While some patent lawsuits continue to drag on, the battle between TiVo and Verizon over DVR technology has come to a resolution. In exchange for cross licensing their patents and dismissing all pending litigation, the two parties have agreed Verizon will pay TiVo $100 million up front followed by recurring quarterly payments totaling $150.4 million through July 2018, as well as monthly license fees for each FiOS DVR user above certain levels. Now that they're no longer at war the two companies may find a few things to work together on, and there is a provision for "certain commercial initiatives" which, if pursued this year, could count as credits toward the amount Verizon has agreed to pay.
Additionally, the press release indicates they are exploring support for the upcoming Redbox Instant service (which Verizon is a partner in) on TiVo's DVRs. This all follows TiVo's $215 million settlement with AT&T earlier this year and last year's $500 million agreement with Dish Network. Meanwhile, lawsuits are still pending against Cisco, Time Warner Cable and Motorola. The press release is after the break and associated filings are linked below, with any luck this infusion of cash will help TiVo on new projects like dropping the price of the Stream.
[Thanks, Dave Zatz]
TiVo Announces Settlement of Patent Litigation With Verizon
TiVo and Verizon Enter Into a Patent Licensing and Commercial Arrangement
ALVISO, CA--(Marketwire - Sep 24, 2012) - TiVo Inc. (NASDAQ: TIVO) announced today that it has settled its pending patent litigation with Verizon Communications Inc. and that the companies have entered into a mutual patent licensing arrangement. Under the terms of the settlement, Verizon will provide TiVo total compensation worth at least $250.4 million. The payments from Verizon to TiVo shall be comprised of a $100 million initial cash payment followed by recurring quarterly payments totaling an additional $150.4 million through July 2018. If the companies pursue certain commercial initiatives prior to December 21, 2012, up to $29.4 million of the payments made by Verizon would be subject to a credit of an equal amount. In addition to the guaranteed compensation, Verizon will also pay monthly license fees through July 2018 for each Verizon DVR subscriber in excess of certain pre-determined levels.
In addition to the cash payments described above, Verizon and TiVo are exploring, among other things, future distribution of Internet video services developed through Verizon's joint venture with Redbox by making content distributed via that service part of the diverse selection of linear and broadband-delivered content accessible to users of TiVo's retail DVR products.
As part of the settlement, TiVo and Verizon agreed to dismiss all pending litigation between the companies with prejudice. The parties also entered into a cross license of their respective patent portfolios in the advanced television field.
"We are pleased to reach an agreement with Verizon which underscores the significant value our distribution partners derive from TiVo's technological innovations and our shareholders derive from our investments in protecting TiVo's intellectual property," said Tom Rogers, CEO and President of TiVo. "We also look forward to working together on a variety of future opportunities as we continue to expand the content choices available to TiVo subscribers. As with prior settlements, we also benefit by being able to operate our business under license from Verizon and by avoiding future legal expenses that we would have incurred during and after trial. Furthermore, we believe this settlement positions us well with respect to future enforceability of our patents."