Google and Cisco Systems will pay TiVo an upfront sum of $490 million to settle the DVR company’s patent litigation much less than Wall Street anticipated and TiVo also announced that it has resolved its lawsuit against Time Warner Cable.
The payments from Google and Cisco bring the total from awards and settlements related to the use of TiVo’s patents to roughly $1.6 billion, including previous deals with Dish Network, AT&T and Verizon, according to TiVo. In conjunction with approving the terms of the settlement, TiVo’s board approved a major expansion of the company’s stock repurchase program.
However, investors and analysts had expected TiVo’s payout from Cisco, Google (which acquired Motorola Mobility) and TWC to be higher with some estimates around $1 billion for Motorola alone. TiVo itself had said in court filings that it could be entitled to “billions of dollars” in royalty fees from Motorola Mobility based on the number of Motorola DVRs deployed by Time Warner Cable.
On the lower-than-expected size of the settlements, TiVo shares opened down 19% Friday from the previous closing price, after the stock climbed Thursday afternoon on early word about the Google-Motorola settlement.
Read also:
TiVo, Motorola / Google settle DVR patent lawsuit (update: Cisco, Time Warner … (Engadget)
Motorola and Cisco pay TiVo $ 490M to dodge East Texas patent trial (Ars Technica)
TiVo Plunges After Settling DVR Suit With Google's Motorola (Bloomberg)
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