TiVo Inc. (TIVO) said it will receive an upfront lump-sum
payment of $490 million from Google Inc. (GOOG) and Cisco Systems
Inc. (CSCO) to settle patent litigation with both companies.
As part of the settlement, which also involves Time Warner Cable
Inc. (TWC), TiVo agreed to enter into patent licensing deals with
Cisco, Google and Arris Group Inc. (ARRS).
In conjunction with the deal, TiVo's board decided to double the
size of its stock buyback program to $200 million and extend its
deadline by an additional two years to August 29, 2015.
Google's Motorola unit had confirmed that it reached a
settlement deal with TiVo on Thursday, though terms of the
agreement weren't immediately disclosed. The patents TiVo initially
sued Motorola over included technology encompassing a digital video
recording and playback device and methods for more efficiently
playing recorded video.
TiVo, a TV set-top box maker, has mostly posted losses since the
second half of 2009, but has seen positive returns from its legal
efforts, reaching settlements with companies including AT&T
Inc. (T), EchoStar Corp. (SATS), Dish Network Corp. (DISH) and
Verizon Communications Inc. (VZ).
Two years ago, Dish Network Corp. (DISH) and its former unit
EchoStar Corp. (SATS) agreed to pay TiVo $500 million to settle
their seven-year patent dispute. In January 2012, the company also
got at least $215 million as part of a settlement with
AT&T.
TiVo Chief Executive Tom Rogers said Friday the latest
settlement further enhances the company's balance sheet, bringing
its cash position to over $1 billion.
"We intend to use our significant capital resources to drive
shareholder value, including more aggressively returning capital to
shareholders under our newly increased share repurchase
authorization," he said.
As part of the settlement, TiVo and Motorola, Cisco, and Time
Warner Cable agreed to dismiss all pending litigation between the
companies. TiVo will recognize a portion of the payment as past
damages during its second quarter and the remainder over time. The
company also expects its profits for the rest of the fiscal year
and beyond to benefit from lower litigation spending.
Last month, TiVo's fiscal first-quarter loss narrowed as the
company continued to increase its subscriber rolls and reported
stronger revenue.
TiVo's shares closed Thursday at $13.71 and were off 20% at
$10.99 premarket. The stock is up 11% this year.
--Ian Sherr contributed to this article.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires