Verizon Communications Inc. (NYSE: VZ) has agreed to pay TiVo Inc. (Nasdaq: TIVO) at least US$250.4 million as part of a settlement that includes a cross-licensing patent agreement and a commercial distribution deal between the two sides. (See TiVo & Verizon Settle DVR Patent Spat .)
Verizon's agreed to make an initial cash payment of $100 million, followed by recurring quarterly payments totaling an additional $150.4 million through July 2018. And that number could rise, as Verizon is also on the hook to pay monthly license fees through July 2018 for each Verizon subscriber "in excess of certain pre-determined levels" that were not disclosed in a TiVo 8-K filing made on Friday (Sept. 21).
Additionally, up to $29.4 million of the money owed by Verizon can be erased if TiVo and Verizon strike "certain commercial initiatives" before Dec. 21, 2012. TiVo and Verizon have also agreed to explore an Internet video distribution deal linked to Verizon's new joint venture with Redbox Automated Retail LLC . (See Verizon & Redbox Boot Up Web Video Service .)
As a final component, the companies have also agreed to dismiss all pending litigation between them with prejudice. TiVo filed its suit against Verizon in August 2009, claiming the telco infringed on three TiVo patents: .S. No. 6,233,389 B1 ("Multimedia Time Warping System"); No. 7,529,465 B2 ("System for Time Shifting Multimedia Content Streams"); and No. 7,493,015 B1 ("Automatic Playback Overshoot Correction System"). TiVo claimed at the time that it tried, but failed, to strike a commercial agreement with Verizon.
Why this matters
The settlement buries the hatchet between TiVo and Verizon, with TiVo once again coming out on the winning end. The FiOS TV commercial component also gives TiVo another potential avenue to pursue with a major pay-TV provider.
The Verizon settlement comes more than eight months after TiVo scored a similar out-of-court settlement with AT&T Inc. (NYSE: T), which agreed to pay TiVo at least $215 million through the middle of 2018. TiVo still has a pending lawsuit against Time Warner Cable Inc. (NYSE: TWC) and Motorola Mobility. Cisco Systems Inc. (Nasdaq: CSCO) , meanwhile, has filed suit against TiVo, asking that four DVR patents be declared invalid. (See TiVo Sues Motorola & Time Warner Cable and Cisco Launches Preemptive Strike on TiVo.)
- TiVo Suit Targets AT&T & Verizon
- TiVo: AT&T and Verizon Won't Strike a Deal
- AT&T to Pay TiVo $215M-Plus to Settle DVR Fight
- No Cash Swap in Microsoft-TiVo Settlement
- TiVo, Dish Settle DVR Case
— Jeff Baumgartner, Site Editor, Light Reading Cable