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TiVo vs. Dish: Settlement reached. Dish to pay $500 million


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#1 OFFLINE   Curtis52

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Posted 02 May 2011 - 04:57 AM

"WASHINGTON (AP) -- Dish Network Corp. and EchoStar Corp. will pay TiVo Inc. $500 million to settle a patent lawsuit over digital video recorder technology, the companies said Monday.TiVo, based in Alviso, Calif., first sued Dish and EchoStar in 2004 for infringing on patents covering its "Time Warp" digital video recorder technology.
The recorders allow users to digitally record television programs and then play them back, as well as pause, fast-forward and rewind.
Under the settlement, Dish and EchoStar will initially pay TiVo $300 million. The remaining $200 million will be distributed in six annual installments between 2012 and 2017.
Also, TiVo granted Dish Network a license under its Time Warp patent and related patents until they expire. TiVo also granted EchoStar a license to make certain DVR-enabled products solely for Dish Network and two international customers.
EchoStar granted TiVo a license under patents EchoStar owns for TiVo-branded, co-branded and ingredient-branded products.
EchoStar is the former parent company of Dish Network and operates the satellites on which its service runs. It spun off Dish in 2008.
TiVo said it will also help Dish Network promote the Blockbuster digital video service. Dish bought Blockbuster Inc. out of bankruptcy last month.
The settlement deal comes on the heels of a decision by a panel of federal appeals judges holding Dish and EchoStar in contempt of court for failing to abide by an injunction. The judges had decided to send the case back to a lower court to consider whether technology being used in newer Dish boxes still infringes on TiVo's patents.
The April 20 ruling required Dish and EchoStar to disable the boxes and awarded $90 million in damages to TiVo. The settlement dismisses that judgment."


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#2 OFFLINE   Jason Nipp

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Posted 02 May 2011 - 06:04 AM

TIVO, DISH NETWORK AND ECHOSTAR ANNOUNCE HALF-BILLION DOLLAR SETTLEMENT OF PATENT LITIGATION


ALVISO, Calif., and ENGLEWOOD, Colo. – May 2, 2011 – TiVo Inc. (NASDAQ: TIVO), DISH Network Corporation (NASDAQ: DISH), and EchoStar Corporation (NASDAQ: SATS) announced today that they have settled all of their ongoing patent litigation.
Under the terms of the settlement, DISH Network and EchoStar agreed to pay TiVo $500 million, including an initial payment of $300 million with the remaining $200 million distributed in six equal annual installments between 2012 and 2017. TiVo, DISH Network and EchoStar agreed to dismiss all pending litigation between the companies with prejudice and to dissolve all injunctions against DISH Network and EchoStar.
The parties also granted certain patent licenses to each other. TiVo granted DISH Network a license under its Time Warp patent (US Pat. No. 6,233,389) and certain related patents, for the remaining life of those patents. TiVo also granted EchoStar a license under the same ‘389 patent and certain related patents, for the remaining life of those patents, to design and make certain DVR-enabled products solely for DISH Network and two international customers. EchoStar granted TiVo a license under certain DVR-related patents for TiVo-branded, co-branded and ingredient-branded products.
We have tremendous respect for TiVo’s management, and we have always said that regardless of the outcome of the case, there were many ways that we could work together with TiVo,” said Charlie Ergen, Chairman and CEO of DISH Network. “The results of TiVo’s formidable intellectual property enforcement program speak for themselves, and consequently, we are pleased to put this litigation behind us and move forward. Additionally, we believe that our agreement with TiVo provides us a competitive advantage as one of the few multichannel operators with rights to operate under TiVo’s Time Warp patent, which ultimately will allow us to enhance the performance of our award-winning DVRs. We look forward to continuing to offer DISH Network customers the most choices in video service.”

“We are extremely pleased to reach an agreement with DISH Network and EchoStar which recognizes the value of our intellectual property,” said Tom Rogers, president and CEO of TiVo. “The compensation from this settlement, including the resulting reduction in legal expenditures, puts TiVo in an enviable financial and strategic position. This settlement, which brings the total compensation paid by DISH Network for use of TiVo’s ‘389 patent family to over $600 million, demonstrates the significant return afforded to our shareholders by diligent enforcement of TiVo’s intellectual property rights. Those efforts will aggressively continue with other parties.”

