TiVo to Net $490 Million in Patent Settlement

SAN JOSE: TiVo has settled its pending patent litigation with Motorola, Cisco and Time Warner Cable, from which it will receive an upfront lump-sum payment of $490 million.

Back in February 2011, Motorola (owned by Google and Arris) had accused TiVo of infringing on its patents for digital video recorders. TiVo filed a counter-suit in March of last year. The out-of-court settlement comes just as the companies were set to go to trial next week. TiVo and Motorola, Cisco and Time Warner Cable have agreed to drop all pending litigation.

As part of the settlement, Google and Cisco will pay the set-top-box maker $490 million, bringing the total amount that TiVo has netted from patent-related awards and settlements to around $1.6 billion. TiVo has now agreed to enter into certain patent licensing arrangements with Arris and Google and Cisco. 

"We are pleased to reach an agreement that brings our pending litigation to an end and further 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 Tom Rogers, the CEO and president of TiVo. "Further, this settlement significantly enhances our already strong balance sheet, bringing our cash position to over $1 billion before inclusion of future expected payments of at least $400 million from prior settlements. We intend to use our significant capital resources to drive shareholder value, including more aggressively returning capital to shareholders under our newly increased share repurchase authorization and we will be increasing the size of our 10B5-1 trading plan as soon as permissible."

Rogers continued, "Importantly, we just recently closed one of our best quarters ever in terms of subscription growth, driven by a number of our existing operator deals in the U.S. and abroad that are now fully up and running. As a result, we delivered our highest gross margin ever and solid MSO revenue growth of 98 percent year-over-year, and we expect this MSO revenue growth will continue as we roll out additional deployments. So, as we look out beyond today’s important settlement we believe our core operating business will continue to drive growth to both the top and bottom line."