TiVo to Get $250 Million-Plus in Verizon Legal Settlement

The DVR pioneer and the telecom giant had been locked into an extended patent case.

DVR pioneer TiVo said Monday that it has agreed to a $250.4 million-plus settlement with telecom giant Verizon in a long-running legal dispute over patents.

"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," TiVo said in a statement. "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 payments, Verizon will also pay monthly license fees through July 2018 for each Verizon DVR subscriber in excess of undisclosed pre-determined levels.

TiVo's stock is expected to benefit from the latest legal settlement as it has done in the case of previous ones.

TiVo previously won legal showdowns with Dish Network and AT&T. It has lawsuits pending against the likes of Time Warner Cable and Motorola.

"TiVo remains an attractive investment opportunity with another settlement highlighting the value of the intellectual property," said BMO Capital Markets analyst Edward Williams. "Collectively, the Dish, AT&% and now Verizon settlements will have brought in more than $1 billion in cash by mid-2018.

"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 TiVo CEO Tom Rogers. "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."

He added: "This settlement positions us well with respect to future enforceability of our patents."