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Tivo Settles Patent Suit with Time Warner, Cisco, and Motorola
A patent dispute between Tivo and Cisco, Motorola Mobility, and Time Warner Cable was settled this morning for $490 million. Tivo alleges that technology developed by the company to record and playback television shows from a set-top device was illegally used in competing systems sold by Cisco, Motorola, and Time Warner. The settlement resolves several long-running disputes and averts a trial.
The Associated Press reports that Tivo will receive a lump-sum payment from Cisco and Google, which now owns Motorola Mobility, and enter into a licensing agreement with the companies that will continue to utilize the disputed technology.
The settlement was substantially less than the amount Tivo investors had hoped for, sending the company’s shares down by 17 percent after the settlement was announced. Tivo has struggled financially over the last ten years, but executives said that they were hopeful for the future of the company now that the patent suits have been settled. On Thursday, the stock price increased by 8 percent based on news of a settlement.
“We intend to use our significant capital resources to drive shareholder value,” said Tivo Chief Executive Tom Rogers, who said that the company will more aggressively return capital to shareholders under a newly increased share repurchase authorization. Tivo executives are also hopeful that, with the new licensing agreements and less focus on litigation, the company can right itself and begin making a profit again.
Time Warner, Cisco, and Motorola all reported that they were pleased with the settlement. All pending litigation between the companies has been dismissed.