updated 07:20 am EDT, Mon May 2, 2011
Dish and EchoStar pay 500m to settle with TiVo
Dish Network and its parent EchoStar started the month of May by reaching a settlement deal with TiVo. Following the loss of its last appeal in a finding of contempt, Dish and EchoStar said they would pay TiVo a total of $500 million to end all lawsuits and end trade bans on DVRs. About $300 million would be paid up front, while the remaining $200 million would be paid between 2012 and 2017.
In the wake of the deal, the two would cross-license each other's patents. TiVo would give Dish a permanent license to the Time Warp feature and connected patents that were at the heart of the original lawsuit. EchoStar in turn gave licenses to DVR-related patents of its own.
TiVo was appropriately "extremely pleased" with the verdict. The cash flow put it in an "enviable financial and strategic position" and was also proof of leverage TiVo could use against other companies it believed were copying its technology.
Dish CEO Charlie Ergen spun the settlement. His company had "tremendous respect" for TiVo executives and claimed it had always believed it could work with TiVo even in the heat of the lawsuit. The deal did give Dish a "competitive advantage" since it was one of the few TV providers that had legal access to the Time Warp feature and could produce DVRs that others couldn't.
The settlement ends a legal battle that had started in 2006. TiVo had already won a victory but claimed Dish hadn't properly worked around the patents triggering a ban. Attempts by Dish to challenge the patents failed and quickly left it with no recourse.