In addition, TiVo will play a role in helping DISH Network promote the Blockbuster digital video service. Ergen added, “We are excited to work with TiVo to help develop our Blockbuster video service. Resolving the patent infringement case allows us to further engage with TiVo on a variety of exciting strategic initiatives, like Blockbuster, where we are uniquely positioned to collaborate.”

About TiVo Inc.
Founded in 1997, TiVo Inc. (NASDAQ: TIVO) developed the first commercially available digital video recorder (DVR). TiVo offers the TiVo service and TiVo DVRs directly to consumers online at www.tivo.com and through third-party retailers. TiVo also distributes its technology and services through solutions tailored for cable, satellite, and broadcasting companies. Since its founding, TiVo has evolved into the ultimate single solution media center by combining its patented DVR technologies and universal cable box capabilities with the ability to aggregate, search, and deliver millions of pieces of broadband, cable, and broadcast content directly to the television. An economical, one-stop-shop for in-home entertainment, TiVo's intuitive functionality and ease of use puts viewers in control by enabling them to effortlessly navigate the best digital entertainment content available through one box, with one remote, and one user interface, delivering the most dynamic user experience on the market today. TiVo also continues to weave itself into the fabric of the media industry by providing interactive advertising solutions and audience research and measurement ratings services to the television industry. www.tivo.com


TiVo and the TiVo Logo are trademarks or registered trademarks of TiVo Inc. or its subsidiaries worldwide. © 2011 TiVo Inc. All rights reserved. All other trademarks are the property of their respective owners.

About DISH Network
DISH Network Corporation (NASDAQ: DISH), through its subsidiary DISH Network L.L.C., provides more than 14.19 million satellite TV customers, as of March 31, 2011, with the highest quality programming and technology with the most choices at the best value, including HD Free for Life. Subscribers enjoy industry-leading customer satisfaction, the largest high definition line-up with more than 200 national HD channels, the most international channels, and award-winning HD and DVR technology. DISH Network Corporation is a Fortune 200 company. Visit www.dish.com.

About EchoStar Corporation
EchoStar Corporation (Nasdaq: SATS), provides equipment sales, digital broadcast operations, and satellite services that enhance today’s digital TV lifestyle, including products from Sling Media, Inc., a wholly owned subsidiary. Headquartered in Englewood, Colo., EchoStar has more than 25 years of experience designing, developing and distributing award-winning television set-top boxes and related products for pay television providers and is creating hardware and service solutions for cable, Telco, IPTV and satellite TV companies. EchoStar includes a network of 10 digital broadcast centers and leased fiber optic capacity. EchoStar also delivers satellite services through 10 satellites and related FCC licenses. For more information, please visit www.EchoStar.com.

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#3 OFFLINE   Sim-X

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Posted 02 May 2011 - 06:33 AM

Well hey now they will have some cash to finish the DirecTV DVR that will never get done. :rolleyes:

#4 OFFLINE   RasputinAXP

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Posted 02 May 2011 - 06:42 AM

Hah! And now, Charlie moves on.

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#5 OFFLINE   jacmyoung

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Posted 02 May 2011 - 06:42 AM

Well hey now they will have some cash to finish the DirecTV DVR that will never get done. :rolleyes:


I wouldn't hold my breath on that one but good for the two to settle. Looks to me a little less than what Charlie's offer before the en banc order came down when he offered about $120M a year for the life of the patent.

So he pays a $500M lump sum, gets to use the patents, hopefully Dish DVRs can consume less energy now and save subs' electric bills a little:)

As far as Blockbuster, I also wish them success, I have always said, the two companies are like minded, they need each other more than anyone else, it is time to put some real pressure on Netflix. As a DirecTV sub, it is also a good news because DirecTV will have to step up too.

Edited by jacmyoung, 02 May 2011 - 07:02 AM.


#6 OFFLINE   rjruby

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Posted 02 May 2011 - 06:47 AM

So he pays a $500M lump sum, gets to use the patent, hopefully Dish DVRs can consume less energy now and save subs' electric bills a little:)


Actually he pays $300M now and $200M over 6 years.

#7 OFFLINE   bobukcat

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Posted 02 May 2011 - 06:54 AM

Wow, two things I didn't think I'd see anytime soon happen within days of each other. Bin Laden is killed by US Forces and E* and TiVo settle their patent disputes! :icon_peac

I hope this means improved performance for the E* DVRs going forward. I really love my 622s, don't get me wrong, but it could always be even better - right?!

