After the recent breakthrough in the patent case between Qualcomm and Apple, another closely-watched patent dispute saw an important development Tuesday when a judge for the International Trade Commission (ITC) ruled that cable-giant Comcast’s receivers infringe on patented technology, and if Comcast wants to offer some DVR features to its customers, it must pay licensing fees to the patent holder, TiVo.
TiVo’s Rovi Corporation provides DVR, parental controls, and search functions to cable companies, which pay licensing fees to TiVo in order to provide those features to their customers. While Comcast paid to license the patent for over a decade, and every other major cable and satellite company licenses the patents, Comcast decided in 2016 to stop paying the licensing fee but continue using the technology.
The functions patented by TiVo are very popular among consumers, but since a previous ruling at the ITC against Comcast, its customers have had features disabled. The new ruling at the ITC is likely to complicate matters further for the cable giant.
Comcast, the biggest cable TV and broadband company in the U.S. with a net worth of more than $140 billion, is already one of the most hated companies in the U.S. Consumer satisfaction continues to fall as the Big Cable company increases prices, and more and more Comcast customers are “cutting the cord” and switching to streaming services like Amazon Prime Video, Hulu, Netflix and others.
For TiVo, beating Comcast may force the cable provider to pay the licensing fees and give consumers what they want.
“We are thrilled by yet another legal victory,” said Arvin Patel, Executive Vice President and Chief Intellectual Property Officer at Rovi Corporation, in a statement. “This decision demonstrates Comcast’s repeated infringement of Rovi’s patents. We hope that today’s decision will encourage Comcast to pay the necessary licensing fees so their customers can once again access advanced cable features.”
But Comcast also claimed victory.
“We view today’s initial determination to be a victory for Comcast because the administrative law judge found no violation as to two of the three patents addressed,” Comcast said in a statement to Multichannel News. “We look forward to the full Commission’s review of the one remaining patent later this year, but we are confident, regardless, this ruling will not disrupt our service to our customers. Rovi also was unsuccessful on five other patents that it had previously withdrawn from this case. We will continue to resist Rovi’s efforts to force Comcast and our customers to make unreasonable payments for aging and obsolete patents.”
Current patent law is murky. A law passed in 2011 faced bipartisan criticism for allowing gamesmanship of the system by big companies. Republican Congressman Steve Stivers of Ohio told InsideSources earlier this year that, “Unfortunately, what we got was a system that threw the proverbial baby out with the bathwater and encouraged gamesmanship of the [inter partes review] process. Combined with some precedential court rulings, we have been left with a patent system that has devalued intellectual property and encouraged willful efficient infringement.”
While some tech companies and individuals rely on patent law to protect their innovations from being ripped off by bigger tech companies, patent trolls use patent litigation for profit instead of focusing on innovating, producing and honing legitimate products and services. A pair of U.S. senators — Chris Coons (D-Del.) and Thom Tillis (R-N.C.) — just introduced a bill aimed at cracking down on trolls by clarifying the patent application and litigation process.
The big companies can file challenges to invalidate the phony patents, but they try to invalidate legitimate patents, too. According to a study by the Alliance for U.S. Startups and Investors for Jobs, big companies, like Comcast, often file a series of challenges to a valid patent in an attempt to improve their odds of a favorable ruling.
“For the top IPR filer, Apple, a whopping 56 percent of its petitions are duplicative (i.e., multiple petitions filed attacking the same claims),” the study says. “For the next four filers each, over a third of their petitions are duplicative (Samsung (38 percent), Google (38 percent), Microsoft (59 percent), and LG (34 percent)).”
TiVo holds more than 6,000 registered and pending patents, and has been on an acquisition spree since 2010, buying up software companies catering to the cable industry. Its intellectual property licensing business had revenue of $295 million in 2018, while its product line, which is mostly data analytics for entertainment platforms, earned $400 million.
TiVo may be a large company, but it faces a behemoth in Comcast, which controls much of the entertainment industry itself and through subsidiaries like NBC Universal. This patent battle is far from over, but Comcast customers may soon find important features returning to their DVRs if the company decides to pay the licensing fees.
