Verizon ponies up $250M to settle with TiVo

The agreement, which runs into 2018, also includes a cross-license provision for both companies' advanced television patents.

TiVo has reached a settlement with Verizon over its DVR technology

Verizon has agreed to pay DVR specialist TiVo at least $250.4 million to settle all litigation between the companies.

Separately, Verizon also reached an agreement with privately held ActiveVideo for at least $260 million, resolving its suit related to on-demand video

"We are pleased to have reached settlements with both TiVo and ActiveVideo in these two matters," a Verizon spokesman said today. He declined to comment further.

According to a regulatory filing, Verizon will give TiVo an upfront cash payment of $100 million by September 28, followed by 25 recurring quarterly payments totaling $150.4 million. The agreement, which expires July 31, 2018, also includes a cross-license provision for both companies' advanced television patents.

In addition, Verizon will pay higher monthly license fees for each user of Fios digital video recorder offerings if the growth of Verizon's DVR subscriber base tops certain predetermined levels. And if the two reach a "commercial services arrangement" before December 21, Verizon may earn a credit of up to $29.4 million against the quarterly payments.

The deal is the latest reached by TiVo, a pioneer in the technology that allows viewers to record TV shows. Rather than selling its own DVR boxes, the company of late has focused on working with cable and satellite operators to distribute its technology, and TiVo has pursued many lawsuits to do so.

TiVo reached a similar deal with AT&T in January, with AT&T agreeing to pay TiVo at least $215 million. It had sued Verizon and AT&T in mid-2009 over three DVR patents. TiVo also settled with satellite TV providers Dish and EchoStar last year for $500 million. Suits are still pending against Motorola and a couple other companies.

Meanwhile, ActiveVideo said in a press release that Verizon agreed to pay the $260 million previously ordered by U.S. District Court, in addition to an unspecified amount of money. The two companies will cross-license their patents and won't sue each other for a period of years.

ActiveVideo declined to provide further details about the deal terms, but Chief Executive Jeff Miller told CNET in an interview that the two companies won't have a relationship beyond the IP cross licensing.

"We've agreed to stand down the guns for a period of time... sufficiently long enough that both companies should be able to go out and operate their businesses normally," Miller said.

ActiveVideo typically doesn't license its patents but instead provides software to TV providers that allows them to provide video via the cloud. Some partners include Comcast, Cablevision and Time Warner Cable.

The company initially filed suit against Verizon in May 2010, alleging that Verizon's Fios television service infringed four of ActiveVideo's patents that are fundamental to interactive television services such as video on demand.

Last month, an appellate court affirmed findings of infringement on three of the patents and upheld the award against Verizon.

Updated at 2:15 p.m. PT with ActiveVideo CEO comments.

 

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