#8 OFFLINE   jacmyoung

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Posted 02 May 2011 - 06:55 AM

Actually he pays $300M now and $200M over 6 years.


My bad, $300M plus $33M a year till the end of patent life. The guy probably owed TiVo at least $100M (in addition to the $110M he already paid a few years back) for the use of the old software before he replaced it with the new software, with interest and other fees, this is basically a $33M a year licensing deal to use TiVo's patents plus covering TiVo's legal bills.

Edited by jacmyoung, 02 May 2011 - 07:02 AM.


#9 OFFLINE   klang

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Posted 02 May 2011 - 07:03 AM

Who, if anyone, actually won this?

#10 OFFLINE   jacmyoung

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Posted 02 May 2011 - 07:09 AM

Who, if anyone, actually won this?


I think they both did. They were both suffering competitively against the bigger companies as DirecTV, ATT/Uverse and Verizon have taken their subs away.

For those who predicted years of fight to come, it is a big surprise I'd say:)

#11 OFFLINE   DishTSR3Mentor

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Posted 02 May 2011 - 07:45 AM

I knew the second Charlie bought Blockbuster that he would be more able to deal with Tivo because Blockbuster is a major retailer for Tivo standalone dvrs. I'm sure all he had to do was say, "we're yanking tivo from Blockbuster" to bring them to the table.
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#12 OFFLINE   scooper

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Posted 02 May 2011 - 07:49 AM

I think they both did. They were both suffering competitively against the bigger companies as DirecTV, ATT/Uverse and Verizon have taken their subs away.

For those who predicted years of fight to come, it is a big surprise I'd say:)


A Pleasant surprise - now they can move on to other issues.
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#13 OFFLINE   harsh

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Posted 02 May 2011 - 07:56 AM

Well hey now they will have some cash to finish the DirecTV DVR that will never get done. :rolleyes:

TiVo needs some serious fundage to bulk up their war chest to continue to defend their patents. The whole proceeding did a lot more harm than good to TiVo's case.

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#14 OFFLINE   Richard King

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Posted 02 May 2011 - 07:57 AM

IF I read the settlement properly, Echostar is permitted to continue to sell to its existing customer base, but not to new customers. This would explain the stock action on SATS this morning. I sold all my SATS stock on reading the settlement, which is certainly not in their favor from my reading. Anyone read this any differently?

Overall, the settlement is MUCH smaller than I had anticipated AND spreading it out over time makes it even smaller.
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#15 OFFLINE   harsh

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Posted 02 May 2011 - 08:03 AM

Overall, the settlement is MUCH smaller than I had anticipated AND spreading it out over time makes it even smaller.

You answered your own question here. This closes the door on the uncertainty of disablement as well as the size of the awards/settlements. I think you may have goofed with the divestiture.

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#16 OFFLINE   Stuart Sweet

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Posted 02 May 2011 - 08:08 AM

All I can say is, it's about time.
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#17 OFFLINE   klang

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Posted 02 May 2011 - 08:09 AM

IF I read the settlement properly, Echostar is permitted to continue to sell to its existing customer base, but not to new customers.


Where do you see this? Hard to believe Dish would agree to that.

Edit: Do you mean new Dish customers or Echostar making DVR's for additional companies?

Edited by klang, 02 May 2011 - 08:14 AM.


#18 OFFLINE   lparsons21

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Posted 02 May 2011 - 08:14 AM

IF I read the settlement properly, Echostar is permitted to continue to sell to its existing customer base, but not to new customers. This would explain the stock action on SATS this morning. I sold all my SATS stock on reading the settlement, which is certainly not in their favor from my reading. Anyone read this any differently?


According to post #1, it doesn't appear that way at all to me. Are you reading something else?

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#19 ONLINE   Doug Brott

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Posted 02 May 2011 - 08:16 AM

It's good that both companies finally came to their senses. It really made no sense to fight this hard as it was just a big money pit for both.
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#20 OFFLINE   jacmyoung

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Posted 02 May 2011 - 09:01 AM

According to post #1, it doesn't appear that way at all to me. Are you reading something else?


You are correct, there is no such thing, they settled all disputes in this litigation, Dish can use TiVo's patents, if they could not do this or that then they did not get to use them.




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