ITEM 3.   LEGAL PROCEEDINGS



EchoStar Communications Litigation. On January 5, 2004, we filed a complaint
against EchoStar Communications Corporation in the U.S. District Court for the
Eastern District of Texas alleging willful and deliberate infringement of U.S.
Patent No. 6,233,389, entitled "Multimedia Time Warping System." On January 15,
2004, we amended our complaint to add EchoStar DBS Corporation, EchoStar
Technologies Corporation, and Echosphere Limited Liability Corporation as
additional defendants. We allege that we are the owner of this patent, and
further allege that the defendants have willfully and deliberately infringed
this patent by making, selling, offering to sell and/or selling digital video
recording devices, digital video recording device software, and/or personal
television services in the United States. On March 2, 2004, EchoStar filed its
answer to TiVo's complaint, moved to dismiss for lack of personal jurisdiction,
and moved to transfer the case from the Eastern District of Texas to the
Northern District of California. TiVo intends to oppose these motions. We seek
unspecified monetary damages as well as an injunction against the defendants'
further infringement of the patent. We could incur material expenses in this
litigation.


Indemnification of Sony Corporation Against Command Audio Corporation Lawsuit.
On February 5, 2002, Sony Corporation notified us that Command Audio Corporation
had filed a complaint against Sony Electronics, Inc. on February 2, 2002 in the
U.S. District Court for the Northern District of California. The complaint
alleges that, in connection with its sale of digital video recorders and other
products, Sony infringes upon two patents owned by Command Audio (U.S. Patent
Nos. 5,590,195 ("Information Dissemination Using Various Transmission Modes")
and 6,330,334 ("Method and System for Information Dissemination Using Television
Signals"). The complaint seeks injunctive relief, compensatory and treble
damages and Command Audio's costs and expenses, including reasonable attorneys'
fees. Under the terms of our agreement with Sony governing the



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distribution of certain DVRs that enable the TiVo service, we are required to
indemnify Sony against any and all claims, damages, liabilities, costs, and
expenses relating to claims that our technology infringes upon intellectual
property rights owned by third parties. We believe Sony has meritorious defenses
against this lawsuit; however, due to our indemnification obligations, we are
incurring material expenses in connection with this litigation. If Sony were to
lose this lawsuit, our business could be harmed.


Pause Technology LLC. On September 25, 2001, Pause Technology filed a complaint
against us in the U.S. District Court for the District of Massachusetts alleging
infringement of U.S. Reissue Patent No. 36,801, entitled "Time Delayed Digital
Video System Using Concurrent Recording and Playback." Pause Technology alleges
that it is the owner of this patent, and further alleges that we have willfully
and deliberately infringed this patent by making, selling, offering to sell, and
using within the United States the TiVo digital video recorder. Pause Technology
seeks unspecified monetary damages as well as an injunction against our
operations. It also seeks attorneys' fees and costs. On February 6, 2004, we
obtained a favorable summary judgment ruling in the case filed against us in
2001 by Pause Technology LLC in the United States District Court for the
District of Massachusetts. The court ruled that our software versions 2.0 and
above do not infringe Pause's patent, and accordingly has ordered that judgment
be entered in our favor. On March 3, 2004, Pause Technology filed a notice of
appeal to the United States Court of Appeal for the Federal Circuit, appealing
the February 6, 2004 summary judgment ruling in favor of TiVo.


IPO Litigation. We and certain of our officers and directors are named as
defendants in a consolidated securities class action lawsuit filed in the U.S.
District Court for the Southern District of New York. This action, which is
captioned Wercberger v. TiVo et al., also names several of the underwriters
involved in our initial public offering as defendants. This class action is
brought on behalf of a purported class of purchasers of our common stock from
September 30, 1999, the time of our initial public offering, through December 6,
2000. The central allegation in this action is that our IPO underwriters
solicited and received undisclosed commissions from, and entered into
undisclosed arrangements with, certain investors who purchased our common stock
in our IPO and in the after-market. The complaint also alleges that the TiVo
defendants violated the federal securities laws by failing to disclose in our
IPO prospectus that the underwriters had engaged in these allegedly undisclosed
arrangements. More than 150 issuers have been named in similar lawsuits. In July
2002, an omnibus motion to dismiss all complaints against issuers and individual
defendants affiliated with issuers (including the TiVo defendants) was filed by
the entire group of issuer defendants in these similar actions. On October 8,
2002, our officers were dismissed as defendants in the lawsuit. On February 19,
2003, the court in this action issued its decision on defendants' omnibus motion
to dismiss. This decision dismissed the Section 10(b) claim as to TiVo but
denied the motion to dismiss the Section 11 claim as to TiVo and virtually all
of the other issuer-defendants.


On June 26, 2003, the plaintiffs announced a proposed settlement with us and the
other issuer defendants. The proposed settlement provides that the insurers of
all settling issuers will guarantee that the plaintiffs recover $1 billion from
non-settling defendants, including the investment banks who acted as
underwriters in those offerings. In the event that the plaintiffs do not recover
$1 billion, the insurers for the settling issuers will make up the difference.
Under the proposed settlement, the maximum amount that could be charged to our
insurance policy in the event that the plaintiffs recovered nothing from the
investment banks would be approximately $3.9 million. We believe that we have
sufficient insurance coverage to cover the maximum amount that we may be
responsible for under the proposed settlement. Our board of directors approved
the proposed settlement at a meeting held on June 25, 2003. It is possible that
the parties may not reach agreement on the final settlement documents or that
the Federal District Court may not approve the settlement in whole or part. In
the event that the parties do not reach agreement on the final settlement, we
believe we have meritorious defenses and intend to defend this action
vigorously; however, we could be forced to incur material expenses in the
litigation, and in the event there is an adverse outcome, our business could be
harmed.