Democrasoft Holdings, Inc. (DEMO): BRST PEOPLE READ THIS!!!!!!!!!!!!!!!!!...

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Re: bagfull post# 699

Saturday, 12/01/2007 4:25:43 AM

Saturday, December 01, 2007 4:25:43 AM

BRST PEOPLE READ THIS!!!!!!!!!!!!!!!!!

Surprising new entrant into the DVR wars – Burst.com

Found this interesting post elsewhere.

It has been a tough week in the digital video recorder (DVR) wars for Echostar, a.k.a. Dish Network. They’ve be been fighting a losing battle in Court against Tivo. Tivo owns what appeared to be (more on that later) the seminal DVR patent ( # 6,233,389) and sued Echostar for infringement. There are thousands of Dish Network DVRs out there happily humming away and helping generating plenty of coin for Echostar. (Revenue of $9.8B and cash flow of $3.81 per share last year.) And, DVR is a key part of their High Definition strategy. So any impediment in those venues would be a major headache for them.

And by all recent accounts, that bad headache may be getting badder. Tivo won its case and got awarded $73.9M in April 2006. Then it went from bad to worse. In August 2006, it got the grant of an injunction against Echostar from the Eastern Texas court known as the “rocket docket” for its swift – some say too swift - meting out of justice. That has now been stayed pending appeal, for Echostar then kicked the litigation up a notch, so to speak.

In an effort to try and further help themselves, they also requested that the US Patent Office re-examine the Tivo patent. Their hope was, the Feds would look at it again and invalidate it.

No such luck. This week, the USPO re-affirmed the Tivo patent. Not only does that end Echostar’s re-exam hopes, it also greatly dims their hopes on their appeal. Echostar put out a brave-sounding press release, but it looked (more on that later) increasingly likely that they would have to settle like Replay did. And with all those Dish Network DVR customers out there, Echostar was over a barrel. The deal wouldn’t come cheap.

But now -- that deal may never happen.

Because “POOF” like some thought bubble over Al Einstein’s head, just this past September, behold what came out of the U.S Patent office? Yet another DVR patent, owned by Burst.com. It’s # 7,272,298, entitled, “System and method for time-shifted program viewing.” And here’s the interesting thing – it was filed over two months BEFORE the Tivo patent. Uh-oh. Big trouble.

Now -- until late October this event largely escaped notice. But then Burst.com, who has been in a big patent lawsuit of their own (alleging infringement by mighty Apple computer), settled. No big surprise there. Burst owned a suite of patents for a digital player that received compressed audio and video. Sound like an IPOD? And many of their key claims had survived months of intensive legal attack by Apple. AND they had extracted a $60M license from mighty Microsoft in 2005. Apple happily settled for a mere $10M license. Burst.com shareholders (it’s a public company - BRST) had been expecting much more, but a bird in the hand, so to speak.

But here is where it gets really interesting. In announcing the settlement, Burst went out of its way to exclude – you guess it – their granted DVR patent and others pending. Oh, they said they would not sue Apple again over the DVR property – but they did not license it.

So why did Burst see fit (and Apple apparently agreed) to mention this new patent? That had nothing at all to do with the infringement lawsuit? Why not keep it all confidential? Why be so revealing?

http://biz.yahoo.com/iw/071121/0331489.html

Well, saner heads prevailed and the formal press release was quickly taken down from the Burst.com website.

But - and this is a big point - the information is still out there for others to ponder. Like Tivo and Echostar (remember them?). If Burst’s patent INVALIDATES Tivo’s (and the earlier filing date is key here), then it could have immense value in the DVR wars to anyone who owns it. Maybe that is the reason why Burst let something slip out about it.

For example, if Echostar bought Burst and all its intellectual property, it could then turn the tables on Tivo. In a brand new lawsuit, it could allege infringement of Dish’s newly-acquired patent on TIVO’s part. That would be sweet revenge. Of course Tivo could strike first and buy Burst out from under DISH, precluding that avenue for DISH.

The remaining question is who will strike first?

And, Burst.com shareholders may want to add, for how much!?

WALL STREET BOARD

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