RealTime IT News

Love Not War for TiVo and Gemstar

Battling interactive television players Gemstar-TV Guide International said they're not only burying the hatchet, they're getting in bed together.

In an agreement announced Monday, Gemstar will drop its patent infringement lawsuit against TiVo, while TiVo will give the company prominent placement on its interface. Los Angeles-based Gemstar develops, licenses and distributes technology and content such as interactive television program guides. TiVo, the San Jose, Calif.-based maker of personal video recorders and software that let users record and playback television programming, developed its own proprietary software and program guides.

Gemstar believes it has a patent lock on electronic programming guides -- it's been a pit bull about defending its patents. In October 1999 Gemstar merged with TV Guide in a $9.2 billion stock deal. TV Guide at the time was the leading provider of digital program guides, while Gemstar provided technology to let viewers record and view TV shows. Soon after the merger, erstwhile-CEO Henry Yuen told the press that he was in talks with TiVo; then, in January 2000, Gemstar dropped paper on it. It's also sued satellite TV operator EchoStar Communications and lost a complaint to the International Trade Commission about infringement by , a maker of set-top boxes and navigation software for interactive TV.

While TiVo has now agreed to license Gemstar's technology, it won't actually use it. Gemstar executive vice president of business development Ryan O'Hara told internetnews.com that the patent license used by TiVo does not require the company to make any changes in its current electronic program guide data provided to subscribers - except to put the Gemstar-TV Guide brand on it.

"It will now have our brand on it, but they'll be able to continue to operate the guide in the same manner," O'Hara said.

With the development of interactive television to include games, video on demand and e-commerce, the program guide has the potential to develop into a lucrative portal. In return for letting TiVo off the IP hook, Gemstar will get valuable real estate on TiVo. O'Hara said that in addition to branding the program guide, Gemstar will receive a premier location within TiVo's entertainment showcases, which it will use to promote its own magazine and television assets. Neither company would say whether money changed hands in the deal, but O'Hara said it did not involve the companies taking an equity position in each other.

TiVo's lover-not-a-fighter strategy began last November, when it and competitor SONICBlue agreed to drop suits against each other for patent infringement. (SONICBlue, maker of the competitive RePlayTV PVR, later went bankrupt and sold its assets to Digital Networks North America.)

Making nice will make it nicer for still-struggling TiVo. Says a company spokesperson, "For larger companies, doing business with us while we were in a patent lawsuit could have made them parties to litigation. Now, as a Gemstar license holder, it makes it much easier for TiVo to do business with other Gemstar license holders. Now, this is one of those hurdles or bumps that just goes away."