# DISH contemplating hostile takeover of TiVo?



## Bierboy (Jun 12, 2004)

Davis Freeberg floats the possibility that DISH may attempt a hostile takover of TiVo.


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## morac (Mar 14, 2003)

He also points out that because of the "poison pill" provision, they wouldn't be able to afford to do so. I don't think it's going to happen. There's companies with a lot more capital than Dish who would benefit from buying TiVo, who have not done so, so it's extremely doubtful Dish would do so.


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## MichaelK (Jan 10, 2002)

I'd wonder if Dish made a move if Directv wouldn't just buy tivo- like in baseball when a player goes on waivers and one team grabs him just to hose the teams ahead of them.


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## dd9 (Aug 10, 2000)

Charlie Ergen is a little whacky and doesn't handle things in the best interest of his customers. If he made that hostile move, it would be for the intention of dismantling Tivo and bringing up his own brand. He's absolutely ripping over this lawsuit patent infringement thing.


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## ZeoTiVo (Jan 2, 2004)

meh, another article marred with innacuracies.
take for example


> The far more damaging portion of Folsoms order is the infringement provision. This prevents Echostar from replacing these DVRs with other DVR set top boxes.
> 
> The DVR functionality, storage to and playback from a hard disk drive, *shall not be enabled in any new placements of the Infringing Products*. (bold added by me)
> 
> The inability to offer a DVR to their customers would put Dish at a severe competitive disadvantage. Furthermore, because Dish has now been caught trying to sneak a replacement DVR in through a redesigned back door, they now must seek court approval prior to deploying any new DVR solutions.


he bolded the above part - but then I underlined the simple point he completely missed. DISH can place new DVRs, just not the ones on the list. He then goes on to base much of his argument on this point of greatly overestimating the damage to DISH done by the lawsuit.

Plus, while the head of DISH is quite capable of doing something illogical just to get simple revenge - I would think DISH would call on those couple of lawyers they have to truly analyze the poison pill versus spend 25 minutes on some journalists take on it


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## gonzotek (Sep 24, 2004)

ZeoTiVo said:


> meh, another article marred with innacuracies.
> take for example
> 
> he bolded the above part - but then I underlined the simple point he completely missed. DISH can place new DVRs, just not the ones on the list. He then goes on to base much of his argument on this point of greatly overestimating the damage to DISH done by the lawsuit.
> ...


Davis Freeberg isn't 'some journalist'. He's been a member of the TiVo-owning community for years and usually has an astute view of the goings-on in the industry. Here's the bio from his site:


> Davis Freeberg is a technology enthusiast living in the San Francisco Bay Area. His interests include Netflix, TiVo, VOD, the Media & Digital Convergence. He is also fascinated with marketing and the impact that it has on consumer choices. He especially enjoys writing and discussing technology from a business perspective.
> Professionally Davis Freeberg is an investment advisor in a non technology related field and uses his pen name to separate his investment career and identity from his thoughts and opinions on new media and technology, both fields which neither he nor his firm advise or offer services for professionally.


http://davisfreeberg.com/about/

In the comments on the article, Dave Zatz mentions he also got a search hit on 'poison pill' recently. The speculation in Davis' article might be far-fetched and there are some inaccuracies as you pointed out, but the main fact that he revealed for us is that _someone_ from within Echostar was looking for (and found) information about TiVo's hostile takeover strategy. Now, it could easily be any random worker who, like you or me, might have had a passing interest in the topic. If however, it was the very first step on the road to a takeover attempt, then Davis has managed to tease out something very important from his site logs.


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## MichaelK (Jan 10, 2002)

gonzotek said:


> ... .... the main fact that he revealed for us is that _someone_ from within Echostar was looking for (and found) information about TiVo's hostile takeover strategy. Now, it could easily be any random worker who, like you or me, might have had a passing interest in the topic. ....


That's kind of my thought. I'm sitting here in a fortune 100 pharma company reading this thread and bouncing around the blogs listed. Does that me this big pharma company is looking into a hostile takeover of Tivo?

it MIGHT be ergen or a lacky sitting around bored one day with a eureka moment and googling. But I'd say the odds are overwelmingly that someone is just screwing off on work time.


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## gonzotek (Sep 24, 2004)

I know, but isn't it *fun* to speculate?


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## ZeoTiVo (Jan 2, 2004)

gonzotek said:


> If however, it was the very first step on the road to a takeover attempt, then Davis has managed to tease out something very important from his site logs.


well Ok then "If Dish is looking at any Journalists take" as part of any serious thought on a take over then that would be surprising. DISH has lawyers who would know how to acquire the official docs and ensure nothing was overlooked.

So maybe some execs in a meeting pulled from the internet for discussion points but it would not be at any serious stage if that is part of the research.

Also as much as Freeberg has been around for a while - his inaccuracies in the article led to seriously overstating the damage to DISH and it kind of blows his whole argument out of the water on this one.

Fun to speculate but also fun to pick apart the speculation


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## socrplyr (Jul 19, 2006)

ZeoTiVo said:


> well Ok then "If Dish is looking at any Journalists take" as part of any serious thought on a take over then that would be surprising. DISH has lawyers who would know how to acquire the official docs and ensure nothing was overlooked.
> 
> So maybe some execs in a meeting pulled from the internet for discussion points but it would not be at any serious stage if that is part of the research.
> 
> ...


While I agree with most of your speculation at picking apart speculation, I will add some more speculation to the mix. He may not be overstating the damages in the end. Right now the suit only covers DVRs that were in existence years ago. Dish software updated them and said they were no longer infringing, which then Tivo continued the suit and the court said they still infringed. Now here is my speculation, I fully doubt that the current models of DVR are more than colorably different than the updated infringing ones when it comes to Tivo's patents (if Dish thought the old ones were fixed with just the software update, I'm sure they didn't reinvent the wheel and come up with a newer way for the new ones). Thus these new DVRs infringe as well and upon further court action will be added to the list. In that case Dish is in real trouble.

Now to agree with you on the thought that Dish is looking to buy Tivo. I'm sure that somewhere near day 1 of the lawsuit that Dish looked at what it would take to acquire Tivo. As for the Echostar IP looking at the info, I bet some Junior VP at Echostar with his fancy MBA had an epiphany. Why not buy Tivo? In his own arrogance he probably went off on his own to do a little research before talking to his boss and thought no one would have ever thought of this before... End result it took him 40 minutes plus to figure out what Echostar's lawyers took numerous hours @ $500/hour to look at years ago. Unless there is a loophole in the poison pill there will be no Echostar takeover. Also, Tivo will not agree to sell itself unless there is a huge markup and then it won't wind up being to Echostar. The reprecusions in the industry would be too great (most likely the death of DirecTV's Tivo, standalone Tivo, and Comcast Tivo), which leaves Tivo a worthless company to buy except for their patents. It would have been a whole lot cheaper just to license even if Tivo wanted unreasonable fees.


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## daveak (Mar 23, 2009)

MichaelK said:


> it MIGHT be ergen or a lacky sitting around bored one day with a eureka moment and googling. But I'd say the odds are overwelmingly that someone is just screwing off on work time.


That never happens, esp on this site... 

I better get back to work, I'm only going to read one more post, just one...


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## ZeoTiVo (Jan 2, 2004)

socrplyr said:


> Now here is my speculation, I fully doubt that the current models of DVR are more than colorably different than the updated infringing ones when it comes to Tivo's patents (if Dish thought the old ones were fixed with just the software update, I'm sure they didn't reinvent the wheel and come up with a newer way for the new ones). Thus these new DVRs infringe as well and upon further court action will be added to the list. In that case Dish is in real trouble.


right, but that is nowhere near the lock others (like the journalist) seem to think it is. Also it does not at all follow that other companies would just fall under the infringement and have to deal with TiVo as well.

There is a fairly specific definition of what infringes on TiVo IP and it is a good bit more than just recording to a hard drive.


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## Davis Freeberg (May 23, 2006)

If I can jump in and defend myself here, I'd like to raise a few points. First off, I'm not a journalist and don't consider myself one. I'm glad that you feel that my personal diary rises to that kind of credibility, but keep in mind, everything I write is just my opinion. 

Secondly, I never denied that it could just be someone goofing off or have some other explanation. Who knows maybe one of their own employees is a shareholder and is interested. On the other hand, more than one analysts have said that Dish may be forced to play their hand and if you were facing the prospect of upsetting half of your customers, it's probably the sort of thing that you'd look into. Not sure why you think that they wouldn't use Google to try and find the info., they did after all end up getting to a copy of the contract. When I first tracked down the poison pill it took me longer than a half an hour to find it, so maybe those $500 attorneys were trying to save Dish $250. Regardless of what their research means, I still don't see how Dish would get around it, so in many ways this their intentions may be a moot point.

Third, you can disagree with my views on damages, but in the long run I believe that my assessment will turn out to be closer to reality then the one put forward by Dish. They've tried to lowball the numbers all along, I'm trying to look at reality. In previous testimony, Charlie Ergen has said that if DVR were forced to stop it would costs them hundreds of million dollars per month vs the orginal $90 million per month that they referenced when they first lost the verdict. In TiVo's court filing objecting to the stay, they reference 6 million DVRs. Currently the injunction may only technically cover 4 million boxes, but at their next hearing, I believe that TiVo will be able to expand the injunction. We can get hung up on the math, but I think that's probably where our core difference is. If TiVo doesn't get the injunction on the new DVRs, I'll be the first to admit that I overestimated the number of DVRs that would be impacted. 

Finally, I'm not sure which specific numbers you have a disagreement with, but I'll run you through some of my math that you feel I'm grossly miscalculating. 

Currently, Charter is in bankruptcy and is selling off their subs for $2,000 a piece. Given the type of sale, I believe that we can establish this as a "conservative" valuation on a per subscriber basis. Assuming that 10% of Dish's sub base churns it would be approx 1.3 million subs. At this valuation, it would represent $2.5 billion in lost market cap. If you try to value Dish from an earnings perspective, the disruption could be as high as $4 billion (again for only 10% churn) based on current multiples. If you don't believe that they'd lose at least 10% if they turned off the DVRs then I'd argue that you're crazier then Charlie.


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## SullyND (Dec 30, 2004)

Davis Freeberg said:


> If I can jump in and defend myself here, I'd like to raise a few points.


Don't just jump in - stay a while.

Sully - who is just jumping in to say he enjoys your posts on ZNF.


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## Davis Freeberg (May 23, 2006)

[pulling up chair] - Thanks Sully, I'm glad you like them. Zatz is a super nice guy, I'm glad that he lets me use his blog for my wacky conspiracy theories.


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## nrc (Nov 17, 1999)

I like that Dish fans think that this is a realistic possibility. It will make it that much more painful for them when Charlie ends up paying TiVo.

Yes, Charlie should buy Tivo for ten times what it is worth and hundreds of times more than he would pay just to license TiVo technology - all for spite. That's the way to run a business that is already getting the snot kicked out of it by DirecTV.


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## MichaelK (Jan 10, 2002)

as above I basically think it was someone screwing off who googled. But I dont think all (or most) of the other dish dvr's getting lumped in as infringing is that crazy. 

I'm not up on it myself but the people who seem to be in the know in the lawsuit threads noticed that Dish's own expert basically testified that the workaround software (that was found to be not colorably different) was essentially the same that dish uses on their other DVR's. That freaked DISH enough that they apparently tried to get their own experts testimony stricken from the record to no avail.

So I think it's a possibility that the other dvr's (I think someone said it may just be broadcom based dvr's - not sure if that's ALL their dvr's or just a subset) do get lumped in at some point. Or at least that tivo makes the move to get them lumped in.


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## Davis Freeberg (May 23, 2006)

_"I'm not up on it myself but the people who seem to be in the know in the lawsuit threads noticed that Dish's own expert basically testified that the workaround software (that was found to be not colorably different) was essentially the same that dish uses on their other DVR's. That freaked DISH enough that they apparently tried to get their own experts testimony stricken from the record to no avail."_

Exactly, which is why I argue that the total number of DVRs is closer to the "majority" that Dish has referenced in their board room comments. Now I could see a situation where the 4 million boxes get shut off and the "replacement" DVRs would stay on pending appeal after appeal after appeal, but it wouldn't make sense for Dish to physically replace their current infringing DVRs with other DVRs that they know will also infringe.

Because of the new work around approval restrictions, I believe it will give TiVo wide latitude in objecting if Dish continues to sell any type of DVR service. One can argue that this is too broad of an interpretation, but an actual work around (think media center PCs) would quadruple the cost of the DVR for Dish (4 million higher DVRs @ $800 a piece would work out to be $3.2 billion even b4 we start to consider the "new" DVRs that I believe also infring) If TiVo really is refusing to settle what options will Dish have? They are in a lot of trouble. $7.5 billion is too large of a number and shutting off DVRs to half your customers would be suicidal at best. Even an all out attempt to replace the hardware would cost them billions.


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## nrc (Nov 17, 1999)

Davis Freeberg said:


> Exactly, which is why I argue that the total number of DVRs is closer to the "majority" that Dish has referenced in their board room comments. Now I could see a situation where the 4 million boxes get shut off and the "replacement" DVRs would stay on pending appeal after appeal after appeal, but it wouldn't make sense for Dish to physically replace their current infringing DVRs with other DVRs that they know will also infringe.


TiVo argues in it's opposition to continuing the stay during Dish's latest appeal limits the models affected to "eight enumerated models." They'll be hard to expand the scope having made that argument.



> 1. The disablement provision is precise and clear. It is limited to eight enumerated models of DVR receivers (the DP-501; DP-508; DP-510; DP-522; DP-625; DP-721; DP-921; and the DP-942 units, which are defined as the Infringing Products), and applies only to the subset of those products placed with an end user or subscriber.


But it doesn't really matter how many DVRs are impacted. You're ignoring the much more reasonable alternative of reaching a licensing deal with TiVo. Such a deal would cost a tiny fraction of the cost of a hostile takeover.


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## Davis Freeberg (May 23, 2006)

_"But it doesn't really matter how many DVRs are impacted. You're ignoring the much more reasonable alternative of reaching a licensing deal with TiVo. Such a deal would cost a tiny fraction of the cost of a hostile takeover."_

Not ignoring, just don't believe that TiVo will settle. If TiVo doesn't settle, I don't see many good options for Dish.


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## nrc (Nov 17, 1999)

Davis Freeberg said:


> Not ignoring, just don't believe that TiVo will settle. If TiVo doesn't settle, I don't see many good options for Dish.


I don't see a basis for that conclusion. TiVo has reached deals with Comcast, Cox, and DirecTV. There's no sign that they demand unreasonable terms and there's little benefit to shutting down Dish DVRs if they still can't build a Dish DVR themselves.


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## morac (Mar 14, 2003)

Davis Freeberg said:


> Not ignoring, just don't believe that TiVo will settle. If TiVo doesn't settle, I don't see many good options for Dish.


If TiVo has the opportunity to make more money off of Dish, they will do so. There's no additional benefit to driving Dish into the ground as TiVo would lose the additional revenue and it's not like making a deal would weaken their position. It's their patents that give them strength, not their lack of deals.

