A victory for TiVo

TiVo (TIVO) nearly created the digital video recorder. In its early days, it sold hundreds of thousands of set-top boxes to early adopters who wanted to record shows to watch at their leisure.

Then, large cable companies and satellite TV operators created DVRs of their own. Because these firms already had millions of customers, they effectively pushed TiVo out of the living room and the den.

All TiVo had to fight back with was its intellectual property, so it began a series of lawsuits against the companies that had taken its business. It has had some success in court.

The most recent legal victory for TiVo is a win in its suit against EchoStar (SATS). The satellite TV company had hoped to create a product that did not violate TiVo's patents. According to a court, that did not work. The Wall Street Journalreports "The court rejected EchoStar's attempted workaround claim regarding its patent, found EchoStar to be in contempt of court and ordered that an earlier permanent injunction EchoStar had lifted be fully enforced." TiVo was awarded $103 million and its stock rose almost 40 percent.

It is a shame when a tech pioneer has to resort to enforcing patents because its original business has been eclipsed. But TiVo's shareholders are lucky the company spent so much time at the U.S. Patent Office.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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