TiVo Announces Settlement of Patent Litigation with AT&T

5254 Views 29 Replies 18 Participants Last post by DancnDude, Jan 10, 2012

sbiller

Discussion Starter · Jan 3, 2012

TiVo and AT&T Enter into a Patent Licensing Arrangement
ALVISO, CA -- 01/03/2012 -- TiVo Inc. (NASDAQ: TIVO) announced today that it has settled its pending patent litigation with AT&T and that the
companies have entered into a mutual patent licensing arrangement. Under the terms of the settlement, AT&T agreed to pay TiVo an initial payment of $51 million, followed by recurring quarterly guaranteed payments through June 2018, totaling $164 million, which together yield minimum payments of $215
million. In addition to these minimum payments, AT&T will pay incremental recurring per subscriber monthly license fees through July 2018 should AT&T's
DVR subscriber base exceed certain levels.

As part of the settlement, TiVo and AT&T 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.

"We are extremely pleased to reach an agreement with AT&T, which acknowledges the value of our intellectual property," said Tom Rogers, CEO and President of TiVo. "This settlement, on the heels of our recent operational success that has resulted in the growth of TiVo's overall subscriber base, is another major accomplishment for TiVo and we believe a great outcome for our shareholders. The combination of guaranteed payments and future additional fees paid to TiVo in the event that AT&T's pay TV business continues to grow in-line with consensus analyst expectations, represents hard-earned compensation for our IP enforcement efforts. The settlement also provides us rights to innovate TiVo products and services under license from AT&T and allows us to avoid significant legal expenses that we expect would have been incurred by us during and after trial.

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JosephB

· #2 · Jan 3, 2012

Would've been even better if AT&T announced a UVerse TiVo

lrhorer

· #3 · Jan 3, 2012

JosephB said:
Would've been even better if AT&T announced a UVerse TiVo

In a round-about way, that may well be exactly what happens, or rather the mirror of what happens. Depending on the actual agreement, it could pave the way for TiVo to make their DVRs, even possibly their existing DVRs, functional on U-Verse systems.

aadam101

· #4 · Jan 3, 2012

Didn't ReplayTV have any patents that are being infringed on? I would imagine since Tivo and ReplayTV were first to market they would have had some too. Is anyone cashing in?

Resist

· #5 · Jan 4, 2012

I'd hope now that Tivo won all this money, that they will use it to fix some of the long standing software bugs.

DaveDFW

· #6 · Jan 4, 2012

Resist said:
I'd hope now that Tivo won all this money, that they will use it to fix some of the long standing software bugs.

Surely you're kidding--that money will go straight into executive bonuses! Software fixes are out of the question.

aadam101

· #7 · Jan 4, 2012

DaveDFW said:
Surely you're kidding--that money will go straight into executive bonuses! Software fixes are out of the question.

Tivo would never dream of putting this money into software development. They might hire some more people to make deals with cable companies.

sbiller

Discussion Starter · #8 · Jan 4, 2012

aadam101 said:
Tivo would never dream of putting this money into software development. They might hire some more people to make deals with cable companies.

TiVO has been spending more than $20M per quarter on development. Arguably much of it has been work related to Virgin Media and other cable operator implementation but now that there is a common series 4 platform the retail TiVo boxes will start to benefit.

stevel

· #9 · Jan 4, 2012

aadam101 said:
Didn't ReplayTV have any patents that are being infringed on? I would imagine since Tivo and ReplayTV were first to market they would have had some too. Is anyone cashing in?

DirecTV owns the ReplayTV patents. TiVo and DirecTV have cross-licensing agreements. I know Intel has at least one patent in this area too, but they aren't doing anything with it.

steve614

· #10 · Jan 4, 2012

aadam101 said:
Didn't ReplayTV have any patents that are being infringed on? I would imagine since Tivo and ReplayTV were first to market they would have had some too. Is anyone cashing in?

I thought I read somewhere that DirectTV bought the ReplayTV patents...

...I could be wrong, though (ETA, maybe not

).