So even though at this point the law is fully on TiVo's side and they can basically dictate whatever terms they want to Dish, they're likely to at least make a deal Dish can live with (though very likely worse than what Comcast, Cox and DirecTV got).


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## howard23 (Dec 21, 2001)

while a poison pill takeover by Dish @ $71/or so per share would be nice (i have owned this phenomenal product and this HORRIBLE stock for close to 10 years!) it is not economically feasible. more likely the threat of punitive damages brought against DISH coupled with the threat of the injunction being permanent will force DISH into a licensing agreement with TIVO. the first stipulation could forgive this new 103 million award in exchange for say $1.25 to $2 per box per month as well as forgoing any additional punitive damages. TIVO could also demand placement of its software platform in the DISH boxes which could fetch an additional $0.50 per month per box once the software is perfected for the DISH platform.


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## gastrof (Oct 31, 2003)

Davis Freeberg said:


> _"But it doesn't really matter how many DVRs are impacted. You're ignoring the much more reasonable alternative of reaching a licensing deal with TiVo. Such a deal would cost a tiny fraction of the cost of a hostile takeover."_
> 
> Not ignoring, just don't believe that TiVo will settle. If TiVo doesn't settle, I don't see many good options for Dish.


Might one be their sitting back and letting TiVo take over DISH?

Oh...wait...

You said GOOD options...


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## Davis Freeberg (May 23, 2006)

Hard to explain what I'm basing my belief that TiVo will refuse to settle on. Part of it has to do with them going 5 years already and not settling. If I'm wrong and they do sign a deal, I think it would be a big win for Dish. After seeing TiVo beat up so much and hearing TiVo execs say multiple times that they intend to enforce it though, I'm confident that I'll be right on this point, we'll probably know within a month or two.

_If TiVo has the opportunity to make more money off of Dish, they will do so. There's no additional benefit to driving Dish into the ground as TiVo would lose the additional revenue and it's not like making a deal would weaken their position. It's their patents that give them strength, not their lack of deals.
_
I think some of the comments on this very thread are proof for why it's in TiVo's shareholders best interest for them NOT to settle. I can't speak for others, but I know that I don't want a .50 cent, or even $1.50 royalites for the Dish's DVR subs. I would be disappointed if TiVo settled for less than the full $12 a month they charge their stand alone subs.

The willingness of Echostar to disregard TiVo's patent has created a situation where TiVo has zero pricing power. If people fear TiVo after they bankrupt Dish (not joking), they'll pay royalties closer to $4 or $5 a month vs. the .80 cents DTV is paying now. Plus don't forget Cisco, Time Warner, AT&T, Digeo and many others still don't respect TiVo enough to have licensing agreements in place.

If giving up Dish's royalty stream can raise prices several multiples and allow you to pick up new "customers', then holding out on Dish would make a lot of strategic sense.


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## samo (Oct 7, 1999)

nrc said:


> But it doesn't really matter how many DVRs are impacted. You're ignoring the much more reasonable alternative of reaching a licensing deal with TiVo. Such a deal would cost a tiny fraction of the cost of a hostile takeover.


Finally the voice of logic in this thread. Of course Charlie is stubborn and fights any extortion till 12th hour. But he didn't get to where he is by being stupid. There are several alternatives to hostile takeover and all of them are much cheaper and make better business sense.
1. Licensing deal. TiVo lost over million subs and keeps losing them. There is nothing Tivo wants more when to add millions of MSO subs to their SEC report. After all the legal remedies are exhausted and should TiVo prevail on appeals, licensing deal will be most logical and most likely outcome and it will be in a best interest of all parties involved.
2. Friendly merger/sale. Some stock swap that will make whole bunch of money for TiVo execs. That will be in the best interest of TiVo execs and a very likely reason why settlement has not been reached yet. It is much cheaper to pay-off Rogers and the gang than to eat the poison pill.
3. Go dark on 4 million old DVRs and start replacing them with new models. Least desirable option, but still cheaper than hostile takeover.


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## Davis Freeberg (May 23, 2006)

samo said:


> Finally the voice of logic in this thread. Of course Charlie is stubborn and fights any extortion till 12th hour. But he didn't get to where he is by being stupid. There are several alternatives to hostile takeover and all of them are much cheaper and make better business sense.


I think that you are making the mistake of thinking that it has been Charlie who has been holding out. May have been true at one point, but I don't think that there's evidence that this is the case now. Per Dish's latest earnings transcript,

"Weve unable to have had dialog with the TiVo, but nothing that was realistic from our perspective, so obviously they are very confident."

http://seekingalpha.com/article/1370...script?page=-1

Or we can take a closer look at the legal filing that TiVo gave the courts today to gain more insights into their thinking on the subject.

_"The *right to exclude conferred by TiVos patent is empty if it can never be enforced*. Since this Court entered its previous stay, TiVo has lost 25% of its DVR subscribers, while EchoStars have nearly doubled. Ex. 1 (Brunelle Decl. Ex. A). That harm can never be fully redressed through damages. Entry of yet another stay will undermine respect for district court process and severely prejudice TiVo."_

further in their response

_"EchoStar is a large, aggressive competitor, more than willing to pay
damages (and face contempt charges) so long as it can continue to do as it likes Granting a stay here will distort the patent system by encouraging other infringers to make minor changes to their adjudicated products and then seek further stays in order to keep operating even after they are held in contempt. With deep-pocketed infringers, endless cycles of purported change and ensuing litigation will *reduce the right to exclude to little more than a compulsory license*and one enforceable only through rounds of litigation that not only drain a patentees resources but allow rapidly-evolving modern markets to be shaped by infringing competition in ways that go far beyond monetary harm." [Note: *Bold* added by me}_

Could just be fancy lawyer talk, but if I'm right that TiVo is playing the North Korean strategy and they refuse to license under ANY terms, then it takes option 1 off of the table. Option 2 won't happen because of the pill and option 3 will likely be stopped by a broadening of the injunction based on Dish's own experts testimony  The only work around the patent would cost several billions to fix. Like I said not very many good options.


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## samo (Oct 7, 1999)

Davis Freeberg said:


> ICould just be fancy lawyer talk, but if I'm right that TiVo is playing the North Korean strategy and they refuse to license under ANY terms, then it takes option 1 off of the table. Option 2 won't happen because of the pill and option 3 will likely be stopped by a broadening of the injunction based on Dish's own experts testimony  The only work around the patent would cost several billions to fix. Like I said not very many good options.


I don't hold TiVo execs in high regard, but even they are not stupid enough to play North Korean strategy. There is not a single publicly traded company that ever refused to license the technology for the right price. As for the poison pill, there hasn't been a single case where poison pill provision has been fully executed. With 73% of TiVo shares in hands of institutional investors TiVo board can not refuse a reasonable offer. Hypothetically speaking, if Dish offered 50 to 75% premium to acquire 50.1% of TiVo shares and board refused there is no question in my mind that institutional investors would kick the board out. Of course Dish would not do it - there is no value in TiVo as a company and TiVo patent is not worth what it would take to buy the company. Much cheaper way to do it is to license technology even if you have to pay the premium to do so.


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## Davis Freeberg (May 23, 2006)

samo said:


> There is not a single publicly traded company that ever refused to license the technology for the right price. As for the poison pill, there hasn't been a single case where poison pill provision has been fully executed.


Both of these statements are 100% false. Not sure if you're letting your distrust of TiVo execs cloud your brain, but hard to argue with this brand of crazy.


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## ZeoTiVo (Jan 2, 2004)

Davis Freeberg said:


> If I can jump in and defend myself here, I'd like to raise a few points. First off, I'm not a journalist and don't consider myself one. I'm glad that you feel that my personal diary rises to that kind of credibility, but keep in mind, everything I write is just my opinion.


 Ok, I did not want to be dismissive of you in total and the term "blogger" in this context could equate with some crazy guy wanting free tea for everyone or whatever. You were clear on the content being your opinion and the details you included you cited well enough as well. I have absolutely no problem with the general presentation of the content. I also think it is cool you jumped in here to delve further into the topic. 



> Third, you can disagree with my views on damages, but in the long run I believe that my assessment will turn out to be closer to reality then the one put forward by Dish. They've tried to lowball the numbers all along, I'm trying to look at reality. In previous testimony, Charlie Ergen has said that if DVR were forced to stop it would costs them hundreds of million dollars per month vs the orginal $90 million per month that they referenced when they first lost the verdict. In TiVo's court filing objecting to the stay, they reference 6 million DVRs. Currently the injunction may only technically cover 4 million boxes, but at their next hearing, I believe that TiVo will be able to expand the injunction. We can get hung up on the math, but I think that's probably where our core difference is.


ok these are two different things here. First, of course DISH could understate the damages to them. However that is not what you talked about in the original article.

In the original article you implied, at least to my reading of it, that DISH could not put in place *any* new DVR if the injunction goes into force. That is incorrect and thus gives DISH legal room and more importantly legal time as TiVo would have to file new paperwork to go after the other DVRs and thus restart all the legal maneuvering. TiVo clearly has that as an option but it is not the current state of affairs and not a lock either.

It could well be that TiVo has dropped an unsavory licensing deal on DISH after all the legal crud DISH has dragged TiVo through - but at some point TiVo needs to stop cutting bait over its IP and actually put a deal in place that makes the investors happy to hold onto their shares and keep TiVo as an independent publicly traded company.
DISH in the past though has resisted making any kind of deal. Frankly I doubt any dealmaking going on right now gets very far at all. I do think taking a 1.50 per month per sub for no work involved on TiVo's part *along with* the settlement for past infringement *and *penalties would be a very good deal for TiVo. I am not sure why you think TiVo should pass on such a settlement. It is in TiVo inc.'s long term interest to not be seen as a pariah or equated with the likes of North Korea.

PS - Samo has always had a distinct pro DISH bias in these forums.


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## nrc (Nov 17, 1999)

Davis Freeberg said:


> I think some of the comments on this very thread are proof for why it's in TiVo's shareholders best interest for them NOT to settle. I can't speak for others, but I know that I don't want a .50 cent, or even $1.50 royalites for the Dish's DVR subs. I would be disappointed if TiVo settled for less than the full $12 a month they charge their stand alone subs.


Then you just don't understand the way that TiVo's MSO deals work. When they've dealt with MSOs they don't need to demand that $12 subscription fee because the MSO is paying for a large portion of the expenses that $12 normally covers - hardware costs, marketing, development, retention, etc.

Prior to the contempt finding I have no doubt that TiVo would have been happy to take their DirecTV contract, scratch out DirecTV and write in Dish. The leverage of the contempt ruling may have raised the price a little, but there's no net benefit to TiVo in forcing Dish to shutdown the infringing DVRs if it doesn't result in a deal for TiVo to make Dish DVRs or at least collect a license fee.


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## CrispyCritter (Feb 28, 2001)

samo said:


> With 73% of TiVo shares in hands of institutional investors TiVo board can not refuse a reasonable offer. Hypothetically speaking, if Dish offered 50 to 75% premium to acquire 50.1% of TiVo shares and board refused there is no question in my mind that institutional investors would kick the board out.


That's ridiculous, Samo. Any institutional investor doing that would be fired! Institutions don't speculate in small companies like TiVo for a 50-75% profit. They invest for the possibility of multiplying their money by a factor of 5 or 10.

My guess is that the settlement will be at a market-rate licensing fee ($1.25 to $1.50) on all DVRs going forward, but with an additional $200-300 million flat settlement (on top of everything so far) for all past transgressions.

My concern is the Dish - Echostar split makes it too easy to declare bankruptcy, and let TiVo have to fight to get the money they deserve from the parent company.


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## howard23 (Dec 21, 2001)

[Quote} Frankly I doubt any dealmaking going on right now gets very far at all. I do think taking a 1.50 per month per sub for no work involved on TiVo's part *along with* the settlement for past infringement *and *penalties would be a very good deal for TiVo. I am not sure why you think TiVo should pass on such a settlement. It is in TiVo inc.'s long term interest to not be seen as a pariah or equated with the likes of North Korea.

this judge has set this up for DISH and TIVO getting together and forging an agreement. while the recent 103 mil award may stay intact i really can't see an agreement where a licensing deal would stand on top of punitive damages as i see this threat as a HUGE incentive for DISH to settle this. this also puts TIVO in the drivers seat and will empower TIVO to extract a higher (but not UNREASONABLE) per sub licensing fee.

Not settling with DISH and dragging this on much longer is not viable for TIVO (continuing to bleed subs) or its shareholders. with the expanding of the Comcast TIVO in Chicago and elsewhere soon it is time to capitalize on the recent momentum generated by the appeals win.

The poison pill was put in place for a reason. i hghly doubt TIVO would give away its company after a hard fought patent win for less than double of its current stock price/market cap.


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## howard23 (Dec 21, 2001)

check this article out

http://seekingalpha.com/article/142627-tivo-is-still-grossly-undervalued


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## Davis Freeberg (May 23, 2006)

ZeoTiVo said:


> In the original article you implied, at least to my reading of it, that DISH could not put in place *any* new DVR if the injunction goes into force. That is incorrect and thus gives DISH legal room and more importantly legal time as TiVo would have to file new paperwork to go after the other DVRs and thus restart all the legal maneuvering. TiVo clearly has that as an option but it is not the current state of affairs and not a lock either.


Fair enough, Dish does still have room to maneuver around this and there are very expensive high end DVRs that would be eligible to deploy. It is the contempt portion of the order that makes me question Dish's ability to continue to provide any DVR service. Since they now must get court approval prior to deploying new DVR solutions (I believe this means software and hardware), it creates a big hurdle. Building high end DVRs wouldn't be economically feasible. It would cost them almost as much as it would to swallow TiVo's pill.

If nearly every Dish DVR on the market has software that infringes, I don't see how Dish can replace them. Any replacements that they do suggest will likely be challenged by TiVo. Whether 4 million boxes are at risk or all of Dish's DVRs is a technicality IMO, we know that TiVo is going to ask to expand the judgment. Since TiVo seems to be in the cat bird seat on this point, I'm giving them the benefit of the doubt. I should have been more clear on this issue, but like i said, when the smoke clears I believe that my analysis will be more accurate then Dish's ridiculous claims that none of customers will ever be affected by this.


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## ZeoTiVo (Jan 2, 2004)

howard23 said:


> ZeoTiVo said:
> 
> 
> > Frankly I doubt any dealmaking going on right now gets very far at all. I do think taking a 1.50 per month per sub for no work involved on TiVo's part *along with* the settlement for past infringement *and *penalties would be a very good deal for TiVo. I am not sure why you think TiVo should pass on such a settlement. It is in TiVo inc.'s long term interest to not be seen as a pariah or equated with the likes of North Korea.
> ...





howard23 said:


> check this article out
> 
> http://seekingalpha.com/article/142627-tivo-is-still-grossly-undervalued


yep - that article outlines why I think TiVo can get the settlement I listed and then noted was a really good deal for TiVo.


