TiVo Blames EchoStar for Problems

TiVo faced off against EchoStar Communications in court on Wednesday, telling a jury that the satellite TV operator's Dish Network is infringing on TiVo's patent regarding the pausing of live television. Dish claims it invented its own digital video recorder and says it did not steal any technology from TiVo.

TiVo received its patent in 2001, but until now it has been largely unenforced. Industry watchers say the case could have a big impact on the company's bottom line if it is able to extract royalties from makers of TiVo-like devices. EchoStar, however, asserts that the patent is not enforcaeble and plans to detail how its own technology differs from TiVo.

Lawyers for TiVo told the courtroom that EchoStar's refusal to license its intellectual property is a prime reason why the DVR maker has never posted a profit since 1997. Despite a loyal following and nary a bad review, TiVo has struggled to increase its subscriber numbers in recent years. The company also is facing pressure following news that DirecTV would begin phasing out TiVo hardware.


Still, things are looking up for the company that says it changed the way Americans watch television. TiVo recently signed a deal with cable provider Comcast, and indicated that it would sacrifice profitability in order to bring on new customers.

Earlier this month the company rolled out a new pricing plan that would offer free TiVo boxes to customers in exchange for slightly higher monthly fees. News of the new pricing plan structure came on the same day as better financial news for the company. For the quarter ending January 31, TiVo finished with 4.4 million subscribers, which showed 45 percent growth from last year.

Dish, in comparison, currently counts some 12 million subscribers.

TiVo will ask for $100 million from EchoStar if it wins the case, but has agreed to provide the technology free of charge if Dish pays for TiVo advertising. EchoStar has filed a countersuit against TiVo, but that case will not be heard until next year.

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