DISH Network is kicking off the month of May without one huge weight on their shoulders. The service provider just announced that they have settled with TiVo in an ongoing patent litigation.
Along with the weight being lifted, comes the weight of a huge amount of cash. Under the terms of the agreement, DISH Network and parent company EchoStar have agreed to pay TiVo a total of $500 million. DISH will pay TiVo one lump sum of $300 million, with the remaining balance coming over six equal annual installments between 2012 and 2017.
TiVo first sued DISH Network and EchoStar back in 2004, stating that the service provider was infringing on TiVo's "time-warp" digital video recorder technology. This is what allows users to pause, fast-forward, and rewind during live TV broadcasts.
"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."
As part of the settlement, TiVo, DISH Network and EchoStar agreed to drop all pending litigation and injunctions. TiVo is also granting DISH Network a license under its Time Warp patent (US Pat. No. 6,233,389) and related patents until they expire. TiVo will also allow EchoStar to make certain DVR-enabled products solely for DISH Network and two international customers. On the flip side, EchoStar has 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."
Now that the companies are on good terms, DISH Network plans to bring TiVo into the fold to help promote the company's Blockbuster digital video service. Early last month, DISH Network announced plans to purchase Blockbuster, for $320 million.
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