Cisco to pay $294M to TiVo in patent settlement

Cisco Systems (CSCO) disclosed that it, ARRIS Group, Google (GOOG) and TiVo (TIVO) entered into an agreement to settle and dismiss all outstanding litigation between them, provide licenses to certain patents between the parties, and release patent infringement claims between the parties with respect to all outstanding litigation in exchange for a monetary payment to TiVo by Cisco and Google. Pursuant to the agreement, Cisco will pay TiVo a single lump sum of $294M. Cisco and TiVo have agreed that Cisco will receive a perpetual license to the patents-in-suit. Cisco and TiVo will also enter into a limited cross-license applicable to the video field, subject to certain limitations and exclusions, as well as cross-covenants not to sue the other party for infringement of any other patents for a period of five years. The settlement expires ten years from the effective date. Cisco expects to recognize charges in Q4 as consideration for past damages, with an impact of 3c per share to GAAP earnings per share. The remaining balance of the charges is expected to be recognized in future fiscal years as licensing fees and Cisco does not believe such charges will have a material impact on its future results of operations, cash flows, or financial position.

Advertisement