Long-running TiVo patent battle settled for $500 million

TiVo has settled its patent infringement lawsuit with the Dish Network and EchoStar, with the companies agreeing to pay TiVo a total of $500 million in exchange for the rights to continue offering some TiVo-patented features. The settlement overrides a judgment from late April that would have required Dish to disable its DVR boxes.

TiVo's patent suit goes back to 2004, when the company sued EchoStar, which then owned Dish, for infringing on its patent for its "multimedia time warping system" that described a way for users to time-shift their TV content. The case has been on a rollercoaster ride since then—TiVo won its suit against EchoStar in 2006, sparking a number of appeals from Dish. TiVo won every appeal, with court after court deciding in favor of TiVo, and the US Patent and Trademark Office ruling that the patent was valid and enforceable. EchoStar and Dish split in 2008.

Dish and EchoStar continued to lose in their battle against TiVo, and in late April 2010, a judge ruled that the two companies would have to disable their offerings and shell out $90 million to TiVo. That was bad news for Dish and EchoStar, which have become reliant on their DVR boxes for revenue, which undoubtedly led to the latest settlement.

Under the settlement, all pending litigation between the companies is settled. Instead, Dish and EchoStar will pay TiVo $300 million up front, with $200 million to be paid in installments between 2012 and 2017. In exchange for their hard-earned money, TiVo granted DISH and EchoStar a license to the time warp patent for the remaining life of the patent, and said that EchoStar can make DVR products solely for the DISH Network and two international customers.

Additionally, EchoStar granted TiVo a license to use two of its own DVR-related patents for TiVo-branded products, and TiVo said it would help DISH promote Blockbuster's digital video service, which it purchased last month.

"The results of TiVo's formidable intellectual property enforcement program speak for themselves, and consequently, we are pleased to put this litigation behind us and move forward," Dish Network CEO Charlie Ergen said in a statement. "Additionally, we believe that our agreement with TiVo provides us a competitive advantage as one of the few multichannel operators with rights to operate under TiVo's Time Warp patent, which ultimately will allow us to enhance the performance of our award-winning DVRs. We look forward to continuing to offer DISH Network customers the most choices in video service."

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