$215M Patent Infringement Settlement for TiVo
AT&T agreed to pay longtime Irell & Manella client TiVo a minimum of $215 million in licensing fees to settle California and Texas patent infringement suits related to TiVo’s digital video recording technology. The two companies entered into a mutual patent licensing arrangement, which resolved the pending litigation on January 3, just days before a scheduled January 9 trial in Marshall, Texas, on TiVo's claims of infringement against AT&T.
Under the terms of the settlement, AT&T agreed to pay TiVo an initial $51 million payment, followed by recurring quarterly guaranteed payments through June 2018 totaling $164 million, which together yield minimum payments of $215 million. In addition to these minimum payments, AT&T will pay incremental recurring per subscriber monthly license fees through July 2018 should AT&T's DVR subscriber base exceed certain levels.
As part of the settlement, TiVo and AT&T agreed to dismiss all pending litigation between the companies with prejudice. The parties also entered into a cross license of their respective patent portfolios in the advanced television field.
TiVo, the developer of the first commercially available digital video recorder, sued AT&T in 2009 in Texas, alleging that AT&T's U-verse products and services infringe three of TiVo's patents covering DVR technology. In 2010, AT&T launched a counter-suit in California accusing TiVo DVRs of violating three AT&T patents.
This is the second mega-settlement Irell helped TiVo secure. In 2011, TiVo settled its long-running dispute with Dish Network for $500 million, after Dish already paid a judgment of more than $100 million.
The Irell & Manella attorneys representing TiVo included Morgan Chu, Richard Birnholz, Ben Yorks and Tom Werner.