things have now ended per the announced details of this settlement, this whole affiar has had virtually NO EFFECT on Dish or Echostar, but nearly ruined TiVo who had to cry "Uncle" and take what it could get and, instead, focus on fresh meat defendants. Of course, this path was the only for TiVO or it would have gone out of business sooner. This settlement keeps TiVo alive, but it is not the big win it had been talking about for years nor does the chump change settlement scare AT&T, Verizon, et al. in the least. TiVo needed this settlement far more than Dish/Echostar, especially with the life of those oh so special patents running out.

Ergan had been saying for years during the conference calls that Dish and TiVo were going to have to work together at some point, and that point came with Dish's purchase of Blockbuster. Now, Dish had a reason not to stall and force TiVo out of business because now Dish would rather have TiVO IN business promoting and granting access to TiVo subscribers to Blockbuster.

I also believe there is more to this settlement that is good for TiVo, but not as far as the direct payments. Echostar has a much longer and successful operation in Europe, Mexico, India, and Asia. Dish's "international" clients, and even "co-branded" products were mentioned . What we could see here is yesterday's enemies are today's lovers. Echostar can easily get TiVo into the international markets with co-branded products that TiVo has so belatedly trying to enter for its survival, and TiVo may show a lot of love for Blocbuster.

All in all, best that it is over for both companies and TiVo will be around at least a few more years, but by that time, we may see Rogers or other board members on the boards at Dish and Echostar.


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## Series3Sub (Mar 14, 2010)

rainwater said:


> Part of that deal is the licensing of Dish/Echostar's patents which certainly has value for TiVo. You can't just look at the cash value in this deal.


TiVo's access to Dish patents seem the most interesting to me. While TiVo has superior search function and better access to on-line content than Dish, there are a number of things Dish DVR's can do that TiVo's can't, and TiVo's engineers may have steered clear to avoid infringing the patents of others.

Here is a list of Dish DVR features that would address many of the complaints from loyal TiVo true believers that would be great if these Dish features could be added to the TiVO:

1. One-hour buffer for both tuners

2. Picture in menu in virtually all menu levels

3. Ability to record 4 HD channels at the same time (for Dish 2 sat and 2 OTA) while playing back a recording.

4. Picture-in-Picture for any TV.

5. Driving a 2nd TV with its independent DVR experience, albeit currently SD, but this feature can be enhanced for TiVo and is a great head-start where both users can access all recordings on DVR and play them back without interfering with the other TV watcher in real time. This mode can be turned on or off on Dish DVR's, so it can be used (Dual Mode) only when necessary, although TV1 is still output in "Single" mode providing the exact experience in the 2nd room as the first room.

6. Instant speed guide. No lags or waiting for lines to appear or stalled scroll.

7. Built in RF remote support for DVR for both TV1 and TV2, if necessary.

8. Unlimited number of external HDD's for archiving and playback from the HDD itself or from any other compatible box on the account. Content can also be transferred to any of compatible DVR's if preferred. No hassle of "married" HDD or losing all program since its first connection should the external HDD die.

Just about the full wish list from those disappointed with the Premier and why once innovative TiVo has slipped form #1 to #3 on my personal list of Best DVR's. I'm still disappointed that my S3 can't record 2 cable and 2 OTA, but I still love my 648 regardless. Let's hope TiVo got access to some good Dish patents, or they may be only the ones Dish was planning to sue TiVo in its suit.


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## Series3Sub (Mar 14, 2010)

From Dish Quarterly Earnings Conference Call:

_Bryan Kraft - Evercore Partners: What about TiVo software, would you consider using their software in your boxes for user interface?

Charlie Ergen - Chairman, President and CEO: I guess I'll say it this way. I think the lines of communication are open with the TiVo. *Tom already owes me a dinner. H owes me about $600 million dinner;* that's before the tip, and I think TiVo has a very good operating system, I think that I like their viewer management, I like their advertising model they do, and I think, that it's up to their management and our management to come up with innovative ways and see if there are ways to work together, because we've been through - it was close, we actually signed this deal on Saturday, so we actually signed a deal before we captured Bin Laden, which I didn't think was - it was a good race to see who got there first, us and TiVo over Bin Laden, and we got Bin Laden, so we beat them by a day, and we're proud of that._


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## Chris Gerhard (Apr 27, 2002)

This is great news, I believe it means TiVo will continue to operate for many years. The focus now should be building a company that can be operated profitably and provide products that meet the market's needs. Continued litigation is alright with me but building a company with the funds necessary for R&D, operations and customer service should be the key to success.


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## morac (Mar 14, 2003)

Anyone know why TiVo has set up to remove the poison pill clause that is preventing another company from buying TiVo 6 months after the end of the Dish/TiVo law suit? That makes it look like TiVo's plan is to sell the company after resolving the law suit.