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## Davis Freeberg (May 23, 2006)

ZEOTIVO said:


> [Quote} Frankly I doubt any dealmaking going on right now gets very far at all. I do think taking a 1.50 per month per sub for no work involved on TiVo's part *along with* the settlement for past infringement *and *penalties would be a very good deal for TiVo. I am not sure why you think TiVo should pass on such a settlement. It is in TiVo inc.'s long term interest to not be seen as a pariah or equated with the likes of North Korea.


Let's think about it this way. If Dish were to lose access to DVR technology how much would this cost them in losses? Certainly a lot more than $1.50 per month. Because DVRs have become so essential to the television experience, consumers value it greatly. Unfortunately for TiVo because no one respects their authority, they can't charge the MSO for that value.

Currently, TiVo gets a measly 80 - 90 cents from DirecTV. If all of a sudden their biggest competitor isn't able to offer this value, how much does being able to offer a DVR to your customers all of a sudden be worth. A wounded Dish would create a feeding frenzy in the pay TV space. If TiVo demonstrates that they are willing to go after non-partners (with this patent or any from their considerable warchest) it enables them to charge considerably more than .80 cents for DVR service. If by squeezing Dish, they can get DTV, Comcast, AT&T, etc to pay $3 - $4 royalties for doing nothing, they would be in a significantly better position. They've got the guns, they've got the money, it's just a question of whether or not they've got the crazy.


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## CrispyCritter (Feb 28, 2001)

Davis Freeberg said:


> If by squeezing Dish, they can get DTV, Comcast, AT&T, etc to pay $3 - $4 royalties for doing nothing, they would be in a significantly better position. They've got the guns, they've got the money, it's just a question of whether or not they've got the crazy.


Not any chance of this at all, IMO. First off, they can't get DTV and Comcast to pay any thing; they're protected by their current agreements with TiVo. But most importantly, any such revenue would be short-term revenue, and that's not what TiVo is aiming at. What they want is exactly what they're getting from Comcast: the chance to be the primary DVR interface for tens of millions of households. Long-term, that's where TiVo has to be; making their money from subs, but also from the targeted ads that TiVo has been positioning itself as the leading experts in (and getting the needed patents there).

The current patents being violated by Dish are, in TiVo's view, primarily a lever to get distribution/partnership agreements with everybody else. In the long-term, TiVo's success has to come from these distribution partnerships that get tens of millions of TiVo software DVRs out there. The short-term patent royalties would be nice, but are insignificant in the long-term -- TiVo is not going to be going after them (except possibly from companies that refuse to partner with TiVo.)


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## howard23 (Dec 21, 2001)

Davis Freeberg said:


> Let's think about it this way. If Dish were to lose access to DVR technology how much would this cost them in losses? Certainly a lot more than $1.50 per month. Because DVRs have become so essential to the television experience, consumers value it greatly. Unfortunately for TiVo because no one respects their authority, they can't charge the MSO for that value.
> 
> Currently, TiVo gets a measly 80 - 90 cents from DirecTV. If all of a sudden their biggest competitor isn't able to offer this value, how much does being able to offer a DVR to your customers all of a sudden be worth. A wounded Dish would create a feeding frenzy in the pay TV space. If TiVo demonstrates that they are willing to go after non-partners (with this patent or any from their considerable warchest) it enables them to charge considerably more than .80 cents for DVR service. If by squeezing Dish, they can get DTV, Comcast, AT&T, etc to pay $3 - $4 royalties for doing nothing, they would be in a significantly better position. They've got the guns, they've got the money, it's just a question of whether or not they've got the crazy.


Davis,

i applaud your enthusiasm here but let's get real. this judge didn't schedule punitive damage hearings to actually go forward, he WANTS the two parties to sign an agreement which will include the end to the lawsuit. if the incentive to reach a settlement is no punitive award then why would they be included? more likely IMHO is that seeing that Tivo has Dish over a barrel, they get a higher fee per month per sub say in the $1.25- $2 range. this could include a bump up of $.50 when the Tivo software platform is able to go live on their system. (no sense in just collecting royalties without the ability for Tivo to make additional $$ through ads ,downloads, etc).

DirectTV and Comcast already have deals and there would be no change to those numbers.

where this adds value is that eveyone else would be forced to play ball with Tivo with the end result that Tivo becomes the dominant DVR platform with stable/growing sub #'s along with stable/growing recurring revenue stream. as for us grossly underwater shareholders, this becomes an attractive takeover target for the CSCO's of the world!


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## Davis Freeberg (May 23, 2006)

howard23 said:


> This judge didn't schedule punitive damage hearings to actually go forward, he WANTS the two parties to sign an agreement which will include the end to the lawsuit.


It doesn't matter if the judge does want them to settle, he can't force TiVo to license technology if they don't want to. Go back and read the quote for their latest court filing, it's clear that TiVo wants this ability. There is substantial case law on this point. The only question is whether or not TiVo chooses to exercise their right to exclude.



howard23 said:


> More likely IMHO is that seeing that Tivo has Dish over a barrel, they get a higher fee per month per sub say in the $1.25- $2 range. this could include a bump up of $.50 when the Tivo software platform is able to go live on their system.


I think I am being realistic. To think that TiVo is only worth $1.25 per month only shows how much damage Echostar's practices have done to TiVo's perceived value. This isn't about what TiVo has licensed for in the past, it's about leveling the playing field for them. Currently, Dish is giving away free DVRs for service committment. How is TiVo expected to sell stand alone boxes when there are these kinds of offers? I understand that a $1.50 royalty wouldn't include hardware costs for TiVo, but if it prevents them from competing in the stand alone market then a settlement this low could do real damage. On the other hand, if they can increase their prices by several multiples, it would make it harder for other companies to offer a DVR for less than what TiVo charges their most loyal subs.


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## ZeoTiVo (Jan 2, 2004)

Davis Freeberg said:


> Let's think about it this way.


first you and howard23 need to do some housekeeping - 
howard23 mangled his attempt to quote me and then you actually have him quoted for what I said.

Second - lets not loose sight of the fact- DISH deliberately copied a key part of TiVo design - that is why they lost the lawsuit.

*It does not follow that all other DVR providers must bow to TiVo or face losing a lawsuit*

Does this do some significant damage to DISH, yes. Does it mean TiVo owns the DVR market? NO.


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## Davis Freeberg (May 23, 2006)

ZeoTiVo said:


> Does this do some significant damage to DISH, yes. Does it mean TiVo owns the DVR market? NO.


I think this is part of why TiVo must refuse to settle. The entire DVR market doesn't fear them, everyone is infringing. Not necessarily on this patent, but certainly on one of them. The Time Warp patent alone won't be a magic bullet, but when it comes to royalty business models, you can't be afraid of litigation.

Look at TV guide for example, they managed to sue their way into a 60+% market share b4 they imploaded b/c of fraud. It wasn't necessarily because they had iron clad patents, (Dish even managed to beat them on one), it was because everyone knew it was easier to pay them hush money then to try and take them on. TiVo may not "own" the DVR market, but I guarantee that if they push beyond clipping royalties and actually shut Dish down, they'll be feared by the entire market. That fear will mean higher prices from high margin MSO royalites and a better competitive environment for them to sell stand alone services.


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## ZeoTiVo (Jan 2, 2004)

Davis Freeberg said:


> I think this is part of why TiVo must refuse to settle. The entire DVR market doesn't fear them, everyone is infringing. Not necessarily on this patent, but certainly on one of them. The Time Warp patent alone won't be a magic bullet, but when it comes to royalty business models, you can't be afraid of litigation.
> 
> Look at TV guide for example, they managed to sue their way into a 60+% market share


I think you need a lot more facts to back up the statement that everyone is infringing on TiVo. especially those that have no agreement now like TWC et all.

I also certainly hope that TiVo does not become some licensing leech like TV guide or SCO is to LINUX. That would be a fate worse than bankruptcy in my opinion as overtime, why bother working on products. Products is why I post in a Tivo forum and read about them. I like media and look for new and better ways to get the media. If TiVo execs find new and better ways to get money without making products(which could be software or hardware) then good for them but bad for consumers. I really think you are off base on thinking TiVo is looking to license everyone out there under threat of lawsuit and I really think anyone proposing that should show how they think others might *actually and really* be infringing.
Would make a good entry on your blog


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## CrispyCritter (Feb 28, 2001)

Davis Freeberg said:


> I think this is part of why TiVo must refuse to settle. The entire DVR market doesn't fear them, everyone is infringing. Not necessarily on this patent, but certainly on one of them. The Time Warp patent alone won't be a magic bullet, but when it comes to royalty business models, you can't be afraid of litigation.
> 
> Look at TV guide for example, they managed to sue their way into a 60+% market share b4 they imploaded b/c of fraud. It wasn't necessarily because they had iron clad patents, (Dish even managed to beat them on one), it was because everyone knew it was easier to pay them hush money then to try and take them on. TiVo may not "own" the DVR market, but I guarantee that if they push beyond clipping royalties and actually shut Dish down, they'll be feared by the entire market. That fear will mean higher prices from high margin MSO royalites and a better competitive environment for them to sell stand alone services.


Sorry, you've shown no vision of a long-term solution for TiVo. TiVo doesn't want the cable systems to fear TiVo; they need the cable systems to start using TiVos as the cable system DVRs. That's the only way TiVo can grow enough.

Your scenario just doesn't make any sense. Sure it might bring in a few hundred million in the upcoming years, but as companies work around TiVo's patents that money will diminish and then disappear.

TiVo is not interested in high patent royalties, or even a better standalone marketplace; it's interested in partnerships with the cable/satellite companies.


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## howard23 (Dec 21, 2001)

Davis Freeberg said:


> It doesn't matter if the judge does want them to settle, he can't force TiVo to license technology if they don't want to. Go back and read the quote for their latest court filing, it's clear that TiVo wants this ability. There is substantial case law on this point. The only question is whether or not TiVo chooses to exercise their right to exclude.
> 
> I think I am being realistic. To think that TiVo is only worth $1.25 per month only shows how much damage Echostar's practices have done to TiVo's perceived value. This isn't about what TiVo has licensed for in the past, it's about leveling the playing field for them. Currently, Dish is giving away free DVRs for service committment. How is TiVo expected to sell stand alone boxes when there are these kinds of offers? I understand that a $1.50 royalty wouldn't include hardware costs for TiVo, but if it prevents them from competing in the stand alone market then a settlement this low could do real damage. On the other hand, if they can increase their prices by several multiples, it would make it harder for other companies to offer a DVR for less than what TiVo charges their most loyal subs.


for ZEO, please accept my apology for not properly quoting you, not quite sure how that happened

Davis,

as for us long suffering shareholders any settlement,licensing deal,treble or other damage awards or just about any outcome from this court victory should have quite a nice bump in per share valuation.

the problem is more long term. i fail to see how NOT making peace with Dish under terms largely dictated by Tivo can benefit Tivo. they may get more cash up front but they need a recurrent per sub fee for as large market share as possible to succeed. unless of course, they are looking to get bought out or taken over at some premium above where the market cap settles after the dust clears from this Dish litigation!


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## ZeoTiVo (Jan 2, 2004)

howard23 said:


> for ZEO, please accept my apology for not properly quoting you, not quite sure how that happened


I saw where you messed up the quote brackets when quoting my post. I am confident it was unintentional and falls under the "stuff happens" category.


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## samo (Oct 7, 1999)

Davis Freeberg said:


> Both of these statements are 100% false. Not sure if you're letting your distrust of TiVo execs cloud your brain, but hard to argue with this brand of crazy.


Since your brain is not clouded and you are not crazy would you please give me one (1) example of fully executed poison pill in last 20 years?
And if you can not, then stop talking as if you know something about a stock market and try science fiction.


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## Davis Freeberg (May 23, 2006)

CrispyCritter said:


> Your scenario just doesn't make any sense. Sure it might bring in a few hundred million in the upcoming years, but as companies work around TiVo's patents that money will diminish and then disappear. TiVo is not interested in high patent royalties, or even a better standalone marketplace; it's interested in partnerships with the cable/satellite companies.


High patent royalties = partnerships w/ cable/satcos. We're on the same page here, I think we just using different language. I agree that TiVo wants on every box, don't agree that they are happy with royalties that were set when their company was just starting. Lots have changed since then including the patent win. Prices should reflect that. Whether or not the DVR market will respect them w/o using the injunction can be debated, but I think it takes a public execution to be able to raise prices. As far as a "few hundred million" goes, I'd encourage you to take a look at other publicly traded companies that rely on royalty business models. These are high margin revenues. Wall St. really loves them. I doubt that you could find one earning at least $200 million in licensing fees per year that is trading for less than what TiVo is worth even today.



howard23 said:


> as for us long suffering shareholders any settlement,licensing deal,treble or other damage awards or just about any outcome from this court victory should have quite a nice bump in per share valuation.
> 
> the problem is more long term. i fail to see how NOT making peace with Dish under terms largely dictated by Tivo can benefit Tivo. they may get more cash up front but they need a recurrent per sub fee for as large market share as possible to succeed. unless of course, they are looking to get bought out or taken over at some premium above where the market cap settles after the dust clears from this Dish litigation!


Before you shed any more crocodile tears, I'd like to point out that shareholders haven't suffered from owning TiVo. Maybe if you bought in on the IPO you could complain, but you can't blame TiVo for the tech bubble. Furthermore, there's a big distinction between TiVo's volatile market valuation and how the company has been run. I'm sorry that you haven't been satisfied with your investment, but I want to focus more on what TiVo is actually doing to grow their business.

How does TiVo benefit by shutting down Dish DVRs? At the risk of repeating myself, I'll walk through it one more time. I'll use numbers this time to see if math can help clarify why it makes sense for them to do this.

A couple of things to remember, first if Dish has no DVR it's likely those customers go someplace else. If TiVo has the rest of the market captured, they don't necessarily lose that licensing revenue in the future. Second, my comparison only uses two companies when you should be thinking about five or six companies that this math could be used on as well. Finally, while I reference DirecTV as an example, I do so because we have the numbers. Eventually the contract goes up for renewal, but we could just as easily substitute Time Warner instead.

*Option A* - Dish has 6 million subs, they agree to pay TiVo $1.50 per month until the patent runs out. That's about $140 million per year to TiVo for a total that's a little over a billion over the life of the patent. Meanwhile, DirecTV currently has 6 million DVR subs as well (really 6.8 but lets keep the #'s easy) TiVo only gets royalites on approximately 1.5 million of these at about .90 cents per sub per month for approx $16 million per year or $120 million or so over time.

When DTV's contract runs up and TiVo asks to renew on all 6 million subs or for a higher rate, DTV will say hmmm you've got to be joking. Get back to work and take the gruel we give you because worst case scenario we'll sue you w/ our patents, engage in 5 years of litigation and only end up paying a $2 royalty if we lose anyway. This has huge impact on how much TiVo is allowed to charge. Total TiVo takes in is about $136 million per year or $1.25 billion over life of the patent.

