Digital Media

TiVo said Wednesday that it is suing AT&T and Verizon over three DVR patents. The complaints seek damages and a permanent injunction.

Simply put, TiVo is pursuing the same legal playbook it followed against Dish/EchoStar. The patents in question include 6,233,389, 7,529,465 and 7,493,015.

TiVo recently won another legal victory against EchoStar, which was found in contempt of court in its legal spat. TiVo won $103 million in damages, but the case will have another hearing in November or so. EchoStar appeals continue. Meanwhile, the U.S. Patent and Trademark Office is reviewing TiVo's patents at Echostar's request.

In a statement, TiVo CEO Tom Rogers said:

We will continue to pursue enforcement where necessary to stop infringement of our intellectual property.

On a conference call, Rogers noted that TiVo was still going to generate value through partnerships and distribution deals, but wanted investors to recognized the company's intellectual property portfolio.

The lawsuits against AT&T and Verizon come as TiVo reported a fiscal second quarter net loss of $2.9 million, or 3 cents a share, compared with a profit of 3 cents a share a year ago. The company reported revenue of $57.3 million, down from $65.2 million a year ago. Wall Street was expecting a loss of 5 cents a share.

Rogers called the quarter "solid" since the company delivered adjusted EBITDA of $5.2 million. TiVo said it has been focused on distribution via the likes of RCN and Best Buy. The company also said DVR rollouts with Comcast and DirecTV are on track.

Updated August 27: to correct amount of quarterly net loss.

The Moxi DVR and its new extender (right), the Moxi Mate.

(Credit: Digeo)

When we last heard from Digeo in April, the company was adding several digital media extras to its flagship Moxi DVR. Flash forward to August, and the company is back with more updates, the biggest of which is a new hardware announcement. The Moxi Mate is an "extender" that adds multiroom capability to any household with a Moxi DVR. The box is basically a thin client (no hard drive) that can access recorded content from the main Moxi, as well as all of the system's online and home networking digital extensions (Rhapsody, PC-based media streaming, PlayOn content such as Netflix and Hulu, and so forth).

Sounds great, but there are some caveats that prospective buyers should know. Most importantly: the Moxi Mate can't currently support the streaming of live TV--only programs that you've previously recorded on the main Moxi DVR. And while you could theoretically have several Moxi Mates in a household, Digeo currently supports only one of them streaming from the main Moxi at a time. (Of course, all of these issues could possibly be addressed in future firmware updates--but those are the product's initial notable limitations.) The other big deal: the Mate doesn't have a built-in Wi-Fi connection, so you'll need to supply an Ethernet network connection.

On the plus side: the video streaming is said to be nearly instantaneous, unlike TiVo's multiroom solution, which requires the video files to be copied to the hard drive in another room first prior to viewing. Also, the Moxi Mate will automatically resume paused programs. So, if you watch half of a movie on the main Moxi, you can retire to the bedroom and easily pick up where you left off on the Moxi Mate.

In addition to the Moxi Mate announcement, Digeo also rolled out new software to existing Moxi DVR owners that adds a variety of small upgrades. Among them:

The United States Patent and Trademark Office (PTO) issued an "office action" Monday rejecting two claims in TiVo's Multimedia Timewarping System (better known as the DVR) patent, the centerpiece of its legal battle with EchoStar.

That DVR is causing some trouble again.

(Credit: TiVo)

According to the PTO, its preliminary finding rejects TiVo's patent Claims 31 and 61.

Claim 31 describes "a process for the simultaneous storage and play back of multimedia data." The claim discusses how TiVo's DVR captures video from a broadcast source, stores it in its hard drive, and allows users to play it back at their convenience.

Claim 61 is similar to Claim 31. It describes "an apparatus for the simultaneous storage and play back of multimedia data." The claim discusses how the TiVo handles stored shows and gives users the ability to control them on the device.

The patent itself, which features more than 60 claims, is a blueprint for how TiVo's DVR works. It discusses an "invention (that) allows the user to store selected television broadcast programs while the user is simultaneously watching or reviewing another program. A preferred embodiment of the invention accepts television (TV) input streams in a multitude of forms, for example, National Television Standards Committee (NTSC) or PAL broadcast, and digital forms such as Digital Satellite System (DSS), Digital Broadcast Services (DBS), or Advanced Television Standards Committee (ATSC)."

The patent goes on to explain how TiVo streams content through MPEG video. It gives users the option to put the video into "reverse, fast forward, play, pause, index, fast/slow reverse play, and fast/slow play."

The PTO's preliminary finding is important for EchoStar. It gives it some breathing room as it moves forward after a series of missteps.

A federal court has awarded TiVo $103 million plus interest in its long-running patent dispute with EchoStar Communications and ordered EchoStar to disable infringing features found on its subscribers' digital video recorders.

U.S. District Judge David Folsom on Tuesday also found EchoStar, which is now part of Dish Network, in contempt of court for violating a permanent injunction by reprogramming millions of DVRs with a new "workaround."

