TiVo 2011 Annual Report Download - page 9

intuitive user interface and many features that we believe dramatically improve a consumer's television viewing experience. Our advanced television solutions
can support linear television delivered through analog cable, digital cable, satellite, or over-the-air, television service provider Video on Demand, and
broadband video. Our technology enables consumers to find and watch their favorite content by helping them discover new programming through features
that search and browse for content by subject, title, genre, actor, director, or channel, enjoy access to extra content via broadband and comprehensive episode
guides, as well as suggesting programs that consumers may like through a variety of TiVo recommendation features.
Offer Increasingly Differentiated Features and Services. Our goal is to lead the market with innovations that expand the value and potential of our
advanced television services. We plan to continue to invest significant resources in innovation to improve consumer choice, convenience, and control over
their home entertainment and to make our services more compelling for both current and potential customers. For example, we have launched TiVo
applications for Android-enabled smart phones and tablets and iOS-enabled smartphones and tablets. These applications give consumers a much richer and
more powerful way to explore all of the content available to them and expand the population of devices upon which we can deploy our services. We expect
that a significant portion of our future product development efforts will be focused on broadband functionality, support for additional secondary devices that
will enable the TiVo experience on additional consumer screens, and integration of new discovery paradigms like social network recommendations.
Develop Solutions for Television Service Providers. Part of our strategy focuses on developing versions of the TiVo service that can be deployed by
third-parties (typically television service providers) in conjunction with both TiVo and third-party designed set-top boxes in order to promote the mass
deployment of devices utilizing our technology. For example, we are able to deliver a set-top box product to our television service provider customers that
combines within one integrated user interface: on-demand viewing of linear broadcast television delivered by the television service provider through a built in
DVR; access to on-demand viewing of a television service provider's own VOD service; and access to broadband delivered content (or so called over-the-top
content). Additionally, we believe our retail business uniquely positions us versus other vendors to license our technology to television service providers as
we understand consumer behavior first-hand. It allows us to leverage our research and development across our direct to consumer products as well as our
products and services provided to television service providers. There are two primary ways in which we license our TiVo technology; a TiVo box provisioned
as a set-top box where we are the hardware and software provider; and TiVo software we build into third-party hardware. We have announced partnerships
with operators to deploy our products in both these manners. We have extensive knowledge of the inner-workings of the television service providers'
infrastructures and believe we are able to integrate with their infrastructures in a cost and time effective manner.
Extend TiVo Products Beyond the U.S. Market. We also believe there is a large opportunity to deploy the TiVo service and technology outside the
United States. For example, we launched an exclusive distribution agreement in the United Kingdom with Virgin Media, the United Kingdom's largest cable
operator, to provide the TiVo service on next generation set-top boxes, including both DVR and non-DVR platforms. We also have distribution arrangements
that cover the geographies of Australia, Mexico, New Zealand, Spain, and Taiwan. Our solutions have the ability to integrate broadband offerings for cable,
satellite, and over-the-air television service providers and our strategy is to sign additional international partnerships and distribution agreements in the future.
Typically, the parties distributing the TiVo service under these agreements are subject to significant deployment and marketing commitments.
Extend and Protect Our Intellectual Property. The convenience, control, and ease of use of the TiVo service is derived largely from the technology we
have developed since prior to the introduction of our first commercial DVR in 1999.
We have adopted a proactive patent and trademark strategy designed to protect and extend our technology and intellectual property. We have filed patent
applications relating to numerous inventions resulting from TiVo research and development, including many critical aspects of the design, functionality, and
operation of TiVo products and services as well as technology that we may incorporate in future products and services.
TiVo is prosecuting an intellectual property lawsuit against Verizon including for willful infringement of the Time Warp patent. During the fiscal year
ended January 31, 2012, TiVo entered into separate settlements of pending intellectual property lawsuits against DISH Network and AT&T Inc. for $500
million and $215 million, respectively. TiVo is also defending counterclaims from Verizon and a lawsuit from Motorola, in addition to other intellectual
property litigation. See the discussions in Item 1A. Risk Factors, relating to pending intellectual property litigation, and Item 3. Legal Proceedings.
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