*North Korean Option* - Refuse to negotiate with Dish. They will still get damages from the infringement, but Dish shuts down their DVRs and very bad things begin to happen. Customers are furious (at TiVo too), they see massive turnover and the sudden loss of subscriber revenue starts to threaten their debt covenants. While Dish self implodes on their mistake, the industry will watch in horror as they realize how important DVR is to the pay TV experience. TiVo gets nothing in ongoing royalties from Dish.

Meanwhile, TiVo's contract with DTV comes up and DTV looks at the situation and says we're not going to be extorted, but at the same time TiVo could do more then just win a big judgement, they could actually shut down our business. Is that a risk we want to take to keep paying .80 cent royalties? Not when DirecTV can just pass the cost onto their customers anyway. So if they pay TiVo $3 - $4 per month on those 6 million subs, then TiVo is earning $216 million - $288 million per year in royalties or $1.7 - $2.2 billion over the life of the patent. If TiVo allows Dish to settle for a $2 per month judgment, it will set a ceiling on what they can charge to the MSOs. They understand this which is why I believe they move forward with the injunction.



ZeoTiVo said:


> I think you need a lot more facts to back up the statement that everyone is infringing on TiVo. especially those that have no agreement now like TWC et all . . . I really think you are off base on thinking TiVo is looking to license everyone out there under threat of lawsuit and I really think anyone proposing that should show how they think others might *actually and really* be infringing.
> Would make a good entry on your blog


That is an excellent suggestion and would make a great blog topic. I'll do some research on my end to see if I can cite some specific patents that others could be infringing. Feel free to PM me any links if there something you feel that I should consider for my article. Until then consider my statement withdrawn and we'll resume our conversation on a future date.


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## gregsully (Jun 12, 2009)

Hey in any talk of DirecTV.. nobody is talking about the fact that DTV bought ReplayTV. With their patients, they could drag out any TIVO litigation for years and any loss by tivo could damage their power with any other companies making it hardly worth while.


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## slowbiscuit (Sep 19, 2006)

Davis Freeberg said:


> This isn't about what TiVo has licensed for in the past, it's about leveling the playing field for them. Currently, Dish is giving away free DVRs for service committment. How is TiVo expected to sell stand alone boxes when there are these kinds of offers? I understand that a $1.50 royalty wouldn't include hardware costs for TiVo, but if it prevents them from competing in the stand alone market then a settlement this low could do real damage. On the other hand, if they can increase their prices by several multiples, it would make it harder for other companies to offer a DVR for less than what TiVo charges their most loyal subs.


I think a more important question here is, how is Tivo expected to sell stand alone boxes to *satellite subscribers*? Because right now they can't, since there is no open access standard for sat.

The argument about stand alones, therefore, is a red herring - the target market is not the same since there are many cable customers that would not (or cannot) consider sat. And cable does not give out free DVRs.

Licensing Tivo's software on a DVR is another matter, and that's what Tivo is after. But I don't see a valid comparison to stand alone sales here.


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## CrispyCritter (Feb 28, 2001)

Davis Freeberg said:


> High patent royalties = partnerships w/ cable/satcos. We're on the same page here, I think we just using different language. I agree that TiVo wants on every box, don't agree that they are happy with royalties that were set when their company was just starting. Lots have changed since then including the patent win. Prices should reflect that. Whether or not the DVR market will respect them w/o using the injunction can be debated, but I think it takes a public execution to be able to raise prices. As far as a "few hundred million" goes, I'd encourage you to take a look at other publicly traded companies that rely on royalty business models. These are high margin revenues. Wall St. really loves them. I doubt that you could find one earning at least $200 million in licensing fees per year that is trading for less than what TiVo is worth even today.


Sorry, we're not on the same page at all. Your ideas don't make any sense to me long-term. You need to separate out the idea of software license and patent royalties. TiVo is not interested at all in long-term patent royalties. They can't commit their company's future to depending on patent royalties. TiVo's patents are too narrowly based and easily avoided by companies offering basic DVR service, not to mention all the alternatives to the basic DVR models that will become more important in the future (eg Cablevision network DVR, as well as computer based systems). TiVo would have had to change their whole approach years ago if they were going towards the patent royalty model - TiVo is not anything like all the companies you're referring to earning $200 million in patent royalties.

TiVo is interested in software licensing - getting its software (and its hardware designs) on as many systems as possible. The patent win is an important foot in the door for TiVo. TiVo can now go to companies and say "You can spend $20 million in legal fees with a possible $500 million payment at the end, or you can spend $40 million starting up a partnership with us with the potential of both of us long-term splitting up a brand new source of revenue (targeted ads)."

The patent win will get companies to fund the startup costs of a partnership. The patents are going to have very little effect on the long-term rate of the software license - that's going to be determined by the market. I agree the software license fee is going to be higher than now - the current DirecTV fee (negotiated at a time when short-term survival was more important than long-term profit) is acknowledged to be too low by everybody (the new DirecTV fee for the new DirecTiVo's is substantially higher, and that's been known for a long time.)

TiVo patents are too easily circumvented to be dependable as a source of revenue, or as an increase in software license fee. I'll be a bit surprised if anybody ever pays TiVo for patent royalties other than by court order.


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## morac (Mar 14, 2003)

Davis Freeberg said:


> Finally, while I reference DirecTV as an example, I do so because we have the numbers. Eventually the contract goes up for renewal, but we could just as easily substitute Time Warner instead.


The issue with DirecTV is they have a ton of DVR patents as well, while Dish has none. A lawsuit against DirecTV wouldn't necessarily be a slam dunk, just because TiVo won against Dish.

As for Time Warner and the cable companies. Assuming Cablevisions current court win against the TV Networks stands, the cable companies can deploy Network DVRs at very little cost, completely bypassing all of TiVo's patents. If TiVo starts to bully them, they'll simply kick TiVo to the curb and TiVo will be out a ton of revenue.

"You attract more flies with honey than you do with vinegar", this is especially true when the Flies are bigger and more powerful than you.


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## MichaelK (Jan 10, 2002)

samo said:


> Since your brain is not clouded and you are not crazy would you please give me one (1) example of fully executed poison pill in last 20 years?
> And if you can not, then stop talking as if you know something about a stock market and try science fiction.


i dont know spit so I'll ask. Did yahoo use a poison pill to chase MS away? If not how else did they keep from being assimilated by the borg?


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## Curtis (Dec 2, 2003)

> The far more damaging portion of Folsom's order is the infringement provision. This prevents Echostar from replacing these DVRs with other DVR set top boxes.
> 
> "The DVR functionality, storage to and playback from a hard disk drive, *shall not be enabled in any new placements of the Infringing Products.*" (bold added by me)
> 
> The inability to offer a DVR to their customers would put Dish at a severe competitive disadvantage. Furthermore, because Dish has now been caught trying to sneak a "replacement" DVR in through a redesigned back door, they now must seek court approval prior to deploying any new DVR solutions.





ZeoTiVo said:


> he bolded the above part - but then I underlined the simple point he completely missed. DISH can place new DVRs, just not the ones on the list. He then goes on to base much of his argument on this point of greatly overestimating the damage to DISH done by the lawsuit.


Perrhaps you didn't see this part of the injunction:


> It is FURTHER ORDERED that each Defendant, its officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with them who receive actual notice hereof, are hereby *restrained and enjoined*, pursuant to 35 U.S.C. § 283 and Fed. R. Civ. P. 65(d), *from making, using, offering to sell, selling, or importing in the Untied States, the Infringing Products*, either alone or in combination with any other product *and all other products that are only colorably different therefrom in the context of the Infringed Claims*, whether individually or in combination with other products or as a part of another product, and from otherwise infringing or inducing others to infringe the Infringed Claims of the '389 Patent.


Dish has said that the newer models use the same "workaround" software as the models just found to be in contempt. Listen to what Rogers said last week at the Credit Suisse conference at link .

Rogers at 37:30 on the webcast: "I will note that Echostar has acknowledged that the software operating on most of those DVRs is the same as the software that was recently reviewed by the court".

It would just take another contempt hearing to settle whether the ViP models are in contempt and it won't take as long this time. Most of the prior briefs, depositions, and rulings can just be cut-and-pasted from the last hearing.


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## Curtis (Dec 2, 2003)

Davis Freeberg said:


> _Exactly, which is why I argue that the total number of DVRs is closer to the "majority" that Dish has referenced in their board room comments. Now I could see a situation where the 4 million boxes get shut off and the "replacement" DVRs would stay on pending appeal after appeal after appeal, but it wouldn't make sense for Dish to physically replace their current infringing DVRs with other DVRs that they know will also infringe. _


_


nrc said:



TiVo argues in it's opposition to continuing the stay during Dish's latest appeal limits the models affected to "eight enumerated models." They'll be hard to expand the scope having made that argument.

Click to expand...

The disablement order applies to the already placed eight named models. However, new models that are only colorably different from the named models in the context of the infringed claims are not to be manufactured or sold._


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## MichaelK (Jan 10, 2002)

Curtis said:


> The disablement order applies to the already placed eight named models. However, new models that are only colorably different from the named models in the context of the infringed claims are not to be manufactured or sold.


and I assume it would be correct to say that if tivo had another hearing to get the newer models declared only colorably different then they would need to be disabled also? Or does it not work that way?


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## Curtis (Dec 2, 2003)

MichaelK said:


> and I assume it would be correct to say that if tivo had another hearing to get the newer models declared only colorably different then they would need to be disabled also? Or does it not work that way?


Yep. That's the way it works and that's why it would be a huge risk for Charlie to replace the named models with newer models. It would more than likely be throwing good money after bad.


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## nrc (Nov 17, 1999)

morac said:


> The issue with DirecTV is they have a ton of DVR patents as well, while Dish has none. A lawsuit against DirecTV wouldn't necessarily be a slam dunk, just because TiVo won against Dish.


Dish already has a patent infringement case pending against TiVo so obviously they have some.

It's arguable whether DirecTV would have struck a deal with TiVo if their patent position were as strong as some think. DirecTV's patents all came after TiVo already had the fundamentals of their technology on the market. ReplayTV only had a few DVR patents and TiVo would seem to be in a good position to defend against those.


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## Curtis (Dec 2, 2003)

nrc said:


> Dish already has a patent infringement case pending against TiVo so obviously they have some.


Dish is not suing TiVo for patent infringement. Dish has filed a declaratory lawsuit to ask the court to declare that they don't infringe TiVo's patent. That lawsuit should be dismissed shorttly as moot.


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## nrc (Nov 17, 1999)

Curtis said:


> Dish is not suing TiVo for patent infringement. Dish has filed a declaratory lawsuit to ask the court to declare that they don't infringe TiVo's patent. That lawsuit should be dismissed shorttly as moot.


Yes, they are. Different suit.


> On April 29, 2005, EchoStar Technologies Corporation filed a complaint against TiVo and Humax USA, Inc. in the U.S. District Court for the Eastern District of Texas alleging infringement of U.S. Patent Nos. 5,774,186 (Interruption Tolerant Video Program Viewing), 6,529,685 B2 (Multimedia Direct Access Storage Device and Formatting Method), 6,208,804 B1 (Multimedia Direct Access Storage Device and Formatting Method) and 6,173,112 B1 (Method and System for Recording In-Progress Broadcast Programs). The complaint alleges that EchoStar Technologies Corporation is the owner by assignment of the patents allegedly infringed.


http://investor.tivo.com/phoenix.zh...maXBhZ2U9NjI1MTE3NyZhdHRhY2g9T04mc1hCUkw9MQ==


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## Curtis (Dec 2, 2003)

You are right. I thought that one had been dismissed. It's just on hold until the patent reexamination is finished. The USPTO has (at this point) found the Dish patent claims to be invalid.


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## Johncv (Jun 11, 2002)

This come from the Tech Night Owl Newsletter, a newsletter which discuss all things regarding UFOs and Apple (computer, iPods, iPhones, iTouch). Recently the writer made comments regarding his switch from Cox to Dish and lawsuit between TiVo and Dish. His second to the last paragraph say it all.

The newsletter can be found here: http://www.macnightowl.com/

*COX SHOWS HOW TO USE LIES AND DISINFORMATION TO LOSE CUSTOMERS* May, 31, 2009

As most of you know, when the Steinberg family moved into its present residence nearly three years ago, I signed up for a bundle deal with Cox Communications that included cable TV, Internet and telephone service. For the most part, as you regular readers know, Ive been pretty satisfied with their services.

However  and this holds true with all the cable companies  they have been slow to roll out large numbers of high definition TV channels. For example, they promised, at various times, to have between 65 and 100 stations available by the end of 2008. The number ended up being less than 50, and some of our favorites were missing.

Now one of the positive aspects of retail sales these days is flat panel TVs. They are moving off the shelves in record numbers. In part, thats because of the switch in the U.S. from analog to digital TV transmission. Why buy a converter for an old set, when you can get a brand new one that also includes high definition for hundreds rather than thousands of dollars? In addition, many families are now opting for in-home entertainment in place of extended travel, visits to upscale restaurants, theme parks and so forth and so on.

The situation caused a dilemma for the cable TV providers because they only have so much bandwidth to go around. One solution is to move analog channels to digital. It forces customers to get digital converters, but it also frees up space of for more high definition offerings. Other network upgrades are being installed to further increase capacity.

Indeed, on two occasions our cable TV service (and Internet, which uses the same cabling) was down for nearly a day to allow for installation of new equipment. A few months later a dozen HD stations were added. That takes us to the end of last year, and all Ive seen since are broken promises.

More recently it reached a head and the answers became more and more confused.

Recently, in order to fix a reception problem, several service people came down, and all claimed that Cox would add a whole bunch of high definition offerings between the middle of May and June. All well and good, but it hasnt happened, at least in my neighborhood.

So I telephoned Cox the other day and asked what was going on. Someone in sales told me 16 stations had been added as of May 19th, and even gave me the list. Except that none of those stations appeared on our HD DVR. They switched me to service, who confirmed the information, but they couldnt figure out what went wrong. This time, they dispatched a service tech to my home.

The tech said he had heard the same thing, but that the change evidently hadnt filtered down to our neighborhood. After talking with no less than four more people at Cox that afternoon and evening, I got multiple explanations as to what was going on. In the end, the head end or transmission center that handles this neighborhood had not been upgraded so far. One person said that the additional channels would be deployed as of mid-July, while another said the activation date had not been determined.

Im sure youve gathered at this point that this whole sorry episode left a seriously sour taste in my mouth, and not from the last container of yogurt I consumed. Clearly Cox is running into technical difficulties in its efforts to match satellite TV in high definition offerings.

It was time to seek other options.

When I signed up for the Cox Bundle, the cable TV package cost less than the satellite providers. That was then, this is now.

After doing some research, I have decided that maybe DirecTV would be a better option. The number one satellite service has garnered quite a high rating compared to the competition, including cable, in various surveys. According to a recent issue of Consumer Reports: This satellite-TV provider scored significantly higher than the major cable companies and rival Dish Network for TV picture, sound, and channel selection, with 150 high-def channels at the latest count, compared with 75 or so for AT&T and 35 to 50 for most cable companies.