"The harm caused to TiVo by EchoStar's contempt is substantial," Folsom wrote. "EchoStar has gained millions of customers since this court's injunction was issued, customers that are now potentially unreachable by TiVo."

Englewood, Colo.-based Dish, which has roughly 13.6 million subscribers, said in a statement it would appeal the contempt ruling and file a motion to stay an order that requires it to disable the disputed DVR features within 30 days.

"Our engineers spent close to a year designing around TiVo's patent and removed the very features that TiVo said infringed at trial," the company said. "Existing Dish Network customers with DVRs are not immediately impacted by these recent developments."

The Alviso, Calif.-based maker of set-top boxes applauded the decision.

"We are extremely gratified by the court's well reasoned and thorough decision, in which it rejected EchoStar's attempted workaround claim regarding the TiVo patent, found EchoStar to be in contempt of court, and ordered the permanent injunction fully enforced," TiVo said in a statement. "EchoStar may attempt to further delay this case but we are very pleased the court has made it clear that there are major ramifications for continued infringement."

In after-hours trading, shares of TiVo rose $2.53, or 36 percent, to $9.51, while shares of Dish fell $1.19, or 6.9 percent, to $16.05.

TiVo first sued EchoStar in 2004 for violating a patent on a "multimedia time-warping system," which involved recording a program on one channel while watching another.

A jury in 2006 found that Dish Network's DVRs infringed upon a patent held by TiVo and ordered it to pay TiVo $73.9 million in damages. A federal appeals court upheld the ruling in January 2008, as did a second U.S. appeals court in April 2008.

TiVo announced two deals Monday that will help the company better target the cable market with its next generation of high-definition digital video recorders.

Specifically TiVo said it will work with set-top software maker Alticast to make it easier to integrate TiVo's technology into advanced set-top boxes for cable operators. Alticast makes software that enables consumer electronics makers to easily create cable set-top boxes that combine functions, like DVR functionality and Blu-ray Disc players.

Using the Alticast technology, TiVo can combine more complicated and sophisticated technology into its next generation of DVR products, which will ultimately help cable operators reduce hardware costs while also increasing the number of interactive services for users.

TiVo also announced a deal with SeaChange, a video-on-demand and IPTV technology provider, to integrate its technology with TiVo's next-generation DVRs. What this means for consumers, is that they will be able to search for VOD titles through the TiVo search interface, helping extend the TiVo experience beyond recorded shows and incorporating VOD services. TiVo said TiVo-branded high-definition cable-ready set-top boxes that integrate the SeaChange VOD functionality will be available later this year.

TiVo practically invented the DVR market. And even though cable operators have launched their own competing DVR services, TiVo's software and user interface have remained top-notch, attracting a loyal following of consumers. Over the past couple of years, TiVo has been partnering with cable operators, helping provide these operators with advanced DVR services that help set them apart from TV competitors. TiVo's latest announcements will help the company move further in this direction by helping make the next generation of TiVo HD products more cable friendly.

Correction: An earlier version of this story misidentified a service called Mystro TV. That service was tested by Time Warner Cable.

The Supreme Court has declined to hear what could be a watershed copyright case that has the potential to make it easier for people to record and watch their favorite movies and TV shows at home.

On Monday, the Supreme Court asked the U.S. Department of Justice to look at a case involving a new service proposed by Cablevision that allows people to record broadcast TV shows and movies on a digital video recorder that sits in Cablevision's network instead of in their living rooms.

The TV networks and Hollywood film studios sued the cable operator in New York, seeking to block the service. The networks and studios have argued that recording programming in this way violates copyrights. (Disclosure: The film studios and television networks that brought the suit against Cablevision include Time Warner, News Corp., Walt Disney, and CBS, which owns CBS Interactive, publisher of CNET News.)

The case has been winding its way through the court system for three years. In 2007, a U.S. District Court in New York barred Cablevision from launching the service after the cable operator lost its initial suit. Cablevision appealed the decision. And in August 2008, a U.S. appeals court overturned the lower court's ruling, siding with Cablevision.

The TV networks and movie studios appealed to the Supreme Court in October, arguing that Cablevision was violating the law because it did not plan to pay a licensing fee to make copies of their TV shows.

But Cablevision has argued that it is the cable subscriber who is determining what is copied. The networked DVR only sits in the Cablevision network where the content is stored and accessed. The company wants to keep this technology in its network because it is more efficient and cost effective to deliver the service than providing every home with multiple DVR set-top boxes.

Cablevision, which services over 3 million customers in the New York metropolitan area, claims each set-top box costs about $100. This cost is passed on to consumers who must pay a rental fee for their DVR set-top-boxes. The cable operator also incurs costs for installing and maintaining this equipment. Eliminating the need for one of these boxes in the home could reduce Cablevision's capital costs, and it could also help reduce the cost of the service for consumers.

