More price increases here we come
FiOS settlements cost Verizon more than $500 million
TiVo moves on to other cases, ActiveVideo and Verizon cross-license patents
September 24, 2012 | By Jim Barthold
Verizon (NYSE: VZ) will pay out more than $500 million ($510 million and change, to be exact) to settle a pair of lawsuits filed against its FiOS TV service. The deep-pocketed telco will pay TiVo (Nasdaq: TIVO) more than $250.4 million in a DVR dispute and cloud TV developer ActiveVideo more than $260 million in a VoD spat.
Although it's tough to believe anyone would be happy about paying out that much money, Verizon spokesman Ed McFadden issued a statement to Bloomberg saying the carrier is "pleased to have reached settlements with both TiVo and ActiveVideo in these two matters."
There were alternatives to paying the money, but they weren't pleasant. A loss in court to TiVo could have meant Verizon would need to remove DVR capabilities from its FiOS service. Something similar happened to Dish in a previous court battle.
In ActiveVideo's case, the two had already gone to court and agreed to a patent cross-license after an appeals court ruled that a jury got it right when it ordered Verizon to pay ActiveVideo $2.74 a month for each FiOS subscriber as remuneration for using ActiveVideo's cloud-based service.
That left only the specific amount of money to be determined, and, while ActiveVideo declined to say exactly how much that would be, it did confirm Verizon would have to shell out more than $250 million to the closely-held California company whose biggest cable customer is Verizon archenemy Cablevision (NYSE: CVC).
"[W]e can confirm that the parties agreed to cross-license their patents, agreed not to sue each other for a period of years, and Verizon agreed to pay the $260 million previously ordered by the district court and an additional unspecified amount of money," ActiveVideo President-CEO Jeff Miller said in his company's statement. "In the end our technology and its value have been recognized."
TiVo is hardly finished sweeping through the MVPD and MVPD vendor space. The DVR pioneer "will now focus their legal efforts on potentially larger infringement claims against Google (Nasdaq: GOOG), Cisco (Nasdaq: CSCO) and Time Warner Cable (NYSE: TWC)," Kevin Stadtler, principal of Stadtler Capital Management, told Bloomberg.
TiVo's patent actions against Motorola Mobility (still the set-top box maker for Google) and Cisco involve set-top boxes made for and used by Time Warner Cable. Moto's case is slated to head to trial in May 2013; Cisco is going to court in 2014.