TiVo was a digital video recording device (DVR) pioneer, but as competition has grown over the years, the company has turned to business litigation to generate revenue from licensing fees. Their most recent legal endeavor involved a patent lawsuit against Google Inc.'s Motorola Mobility and Cisco Systems. The patent trial was scheduled to begin soon in Texarkana, Texas, but Cisco and Motorola agreed to pay a lump sum of $490 million to end all litigation. This is another big win for TiVo, as it has been very successful in legal battles against larger rivals that are making competing devices that infringe its patents. Other settlements include:
- $500 million from EchoStar in 2011, seven years after they filed the initial lawsuit. It went through an East Texas jury trial, with TiVo winning. There were many appeals and disputed software design-arounds, but in the end, EchoStar decided to settle when they faced an injunction that could have shut down many of their DVRs.
- $215 million from AT&T in January 2012
- $250 million from Verizon in August 2012
All in all, TiVo claims they have made a total of $1.6 billion from patent settlements.
"TiVo's legal victories enhance its ability to monetize its intellectual property in alternative channels," Janney Capital Markets analyst Tony Wible said in a client note.
Unfortunately, aside from their successful lawsuits, TiVo's non-patent operations have lost money for many years. And, as large as the settlement they received from Motorola and Cisco was, it actually disappointed many investors who expected a much bigger payout.
If you need help with a business litigation matter of your own, contact us today.