An intellectual property lawsuit filed by TiVo against Cisco Systems Inc. claims Cisco’s set-top boxes contain digital-video recorders that infringe on the California DVR maker’s patents. The federal court filing followed days after Cisco asked a San Jose court to rule that the company has not infringed on TiVo patents.
TiVo has been in and out of court for seven years trying to secure patents in an attempt to stem a growing tide of competitors. Charter Communications Inc. and Comcast Corp. are TiVo clients. Cisco is a set-top box supplier for Time Warner Cable Inc. and Verizon Communications Inc.
In anticipation of the lawsuit filing, Cisco filed suit against TiVo in federal court in San Jose, California late last month. Cisco wanted to court to declare that the company was not infringing on any TiVo patents.
Because of its legal costs, TiVo profits are expected to take a large hit this quarter. In its lawsuit filing, TiVo alleges that Cisco knew it was infringing on TiVo’s patents because Cisco was subpoenaed in TiVo’s previous lawsuits against AT&T Inc. and Verizon. AT&T settled its lawsuit by paying TiVo at least $215 million. In 2004, satellite TV provider Dish Network Corp., paid TiVo more than $500 million in a lawsuit.
Judging by TiVo being the first on the scene and other companies being willing to settle for so much money, it appears TiVo may have a legitimate argument to make against Cisco.
Source: Bloomberg, “Tivo, Apple, Yahoo, Coca-Cola: Intellectual Property,” Victoria Slind-Flor, June 6, 2012