Has Comcast (CMCSA) Lost Patent Licensing Suit Against TiVo?

Comcast Corp. CMCSA, the leading cable multi-service operator MSO in the U.S. is said to have reportedly lost against TiVo Corporation TIVO over a patent licensing dispute. The complaint was filed by Rovi Corp. against the cable MSO to the International Trade Commission ITC in Apr 2016. Rovi filed the suit before it purchased TiVo for $1.1 billion and merged as a new company, while carrying the latter's brand. 

The complaint accused Comcast and its vendor partners for violating six patents related to digital video recording and interactive program guides through Comcast's X1 technology. As per Law 360, ITC Judge David Shaw had found Comcast Corp. and its vendor partners guilty of breaching two of the related patents of TiVo.

In Jan 2017, Comcast chose Gracenote, Inc. over TiVo as the principal metadata vendor for its X1 platform. Gracenote, Inc. – a subsidiary of Nielson Holdings plc NLSN – is a provider of music, video and sports metadata and automatic content recognition (ACR) technologies to entertainment services and brands both in the U.S. and globally. We believe this patent licensing dispute with TiVo might have prompted Comcast for the switchover.

We expect Comcast to quickly resolve all such disputes and focus on its expansion strategies – online TV services, theme park businesses, Internet TV services and Business Services growth. Additionally, Comcast is working toward 5G wireless network deployment and is gearing up to enter the U.S.  wireless industry in collaboration with Charter Communications. Tough competition, consolidation-related woes, mounting programming costs, loss of customer base and a debt-laden balance sheet act as major dampeners for the company's growth prospects.

Currently, Comcast is a Zacks Rank #2 (Buy) stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Price Performance

The price performance of Comcast looks encouraging over the past three months. Share price of the company has moved up 9.09% outperforming the Zacks-categorized Cable Television industry's 6.01% gain in the said timeframe.

Latest Lawsuits and their Settlements

Last week, DISH Network Corp. DISH was penalized by the U.S. District Judge for the Central Illinois District, Sue Myerscough with a fine-cum-damage recovery cost of $280 million - to be paid to the U.S. government and four states - in relation to the eight-year-old ‘robocall' telemarketing lawsuit.

Qualcomm Inc. QCOM, the largest mobile chipset manufacturer using baseband technology globally, is frequently found engaged in any lawsuits and their payments. Recently, the company settled a licensing dispute with BlackBerry Limited BBRY by paying U.S. $940 million, on or before May 31, 2017. This is in relation to the over-payment by BlackBerry to Qualcomm in royalty payments from 2010 to 2015 under terms of a licensing deal.

Meanwhile, Qualcomm has been engaged in a $1-billion lawsuit related to licensing royalty payments by tech giant Apple Inc. AAPL, since Jan 2017.

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