TiVo’s Rogers: Settlement Will Provide Recurring Revenue From Licensing

TiVo (NSDQ: TIVO) CEO Tom Rogers hailed the $500 million patent settlement with Dish Network (NSDQ: DISH) as a historic day for the DVR company. The agreement, which is further explained in an 8-k filing on TiVo’s site, represents the “one of largest technology patent settlements of all time,” the TiVo CEO said.

Rogers added that the amount of the settlement is notable, considering that it only covers a small subset of TiVo’s intellectual property — specifically, the *Time* Warp feature — which covers devices that can record, store, play, rewind and fast forward live TV.

“In addition to highlighting the significant value of our intellectual property, it creates a recurring stream of high-margin licensing revenue that enhances our financial profile while also removing the overhang inherent in this kind of protracted litigation,” Rogers said during a hastily arranged conference call with investors and the media.

On top of the $500 million settlement, Dish has also paid $100 million in licensing fees to TiVo for the *Time* Warp patent, Rogers noted. Over the next several years, TiVo says it will realize at least $50 million in additional annual revenue tied to licensing fees through 2017, when the patent expires.

The settlement also includes a marketing agreement to promote the Blockbuster (NYSE: BBI) Digital Video service. Dish’s $320 million acquisition of Blockbuster closed last week and the company can use all the help it can get to revive the bankrupt rental chain. “This is one of many opportunities that [Dish Network CEO Charlie Ergin] and I have discussed. And we look forward to the possibility of pursuing those further,” Rogers said.

TiVo also intends to use the $500 million settlement to the company’s six-year battle against Dish as a warning to other companies looking to face it in court — particularly AT&T (NYSE: T), Microsoft (NSDQ: MSFT) and Verizon, which are currently involved in pending litigation against TiVo over the *Time* Warp technology. Rogers promises to wage a continued “vigorous” defense of its intellectual property.