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TiVo is trying to preserve its lucrative patent business by suing Samsung

TiVo is taking Samsung to court, and it very badly wants to come out the winner. In a lawsuit announced today, TiVo asserts that several of its DVR patents are being infringed by Samsung products. TiVo has a history of coming out on the winning side of these disputes — it's currently receiving licensing fees from AT&TVerizon, and Googleamong others — but whether it wins or loses this time around has bigger consequences. TiVo makes a ton of money off of these licensing agreements, but its big moneymaker, the '389 Time Warp patent, expires in 2018. This lawsuit puts forth newer patents to find out whether TiVo will be able to keep that licensing money rolling in for an additional five years.

TiVo's still doing the Time Warp

The impact that this case will have on TiVo's bottom line is underscored by the fact that TiVo announced this lawsuit in a quarterly earnings release. That's probably because licensing fees account for a major chunk of TiVo's overall revenue; if it doesn't have a replacement for the Time Warp patent after 2018, investors are going to have a lot less of a reason to be interested in it as a company. If TiVo wins on account of the two new Time Warp-related patents that it's asserting — both of which, Multichannel News reports, expire in 2023 — it should be able to keep licensing revenue rolling in. You can call it a trollish move (the lawsuit is even filed in the Eastern District of Texas), but TiVo just calls it "technology revenue." It does, after all, continue to make and sell DVRs and related services. They just happen to be DVRs and services that not many people want.

TiVo's going to have a particularly tough time in the years to come as people move away from DVRs and over to streaming TV services. Those services necessarily include the ability to skip around without recording anything, which seemingly leaves them free from TiVo's reach. TiVo is pretty straightforward about the fact that this lawsuit against Samsung is going to be an important barometer of its future prospects. "Today's action should help address one of the questions regarding the value, breadth, and applicability of TiVo's IP portfolio post the 2018 expiration of the '389 patent," TiVo CEO Tom Rogers says in a statement.

Rogers is even more straightforward when talking to Multichannel News. "People know that we have quite a track record when it comes to our litigation," he says, "and they also know that we don’t pursue these things unless we believe there is significant damage opportunity." That may be true of TiVo's existing patents, the question is whether its newer ones will play out that way as well.