DirectTV also had an enticing package that included several rebates. All told, pricing is very similar to what Cox charges, and its HD-DVR offers far more storage capacity, true 1080p picture quality on On Demand programming (equivalent, roughly speaking, to Blu-ray DVD) and superior programming options. Theres even an iPhone app to schedule shows while youre on the road.

Our DirectTV installation is scheduled for Tuesday morning. If Cox representatives are reading this, they can expect my cancellation notice for cable TV service 72 hours later, assuming DirectTVs service and picture quality fulfills our expectations. I am, as they say, hopeful, but the conclusion to this story has yet to be written.

*THE NIGHT OWLS HIGH DEFINITION TV EXPERIENCE HITS ANOTHER BUMP IN THE ROAD* June 7, 2009

So as of last week, I had ordered a fairly complete digital TV package from DirecTV, the largest satellite provider in the U.S. As I said, they have earned high marks for service and support from Consumer Reports and others, so I put them at the very top of my list when Cox Communications fell down on the job to deliver a wide selection of high definition channels.

Well, this proved rather more difficult than I anticipated. Before I ordered service from DirecTV, I made sure there was a clear southward view from my home, and I observed that neighbors had previously installed satellite service, though mostly from Dish Network. Maybe I should have gotten the message.

In any case, the installation was scheduled for Tuesday morning. An installer phoned shortly after 8:00 AM to tell me that the Steinberg family was second on their list, which meant we should expect their arrival around 11:00 AM or so, depending on the problems they encountered on their first call that day.

Indeed, they did show up on time. However, my hopes for a satisfactory installation dimmed when it appeared they failed to bring the proper components for our particular setup scenario. This despite the fact that they had been previously informed of our location and requirements.

Upon checking the location where the satellite dish was to be placed, one of the installers concluded that he would be unable to receive a clear signal. As I said, we had a clean line-of-sight to the southeast location in the sky required for DirecTV. Curious. That afternoon, I telephoned their customer support people to cancel the account, and was offered the opportunity to get a second opinion on the setup problem, after I complained that the two installers who arrived  they appeared to be independent contractors and not employees of the company  had not taken the required equipment with them on their truck.

I was assured I would receive a callback in 20 minutes flat! It never came, so I told them to just forget it, since they clearly didnt want my business, and checked out Dish Network as an alternative.

Now despite all the claims that one service, be it satellite or cable, might be cheaper than the other, that only appears be true for budget packages. If you want anything higher up in their food chain, youll see that, in this hotly competitive environment to get your business, prices are really close. Indeed, the monthly fees for comparable packages, after all the rebates are accounted for (and they can get really, really complicated), came within $10 of each other regardless of whether it was Cox, DirecTV or Dish Network.

The Dish package I selected included over 100 high definition channels. As I said last week, Cox was still offering less than 50, with no guarantee when more will be deployed, after many failed promises.

On Friday morning, Dish sent their lone installer, an actual employee of the company. He had no problems getting a strong signal after positioning a dish in the appropriate southeast location, and departed less than three hours later after two receivers were connected and authorized.

Our master bedroom has the Dish VIP-722 high definition DVR receiver, a model that has been praised by a number of reviewers as the best in the industry, even superior to TiVO, so they say.

Not having used TiVO, I wont comment, except to say that picture quality from Dish Network is simply superb, on both standard and high definition channels. The comparison with Cox is striking. The Dish picture has much less video noise and noticeably fewer digital artifacts. The VIP-722 DVR is also far more responsive to remote control commands than the Scientific Atlanta 8300HD DVR supplied by Cox. The delay in switching from one channel to another is about three seconds; cable is no better.

In Coxs favor is that their remote handles multiple components more flexibly than the one provided by Dish, but youd still be far better off getting one of Logitechs Harmony Universal remotes.

*The only fly in the ointment is that ongoing legal skirmish between TiVO, and Echostar, a spin-off company that makes Dishs DVRs. The threat is that TiVO might force Dish to disable the ability to record one show while watching another on their DVRs. However, Dish claims to have a workaround and if thats not a suitable solution, they can always toss TiVO some more cash to quiet them, or perhaps even license their technology*.

No, Im not expecting my VIP-722 to stop working anytime soon. For now, Im happy to be a Dish customer once again.

*DISH NETWORK: AFTER THE SWITCH* June 14, 2009

So as regular readers recall, Ive gone back and forth in TV services since I moved to Arizona in 1993. First there was the local cable company, Cox. But after having some particularly irritating customer service issues, I dropped the TV component of the service and switched to Dish Network.

Picture quality was clearly superior, particularly compared to the remaining analog stations on Coxs network. But Dishs transition to high definition was painfully slow at first. They and DirecTV needed to launch additional satellites to provide the extra capacity. So when we moved to a new home nearly three years ago, I returned to Cox Communications, which made various promises about expansion of the number of HD channels that would be added to their system.

Segue to June 2009, where Coxs promises were mostly unfilled. Whether 65 HD channels or 100  both set for the end of 2008  it never seemed to happen. The straw that broke the camels back was the claim that 16 new HD channels had been added to the service, yet I couldnt receive any of them, and got half a dozen answers as to why.

Dish Network has long since boosted its capacity, and nowadays boasts of having more HD channels in its arsenal than any other TV service. The claimed number is 140. The service I ordered lists 105, but doesnt include an extra Platinum HD package, nor some of the additional sports programming, so I will be generous and accept their claim.

The first weeks service has been pretty much what I expected. Sharp pictures, substantially free of digital noise, and only occasional pixelation and other digital artifacts. A couple of days of bad weather (the bane of satellite TVs existence) didnt hurt reception in any way that I noticed.

Technical support has been good. One rep talked me through an undocumented remote control trick that lets you switch the mapping of the volume control from the TV to a standard audio system (which is accessed via the AUX mode). However, I still prefer my Logitech Harmony 890 universal remote, which offers a far more automated setup. I did have to spend a little time  with the help of a friendly Logitech support person  to configure the remote for Dishs VIP-722 DVR. After that, every conceivable function that I needed to use was readily available and clearly labeled.

As I said previously, Dishs highly-rated VIP-722 DVR is way better than the Scientific-Atlantic unit provided by Cox and other cable providers. It manages functions far faster and more reliably, and the interface is reasonably pleasant to navigate through, with large text and descriptive labeling. There are a few areas where it might be improved, but nothing significant comes to mind after limited exposure.

Storage space for HD content is also far more commodious than the Cox box. The VIP-722 has a 500GB drive, sufficient to store roughly 55 hour-long HD programs. Cox promises 20 on their DVRs 160GB drive, which indicates to me that its getting more compression. The picture quality, noticeably inferior to that provided by Dish, indicates that my conclusion is accurate.

The VIP-722 also has a Skip function that lets you jump forward in 30 second increments on recorded shows, so you can quickly scan through commercials. The Scientific-Atlanta DVR offers only the more awkward Fast Forward mode, which remained a trial and error process even after I became reasonably accustomed to navigating back and forth.

*As I said last week, I am concerned about the potential threat to Dishs customers who could lose all or most of their DVR functions if Dishs latest appeal in their ongoing legal skirmish with TiVO results in still another loss. Since its really all about money, it would seem to me that Dish ought to find a way to reach a licensing pact with the still-struggling TiVO and be done with it. Even though the VIP-722 has a decent, functional interface, having a real TiVO alternative would still be a better solution.*

*All this assumes, of course, that the two companies and their lawyers can agree to make nice. Or maybe Dish/Echostar CEO and Chairman Charlie Ergen will just decide write a large check to TiVO and buy the company outright. Then he can get in on the lawsuit action against Dishs competitors.
*
*THE FINAL WORD*

The Tech Night Owl Newsletter is a weekly information service of Making The Impossible, Inc.

Publisher/Editor: Gene Steinberg
Managing Editor: Grayson Steinberg
Marketing and Public Relations: Barbara Kaplan
Worldwide Licensing and Marketing: Sharon Jarvis


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## Curtis (Dec 2, 2003)

Johncv said:


> His second to the last paragraph say it all.


You might want to edit out the rest. It's a really long article.


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## Johncv (Jun 11, 2002)

Curtis said:


> You might want to edit out the rest. It's a really long article.


Yes, I could have, but I wanted to be fair to the writer and let everyone know what he went through regarding the change between Cox and Dish. Also, I did not want to quote him out of contents.


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## nrc (Nov 17, 1999)

Someone who holds their MSO so closely to delivering on their promises is going to be in for an interesting ride with Dish.


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## [email protected] (Dec 1, 2007)

Johncv said:


> Yes, I could have, but I wanted to be fair to the writer and let everyone know what he went through regarding the change between Cox and Dish. Also, I did not want to quote him out of contents.


If you were truly being fair to the original writer you wouldn't quote his entire article (a blatant violation of copyright) - you'd post a small extract, as permitted under fair use doctrine (in this case just the relevant paragraph), together with a link to the original article.


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## Davis Freeberg (May 23, 2006)

Exhibit B - http://davisfreeberg.com/2009/06/15/does-dish-have-the-antidote/


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## MichaelK (Jan 10, 2002)

cant wait till tomorrow morning to see if you are a genius or our crazy uncle hooching on the moonshine again.


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## Davis Freeberg (May 23, 2006)

You won't need to wait that long. Just check back in four hours and we'll know for sure. If there's no 13-D filing, it'd be very hard for Dish to have made a hostile takeover, if there is, the next ten days would be like watching an election as we figured out how many shares they bought in with.


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## Davis Freeberg (May 23, 2006)

Well, there's only 30 minutes left for Dish to rush in late paperwork, but if it was going to happen, I would have expected to see higher volume and the 13-D in already. I'm going to check back later, but it looks like it might be time to cut back on the moonshine. 

On the positive front, without the 13D, it makes it nearly impossible for Dish to have tried to acquire 50% on the remaining volume, so it looks like TiVo is in the free and clear for now. I would still like to see them issue more shares though so that the pill better reflects their value with injunctive power. This may have been a false alarm, but the fact that someone could get around the pill doesn't make me comfortable. It would be one thing if a company like Google approached TiVo and negotiated a friendly arrangement, it'd be another to have Echostar take control of TiVo instead of suffering the consequences of their infringement.


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## ZeoTiVo (Jan 2, 2004)

Curtis said:


> Perrhaps you didn't see this part of the injunction:
> 
> Dish has said that the newer models use the same "workaround" software as the models just found to be in contempt. Listen to what Rogers said last week at the Credit Suisse conference at link .
> 
> ...


correct - and thus my point that DISH can put out all the VIP 722 DVRs it wants even if the injunction goes into place. Does it run the risk of those DVRs running afoul of the infringemnet suit? Sure, but the courts would have to rule as such and DISH has shown a high propensity to ride out such court dealings with multiple manipulations and delays. All I ever said was it was no slam dunk and the bulk of DISH customers will not see a hassle right off.

I am surprised stockholders have not gotten involved in making DISH do a deal or some other definitive action but for clarity in this thread it needs to be noted that only specific models are involved currently and none of them are the newer ones. Maybe trhe sticking point for DISH is that TiVo is insisting on all DVRs be part of a deal.


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## Curtis (Dec 2, 2003)

SEC:

" From the time the person has acquired or holds the securities with a purpose or effect of changing or influencing control of the issuer, or in connection with or as a participant in any transaction having that purpose or effect until the expiration of the tenth day from the date of the filing of the Schedule 13D pursuant to this section, that person shall not:

1. Vote or direct the voting of the securities described therein; *or*

2. *Acquire an additional beneficial ownership interest* in any equity securities of the issuer of the securities, nor of any person controlling the issuer."


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## samo (Oct 7, 1999)

ZeoTiVo said:


> I am surprised stockholders have not gotten involved in making DISH do a deal or some other definitive action


Charlie holds controlling interest in a company (46%) and although he only makes $550K a year as CEO with no bonuses, he is the one who makes decisions. Good, bad or indifferent - he is a founder and the owner.


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## Davis Freeberg (May 23, 2006)

Curtis said:


> SEC:
> 
> " From the time the person has acquired or holds the securities with a purpose or effect of changing or influencing control of the issuer, or in connection with or as a participant in any transaction having that purpose or effect until the expiration of the tenth day from the date of the filing of the Schedule 13D pursuant to this section, that person shall not:
> 
> ...


This certainly would create a problem for the plan I outlined, but I'm not 100% sure that it's bullet proof. This is from an article on poison pill strategies from a securities attorney.

_"Under federal securities laws, a shareholder with activist intentions is required to make a public filing on Schedule 13D within ten days of acquiring a 5% ownership position in a company. While this disclosure requirement provides some advance notice, *an acquiring shareholder may be able to acquire an ownership stake far in excess of 5% during the 10-day period before which a shareholder must make a filing*.

An additional layer of advance warning is provided under the Hart-Scott-Rodino Antitrust Improvements Act, which generally requires a shareholder to observe a 30-day waiting period before consummating an open-market acquisition of voting securities of a company with a value of at least $65.2 million that constitute at least 10% of the outstanding voting securities of the company (during which time the acquisition may be subject to antitrust review)."_

http://www.bassberry.com/files/Publ...cc-4992-96fe-076ea8608e72/Corporate alert.pdf

I'm not even sure what Hart-Scott-Rodino even is, so it sounds like there are other hoops you'd have to jump through, but this article would suggest that you can continue to acquire after triggering 5%. Based on a quick glance at the Hart-Scott-Rules, it sounds like TiVo would need to have a market cap at less than $665 million in order to get around that.


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## samo (Oct 7, 1999)

MichaelK said:


> i dont know spit so I'll ask. Did yahoo use a poison pill to chase MS away? If not how else did they keep from being assimilated by the borg?


It was never a poison pill. Yahoo rejected MS offer and MS walked away not willing to pay more. As I said before, poison pill was never fully executed by any company.


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## gastrof (Oct 31, 2003)

I still say TiVo should take over DISH.

It'd be funny.


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## ZeoTiVo (Jan 2, 2004)

samo said:


> Charlie holds controlling interest in a company (46%) and although he only makes $550K a year as CEO with no bonuses, he is the one who makes decisions. Good, bad or indifferent - he is a founder and the owner.


Ah, that explains that. So it would take an unprecedented unity of the other 54%, which of course is not likely to ever happen. So we get to watch Charlie run this lawsuit out to the worst outcome for him. Only in America.


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## orangeboy (Apr 19, 2004)

http://www.homemediamagazine.com/legal-news/group-says-dish-network-abusing-appeals-process-16096



> Group Says Dish Network is Abusing Appeals Process
> 
> By Erik Gruenwedel | Posted: 15 Jun 2009
> [email protected]
> ...


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## D3372 (Jun 17, 2009)

I want to start by saying, I have enjoyed all of the information and speculation.

1. I guarantee Charlie has not shown his cards yet.
2. I guarantee that Tivo has made several offers to Dish and all have been rejected.
3. I guarantee that Charlie feels he has absolutely done nothing wrong and his DVR technology far outpasses Tivo's. (hardware as well as software)
4. I guarantee that Dish makes no attempt to buy Tivo.
5. And I guatantee that Dish does not enter into any agreement with Tivo unless they run out of time and then limited to only those DVRs still in use.

