Which might explain the new CEO's reluctance to develop products without regard for their potential to draw Hollywood's fire.

"I don't want to get sued every time we do something," Ballard says, without equivocation. "If I'm in a product meeting and I'm offered a choice of two features, one which will trigger a lawsuit, and one not, I'm inclined to choose the one that will not, even if our lawyers think we can win."

While Potashner liked to say that settling the ReplayTV lawsuit by removing the ad-skipping and Internet features was "not an option," Ballard is looking for a way to end the conflict. "I think I've signaled I'd rather not be sued," he says. "I'm going to be exploring ways we can move this thing along. I'm going to think through what our options are. I'm not willing to make a commitment that we're not going to do something to settle."

That only sounds like smart business, of course. But it's also very sad. Maybe Potashner's reckless urge to make products on the edge of permissible copyright law was driving his company into the ground. Then again, if Sonicblue had been operating under Ballard's direction in 1998, you could still be waiting for an MP3 player today. If it had been operating under his conciliatory strategy a year ago, you would not now be able to buy a personal video recorder with an Internet connection on its back panel. Nor would you have the ability to skip commercials without fast-forwarding through them. And even if Ballard continues to press on with the current lawsuit, one can only guess what products won't be developed next year, or the year after that, now that he's steering clear of Sonicblue's former role as the company that tested the limits of copyright law and consumer rights.

All of which prompts the question: Why do technology companies continue to rely on Lone Ranger tactics from industry mavericks like Potashner, while Hollywood moves in lock step to protect its interests? It's a losing strategy, one that pits a company that needed to raise $60 million in convertible debt to stay afloat last spring against the resources of a united $100 billion entertainment industry. It's not just Sonicblue that loses; all of its competitors do, as well -- after all, every battle Sonicblue won allowed its rivals to offer the same products.

"Sonicblue pushes the envelope, introducing new features all the time that are seen as very controversial in Tinseltown," says Sean Badding, vice president of business development for the Carmel Group, which follows the personal video recorder market. "If they win, the whole [personal video recorder] industry wins. If they lose, it's going to hinder other companies from innovating, too. It may not affect the growth of the overall market, but it will affect what customers are offered in terms of technology choices."

But until technology companies learn to act with the same singularity of purpose that Hollywood does, through industry consortia of their own, Ballard and CEOs of other innovative technology companies will have little choice but to capitulate.

"This lawsuit has far broader implications than just how we're going to watch TV," says Fred Von Lohmann, attorney for the Electronic Frontier Foundation, a digital rights advocacy group that has vowed to continue the legal battle even if Sonicblue folds its hand. "Are we going to let copyright policy become technology policy? Are we going to let a $100 billion industry dominate a several-trillion-dollar industry? If so, then engineering decisions are going to be made by Hollywood, because technology companies are going to need to worry about some Disney lawyer down the road saying, 'You should have done that differently, so now you need to pay.'"

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