TiVo’s business model seems to be based on suing companies for selling DVRs that allegedly use its patented processes to do things that users take for granted such as watching one show while recording another. And today it challenged a formidable opponent: Time Warner Cable, which has 12M subs, is the No. 2 cable company and No 4 pay TV provider. TiVo’s attack comes in an amended counterclaim to its patent infringement suit against Motorola, which is being heard in a U.S. District Court in eastern Texas. It blames Time Warner Cable for providing its customers with Motorola’s DVRs. The cable company “engaged in objectively reckless conduct when they continued selling the infringing products in the face of an objectively high risk that they were infringing TiVo’s valid United States patents,” TiVo says. It has a perfect score so far in patent cases, reaching settlements with Dish Network, AT&T and Microsoft. TiVo has another suit outstanding against Verizon. B. Riley analyst Eric Wold says that while the counterclaim “could pressure (TiVo’s) litigation expenses, we believe it is well worth the investment given past success rates and settlement amounts.” TiVo wants a jury trial, and payments fro Motorola and Time Warner Cable for “compensatory damages.” The cable company won’t say yet what it thinks about the case, or how it will respond.
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