TiVo Q2 see shares rise despite losing Comcast patent case | Major Businesses | Business
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The Patent Trial and Appeal Board has awarded a judgment in favour of Comcast in its ongoing patent war with TiVo – but the company’s stock is surging following a favourable Q2 earnings report.

x1 9 august 2018In the failed suit, TiVo argued that a feature in the Comcast X1 middleware that lets users watch one channel while recording a show on another violates its intellectual property; specifically, Patent No 8,621,512, held by TiVo’s Rovi division.

In its final decision, the board invalidated the patent, ruling it describes “obvious” feature that is by design native to modern digital video recorders in general – implying its obsolescence.

“We are pleased that the Patent Office agrees with us that the claims ... asserted in litigations by Rovi against Comcast, are invalid,” Comcast said. “We look forward to rulings from the Patent Office in our instituted challenges to Rovi’s other patents.”

Those challenges involve around three dozen patents held by TiVo, including fresh suits filed earlier this year impacting key features in X1’s next-gen UX, like voice search, pausing and resuming shows on different devices, restarting live programming from the beginning when joined in progress, advanced DVR recording and various content discovery. All of these are considered significant differentiators for the operator’s Xfinity pay-TV service.

Late last year, the US International Trade Commission ruled in favour of TiVo Corp, agreeing that Comcast violated two of its patents for certain Xfinity X1 set-top boxes, related to remote recording. Comcast has been prohibited from importing and selling the infringing gear. The import ban doesn’t apply to legacy Xfinity boxes.

Meanwhile, TiVo reported its latest quarterly earnings results on Wednesday, which sent shares higher despite poor results on the patent front.

Licensing revenue fell a quarter (23%) compared to one year ago, including a loss of $19.5 million decline in pay-TV operator revenue. Meanwhile, operating expenses spiked thanks to a $5.6 million increase in patent litigation costs (mostly to battle Comcast). That increase also led to tighter margins. Overall, the company posted a 200% negative change in operating losses.

Nonetheless, shareholders were pleased the results were better than expected.

“We delivered a solid second quarter and we continue to stay ahead of our internal plan, including optimising our costs,” said Raghu Rau, interim president and CEO. “Additionally, the CEO transition has gone smoothly and we continue to make progress in our strategic review and have narrowed our focus in terms of the strategic alternatives we are evaluating. The company has a strong foundation to deliver profitable growth and stockholder value and we remain focused on execution and meeting our customers’ needs.”

TiVo stock was up about 3.7% in after-hours trading following the company’s quarterly earnings results. Shares were up about 0.8% during regular trading hours on 8 August 2018.