Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Time to Get Back On the TiVo Roller Coaster?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Investing in TiVo (Nasdaq: TIVO  ) is not for the faint of heart. Another reversal in the long-running patent infringement case TiVo has going against DISH Network (Nasdaq: DISH  ) and EchoStar (Nasdaq: SATS  ) cut TiVo's stock at the ankles on Friday.

In early March this year, TiVo won another in a seemingly endless string of legal victories against the Dish twins. A panel of three judges from the U.S. Court of Appeals held Dish and EchoStar responsible for $300 million in fees and damages due to the satellite company's stepping on TiVo's patented toes back in 2004. That decision sent TiVo's stock up by more than 60% overnight, and last week's reversal of that panel's actions also brought TiVo back to earth again. The stock now trades just about where it was in early March.

Dish CEO Charles Ergen recently noted that this kind of case review isn't granted often, so it's a bit of a shocker. Then again, it's a very material case for both sides of the battle -- maybe the Appeals Court simply felt that it was only fair to give it the full treatment rather than a cursory, three-judge review. I'm not a lawyer, but that would make sense.

If TiVo wins this case, the company could use that victory as leverage to squeeze contracts and payments out of other unlicensed DVR providers. Comcast (Nasdaq: CMCSA  ) already pays license fees to TiVo, and it even runs TiVo's software on some of its cable boxes. DIRECTV (Nasdaq: DTV  ) is another TiVo licensee and business partner, but Time Warner Cable (NYSE: TWC  ) isn't. This legal ammunition has the potential to breathe new life into TiVo's entire business overnight.

Ergen was ready to disable 7.3 million DVR boxes if the Appeals Court didn't come through, at a cost of about $3 billion and the loss of many a disappointed customer. He sounded conciliatory notes in his latest earnings call. "We have a lot of respect for what they've done," he said, "and this has always been about an honest disagreement on how our DVRs work. There's never been anything personal about it. ... There is a logic to us working together."

Whether that translates into a technical workaround, a license deal, or maybe even a buyout to settle the score once and for all, the TiVo roller coaster clearly hasn't parked yet. Is this a buy-in opportunity before the stock shoots skyward again -- or just the calm before another precipitous drop? I think it's the former, though the courts seem to have the final say in the matter. Feel free to discuss the six-year case and its many implications in the comments below.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

Read/Post Comments (0) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1184357, ~/Articles/ArticleHandler.aspx, 10/23/2016 6:13:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
TIVO $19.90 Down -0.10 -0.50%
TiVo CAPS Rating: **
CMCSA $64.06 Down -0.29 -0.45%
Comcast CAPS Rating: ***
DISH $57.40 Down -1.78 -3.01%
DISH Network CAPS Rating: **
DTV.DL $0.00 Down +0.00 +0.00%
DirecTV CAPS Rating: ***
SATS $46.62 Up +0.60 +1.30%
EchoStar CAPS Rating: *****
TWC.DL $0.00 Down +0.00 +0.00%
Time Warner Cable CAPS Rating: **