DISH Network and EchoStar agreed to pay $500 million to TiVo

After years of patent litigation, TiVo Inc., EchoStar Corporation, and DISH Network Corporation have finally settled on certain terms. 

TiVo Inc. developed and marketed the digital video recorder, or DVR, which is a system for recording television programs. It was introduced in 1999, and allows users to record television shows as well as search for shows to record based on their interests though the "WishList" option. When the DVR is connected to a home network, users can perform an advanced search, online scheduling, download movies and television shows, and view personal photos. 

In 2004, TiVo filed a lawsuit claiming that DISH and EchoStar had violated its patents with the DVR technology they were distributing to customers. Since then, an ongoing war has ensued, where many battles ended in TiVo's favor.

Now, under the terms of the latest settlement, DISH and EchoStar agreed to pay $500 million to TiVo. The first $300 million will be paid up front while the other $200 million will be paid in six annual payments between 2012 and 2017. 

In addition, TiVo granted DISH Network a license under its Time Warp patent, which is US Patent No. 6,233,389, and some other related patents during their lifespan. As for EchoStar, TiVo granted it a license under the same patent as well as other related patents for the lifespan of said patents. EchoStar can only make certain DVR-enabled products for DISH Network and two international customers only. In return, EchoStar granted TiVo a license under specific DVR-related patents "for TiVo-branded, co-branded and ingredient-branded products."

At this point, TiVo, DISH Network and EchoStar have agreed to end all pending litigation. EchoStar and DISH Network noted that they have "tremendous respect" for TiVo, and are pleased by the outcome of the long-lasting litigation. EchoStar and DISH Network believe they now have a competitive advantage by owning the rights to operate under TiVo's Time Warp patent, and are happy to put all of this legal business behind them. 

TiVo shares their sentiment. In fact, TiVo will help DISH Network with the Blockbuster digital 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."

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