I got an e-mail about the settlement and was hoping to read what patents got cross licensed...what does AT&T have that TiVo would want to use and vice versa.

aadam101

· #11 · Jan 4, 2012

stevel said:
DirecTV owns the ReplayTV patents. TiVo and DirecTV have cross-licensing agreements. I know Intel has at least one patent in this area too, but they aren't doing anything with it.

Thank you. I knew that. You have refreshed my memory.

CuriousMark

· #12 · Jan 4, 2012

steve614 said:
I got an e-mail about the settlement and was hoping to read what patents got cross licensed...what does AT&T have that TiVo would want to use and vice versa.

TiVo was given licenses to the patents that ATT says TiVo infringed in their countersuit, which was also dropped as part of this settlement. I am not sure what those patents covered.

sbiller

Discussion Starter · #13 · Jan 4, 2012

steve614 said:
I thought I read somewhere that DirectTV bought the ReplayTV patents...

...I could be wrong, though (ETA, maybe not ).

I got an e-mail about the settlement and was hoping to read what patents got cross licensed...what does AT&T have that TiVo would want to use and vice versa.

A quick-look at the AT&T patents makes me conclude that they aren't very interesting to TiVo.

AT&T granted TiVo a limited license under its advanced television patents, including the patents that AT&T
had asserted against TiVo (U.S. Patent Nos. 5,809,492, 5,922,045, 6,118,976 and 6,983,478), to make, have made, use, sell, offer to sell and import advanced television technology in
connection with TiVo products and services, including products and services provided to other multichannel video programming service providers, subject to certain limitations and exclusions.

JosephB

· #14 · Jan 4, 2012

The first one is a patent on hierarchical rules, which is so broad I don't see how it's a valid patent. Would cover everything from season passes to your gmail filters. It's very generic

The second one applies to bookmarking a user's spot in an audio recording. It specifically cites audio recordings, so it'd be difficult IMO to apply this to TiVo, but, if the court included video then it would apply to TiVo remembering your position in a show when you stop watching it and come back to finish later

The third one has to do with broadcast TV and decoding UHF signals addressed for specific receivers. Don't know how that'd apply to TiVo

The fourth one would've been the kicker. It applies to assembling all the data you generate via keypresses, what you watch, when you fast forward, how long you watch, thumbs, etc. to generate ratings to sell to programmers.

aaronwt

· #15 · Jan 4, 2012

Well at least it didn't drag out as long as the Dish lawsuit. This one took, what, around 2.4 years to complete?

Just less than half the time of the Dish lawsuit. At least that gets them some guaranteed money coming in over the next six years.

That combined with the continuing money from Dish and new subscribers from cable deals will hopefully push TiVo into the black for multiple quarters.

nrc

· #16 · Jan 4, 2012

With this settlement in the bag it will be interesting to see how Microsoft proceeds. It's been assumed that they were suing TiVo to defend AT&T's use of their DVR platform. They could back off now, but they will have to contend with similar TiVo suits against anyone else using their platform.

If Microsoft chooses to continue their suits against TiVo will TiVo now counter-sue Microsoft directly to ensure that they enough ammunition in the fight?

replaytv

· #17 · Jan 4, 2012

Resist said:
I'd hope now that Tivo won all this money, that they will use it to fix some of the long standing software bugs.

Not likely. Tivo has been losing money for so long except for what they have won from lawsuits.

unitron

· #18 · Jan 4, 2012

sbiller said:
A quick-look at the AT&T patents makes me conclude that they aren't very interesting to TiVo.

A quick look at the figure of $215,000,000.00 makes me conclude they're very interested in that.

dwarner

· #19 · Jan 4, 2012

JosephB said:
Would've been even better if AT&T announced a UVerse TiVo

Yes.. Tivo should have made a deal with them to supply U-Verse-compatible Tivos. They'd get to sell more hardware, and AT&T would gain more customers.

The only thing preventing me from leaving Charter for U-Verse is their DVR.

Chris Gerhard

· #20 · Jan 4, 2012

I didn't realize this suit was going to settle this quickly, great news for TiVo and its shareholders. I can also hope it works out to the benefit of TiVo's customers.

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