Deeper Dive—Resistance proves (somewhat) futile as TiVo patent licensing machine keeps rolling

This week, TiVo announced that it had come to terms on a new intellectual property licensing deal with TV maker Vizio.

“TiVo’s intellectual property (IP) continues to provide companies around the globe with access to the technologies transforming entertainment for viewers,” said Arvin Patel, executive VP and chief intellectual property officer of TiVo division Rovi Corporation, in a statement touting the deal. 

Of course, Vizio is only the latest company to come to terms with TiVo, which is the corporate manifestation of a $1.1 billion merger two years ago between Rovi, a company known for such things as user guides and patent litigation, and TiVo, which built its reputation on pioneering the digital video recorder.

Right now, there doesn’t seem to be a whole lot of resistance to the newly configured TiVo, which in 2016 combined forces with Intellectual Ventures to form the biggest patent portfolio in all of tech. 

The rebranded San Jose, California, company, which took in $354 million in IP licensing revenue in 2016, accounting for 54% of its revenue, warned investors in February of last year that a number of its patent deals were expiring. And since that time, month after month, the company has been on a roll in terms of IP renewals. 

Last month, TiVo announced IP deals with U.S. cable operator Mediacom,  Australian telecom Telstra, and programmer Starz.

In January, there was a patent deal announced for YouTube TV

In December, Altice USA kissed TiVo’s ring to launch its new video platform, Altice One. 

In November, there were renewal agreements announced for Liberty Global, AT&T and Sony Corp. 

And in April of last year, Roku announced a renewal deal with TiVo covering some 6,000 patents. 

The TiVo licensing juggernaut seems so unstoppable, we put Patel, the company’s top IP executive, on our Fierce 50 list of the most impactful folks working in pay TV today. 

But quietly—and in one case, not so quietly—a few companies are fighting back.

Most notably, Comcast has resisted paying. Comcast continues to battle TiVo in court, insisting that the technologies in its X1 video operating system TiVo lays claim to were developed by the cable operator’s now very robust internal technology development resources. 

“Comcast engineers independently created our X1 products and services, and through its litigation campaign against Comcast, Rovi seeks to charge Comcast and its customers for technology Rovi didn’t create," Comcast spokesperson Jennifer Khoury said in a statement emailed to Fierce in January.

“For over a decade, Comcast built its business using Rovi’s patented technology, which it licensed for a fixed term,” outgoing TiVo CEO Thomas Carson said last year. "Comcast’s decision to continue using Rovi’s pioneering technology as an unlicensed infringer is simply intolerable. After numerous attempts at negotiations, Rovi was left with no choice but to defend its intellectual property from unlicensed use.”

Carson said bringing Comcast to heel was one of his biggest priorities under his watch. 

According to law firm Banner & Witcoff, Baker Botts and Ropes & Gray, Comcast was the biggest petitioner against patent claims in all of technology in 2017, and 44 of its 45 filed petitions were directed at TiVo’s Rovi division—which was the biggest target for such petitions in all of tech … with 44 petitions targeting the company. 

Is Comcast the only company standing up to TiVo? Actually, no.

Hulu has been quietly battling the company in court, arguing that only one patent that TiVo is laying claim to is even viable. 

“Of the three patents that were asserted against Hulu in the earlier litigation, one of the patents has expired, another was held invalid as unpatentable, and the final patent was alleged by Rovi to be infringed by a service that Hulu no longer offers,” Hulu said in its complaint filed last year. 

Meanwhile, in 2016, a federal court upheld Netflix’s victory over TiVo, ruling that the streaming service didn’t have to pay royalties on eight patents. That ruling exposed TiVo’s vulnerability to legal challenges after U.S. Supreme Court’s June 2014 decision in Alice Corp. v. CLS Bank Int’l, invalidated hundreds of software patents for covering ineligible abstract ideas.

We approached TiVo reps yesterday to talk about their IP licensing business. We’re still waiting to hear back.