The two companies filed lawsuits against each other in the United States District Court for the Northern District of California late last year andthis year. Both cases were pending.
Both suits were for infringements on patents dealing with capabilities associated with digital video recorders (DVRs).
"We believe our energies are better spent expanding the market for digital video recorders (DVRs) rather than fighting each other. Both sides believe in the merits of their respective positions, but the overall success of the DVR category is what is most important to the companies at this time," the two companies said in a joint statement.
Sonicblue and Tivo representatives were not available to comment on the settlement.
The competing companies each maintain a digital video recording service. Sonicblue also sells recorders under its ReplayTV brand.
The patent dispute developed after Sonicblue first filed suit in December of last year, a day after receiving a patent covering 50 claims for developing devices that can pause and play back television shows. San Jose, Calif.-based TiVo in turn filed suit in January for a "multimedia time warping system".
Both companies said they were looking to protect their intellectual property.
Sonicblue's legal woes aren't yet over. The company must still grapple with a suit filed by major entertainment companies including AOL Time Warner, MGM, Disney, and the big three TV networks.
Among the more controversial features offered by Sonicblue's ReplayTV machines and service are the ability to remove commercials during recording and the ability to send copies of recorded programs to other ReplayTV recorders over the Internet.
Fearing a Napster-like situation, media powerhouses have banded together to challenge Sonicblue, claiming the company's service adds up to copyright infringement.
The settlement comes after Sonicblue reported Wednesday narrowing losses for the third quarter and said that fourth-quarter results would lag behind expectations. The Santa Clara, Calif.-based company said during a conference call with analysts that it expected competition in the DVR market to increase.
One of the key features in new PCs using Microsoft's latest version of the Windows XP operating system,, will provide DVR capabilities. Hewlett Packard is systems using the new operating system.