DISH Network And EchoStar Pay TiVo $500m To Settle Litigation

Well, it's not exactly the ideal way to add cash to the coffers, but given TiVo's struggles, they'll take it. A release was put out this week noting that TiVo would soon be taking home $500 million courtesy of Dish Network and EchoStar, who have agreed to pony up half a billion dollars to settle ongoing patent litigation. Under the terms of the settlement, DISH Network and EchoStar agreed to pay TiVo $500 million, including an initial payment of $300 million with the remaining $200 million distributed in six equal annual installments between 2012 and 2017. As part of the deal, TiVo, DISH Network and EchoStar agreed to dismiss all pending litigation between the companies with prejudice and to dissolve all injunctions against DISH Network and EchoStar.

The announcement marks the end of a long and drawn-out court battle between these firms, basically suggesting that TiVo's patents were being infringed upon for the profits of another company. The "Time Warp" patent was particularly thorny, but in the end, it looks as if DISH will now be able to offer TiVo boxes to customers. Of course, they'll now need to sell an awful lot of them to make up for lost income, but hey...

TiVo, DISH Network and EchoStar Announce Half-Billion Dollar Settlement of Patent Litigation

ALVISO, CA and ENGLEWOOD, CO, May 02, 2011 (MARKETWIRE via COMTEX) --

TiVo Inc. (NASDAQ: TIVO), DISH Network Corporation (NASDAQ: DISH), and EchoStar Corporation (NASDAQ: SATS) announced today that they have settled all of their ongoing patent litigation.

Under the terms of the settlement, DISH Network and EchoStar agreed to pay TiVo $500 million, including an initial payment of $300 million with the remaining $200 million distributed in six equal annual installments between 2012 and 2017. TiVo, DISH Network and EchoStar agreed to dismiss all pending litigation between the companies with prejudice and to dissolve all injunctions against DISH Network and EchoStar.

The parties also granted certain patent licenses to each other. TiVo granted DISH Network a license under its Time Warp patent (US Pat. No. 6,233,389) and certain related patents, for the remaining life of those patents. TiVo also granted EchoStar a license under the same '389 patent and certain related patents, for the remaining life of those patents, to design and make certain DVR-enabled products solely for DISH Network and two international customers. EchoStar granted TiVo a license under certain DVR-related patents for TiVo-branded, co-branded and ingredient-branded products.

"We have tremendous respect for TiVo's management, and we have always said that regardless of the outcome of the case, there were many ways that we could work together with TiVo," said Charlie Ergen, Chairman and CEO of DISH Network. "The results of TiVo's formidable intellectual property enforcement program speak for themselves, and consequently, we are pleased to put this litigation behind us and move forward. Additionally, we believe that our agreement with TiVo provides us a competitive advantage as one of the few multichannel operators with rights to operate under TiVo's Time Warp patent, which ultimately will allow us to enhance the performance of our award-winning DVRs. We look forward to continuing to offer DISH Network customers the most choices in video service."

"We are extremely pleased to reach an agreement with DISH Network and EchoStar which recognizes the value of our intellectual property," said Tom Rogers, president and CEO of TiVo. "The compensation from this settlement, including the resulting reduction in legal expenditures, puts TiVo in an enviable financial and strategic position. This settlement, which brings the total compensation paid by DISH Network for use of TiVo's '389 patent family to over $600 million, demonstrates the significant return afforded to our shareholders by diligent enforcement of TiVo's intellectual property rights. Those efforts will aggressively continue with other parties."

In addition, TiVo will play a role in helping DISH Network promote the Blockbuster digital video service. Ergen added, "We are excited to work with TiVo to help develop our Blockbuster video service. Resolving the patent infringement case allows us to further engage with TiVo on a variety of exciting strategic initiatives, like Blockbuster, where we are uniquely positioned to collaborate."