TiVo 2003 Annual Report Download - page 34

Table of Contents
Because we do not require customized components from NEC, Broadcom, Amtek, or ATMEL suppliers, we do not have binding supply agreements
with these suppliers. Therefore, they are not contractually obligated to supply us with these key components on a long-term basis or at all. In addition to the
above, we have several sole suppliers for key components of our products currently under development.
Tribune is the sole supplier of the program guide data for the TiVo service. On January 12, 2004, we executed a new Television Listings Data
Agreement with Tribune Media Services, Inc. ("Tribune"), the current sole supplier of program guide data for the TiVo service. This agreement supersedes
our existing television listing agreement with Tribune, which was originally executed in 1998.
If our arrangements or our consumer electronics manufacturers' arrangements with NEC, Broadcom, Amtek, ATMEL or Tribune Media Services were
to terminate or expire, or if we or our manufacturers were unable to obtain sufficient quantities of these components or required program guide data from our
suppliers, our search for alternate suppliers could result in significant delays, added expense or disruption in product or service availability.
Intellectual property claims against us could be costly and could result in the loss of significant rights.
From time to time, we receive letters form third parties alleging that we are infringing their intellectual property. Regardless of their merit, we are
forced to devote time and resources to respond to these letters. In addition, if any of these third parties or others were to sue us, our business could be harmed
because intellectual property litigation may:
• be time-consuming and expensive;
• divert management's attention and resources away from our business;
• cause delays in product delivery and new service introduction;
• cause the cancellation of new products or services; or
• require us to pay significant royalties and/or licensing fees.
The emerging enhanced-television industry is highly litigious, particularly in the area of on-screen program guides. Additionally, many patents
covering interactive television technologies have been granted but have not been commercialized. For example, we are aware of multiple patents for pausing
live television. A number of companies in the enhanced-television industry earn substantial profits from technology licensing, and the introduction of new
technologies such as ours is likely to provoke lawsuits from such companies. A successful claim of infringement against us, our inability to obtain an
acceptable license from the holder of the patent or other right, or our inability to design around an asserted patent or other right could cause our manufacturers
to cease manufacturing DVRs that enable the TiVo service, our retailers to stop selling the product or us to cease providing our service, or all of the above,
which would eliminate our ability to generate revenues.
Under our agreements with many of our manufacturing and licensing partners, we are obligated to indemnify them in the event that our technology
infringes upon the intellectual property rights of third parties. Due to these indemnity obligations, we could be forced to incur material expenses if our
manufacturing and licensing partners are sued. If they were to lose the lawsuit, our business could be harmed. In addition, because the products sold by our
manufacturing and licensing partners often involve the use of other persons' technology, this increases our exposure to litigation in circumstances where there
is a claim of infringement asserted against the product in question, even if the claim does not pertain to our technology.
Pending intellectual property litigations. On September 25, 2001, Pause Technology filed a complaint against us in the U.S. District Court for the
District of Massachusetts alleging willful and deliberate infringement of U.S. Reissue Patent No. 36,801, entitled "Time Delayed Digital Video System Using
Concurrent Recording and Playback." Pause Technology alleges that it is the owner of this patent, and further alleges that we have willfully and
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