TiVo Settlements Now Top $1B

09.2012

Longtime Irell & Manella client TiVo Inc. settled its patent litigation with Verizon and entered into a mutual patent licensing arrangement. Verizon agreed to provide TiVo with total compensation worth at least $250.4 million, bringing the total amount Irell has secured for TiVo to more than $1 billion. The settlement was finalized just days before jury selection and trial were scheduled to begin.

The agreement ends a more than three-year patent dispute between the companies, which began when TiVo, developer of the first commercially available digital video recorder (DVR), filed separate patent infringement suits against Verizon and AT&T Inc. in Texas federal court in August 2009, accusing the companies of infringing three of its DVR technology patents.

Irell, led by Morgan Chu, has represented TiVo for the past twelve years, which has included multiple cases, three trials, four trips to the Federal Circuit Court of Appeals and three settlements that, together with a judgment of more than $100 million, total almost $1.1 billion for TiVo. Last year, TiVo settled with satellite TV company Dish Network Corp. and its set-top box provider EchoStar Corp. for $500 million, after EchoStar already paid more than $100 million to satisfy a court judgment. Earlier this year, TiVo resolved a lawsuit against AT&T Inc. for $215 million.

The payments from Verizon to TiVo will be comprised of a $100 million initial cash payment followed by recurring quarterly payments totaling an additional $150.4 million through July 2018. If the companies pursue certain commercial initiatives prior to Dec. 21, 2012, up to $29.1 million of the payments made by Verizon would be subject to a credit of an equal amount. In addition to the guaranteed compensation, Verizon will pay monthly license fees through July 2018 for each Verizon DVR subscriber in excess of certain pre-determined levels.

As part of the settlement, TiVo and Verizon agreed to dismiss all pending litigation between the companies with prejudice. The parties also entered into a cross license of their respective patent portfolios in the advanced television field.

In addition to Chu, the Irell team consisted of Richard Birnholz, Samuel Lu, Babak Redjaian, Thomas Werner and Ben Yorks.