Most hardware companies are delighted when a third party develops a complementary product for their platform. Apple, Microsoft, and many other companies have an active ISV (Independent Software Developer) recruitment effort, as they realize the benefits of others working on their behalf (for free) to make their products better.

When we developed our SlingBox device recording product, we kind of expected the same red carpet treatment. The SlingBox device is a terrific piece of hardware that attaches to your TV, and lets you watch it remotely from anywhere with a high speed internet connection. Sony has a competing product called LocationFree, and if I were competing with Sony, I’d want to do everything possible to make my product stand out.

Sling’s reaction was not what we expected. First of all, they had an issue with the product name, as it used the letters “sling” in it. Kind of a trademark deal. Our conversation went something like this:

Us: “Can we license the “Sling” part, and pay you a royalty on each copy sold.”
Sling: “No.”
Us: OK, how about changing the name to “SBox Recorder.”
Sling: “too close.”
Us: “Hmmm… how about “S Recorder. ”
“Still too close.”
“OK, we’ll call it “Blake’s recorder” or something. ” (Blake is the CEO).
Long pause. “Well, I guess that would be OK.”
Sling: “Your trade-dress is too much like our product – you need to change it, too.” (Our UI was red and grey, in the shape of a Slingbox device.)
Us: “OK – we’ll change the shape to a parallelogram.”
Sling: “No – the angles would be similar.”
Us: “You’re kidding…. OK – we’ll make it a rounded rectangle then.”
Sling: “You’ll have to change the colors, too. Don’t use either red or grey.”
Us: “You’re messing with me now.”
Sling: “No – we need to strongly defend our trademark and trade dress.” (At this point, it was Sling’s IP lawyer in this exchange. She was very polite, and was just doing her job. It’s still pretty ludicrous.)
Us: “bbbbbbbbbbbbbbbb”

Anyway, we went ahead and complied with their requests, and came out with At-Large Recorder. Definitely no trademark issues there. I thought we were in the clear and good to go. Today we learn Sling is encrypting their stream transmission, thereby rendering our product inoperable in its present form.

I actually talked with Blake – Sling’s CEO – when we first launched and he was very cordial, although slightly annoyed. Said something about “getting a phone call” about our product. And brought up the trademark issues. That was about it.

So – what’s the deal?

Theory #1: Sling is pushing into uncharted legal territory – removing the geographical limitations on TV viewing isn’t taken very well by Major League Baseball, to name one. Anything they can do to reduce their legal risks may be a part of the strategy.

Theory #2: Sling is going to produce their own recording add-on.

Theory #3: Don’t know. Leave a comment and tell me your theory. Sling representatives are particularly welcome to respond.

Update: Sling responds, and we dig deeper.

Update #2: Digg this story.