NEW YORK – TiVo settled patent disputes with Cisco, Motorola Mobility and Time Warner Cable, averting a trial that was to begin next week and bringing to a close a string of long-running legal squabbles over its pioneering digital video recorder technology.
The terms fell well short of what most TiVo investors had expected, however, and shares of TiVo plunged 19 percent Friday.
Under the agreement, TiVo will get a lump-sum payment of $490 million from Google Inc. and Cisco Systems Inc. Cisco will be responsible for $294 million of that, according to a Securities and Exchange Commission filing.
TiVo will also enter into patent licensing deals with Google, Cisco and Arris Group Inc. Google bought Motorola Mobility in 2012 and sold its set-top-making unit to Arris this year.
TiVo Inc., based in San Jose, Calif., spent the past several years going after pay-TV companies, saying that they were using its patented technology in DVRs. It previously negotiated settlements in similar cases against companies including Dish Network Corp., AT&T Inc. and Verizon Communications Inc. Counting this week’s settlement, TiVo’s awards from patent lawsuits now total about $1.6 billion. TiVo has still struggled to make money, however, posting annual losses in eight of the past 10 years.
Piper Jaffray analyst Michael Olson said that while the amount of the settlement was “disappointing,” it removes some of the uncertainty surrounding TiVo and its legal expenses.
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