TiVo 2004 Annual Report Download - page 16

Table of Contents
Index to Financial Statements
On June 26, 2003, the plaintiffs announced a proposed settlement with us and the other issuer defendants. The proposed settlement provides that the
plaintiffs will be guaranteed $1.0 billion dollars in recoveries by the insurers of TiVo and other issuer defendants. Accordingly, any direct financial impact of
the proposed settlement is expected to be borne by our insurers in accordance with the proposed settlement. In addition, we and the other settling issuer
defendants will assign to the plaintiffs certain claims that they may have against the underwriters. If recoveries in excess of $1.0 billion dollars are obtained by
the plaintiffs from the underwriters, our and the other issuer defendants' monetary obligations to the class plaintiffs will be satisfied. Furthermore, the
settlement is subject to a hearing on fairness and approval by the Federal District Court overseeing the IPO Litigation. On February 15, 2005, the Court issued
an order preliminarily approving the terms of the proposed settlement. The Court also certified the settlement classes and class representatives for purposes of
the proposed settlement only. Due to the inherent uncertainties of litigation and assignment of claims against the underwriters, and because the settlement has
not yet been finally approved by the Federal District Court, the ultimate outcome of the matter cannot be predicted. In accordance with the Statement of
Financial Accounting Standards No. 5, "Accounting for Contingencies", we believe any contingent liability related to this claim is not probable or estimable
and therefore no amounts have been accrued in regards to this matter as of January 31, 2005.
Igbinadolor litigation. In August and September 2004, Phillip Igbinadolor, on behalf of himself, filed complaints against TiVo, Sony Corporation,
Sony Electronics, Inc., Sony Corporation of America, JVC, Clarrion Corporation of America, and Philips Consumer Electronics Company in the U.S. District
Court for the Eastern District of New York alleging infringement of U.S. Patent Nos. 395,884 and 6,779,196 and U.S. Trademark No. 2,260,689, each relating
to an "integrated car dubbing system." The complaints were consolidated into one action captioned Igbinadolor v. Sony Corporation et al. The complaints
allege that Mr. Igbinadolor is the owner of the patents and trademark allegedly infringed. On November 10, 2004, we filed our answer, affirmative defenses
and counterclaims and on January 31, 2005, we filed a motion for summary judgment. We are incurring expenses in connection with this litigation that may
become material in the future, and in the event there is an adverse outcome, our business could be harmed.
Digital Development Corporation Litigation. On November 23, 2004, Digital Development Corporation filed a complaint against us in the U.S.
District Court for the Southern District of New York alleging infringement, inducement of others to infringe, and contributory infringement of U.S. Patent
Nos. 4,975,950 and 5,121,345, each entitled "System and Method of Protecting Integrity of Computer Data and Software." On January 27, 2005, we entered
into a settlement agreement with Digital Development Corporation in which we agreed to license the patents at issue for an immaterial amount, and on
February 23, 2005, the Court dismissed the case.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the quarter ended January 31, 2005.
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