At long last, it's finally over. The long running patent dispute between Verizon
is finally over, and TiVo has to be smiling. The companies have entered into a license agreement, and according to those terms, 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, which is a most interesting wrinkle in all of this. Below is a quote regarding the settlement.
"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