Let me give you some missing info.

Dish is currently installing at a frantic rate only 722 DVRs and a lot of them. The 721 is no longer being installed. Even if the customer is not subscribing to HD programming, which is what the 722 is for, the 722 is being installed.

The 922 has not been released for wide spread installation and there is no confirmed date for release.

The 625 is not authorized in any new installations. No other DVR models are currently part of any new installations.

Current existing customer promotion is being pushed, hard, to give free DVR upgrade to the 722 in exchange for a new 2 year commitment.

The only authorized use of any of the listed infringed DVRs is limited to replacing faulty existing boxes to existing customers who do not want the upgrade.

The DPP technology along with the DPP switching along with the advanced dianostics in the 722 make the 722, by far, the leading DVR box. Nothing else comes close, except maybe the 922, I've seen the technology and with the sling box integration for broadband will take satelite to the next logical step.

The 722 is outside the infringement. Dish is well on its way to replacing the existing DVR boxes with 722s and all new installs get the 722.

Charlie is going to eat the 300 mil and tell Tivo good luck.

Within the next 5 years Dish will rule the market. The technology is already being set up and it blows everything else away. Dish has almost completed taking all international programming off of the 61.5 HD satelites and putting it on the 118.7. Which will releave a ton of space for additional HD programming.

Your conclusions were great, all of them in their own respect,but, Dish isn't worried about Tivo. Within a couple of years Tivo's technology will be redundent.


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## Curtis (Dec 2, 2003)

"The 722 is outside the infringement."

What makes you think so? Because it hasn't been included in the list of named infringing models *yet*? That's hardly an acquittal.


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## D3372 (Jun 17, 2009)

Curtis said:


> "The 722 is outside the infringement."
> 
> What makes you think so? Because it hasn't been included in the list of named infringing models *yet*? That's hardly an acquittal.


You are right. Its not. The 721 was recently replaced with the 722 with a major modification (software). The technology of the dianostics of the entire system allows for multiple different software format applications to be run simultaneously and is switched and interpreted at the individual box. A continual dianostic feed is maintained between the individual box and the signal compression hub through the dpp LMBF which constantly interprets multiple software formats simultameously.


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## D3372 (Jun 17, 2009)

D3372 said:


> You are right. Its not. The 721 was recently replaced with the 722 with a major modification (software). The technology of the dianostics of the entire system allows for multiple different software format applications to be run simultaneously and is switched and interpreted at the individual box. A continual dianostic feed is maintained between the individual box and the signal compression hub through the dpp LMBF which constantly interprets multiple software formats simultameously.


Charlie was stalling for time. He needed time to advance the technology in order to be able to revamp the DVR software to fall outside the infringement and still be able to control the existing boxes. Ex. Microsoft doesn't sue Apple. Their software formating is absolutely none compatible (completely different). But, if one had infinged and then changed their software they would also have to figure out a way for the new technology to interpret the old without adding to any infringement. You wouldn't do it through the software you would still be infringing. You would have to add something to the hardware to look for the old and switch between the two and phase the old out or you would be forced to recall all the old software because it wouldn't work with the new.


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## Curtis (Dec 2, 2003)

D3372 said:


> Its not.


It's not _what_?


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## D3372 (Jun 17, 2009)

Curtis said:


> It's not _what_?


Its not an aquittal. I'm doing the same thing your doing I'm taking the information I know and have been presented and making a logical reasonable conclusion based on that information.

This is what I know.

For 5 years Dish has been under the gun. But, they have been able to get themselves 5 years to fix the problem. Dish recently deployed the 722, replacing the 721, with a major software modification. Over the last 3 years they have deployed the dpp (dish pro plus) technology, replacing Legacy and more recently Dish Pro, which allows for the advanced dianostics. Dish has mandated the replacement of all Legacy and Dish Pro technology during any service. Dish has installed and replaced using nothing but 722 DVRs all within the last 2 months. Dish has spent a lot of money doing this. Technicians are are currently working mandatory 14-16 hour days. 3 days on 4 off, 4 on 3 off. With an A and B shift and a swing shift. Dish has spent a lot of money in the last 6 months, with a very large turn around, to employ more experienced and competent techs with customer relation skills as well as hiring new customer support all in an effort to greatly enhance customer satisfaction. A company that is worried about going out of business isn't putting together that kind of push. In a time with a uncertain economy Dish is currently hiring full bore. They're not worried about Tivo.


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## Davis Freeberg (May 23, 2006)

D3372 said:


> Dish is currently installing at a frantic rate only 722 DVRs and a lot of them. The 721 is no longer being installed. Even if the customer is not subscribing to HD programming, which is what the 722 is for, the 722 is being installed.


I too enjoy the speculation and since we all see the world from a different viewpoint, it makes sense that we would reach different conclusions. For the sake of playing this scenario out, riddle me this, if TiVo is able to get their injunction expanded to the 722, what would Charlie do?


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## samo (Oct 7, 1999)

Davis Freeberg said:


> I too enjoy the speculation and since we all see the world from a different viewpoint, it makes sense that we would reach different conclusions. For the sake of playing this scenario out, riddle me this, if TiVo is able to get their injunction expanded to the 722, what would Charlie do?


May I suggest that small speculator like you would not have clue how self made billionaire thinks? At least this "D" guy is trying to analyze the facts as he knows them presumably from some Dish insider information. You are just know nothing full of hot air making wild ass statements about things that are well above your understanding or knowledge.


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## D3372 (Jun 17, 2009)

Davis Freeberg said:


> I too enjoy the speculation and since we all see the world from a different viewpoint, it makes sense that we would reach different conclusions. For the sake of playing this scenario out, riddle me this, if TiVo is able to get their injunction expanded to the 722, what would Charlie do?


Charlie would be screwed and all of his actions within his company and the chess/ cat and mouse game he is playing with Tivo would have made absolutely no human sense what so ever. For a man who started with just 2 dishes and damaged the 1st one at the 1st job to play out a hand with absolutely no chance of winning and no ace in the whole and then to set up and push forward a very successful company just to set it up for someone else to swoop in and reap the rewards would be beyond suicide.


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## D3372 (Jun 17, 2009)

D3372 said:


> Charlie would be screwed and all of his actions within his company and the chess/ cat and mouse game he is playing with Tivo would have made absolutely no human sense what so ever. For a man who started with just 2 dishes and damaged the 1st one at the 1st job to play out a hand with absolutely no chance of winning and no ace in the whole and then to set up and push forward a very successful company just to set it up for someone else to swoop in and reap the rewards would be beyond suicide.


I,m a betting man and I would bet that Charlie has figured it out. The day the stay is lifted and it will be lifted. That week Dishes stock will take a hit. The next week I'm buying


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## D3372 (Jun 17, 2009)

D3372 said:


> I,m a betting man and I would bet that Charlie has figured it out. The day the stay is lifted and it will be lifted. That week Dishes stock will take a hit. The next week I'm buying


Right now, this company seems to be attempting to gain enough time to replace as many of the existing DVR boxes, if not all, before the stay is lifted. It seems that Charlie is setting things up to be able to decline any offer from Tivo, abide by the injunction and not lose one customer doing it. If the 722 box was within the infringement, based on the number of boxes that will have been replaced and installed in the next month or so, Charlie would not be in business anymore or at least it would not be his company anymore.


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## bkdtv (Jan 9, 2003)

D3372 said:


> If the 722 box was within the infringement, based on the number of boxes that will have been replaced and installed in the next month or so, Charlie would not be in business anymore or at least it would not be his company anymore.


Dish Network's own expert witness said back in February that software on the 622/722 and not more than colourably different from new software on the infringing boxes (with respect to the TiVo patents). Dish Network tried unsuccessfully to get that testimony expunged from the record.

That testimony is not sufficient to add the 622/722 to the list of infringing DVRs, but it should be sufficient for the judge to grant a hearing on the subject, provided the current decision is allowed to stand.


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## D3372 (Jun 17, 2009)

bkdtv said:


> Dish Network's own expert witness said back in February that software on the 622/722 and not more than colourably different from new software on the infringing boxes (with respect to the TiVo patents). Dish Network tried unsuccessfully to get that testimony expunged from the record.
> 
> That testimony is not sufficient to add the 622/722 to the list of infringing DVRs, but it should be sufficient for the judge to grant a hearing on the subject, provided the current decision is allowed to stand.


They will get their hearing but the contempt charge and the basis of the injunction would have gotten them that anyway. If you have a company and you have no other choice then to make a deal and its really close to the 12th hour. Why spend ungodly amounts of money stocking shelves with a receiver that you don't need? If you were going to pay a royalty the 721 was fine or the 612. Why needlessly GIVE customers who do not have HD tvs or subscribe to HD programming a DVR twice the cost of the 625 which is not HD?. Why fill subsidized housing with expensive 722s to people who can't afford rent? If Tivo is shutting you down, What's the point? and if you're going to make a deal, Why put in anymore then you need to?


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## Curtis (Dec 2, 2003)

bkdtv said:


> Dish Network's own expert witness said back in February that software on the 622/722 and not more than colourably different from new software on the infringing boxes (with respect to the TiVo patents). Dish Network tried unsuccessfully to get that testimony expunged from the record.


I have the transcript and can't find that. Where is it?


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## Curtis (Dec 2, 2003)

D3372 said:


> If you have a company and you have no other choice then to make a deal and its really close to the 12th hour. Why spend ungodly amounts of money stocking shelves with a receiver that you don't need?


Charlie has miscalculated throughout this saga. Why would that change now?


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## CrispyCritter (Feb 28, 2001)

D3372 said:


> They will get their hearing but the contempt charge and the basis of the injunction would have gotten them that anyway. If you have a company and you have no other choice then to make a deal and its really close to the 12th hour. Why spend ungodly amounts of money stocking shelves with a receiver that you don't need? If you were going to pay a royalty the 721 was fine or the 612. Why needlessly GIVE customers who do not have HD tvs or subscribe to HD programming a DVR twice the cost of the 625 which is not HD?. Why fill subsidized housing with expensive 722s to people who can't afford rent? If Tivo is shutting you down, What's the point? and if you're going to make a deal, Why put in anymore then you need to?


I appreciate all your comments! It's always good to hear from folks who know a bit more about some aspects.

My reading of the situation, given your info, is that Charlie gambled and has lost (for now). He was trying hard not to reach any license agreement with TiVo; just pay for past infringements. Unfortunately for him, the language the judge used was strong - the judge has to actively rule that the 722 DVR doesn't infringe before it gets exempted from the license requirements. There is no way that ruling can happen before the stay expires. I suspect Charlie is going to be stuck having to make an agreement with TiVo.


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## Davis Freeberg (May 23, 2006)

D3372 said:


> Right now, this company seems to be attempting to gain enough time to replace as many of the existing DVR boxes, if not all, before the stay is lifted. It seems that Charlie is setting things up to be able to decline any offer from Tivo, abide by the injunction and not lose one customer doing it. If the 722 box was within the infringement, based on the number of boxes that will have been replaced and installed in the next month or so, Charlie would not be in business anymore or at least it would not be his company anymore.


This would be consistent with his MO throughout the trial. He's done everything he could to stretch this out for as long as possible. It seems like a pretty dangerous move to make though, if TiVo gets the injunction on the 722, then he's just thrown good money after bad.

So if he's screwed in this situation and by your own admission would have torpedoed his own company, then I'll ask again, What would Charlie do? Surely he must have a backup plan? Wouldn't that include trying to seize control over what he must view as little more than an ankle biting lap dog? How can you guarantee us that he'd never move against TiVo, when an injunction against the 722 could very well happen?



D3372 said:


> Why spend ungodly amounts of money stocking shelves with a receiver that you don't need? If you were going to pay a royalty the 721 was fine or the 612. Why needlessly GIVE customers who do not have HD tvs or subscribe to HD programming a DVR twice the cost of the 625 which is not HD?


If Charlie owned TiVo he could still use these receivers


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## ZeoTiVo (Jan 2, 2004)

So after years of litigation and DISH lawyers who care only about the results of dragging things out and buying DISH time - how does anyone see getting the 722 incluced in the infringement as easy and or done in a timely manner?


for a hostile takeoever; 2 things.
1: What about the agreements TiVo has in place with competitors of DISH like DirectTV and COX. What provisions are in those agreements about a hostile takeover?
2: How would the govt. see a ostile take over seeing that TiVo is currently the only major (by market share) standalone DVR out there and indeed that hostile takeover would give DISH undue leverage via those other agreements.


so in all this thread I see a bunch of speculation but nothing that seems to have a grip in reality. TiVo will have yet another long and PITA road to go to get the 722 included in infringemnet and DISH doing a hostile takeover of TiVo would have even more obstacles to overcome.


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## howard23 (Dec 21, 2001)

Davis Freeberg said:


> This would be consistent with his MO throughout the trial. He's done everything he could to stretch this out for as long as possible. It seems like a pretty dangerous move to make though, if TiVo gets the injunction on the 722, then he's just thrown good money after bad.
> 
> So if he's screwed in this situation and by your own admission would have torpedoed his own company, then I'll ask again, What would Charlie do? Surely he must have a backup plan? Wouldn't that include trying to seize control over what he must view as little more than an ankle biting lap dog? How can you guarantee us that he'd never move against TiVo, when an injunction against the 722 could very well happen?
> 
> If Charlie owned TiVo he could still use these receivers


this judge has clearly structured his rulings in an attempt to foster an agreement beteewn DISH and TIVO. Charlie is out of moves here. me thinks that when the judge is about to lift the stay he will call both parties into chambers and say something like, " damage awards, interest + punitive damages in the neighborhood of 500 mil AND DISH is to turn off DVRs. you have 10 days to reach agreement or this order becomes final".

TIVO as a company is long term best served by an agreement where the TIVO software platform is incorporated into the DISH DVRs. with the Comcast rollout expanding this would make TIVO the dominant DVR platform. on a side note, i reluctantly accepted a free comcast dvr and placed it in my bedroom. the interface is barely usable after using multiple Tivo's for the last 10 years. i can't wait for this expected summertime Tivo rollout here in Chicagoland!


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## CrispyCritter (Feb 28, 2001)

There's two separate issues here. As I read it, 722 is not determined to be infringing yet and there will have to be a long process to determine if it does infringe.

However, it has not been determined not to be infringing, and as such it is covered by the shutdown order, unless the judge (or the appeals court) otherwise specifically rules. Thus Dish is going to have to pay licensing fees for the 722 to TiVo, or it is going to have to shut the 722 down.

I think there's very little chance of a hostile takeover. There's lot of obstacles.


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## ZeoTiVo (Jan 2, 2004)

CrispyCritter said:


> There's two separate issues here. As I read it, 722 is not determined to be infringing yet and there will have to be a long process to determine if it does infringe.
> 
> However, it has not been determined not to be infringing, and as such it is covered by the shutdown order, unless the judge (or the appeals court) otherwise specifically rules. Thus Dish is going to have to pay licensing fees for the 722 to TiVo, or it is going to have to shut the 722 down.
> 
> I think there's very little chance of a hostile takeover. There's lot of obstacles.