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## Chris Gerhard (Apr 27, 2002)

morac said:


> Anyone know why TiVo has set up to remove the poison pill clause that is preventing another company from buying TiVo 6 months after the end of the Dish/TiVo law suit? That makes it look like TiVo's plan is to sell the company after resolving the law suit.


I don't know if there is a company that will buy TiVo now or not but I do know that until the litigation was resolved, TiVo wasn't worth much and the poison pill prevented a sale when the company had only speculative value, not real value. If TiVo can't begin to operate profitably, long term the value will go down so either turn it around and operate in the black or let a company that can operate it profitably takeover is how I expect things to go now.


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## Chris Gerhard (Apr 27, 2002)

Of course preventing Dish Network from buying TiVo before the litigation ended was an important consideration as well so the poison pill isn't necessary now.


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## ZeoTiVo (Jan 2, 2004)

Series3Sub said:


> From Dish Quarterly Earnings Conference Call:
> 
> _Bryan Kraft - Evercore Partners: What about TiVo software, would you consider using their software in your boxes for user interface?
> 
> Charlie Ergen - Chairman, President and CEO: I guess I'll say it this way. I think the lines of communication are open with the TiVo. *Tom already owes me a dinner. H owes me about $600 million dinner;* that's before the tip, and I think TiVo has a very good operating system, I think that I like their viewer management, I like their advertising model they do, and I think, that it's up to their management and our management to come up with innovative ways and see if there are ways to work together, because we've been through  it was close, we actually signed this deal on Saturday, so we actually signed a deal before we captured Bin Laden, which I didn't think was  it was a good race to see who got there first, us and TiVo over Bin Laden, and we got Bin Laden, so we beat them by a day, and we're proud of that._


that is simply bizarre


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## ZeoTiVo (Jan 2, 2004)

Series3Sub said:


> Rogers not wanting to take the time to go to the Supreme Court (not that they would actually hear it, but maybe they would)


actually, the SCOTUS was pretty likely to hear this for the review of how to handle infringement cases where the offending party simply makes changes and then says all better now. there was a chance for some far reaching changes if the court desired to make those changes.


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## Phantom Gremlin (Jun 20, 2002)

morac said:


> What kind of ending were you hoping for? A fight to the death between Ergen and Rogers?


You say that like it's a bad thing.


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## lrhorer (Aug 31, 2003)

Series3Sub said:


> TiVo's access to Dish patents seem the most interesting to me. While TiVo has superior search function and better access to on-line content than Dish, there are a number of things Dish DVR's can do that TiVo's can't, and TiVo's engineers may have steered clear to avoid infringing the patents of others.
> 
> Here is a list of Dish DVR features that would address many of the complaints from loyal TiVo true believers that would be great if these Dish features could be added to the TiVO:
> 
> ...


I don't want *ANY* of those things. Not one. A DVR without them is potentially a much better DVR.



Series3Sub said:


> 7. Built in RF remote support for DVR for both TV1 and TV2, if necessary.


RF remotes are nice, especailly for remote music applications. Otherwise - meah.



Series3Sub said:


> 8. Unlimited number of external HDD's for archiving and playback from the HDD itself or from any other compatible box on the account. Content can also be transferred to any of compatible DVR's if preferred. No hassle of "married" HDD or losing all program since its first connection should the external HDD die.


I don't think there is any way in Hell CableLabs would approve this unless the drive is indeed married to the box. They have relaxed their regs as of late, but I don' think that much. It would defeat the DRM. They would probably be OK with polygamous external HDs.



Series3Sub said:


> Just about the full wish list from those disappointed with the Premier and why once innovative TiVo has slipped form #1 to #3 on my personal list of Best DVR's. I'm still disappointed that my S3 can't record 2 cable and 2 OTA, but I still love my 648 regardless. Let's hope TiVo got access to some good Dish patents, or they may be only the ones Dish was planning to sue TiVo in its suit.


None of this, if added to a Premier, would induce me to recommend the Premier. Quite the opposite.


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## Mike Pfeifer (Mar 17, 2011)

Numbers 1 and 2 sound good to me. I miss the 1 hr buffer that I had on my directv box. I never used it on purpose, but for a live sports event that you had to get up to do something in the middle of, its nice.


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## ZeoTiVo (Jan 2, 2004)

I typically turn off picture in menu in 5 minutes time. I keep it as it is nice when checking to do list or guide, but when I go to the main menu - it means I am not wanting to watch something, but do something.

If I need more than 30 minutes I hit record.

I would use 4 tuners if I had them but then would have to keep my eye out for how to get that 4 TB drive in the beast and be worried that I would lose many, many shows.

cablelabs would not want to do anything to help TiVo in this design

I like having a TiVo at each TV and shows appropriate for that viewing spot.


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