It could also allow consumers to get rid of their set-top boxes altogether or at least get smaller devices that don't take up as much room as the bulky DVR boxes of today. And because the DVR function is housed in Cablevision's network instead of at home, consumers also won't have to deal with the hassle that often comes along with housing a relatively complex piece of networking equipment in their homes.

Experts agree that how the legal questions surrounding the case are ultimately decided will likely have a huge effect on the TV industry. Some believe it could even be as important a decision as the 1984 Supreme Court decision to allow consumers to record TV shows and movies on home videocassette recorders. That decision paved the way for the VCR, and it also cleared the way for DVR services that were first offered by Tivo and are now a mainstay of every cable, satellite, and phone company offering paid TV services.

It's been reported that Comcast and Time Warner Cable are also planning to introduce a networked DVR service if Cablevision wins its legal battles. And Verizon, which offers TV service through its Fios service, has also said it would consider offering a similar service.

For now the Supreme Court has sent the case to the Justice Department to consider. But the solicitor general at the Justice Department still has the option to toss the case back to the Supreme Court. If that happens, it wouldn't be heard until fall.

Updated at 10:00 AM Pacific.

Six months after announcing its intention to bring SlingPlayer to the iPhone 3G, Sling Media has another announcement to make--just not the one you're wishing for.

SlingPlayer Mobile for iPhone isn't ready yet, Sling said on Tuesday, but it is on its way.

Like SlingPlayer Mobile for Windows Mobile, Palm, Symbian, UIQ, and BlackBerry (beta) platforms, this iPhone version will let you access one or more Slingboxes from your mobile device, and watch your TV stations on-the-go. It will also be compatible with the iPod Touch.

You'll also be able to manage your DVR from the iPhone, and can synchronously add and remove favorite channels directly from the phone's interface--a first for the SlingPlayer Mobile line.

In our demo, the client streamed live, high-quality video of stations like MTV and TBS on both Wi-Fi and the iPhone's 3G network. Swiping the screen horizontally advances you through favorite stations, and flicking up and down rotates through all your home channels.

Sling Media says it will submit the file to the iTunes AppStore by the end of the first fiscal quarter. While Sling Media shared no firm price tag, it could mirror the $29.99 lifetime fee of SlingPlayer Mobile on other platforms.

Before getting too excited, just remember that Apple has been known to kill promising apps, ostensibly for the crime of a large data transfers. SlingPlayer Mobile for iPhone could suffer the same fate. Assuming it doesn't, the client still faces competition from Orb, whose full version, OrbLive, delivers live TV and media stored on your PC for $10.

(Credit: CNET)

Netflix streaming will be coming to TiVo DVRs by the end of 2008.

The ability to stream Netflix movies and TV shows will begin beta testing for select TiVo owners immediately, with an official roll-out scheduled for early December. It will be available on TiVo HD, HD XL, and Series3 DVRs (not Series2 or DirecTV models).

The service will effectively be identical to the Netflix feature available on the LG BD300, Samsung BD-P2500, and BD-P2550, Roku Player, and--as of mid-November--the Xbox 360. That means that existing Netflix subscribers can stream more than 12,000 movies and TV shows directly to their TV over a broadband Internet connection on an "all you can eat" basis, with no additional charges beyond the existing Netflix and TiVo service fees.

Interestingly, the TiVo/Netflix tie-up makes good on a deal originally announced in September 2004. At that time, the then-novel idea of streaming Netflix movies directly to TiVo set-tops generated a lot of industry buzz and consumer excitement, but nothing became of it. Both companies seemed to go their separate ways, with TiVo adding on-demand content from Amazon and (just last week) CinemaNow and Jaman, while Netflix's service rolled out on the above-mentioned devices from Roku, LG, Samsung, and Microsoft. More than four years later, however, TiVo owners will finally be getting their Netflix streaming.

Separately, CNET has confirmed that Netflix's nascent HD streaming capability will soon be coming to all Netflix-compatible devices, not just the Xbox 360. However, the Netflix HD library will be starting with a very small selection (just 300 titles), and will require significantly higher bandwidth than the standard-def streaming that's currently available.

AT&T is upgrading the digital video recorder on its U-Verse Internet-based television service, allowing users to record and play back multiple programs on up to eight televisions.

The upgrade, called Total Home DVR, is free as part of a U-verse subscription, which costs from $44 to $99 a month. The service is already available in the San Francisco Bay Area and is expected to be rolled out to all customers by the end of the year, the company said.

Total Home DVR, which can store up to 133 hours of standard-definition programs or 37 hours of high-definition programming, can also simultaneously play back four SD recordings or three in HD.

While DVRs have made it easier to watch programs whenever viewers want, they are considered a key component to attracting and retaining customers in the market for bundled Internet, video, and phone services.

The upgrade gives AT&T bragging rights against rival Verizon Communications, whose Fios TV service offers programming access from seven televisions, compared with AT&T's eight. However, Verizon still dominates the sector, with 1.4 million subscribers, compared with AT&T's 549,000. AT&T hopes that the Total Home DVR will help it achieve its stated goal of 1 million subscribers by the end of the year.