TiVo sues AT&T and Verizon

DVR firm claims patent infringement

Unable to strike a deal with either of the major phone companies that offer TV services, TiVo on Wednesday sued them both.

TiVo filed its DVR patent infringement lawsuits against AT&T and Verizon in the U.S. District Court in the Eastern District of Texas, where it has been battling -- mostly successfully -- Dish Network for five years.

TiVo has already taken Dish for more than $200 million and a judge has slapped a permanent injunction, now being appealed, against Dish. If all goes TiVo's way, Dish will have to shut off millions of its customers' DVRs or strike a licensing deal with TiVo.

Now, the company that introduced DVRs to the world is hoping for a similar outcome against the two phone companies.

"We need to stop their continued use of our intellectual property," TiVo CEO Tom Rogers said Wednesday during a conference call with analysts to discuss quarterly financial results.

Rogers was asked more than once why TiVo has been so selective about its lawsuits, leaving out cable operators and the makers of set-top boxes, for example. One analyst asked specifically why TiVo hasn't sued Time Warner Cable.

Rogers dodged such queries except to indicate that negotiations with cablers have been going better than they had with Dish and the phone companies. Comcast, for example, has launched its service with TiVo in New England and will do so soon in Chicago.

TiVo reported a net loss of $4.2 million in the fiscal second quarter compared with net income a year ago of $3.6 million on revenue that fell 10% to $54.9 million.

TiVo lost 139,000 subscribers quarter-over-quarter to 3.2 million, with the bulk of the losses coming from DirecTV users who are switching to HD-DVRs. TiVo's HD-DVR for DirecTV users is yet to come.

Recent highlights noted by Rogers included a deal that will have 4,000 Blockbuster stores selling TiVos and an arrangement with Best Buy that will include the retailer building TiVo's interface into Best Buy's exclusive TV brands.

Rogers promised Best Buy was preparing to throw "substantial marketing muscle" behind that and other initiatives involving TiVo.

He also boasted of TiVo's measurement services that can tell advertisers and media companies detailed demographic information about a show's audience, including the political party they belong to, car brands they own and groceries they purchase.

Analyst Tony Wible at Janney Montgomery Scott asked Rogers about networks "seemingly pushing back against Nielsen" recently.

"We are not looking to dislodge the Nielsen data as the key currency for advertising ratings negotiations," he said. "Our goal is to fill all kinds of voids that the Nielsen data has in the marketplace."