*the 722 is NOT included in any shutdown order*. There is language for not colorably different but DISH is not going to just say "Oh yeah, that inlcudes the 722" but will insist the court specifically name any DVRs not alrady named in the suit.


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## Curtis (Dec 2, 2003)

ZeoTiVo said:


> *the 722 is NOT included in any shutdown order*. There is language for not colorably different but DISH is not going to just say "Oh yeah, that inlcudes the 722" but will insist the court specifically name any DVRs not alrady named in the suit.


All it takes is a contempt hearing to find out whether the newer models need to be added to the injunction. No big deal. Everyone is well rehearsed. They just did one.


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## D3372 (Jun 17, 2009)

Davis Freeberg said:


> This would be consistent with his MO throughout the trial. He's done everything he could to stretch this out for as long as possible. It seems like a pretty dangerous move to make though, if TiVo gets the injunction on the 722, then he's just thrown good money after bad.
> 
> So if he's screwed in this situation and by your own admission would have torpedoed his own company, then I'll ask again, What would Charlie do? Surely he must have a backup plan? Wouldn't that include trying to seize control over what he must view as little more than an ankle biting lap dog? How can you guarantee us that he'd never move against TiVo, when an injunction against the 722 could very well happen?
> 
> If Charlie owned TiVo he could still use these receivers


I loved the theory of the idea of Charlie making a play for Tivo. I'm guilty of watching for it. I believe the idea of that is well within his character.

But, Dish has spent a lot of money and effort to get the 722 in as many homes as possible as quickly as possible and is still doing that as we speak. Remember, Dish does not charge for installation, they are not making anyone purchase the 722s, they are putting the 722s in homes that don't need it and no up front monies for this endeaver. Also, the 722 is not the receiver Charlie wants in every home. The 922 is that receiver. The 922 has all of the future technology already built into it, so no external upgrades or additional hardware will be needed for add-ons. The 922 is not ready for this kind of deployment at this time though. If Charlie was going to buy Tivo he wouldn't push the 722.

The other possibility could be. That Charlie's lawyers have determined that the amount of additional time he would get by employing the 722 and keeping the DVRs on would allow him to make the neccessary changes to the 922 to fall outside the infringement. If the 722 falls within the infringement but is far enough removed a substantial drawn out argument could ensue. That is an expensive way to go though. He would have been better off just making a deal, making the neccessary changes to the 922 and then kicking Tivo to the curb.

Charlie could also be rolling the dice that the 722 is outside the infringement with the idea that worse case scenerio he would have to pay a royalty to Tivo. That seems to only work if he were sure that Tivo would deal and I believe they have already tried to. Based on Charlie's character I don't believe he wants anyone dictating what he has to do with any part of his business. 5 years and no settlement. This is playing out to the end.

Again, I love the idea of Charlie making a bid for Tivo but I don't think that's where he's going.


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## Curtis (Dec 2, 2003)

D3372 said:


> The other possibility could be. That Charlie's lawyers have determined that the amount of additional time he would get by employing the 722 and keeping the DVRs on would allow him to make the neccessary changes to the 922 to fall outside the infringement.


Would that be the same "Fish and Richardson" lawyers that told Charlie the workaround didn't infringe? I'm guessing Judge Folsom would advise Charlie to get new lawyers.


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## 20TIL6 (Sep 7, 2006)

Maybe this has been brought up.

MOFO (DISH firm) recently sent a short letter to the district court in TX. It basically said that DISH would like to continue to investigate possible software work-around designs that would not infringe on TiVo patents. The last sentence states that at this time, they are unsure if any further work-around designs are even possible.

Now I take that as their complying with the recent ruling that any additional software work had to be brought to the court's attention. That makes sense.

The odd part is that last statement. That DISH is not sure anything else can be done to avoid infringement of '389. DISH has argued that the patent is overly broad in the past.

If DISH is saying that they are not sure any work-around gets past TiVo patents, then what's the saving value of the 722? At most, isn't it also just a work-around?


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## D3372 (Jun 17, 2009)

20TIL6 said:


> Maybe this has been brought up.
> 
> MOFO (DISH firm) recently sent a short letter to the district court in TX. It basically said that DISH would like to continue to investigate possible software work-around designs that would not infringe on TiVo patents. The last sentence states that at this time, they are unsure if any further work-around designs are even possible.
> 
> ...


RIGHT, why make all this unnecessary effort and expense to deploy a DVR that is totally useless to any outcome and is not the DVR that you ultimately want to use anyway?


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## Curtis (Dec 2, 2003)

20TIL6 said:


> The odd part is that last statement. That DISH is not sure anything else can be done to avoid infringement of '389. DISH has argued that the patent is overly broad in the past.
> 
> If DISH is saying that they are not sure any work-around gets past TiVo patents, then what's the saving value of the 722? At most, isn't it also just a work-around?


Good point. It's pretty obvious that Dish doesn't know how to get around TiVo's patent.


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## D3372 (Jun 17, 2009)

Curtis said:


> Would that be the same "Fish and Richardson" lawyers that told Charlie the workaround didn't infringe? I'm guessing Judge Folsom would advise Charlie to get new lawyers.


You're right, that is a whole lot of expense (4 million 722 receivers, the 722 is the most expensive receiver currently being used) for the CHANCE of a worth while delay. Better off making the deal and figuring out how to get out from under Tivo later.


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## 20TIL6 (Sep 7, 2006)

D3372 said:


> RIGHT, why make all this unnecessary effort and expense to deploy a DVR that is totally useless to any outcome and is not the DVR that you ultimately want to use anyway?


Is that an answer? That's just another question. If you are asking me....

I have no idea why Charlie Ergen does what he does. He was quoted recently (and in relation to the TiVo litigation), and said "I'm just stubborn that way".

So the strategy based on the 722 could be because of stubbornness, I guess. But like I said, I really don't know why.


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## Curtis (Dec 2, 2003)

D3372 said:


> Better off making the deal and figuring out how to get out from under Tivo later.


That's why TiVo may ask for a fleet of armored cars full of cash instead of monthly royalties from a nefarious character.


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## D3372 (Jun 17, 2009)

20TIL6 said:


> Is that an answer? That's just another question. If you are asking me....
> 
> I have no idea why Charlie Ergen does what he does. He was quoted recently (and in relation to the TiVo litigation), and said "I'm just stubborn that way".
> 
> So the strategy based on the 722 could be because of stubbornness, I guess. But like I said, I really don't know why.


He may indeed be that stubborn but he is far from an idiot. The funny thing about public quotes and sound bites is that they generally don't have any credibility, they're just words. All the statements, all the posturing may very well be a lot of smoke and mirrors to hide an underlying reality. The fact is that the actions that Dish is taking, within their company, right now are those of a company that is moving forward and setting up for the future. Not of a company that is desperately trying to stay in business. The steps they are currently employing don't correspond to the idea that a deal is going to be made or that Dish wants to buy Tivo.


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## ZeoTiVo (Jan 2, 2004)

Curtis said:


> All it takes is a contempt hearing to find out whether the newer models need to be added to the injunction. No big deal. Everyone is well rehearsed. They just did one.


no big deal? Have you read the very long threads here detailing the years this has taken so far. Why would DISH lawyers change tactics now and not push this simple hearing to determine 722 infringement out long enough to make the 722 as pointless since the 922 is out. We all know full well that DISH has a strategy in place of making this whole process work its way through the courts as slowly as possible


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## D3372 (Jun 17, 2009)

Curtis said:


> That's why TiVo may ask for a fleet of armored cars full of cash instead of monthly royalties from a nefarious character.


At this point that very well may be true. But why close that door. Even if you're completely disenchanted with Dish. At some point the patents run out. If you make deals with everyone and force them to use your software and equipment for long enough, at some point, even when the patents run out, it becomes more cost effective to stay with the original deal then to retool.


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## Curtis (Dec 2, 2003)

ZeoTiVo said:


> no big deal? Have you read the very long threads here detailing the years this has taken so far.


The last contempt hearing went quickly. The next one will be even faster. The parties involved just have to cut and paste the stuff that was submitted a few months ago. It'll be a rubber stamp scenario.


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## 20TIL6 (Sep 7, 2006)

D3372 said:


> The funny thing about public quotes and sound bites is that they generally don't have any credibility, they're just words. All the statements, all the posturing may very well be a lot of smoke and mirrors to hide an underlying reality.


Agreed. And I'd say the very same thing about posts on a message board that benefit greatly from anonymity.


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## Curtis (Dec 2, 2003)

D3372 said:


> At this point that very well may be true. But why close that door. Even if you're completely disenchanted with Dish. At some point the patents run out. If you make deals with everyone and force them to use your software and equipment for long enough, at some point, even when the patents run out, it becomes more cost effective to stay with the original deal then to retool.


Haven't you been introduced to the remote DVR proponents? The streaming internet proponents? Maybe they are right.


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## D3372 (Jun 17, 2009)

Curtis said:


> Haven't you been introduced to the remote DVR proponents? The streaming internet proponents? Maybe they are right.


Maybe, but its all speculation anyway. All any of these companies can do is work with and get the most of what they have for as long as they can and then move on.


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## ZeoTiVo (Jan 2, 2004)

Curtis said:


> The last contempt hearing went quickly. The next one will be even faster. The parties involved just have to cut and paste the stuff that was submitted a few months ago. It'll be a rubber stamp scenario.


not when it is a new model that needs to be examined for colorably different


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## Curtis (Dec 2, 2003)

ZeoTiVo said:


> not when it is a new model that needs to be examined for colorably different


Dish was able to describe the difference in the workaround software in a few sentences. It's no big deal.


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## D3372 (Jun 17, 2009)

I feel for Tivo. Here is a company that has done everything they had to do. They picked the absolute right company to set precident. They flexed some muscle by showing they're not afraid to fight. They got the decision, which is the real power. Not whether or not they actually shut Dish down but the real threat that they can. And because the court system is allowing Dish to drag this out, could very possibly be left with some penalties and a blueprint for every other company with the same issue of how to deal with this situation.


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## Davis Freeberg (May 23, 2006)

Since we are trying to come up with nefarious plots to take over the DVR world, I'll throw out another idea. Let's say Dish does what they can to stretch this out, but sooner or later they know they have to settle. At that point Charlie would have to settle, but would have even less leverage than today. Why not buy 5&#37; to trigger a 13D filing, but not 15% to trigger the pill. If TiVo was worried that he might actually try to take them over, he could greenmail them into a better deal then he would get otherwise. If he's willing to risk $800-$1.2 billion to replace 4 million DVRs with ones that likely infringe, why wouldn't it be worth $50 - $100 million to scare the hell out of TiVo? Even if he ended up losing $20 or $30 million on the "investment", you'd have to believe that he'd enjoy flushing the shares at once when he was done with them.


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## D3372 (Jun 17, 2009)

Davis Freeberg said:


> Since we are trying to come up with nefarious plots to take over the DVR world, I'll throw out another idea. Let's say Dish does what they can to stretch this out, but sooner or later they know they have to settle. At that point Charlie would have to settle, but would have even less leverage than today. Why not buy 5% to trigger a 13D filing, but not 15% to trigger the pill. If TiVo was worried that he might actually try to take them over, he could greenmail them into a better deal then he would get otherwise. If he's willing to risk $800-$1.2 billion to replace 4 million DVRs with ones that likely infringe, why wouldn't it be worth $50 - $100 million to scare the hell out of TiVo? Even if he ended up losing $20 or $30 million on the "investment", you'd have to believe that he'd enjoy flushing the shares at once when he was done with them.


That's interesting, the problem is that he has already started replacing all the existing DVRs with the 722 and has stocked the shelves with them. I don't know if it would be a plausable plan once he has spent all of that money replacing the existing DVRs. But I do like the threat idea. Especially if any deal breaker was hinging on specific concessions by Tivo.


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## DancnDude (Feb 7, 2001)

Any chance that these 722's are just more efficient in some way that makes or saves Dish money, completely separate from the TiVo situation? Do they allow Video on Demand where the old ones do not? Do they allow web scheduling? Do they do things more efficiently that will help Dish's servers on the backend? They could be upgrading all these boxes just because it will make them money overall and have nothing to do with the TiVo trial. I have no idea, just offering a query.


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## D3372 (Jun 17, 2009)

DancnDude said:


> Any chance that these 722's are just more efficient in some way that makes or saves Dish money, completely separate from the TiVo situation? Do they allow Video on Demand where the old ones do not? Do they allow web scheduling? Do they do things more efficiently that will help Dish's servers on the backend? They could be upgrading all these boxes just because it will make them money overall and have nothing to do with the TiVo trial. I have no idea, just offering a query.


Yes, they are better and yes they support broadband, and yes, as of May 8th., they allow for DVR scheduling, in conjunction with the slingbox but they're only meant to be a bridge component. The 922 is the real deal with all of the neccessary hardware already incorporated in the receiver. The unusual aspect of the 722 migration isn't its use its how its being implemented. The 722s are being placed in homes with absolutely no applicable use for them. Even if that customer was going to get an HDTV or even internet at some point, as soon as the 922 is released the 722 becomes obsolete.


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## Curtis (Dec 2, 2003)

D3372 said:


> Yes, they are better and yes they support broadband, and yes, as of May 8th., they allow for DVR scheduling, in conjunction with the slingbox but they're only meant to be a bridge component. The 922 is the real deal with all of the neccessary hardware already incorporated in the receiver. The unusual aspect of the 722 migration isn't its use its how its being implemented. The 722s are being placed in homes with absolutely no applicable use for them. Even if that customer was going to get an HDTV or even internet at some point, as soon as the 922 is released the 722 becomes obsolete.


Even if it has cupholders, that's irrelevant as far as TiVo's patent is concerned. TiVo's patent doesn't have to mention cupholders for there to be infringement.


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## D3372 (Jun 17, 2009)

Curtis said:


> Even if it has cupholders, that's irrelevant as far as TiVo's patent is concerned. TiVo's patent doesn't have to mention cupholders for there to be infringement.


I believe the user's question was referring to the possibility that the migration of the 722 is just a naturally planned event because of a stardard technical upgrade and really has nothing to do directly with decisions pertaining to the lawsuit. Why so brash? We're just talking.


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## D3372 (Jun 17, 2009)

Davis Freeberg said:


> Since we are trying to come up with nefarious plots to take over the DVR world, I'll throw out another idea. Let's say Dish does what they can to stretch this out, but sooner or later they know they have to settle. At that point Charlie would have to settle, but would have even less leverage than today. Why not buy 5% to trigger a 13D filing, but not 15% to trigger the pill. If TiVo was worried that he might actually try to take them over, he could greenmail them into a better deal then he would get otherwise. If he's willing to risk $800-$1.2 billion to replace 4 million DVRs with ones that likely infringe, why wouldn't it be worth $50 - $100 million to scare the hell out of TiVo? Even if he ended up losing $20 or $30 million on the "investment", you'd have to believe that he'd enjoy flushing the shares at once when he was done with them.


