I don't understand what owning content has to do with working to develop the most technologically advanced DVR. TIVO may or may not wish to own content, have an interedt in content, but whether that does or does not happen, will never affect the technical capability of the DVR.
I do say that it's DVR must compete with the companies who also make a DVR, like Echostar, Scientific Atlanta, Phillips etc. DirecTV never made their own DVR's they licensed specs for other companies to make them. Even Dishnetwork licensed Phillips at one time to make their receivers while simultaneously making their own. Not having content in no way restricts a company from building a good DVR and selling it at Radio shack for OTA channels ( what TIVO did) selling it to cable providers, selling it to satellite companies like D* or even DishNetwork.
All those content providers you mentioned TIVO is trying to add is what is called value added in the business. It's not a required raw material for production.
TIVO was never forced to go to the litigation route. They chose to do that because they thought their patents were being infringed and under the law they had that right to protect and be awarded damages if they won. Totally separate issue.