2015 marked a milestone in a relatively less known war that has been plaguing the tech and entertainment industry. This is the patent war. This is a war between what are called as patent trolls and the average organizations. Patent trolls, as they are known, are some obscure companies that buy relatively unknown patents and start bullying organizations by threatening them with lawsuits for intellectual property infringements. Whether the patents they actually own do cover the products or services offered by the other organization is highly debatable. But, fearing lawsuits, most companies simply settle for a sum. Some companies are not intimidated, and they fight their battles in the court. In some cases, they win, while in others, they fail.
If this sounds all too familiar, that is because many analysts feel that, more often than not, Apple vs. Samsung lawsuits fall in this category. Whether Apple does possess a valid justification or is simply trying to weed out the competition the dirty way is something that is for the judiciary to decide. But industry experts agree that a desperate change is needed in how patents are issued and how patent licensing should work, so that companies with genuine cases are not strong-armed by the patent trolls.
If you are wondering what Rovi and TiVo have to do anything with all this, well, the answer is quite complicated. As you must know, Rovi provides TV programming guides. Roughly about 18 million American households use Rovi TV guides through various apps and devices. But, have you ever wondered what is so special about Rovi guides? Why doesn’t everyone else build their own TV guide? It’s not like Rovi is the only company which has a copyright on making TV guides, right? Well, the simple answer is that Rovi has about more than 1,500 issued and pending patents in the US alone. Because of its patents, it has intellectual property rights on many features and functions of TV guides in general. That’s why most other companies simply go with Rovi when they offer TV programming guides. Even the giants like Google, Facebook, Samsung, Sony, Apple, and Comcast simply prefer to sign licensing deals with Rovi rather than build their own TV guides and antagonize Rovi. However, not everybody is comfortable with this idea.
Some companies like Amazon, Netflix, Sharp, Hulu, Toshiba and others stood up against Rovi. Amazon took on Rovi head on in court, and won the case in 2014. Amazon had attracted the case from Rovi, just because it bought IMDB. The patents which Rovi claimed that Amazon’s IMDB was infringing, that they were just describing TV guides, but on the internet. With Rovi losing the case, these “but-on-the-internet” cases are slowly losing their steam. It was Netflix’s court battle against Rovi in 2015 that deserves special attention. The US District Judge Phyllis Hamilton invalidated 5 of the patents Rovi was holding, essentially making it impossible for the company to cause trouble toward other companies based on those patents. Hamilton noted that these patents were not given for new technology or revolutionary concept. Instead, those patents were awarded for generic ideas. Ideas such as combining two categories into one set of suggestions such as crime dramas, sci-fi fantasies, and so on. Hamilton noted that patents cannot be given away for abstract ideas.
With these two lawsuits, Rovi’s death grip on the TV guide industry has taken a serious hit. It may not be too farfetched to presume that Rovi might find its customers abandoning it and developing their own TV guides instead. Perhaps, it is this reason which has pushed it to acquire another player in the industry to ensure that it continues to maintain its market share in the industry and stays relevant. A few months ago Rovi announced that it is acquiring TiVo, a DVR and TV guide company, for $1.1 billion.
This deal gives Rovi all of the 10 million customers of TiVo. Also, as TiVo brand is more popular and customer-friendly, the company, post-merger, will take the name of TiVo. This deal is expected to give Rovi the foothold it wants in the industry. Also, the company will threaten new competitors with lawsuits, as it still has a lot of patents in its bag, which it can use. Even though it is impossible to guess how many of those lawsuits it will actually win in the future, if at all it is challenged. A lot of companies might simply choose to avoid the confrontation and sign a licensing deal with Rovi. Coupled with its newfound bump in the market share after it buys off TiVo, it is safe to say that Rovi will continue to be the leader in this industry.