It's time for Comcast to settle TiVo suit, Cowen & Co. analyst says

Rovi

Rob Stone, an analyst with Cowen & Co., says it is time for Comcast to settle with TiVo. The two companies have countersued each other over alleged patent violations.

In reiterating his “outperform” rating on TiVo shares, Stone cited a finding of violations on two TiVo patents by a U.S. administrative law judge last week and also continuing erosion in pay-TV subscriptions, which could represent an opportunity for TiVo. Comcast, by contrast, stands to incur “significant incremental legal costs,” he wrote.

The target date for completion of the investigation into the patent claims is Sept. 26. After that point, if nothing changes, the importing of infringing Comcast set-top boxes could be blocked at the port, Stone argued.

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Rovi Corp. acquired TiVo in 2016 for $1.1 billion and adopted the TiVo name. TiVo filed two federal lawsuits against Comcast. The first case, which covers the same six patents as the ITC case, was stayed, pending the ITC outcome. However, Rovi brought a second federal case, with eight more patents, for which a hearing is expected in July.

At issue are patents relating to features in Comcast’s X1 video platform, including the way Comcast implements remote recording, the “AnyRoom” DVR and search.

In its countersuit last June, Comcast said Rovi’s Texas-based patent suit violated the terms of a licensing deal that requires such disputes to be handled in New York.

Comcast argued that the company is covered by agreements reached in 2010 after it bought out Rovi’s interest in Guideworks, which was created to develop interactive programming guides for Comcast and others, according to a report in Cablefax.

The positive news on the judge’s ruling sent TiVo shares up 10% in Tuesday trading. The company announced last week that CEO Thomas Carson plans to leave TiVo after 11 years at the company.

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