Dish ripped them off, plain and simple. They were in talks to do a deal, TiVo gave them a prototype in good faith, and then dish just stole the hardware design and did it themselves. Also just because something seems obvious after the fact doesn't mean it's not patentable. There are a ton of "obvious" ideas that are patented. Netfix has a patent on their queue, Amazon has a patent on "one click" purchasing, and Gemstar has a patent on electronic programming guides. The whole purpose of patents is to protect ideas, no matter how simple they seem after the fact or how easy to copy.