Dish, EchoStar to Pay TiVo $500 Million to Settle Suit

Deal ends years-long dispute over DVR patents

Dish Network and its parent EchoStar announced Monday morning that they plan to pay TiVo $500 million to settle an ongoing patent dispute.

The settlement has been years in the making. TiVo had sued the companies (which at the time were a single entity) in 2004 over patent infringement relating to TiVo’s DVR technology. TiVo won the suit, but then in May 2010, a federal appeals court decided to reconsider the verdict. Two weeks ago, the court ruled that it would uphold the verdict.

Dish and EchoStar will pay an initial sum of $300 million, and the remaining $200 million will be paid in installments between 2012 and 2017. The settlement will dismiss all further litigation with prejudice and dissolve injunctions against Dish and EchoStar.

Additionally, TiVo has granted Dish and EchoStar licenses under its TimeWarp patent, which “ultimately will allow us to enhance the performance of our award-winning DVRs,” said Dish CEO and chairman Charlie Ergen. (TimeWarp is the technology that allows users to record a TV program while watching another simultaneously.) TiVo will also play a role in promoting Dish’s Blockbuster digital video service.

"The compensation from this settlement, including the resulting reduction in legal expenditures, puts TiVo in an enviable financial and strategic position,” said TiVo president and CEO Tom Rogers.