Under the terms of the settlement, Dish 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.
The three companies 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
TiVo also granted EchoStar a license under the same â€˜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
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," stated Charlie Ergen, Dish Network
chairman and CEO. "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, TiVo president and CEO. "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 â€˜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."
TiVo said it will also 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."