TiVo 2011 Annual Report Download - page 29

Table of Contents
have and expect to continue to partner with local broadcasters, cable television operators, and satellite providers to provide the TiVo service internationally.
Transactions with international partners may never materialize or may not result in significant revenue for us and may result in significant costs.
Entertainment companies and other content owners may claim that some of the features of our DVRs violate copyright or trademark laws,
which could force us to incur significant costs in defending such actions and affect our ability to market the TiVo service and the products that
enable the TiVo service.
Although we have not been the subject of such actions to date, a past competitor's DVRs were the subject of several copyright infringement lawsuits by a
number of major entertainment companies, including the major television networks. These lawsuits alleged that the competitor's DVRs violate copyright laws
by allowing users to skip commercials, delete recordings only when instructed and use the Internet to send recorded materials to other users. TiVo-enabled
DVRs have some similar features, including the ability to fast-forward through commercials, the ability to delete recordings only when instructed and the
ability to transfer recordings from a TiVo-enabled DVR to a PC and/or portable media devices via TiVoToGo transfers. Based on market or consumer
pressures, we may decide in the future to add additional features that may be objectionable to entertainment companies. If similar actions are filed against us
based on current or future features of our DVRs, entertainment companies may seek injunctions to prevent us from including these features and/or damages.
Such litigation can be costly and may divert the efforts of our management. Furthermore, if we were ordered to remove features from our DVRs, we may
experience increased difficulty in marketing the TiVo service and related TiVo-enabled DVRs and may suffer reduced revenues as a result.
Entertainment companies, networks, or video distributors may claim that our advertising products or features may unintentionally violate
copyright or trademark laws or otherwise unfairly compete with them, which could result in the blocking, stripping or failure to carry out our
advertising products or features or force us to incur significant costs in defending such actions and affect our ability to generate advertising
revenues.
Entertainment companies, networks, or video distributors may claim that our advertising products or features may unintentionally violate copyright or
trademark laws, or otherwise unfairly compete with them, by being placed within, adjacent to, or on top of, existing video programming or advertising.
Entertainment companies or video distributors may seek injunctions to prevent us from offering these products or features, seek damages and/or take other
measures, such as blocking, stripping or refusing carriage to prevent us from selling or distributing our advertising products. If we were unable to sell or
distribute our advertising products or features on our DVRs, we may suffer reduced revenues as a result.
We use open source software in our products, which could expose us to intellectual property infringement claims, require us to provide
indemnification to third-parties, and delay or prevent development of certain products or features, any of which could harm our business.
TiVo's products include open source software. From time to time, we may face claims seeking to enforce the terms of an applicable open source
license. Such claims could result in litigation, require us to seek licenses from third-parties in order to keep offering our software, require us to re-engineer our
software, require us to release proprietary source code, require us to provide indemnification or otherwise subject us to liability to a customer or supplier, or
require us to discontinue the sale of a product in the event re-engineering cannot be accomplished in a timely manner, any of which could adversely affect our
business.
If we release software that includes open source software licensed under version 3 of the GNU General Public License ("GPLv3"), even if it was
software provided to us by a supplier, we may be required to provide end users with the ability to install modified software on their TiVo product, which
could adversely affect our business.
If GPLv3 is widely adopted among the open source community, we may be unable to use future open source enhancements or components in our
software, which could adversely affect our business.
DVRs could be the subject of future regulation relating to copyright law or evolving industry standards and practices that could adversely
impact our business.
In the future, copyright statutes or case law could be changed to adversely impact our business by restricting the ability of consumers to temporally or
spatially shift copyrighted materials for their own personal use. Our business could be harmed as a result. In addition, we are aware that some media
companies may attempt to form organizations to develop standards and practices in the DVR industry. These organizations or individual media companies
may attempt to require companies in the digital video recorder industry to obtain copyright or other licenses. Lawsuits or other actions taken by these types of
organizations or companies could make it more difficult for us to introduce new services, delay widespread consumer acceptance of our products and services,
restrict our
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