TiVo settles lawsuit against Verizon for $250.4M
Verizon will pay TiVo Inc. at least $250.4 million to license its digital video recording technology and settle a patent lawsuit.
It is the third settlement that TiVo has garnered in recent patent cases. At the heart of the cases, TiVo has alleged that companies have copied its DVR technology. The company's string of settlements "bodes well for its future litigation," said Alan Gould, an analyst with Evercore, in a research note.
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TiVo, based in Alviso, Calif., is set to go to trial in patent lawsuits over DVRs made by Google Inc.'s Motorola unit and Cisco Systems Inc. next year. Gould reiterated his "Overweight" rating on shares with a $13 price target.
News of the settlement sent TiVo's stock up 38 cents, or 4 percent, to close at $9.94 Monday. The stock traded at a 52-week high of $12.37 in late March.
Shares of New York-based Verizon Communications Inc. rose 4 cents to $45.68.
The two companies agreed to dismiss all pending litigation. They had been scheduled to go to trial in October.
The deal with Verizon in a federal lawsuit filed in Marshall, Texas, is the latest in a string of patent settlements for TiVo, which developed the first commercially available DVR. The device made it easy for people to record programs to watch later, skipping over ads.
Last year TiVo settled with satellite TV company Dish Network Corp. and its set-top box provider EchoStar Corp. for $500 million, and earlier this year resolved a lawsuit against AT&T Inc. for $215 million. The payments from those settlements are staggered over several years.
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