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Verizon pays out $500 million + to settle two patent disputes

Attention, Verizon customers: Your bills may be taking a slight trend upwards over the next few months, as your provider finds itself saddled with a brand new $500 million+ debt following the settlement of two separate lawsuits surrounding potential patent infringement concerning the company’s Video on Demand technology.

The company announced today that it has settled lawsuits with both TiVo and a company known as ActiveVideo over allegations that Verizon had infringed on proprietary technology relating to VoD, DVR and interactive televisions. In the case of the ActiveVideo settlement, describing it as a settlement is definitely positive spin on Verizon’s part; the situation there is less “settlement” and more “finally agreeing on just how much money to pay in damages,” considering that that particular case had been decided twice in court – once in “regular” court, and once on appeal – and both times decided in ActiveVideo’s favor.

The exact sum Verizon owes ActiveVideo is uncertain at this time; the appeals court ruled that the former company owed $260 million to the latter, but exact terms of the settlement between the two have not been publicly disclosed at this time, meaning that it’s possible that the actual figure is significantly higher.

In addition to that sum, Verizon has also settled a long-lasting dispute with TiVo over DVR technology patents, with the agreement between companies seeing Verizon pay an initial $100 million payment, followed by additional quarterly payments until July, 2018 that will ultimately total somewhere in the region of $150.4 million. Additionally, Verizon will pay monthly fees to continue to use the particular technology if its DVR subscriber base rises above a certain level, and has until December 21 of this year to come to an agreement with TiVo that will see the two essentially go into business together, with – it’s believed, Verizon offering TiVo boxes to its customers. If that happens, then Verizon will earn a $29.4 million credit towards the total $250.4 million it owns TiVo.

(Another possible collaboration would see TiVo boxes carry a streaming video service currently being piloted by Verizon and Constar’s Redbox as a Netflix killer. If the company ends up going with this, then it will be in addition to TiVo’s existing streaming offerings with Netflix and Amazon Prime.)

This is, of course, just one of many patent infringement suits that TiVo has launched over its DVR technology. The outcome, in many cases, mirrors what’s happened here, with all parties either settling out of court, and the court finding in TiVo’s favor, and the infringer ending up paying a monthly fee to essentially license out the technology from that point on. In a statement accompanying news of the settlement, TiVo CEO Tom Rogers seems to recognize that this latest result only strengthens the company in any similar legal action, being quoted as saying that the company “believe[s] this settlement positions us well with respect to future enforceability of our patents.”

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