Davis, let me pick your brain for a couple of minutes. Based on what I have read from everyone in the last few days vs. what I know I have a reasonable idea of what is going on but based on some of the new input today I am coming back to some questions and back to your original theory. Since you seem to be up on the numbers and the research maybe you can help.

I'm going to make some assumptions based on today's discussions. For argument sake let's assume they are 100% accurate.

Let us assume that the 722 box is within the infringement

that Charlie is replacing all of the listed infringement boxes with the 722
in order to end around the injunction (which on my end appears to be happening)

that Charlie already knows that the boxes are within the infringement

that Charlie is buying for time (playing the system) to figure out the problem with the 922 box, if possible (it is currently be held up) and then replace all of the 722 boxes with the 922, done deal.

and that the actual total number of none 722 DVR boxes existing is 4 million

The current recovery value of the 722 box is 400.00 per if the 722K (reman) is used it is 350.00 per. I have no idea what the actual cost of each is but let's assume at least half of that. At 400.00 per that's 1.6 billion take half of that and get 800 mil. That's just the receivers. That does not include installation costs, scheduling costs, etc. The total actual number could easily be well over 1 billion. Plus the additional cost to do it all over again with the 922, which would cost more but is the receiver Dish ultimately wants in everyone's home anyway. Add the fact that Dish is replacing and installing these receivers for all DVR applications with no up front cost to the customer.

Here is where I'm having a problem.

Using this scenerio vs. a take over scenerio the reward vs. risk aspect doesn't make sense.

the ultimate risk of doing either one is total loss.
but the reward of being successful seems to greatly tilt in favor of a take over vs. replacement.

Help me with some numbers

5% triggers 13D at roughly 11.00 per share
15% triggers pill and a 60.00 per share bonus
Does the 15% trigger of the pill revert to include the original 15% or just the remaining stock purchased thereafter?
Is the pill inclusive to all stocks purchased or are there any exclusions?
Exactly how long after the 13D filing would Dish have to aquire a majority or do they actually need a majority? Could they proxy? Could they enlist the voting rights of other shareholders without actually purchasing the stock?

I forgot to add in new installs to the 4 million. All new installs using the DVR get the 722


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## Davis Freeberg (May 23, 2006)

D3372 said:


> Using this scenerio vs. a take over scenerio the reward vs. risk aspect doesn't make sense.
> 
> the ultimate risk of doing either one is total loss.
> but the reward of being successful seems to greatly tilt in favor of a take over vs. replacement.


My thoughts exactly Why would he risk spending $1 billion plus on what could very well be a wild goose chase when he could seize TiVo for $3 billion (-$1 billion in cash, tax losses and an invaluable patent portfolio.)



D3372 said:


> 5% triggers 13D at roughly 11.00 per share
> 15% triggers pill and a 60.00 per share bonus
> Does the 15% trigger of the pill revert to include the original 15% or just the remaining stock purchased thereafter?


The way I read it is that once Dish trips the pill (announces tender or publicly declares over 15%), then the $60 dividend comes into play the very next day. Dish wouldn't have to pay $60 for whatever shares they owned at that point, but they would have to pay it out to the rest of TiVo's shareholders. This is why the more shares they could get in the open market, the weaker TiVo's pill would become. How many shares Dish could actually buy up this way before supply would run is open to all kinds of debate.



D3372 said:


> Is the pill inclusive to all stocks purchased or are there any exclusions?


The 5% reporting requirement is in place for every stock, but there are exceptions if you are buying for passsive (non-takeover) purposes. The pill itself is something that TiVo put into place after their stock crashed and there were rumors that DirecTV was going to try and buy them. Since it is somewhat of a controversial provision, it will be interesting to see what they do with it in two years when it expires.



D3372 said:


> Exactly how long after the 13D filing would Dish have to aquire a majority or do they actually need a majority? Could they proxy? Could they enlist the voting rights of other shareholders without actually purchasing the stock?


These are good questions and the answers probably get more complicated when you bring in attorneys, but the way I understand it, between the time they buy their 5% and the time they report it, they get 10 calendar days. (11 or 12 if the due date falls on a weekend or holiday) I'm not exactly sure how many shares they'd be allowed to add ,between owning 5% and telling the world about it, but maybe someone who better understands the nuances of this process can chime in with more details.

I also believe that they could also buy future contracts on more than 50% of the company and not have to report it as long as it was 60 days away. So in theory, they could buy the company six months from now and not have to tell anyone for the next 4 months while they added to the positions. Of course hiding that kind of futures activity from Wall St. would probably be pretty tough.

They would need a majority in order to take over TiVo though, any less and the pill would sink them. If they bought 14%, they could advocate for the removal of the pill and some TiVo shareholders might be willing to strip it out, but it would take over a year for Dish to do that and I don't believe they have that kind of time to work this out. I also don't know that they would get the support. It's always hard to say how things would shake out on a proxy contest.


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## ZeoTiVo (Jan 2, 2004)

Dish is very good at making simple take years


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## MichaelK (Jan 10, 2002)

D3372 said:


> RIGHT, why make all this unnecessary effort and expense to deploy a DVR that is totally useless to any outcome and is not the DVR that you ultimately want to use anyway?


cause ergen never likes to admit defeat and will do anything to stall and abuse the court system of our country?

how long has this contempt nonsense been going on? A year now? So deploying the 722 becasue it's not currently specifically listed probably buys another year between all the stalling, whining, and appeals. Another year for Charlie to hope tivo goes belly up or a judge goes insane or that he can come up with some magic bullet. That's how I read his behavior. Push every last way to avoid admitting defeat- all the way to the supreme court if possible on every last issue.


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## MichaelK (Jan 10, 2002)

D3372 said:


> You're right, that is a whole lot of expense (4 million 722 receivers, the 722 is the most expensive receiver currently being used) for the CHANCE of a worth while delay. Better off making the deal and figuring out how to get out from under Tivo later.


better to make a deal if you are a rational person that doesn't see the world as all or nothing.


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## Curtis (Dec 2, 2003)

Dish said on 6-15 that they don't know how to make a non-infringing DVR:

"The satellite provider said in a one-sentence court filing Monday that it's "investigating other potential design-around options, but at this stage, does not know whether a future design-around is even possible."

link


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## Wil (Sep 27, 2002)

Curtis said:


> TiVo said on 6-15 that they don't know how to make a non-infringing DVR


"Charlie" said, not Tivo said..

Tivo knows. The Judge knows. Everybody in the world knows how Charlie can make a non-infringing DVR except Charlie. He simply has to pay to license the required technology that he has been stealing from Tivo.


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## nrc (Nov 17, 1999)

20TIL6 said:


> The odd part is that last statement. That DISH is not sure anything else can be done to avoid infringement of '389. DISH has argued that the patent is overly broad in the past.
> 
> If DISH is saying that they are not sure any work-around gets past TiVo patents, then what's the saving value of the 722? At most, isn't it also just a work-around?


Dish is saying that to avoid being pinned down on an argument. How can they say that an injunction will cause them irrepairable harm if they believe that they can work around the patent?

There's no reason for TiVo to bring up the question of the 722 before it's necessary. They probably expect that Dish will settle as soon as they can no longer avoid the injunction.

On the slim chance that Dish does decide to pull the plug on 4 million DVRs and leaves the 722 active, TiVo will make the argument for whatever additional DVRs should be included as no more than colorably different.


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## Phantom Gremlin (Jun 20, 2002)

samo said:


> May I suggest that small speculator like you would not have clue how self made billionaire thinks? At least this "D" guy is trying to analyze the facts as he knows them presumably from some Dish insider information. You are just know nothing full of hot air making wild ass statements about things that are well above your understanding or knowledge.


Most postings on this tread have been quite civil; many have also been quite educational. Yours, however, is neither. It is nothing but an ad hominem that was better left unsaid.


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## samo (Oct 7, 1999)

Phantom Gremlin said:


> Most postings on this tread have been quite civil; many have also been quite educational. Yours, however, is neither. It is nothing but an ad hominem that was better left unsaid.


I do agree with you that I should have explained my comment about knowledge. The problem is that stock talk has been prohibited on this board for quite some time. Here is the link to poison pill document for people who want to read it. If you do read it, please note that $60 dividend is complete misinterpretation of the document. And if moderators feel that this link is stock talk -please remove this post.


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## dswallow (Dec 3, 2000)

samo said:


> I do agree with you that I should have explained my comment about knowledge. The problem is that stock talk has been prohibited on this board for quite some time. Here is the link to poison pill document for people who want to read it. If you do read it, please note that $60 dividend is complete misinterpretation of the document. And if moderators feel that this link is stock talk -please remove this post.


One day they'll require all contracts to be in English and to fit on one page using 10-point type or larger.


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## Curtis (Dec 2, 2003)

Dish's Delaware lawsuit against TiVo has been transferred to Judge Folsom.


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## MichaelK (Jan 10, 2002)

Curtis said:


> Dish's Delaware lawsuit against TiVo has been transferred to Judge Folsom.


nice. no more stalling in other jurisdictions


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## howard23 (Dec 21, 2001)

Curtis said:


> Dish's Delaware lawsuit against TiVo has been transferred to Judge Folsom.


do you have a link for this info?


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## gonzotek (Sep 24, 2004)

howard23 said:


> do you have a link for this info?


Not really official since I don't know where this came from originally, but here's the pdf of the docket transfer order someone posted in DBStalk:

http://www.dbstalk.com/showpost.php?p=2135599&postcount=398


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## Johncv (Jun 11, 2002)

Curtis said:


> Dish's Delaware lawsuit against TiVo has been transferred to Judge Folsom.


So, does this mean that the endgame is near?


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## magnus (Nov 12, 2004)

So, what exactly is Dish's lawsuit against Tivo about?


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## Curtis (Dec 2, 2003)

magnus said:


> So, what exactly is Dish's lawsuit against Tivo about?


Dish wanted to do an end run around the contempt hearings that they knew were coming. They filed a lawsuit in Delaware asking that they be declared non-infringing. They wanted a jury trial instead of contempt hearings and they didn't want it to happen in Texas. They wanted a new Markman hearing that a new lawsuit would give them. The whole effort was an utter failure.


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## howard23 (Dec 21, 2001)

gonzotek said:


> Not really official since I don't know where this came from originally, but here's the pdf of the docket transfer order someone posted in DBStalk:
> 
> http://www.dbstalk.com/showpost.php?p=2135599&postcount=398


thanks for the link. that is quite a thread over there on the DISH site. looks like the vast majority thinks Charlie should have acquiesced and made a licensing deal with Tivo. this is now getting very interesting. his days to get this done are quickly dwindling and the terms will be dictated by Tivo! i just hope that the Tivo platform will eventually become part of all those 'infringing' boxes


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## magnus (Nov 12, 2004)

Can you post that link to dish forum? I can't seem to find it. Thanks



howard23 said:


> thanks for the link. that is quite a thread over there on the DISH site. looks like the vast majority thinks Charlie should have acquiesced and made a licensing deal with Tivo. this is now getting very interesting. his days to get this done are quickly dwindling and the terms will be dictated by Tivo! i just hope that the Tivo platform will eventually become part of all those 'infringing' boxes


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## howard23 (Dec 21, 2001)

magnus said:


> Can you post that link to dish forum? I can't seem to find it. Thanks


http://www.dbstalk.com/forumdisplay.php?s=&daysprune=&f=11

it is the top sticky. get a big soda and confy chair as it's 17 pages!


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## magnus (Nov 12, 2004)

Ok, thanks. I thought you were saying it was on dishnetwork.com



howard23 said:


> http://www.dbstalk.com/forumdisplay.php?s=&daysprune=&f=11
> 
> it is the top sticky. get a big soda and confy chair as it's 17 pages!


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## BobCamp1 (May 15, 2002)

You generally can't perform a hostile takeover of a company that doesn't sell its shares publicly. But who says it has to be hostile?


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## Curtis (Dec 2, 2003)

BobCamp1 said:


> You generally can't perform a hostile takeover of a company that doesn't sell its shares publicly. But who says it has to be hostile?


This is apropos to what?


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## nrc (Nov 17, 1999)

In the contempt judgement Folsom ordered a schedule for proceedings on sanctions against Dish for contempt which started with TiVo having their motion for sanctions and opening brief filed by June 26th. Does Dish's appeal postpone that process?

It will be interesting to see what sanctions TiVo argues for.


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## Curtis (Dec 2, 2003)

nrc said:


> In the contempt judgement Folsom ordered a schedule for proceedings on sanctions against Dish for contempt which started with TiVo having their motion for sanctions and opening brief filed by June 26th. Does Dish's appeal postpone that process?


No. In fact, even if there is a stay, the hearing will be necessary to determine the amount of money Dish is required to put into escrow.


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## Johncv (Jun 11, 2002)

Someone in another thread posted this regarding TiVo and Time-Warner Cable in talks.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2d0e1TXcCuc

The following paragraphs caught my eye:

_In a June 8 report, Mark Argento, an analyst at Craig- Hallum Capital Group LLC in Minneapolis, also identified Amazon, Apple Inc., Cisco Systems Inc., Microsoft Corp. and Netflix as possible TiVo suitors. Officials at Seattle-based Amazon and Los Gatos, California-based Netflix declined to comment.

We do not anticipate any changes in our current working relationship with TiVo, Terry Alberstein, a spokesman for San Jose, California-based Cisco, said in an e-mail. The company makes set-top boxes and DVRs.

Apple, based in Cupertino, California, and Redmond, Washington-based Microsoft, which operate services that sell movies, music and video games, also declined to comment._

First question: What would be the working relationship between TiVo and Cisco System be about? A TiVo interface for the SA boxes? Anyone have a clue here.

Second question: What would happen to the poison pill if there was a war between five or six difference companies? Not that it would happen, but we do live in strange times.


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## Curtis (Dec 2, 2003)

Johncv said:


> First question: What would be the working relationship between TiVo and Cisco System be about? A TiVo interface for the SA boxes? Anyone have a clue here.


Sept, 2007: 


> Scientific Atlanta, the maker of the nondescript cable boxes and digital video recorders attached to TVs in millions of homes, has for several years competed with the smaller, Alviso, Calif.-based company, whose name has become synonymous with the DVR.
> 
> But now, Scientific Atlanta, a division of Cisco Systems Inc., is teaming up with TiVo to design a DVR that will marry the Lawrenceville company's hardware with TiVo's user-friendly software. The partnership is possible thanks to one of Scientific Atlanta's biggest customers, cable TV and communications provider Comcast Corp. The cable giant is funding a "substantial" amount of the development of the new product, TiVo said Aug. 29 in its quarterly Securities and Exchange Commission filing.


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## Johncv (Jun 11, 2002)

Now that interesting, but 2007? It take four years to develop a cable box DVR, this better be one good box.


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## CuriousMark (Jan 13, 2005)

This is probably the box they are deploying in the northeast with TiVo service on it now.


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## Curtis (Dec 2, 2003)

CuriousMark said:


> This is probably the box they are deploying in the northeast with TiVo service on it now.


Cisco helped TiVo port their software to the existing SA boxes.


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