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Microsoft Sues TiVo; So What?

January 25, 2011 | Author: Ibex Marketing

The story is breaking that Microsoft has sued TiVo for alleged patent infringements. What fascinates me is that so many industry pundits are ready to jump in with an explanation of the suit and its implications for the two companies and their markets. Here’s what I think we know for sure about this lawsuit:

We’ll probably never know the story behind it.

I checked in with a couple of my patent experts for some feedback on this, and they generally confirmed what I already suspected. Companies sue other companies for patent infringement all the time, and the motivations are deep and varied. For example, a suit can be a ploy to encourage the other company to enter into a cross-licensing agreement where both get to use each other’s patents. Or such a suit can be the result of a breakdown in direct negotiations — which sometimes can have been running for years — and one side decides to give up trying to reach an agreement and go to the courts instead. Or it can simply be an attempt at intimidation or retaliation, to inflict some damage on other company for your own competitive advantage. And the fact of the matter is that we rarely hear about the true motivation or the outcomes of this sort of action.

One important detail about this particular suit is that Microsoft filed the complaint with the US International Trade Commission, which has the power to ban imports of any products deemed to contain components that violate patent rights. According to one of my sources, Microsoft will likely have to spend millions of dollars on such a suit, which means that more is at stake than just a cross-licensing deal. In any case, it will be interesting to see if anything comes of this suit, and if we ever hear about the details.