AT&T and Tivo Reach Agreement Over Patent Infringement Dispute

Reuters reported Tuesday evening, January 3, 2012, that AT&T and Tivo have reached an agreement which includes suspending any further litigation regarding patent disputes surrounding live TV recording.  This isn’t the first time Tivo has engaged in other settlements after litigation with Dish Network and Echostar last May, which included a $500 million patent settlement.

Tivo’s share rose 14% to $18.18 per share in after-hours trade after the news was announced.

The agreement includes an initial payment of $51 million, plus quarterly recurring payments through June 2018, totaling $164 million.  Additionally, AT&T will pay incremental monthly subscriber license fees through that timeframe if the DVR subscriber base exceeds a certain predetermined level.

Tivo CEO Tom Rogers could not reveal specifics, but mentioned that Tivo could generate more revenue from the deal.  “No matter which projections you take, they all involve AT&T paying us significantly higher revenue than $215 million.”

The rulings with Dish, Echostar and AT&T set a precedent regarding Tivo’s lawsuit with Verizon.  Rogers indicated that the relevant parties would be meeting soon to decide on a timetable for the Verizon case now that the AT&T case is settled.


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