Verizon to pay more than $250 million in TiVo settlement

By Sinead Carew and Liana B. Baker

(Reuters) - TiVo Inc will receive at least $250.4 million from Verizon Communications Inc as part of a patent litigation settlement, the video recorder pioneer said on Monday, sending its shares up more than 4 percent.

TiVo, whose brand is synonymous with digital video recorders, has had to turn to litigation to generate revenue from licensing fees as it struggles to fight competition from low-cost rivals.

Analysts said the Verizon settlement could bode well for a TiVo victory in cases against other companies, including Time Warner Cable Inc and Motorola Mobility, which is now owned by Google Inc.

The settlement, a big victory for TiVo, follows a similar deal it reached in January with AT&T Inc, which agreed to pay $215 million.

TiVo had also prevailed in a similar case against Dish Network Corp and EchoStar Corp in May 2011.

Regarding the ongoing cases, "Verizon has set a strong precedent for Motorola to settle," Brean Murray analyst Todd Mitchell said.

TiVo had sued Time Warner Cable in a lawsuit connected with the Motorola litigation, and Monday's settlement only improves the company's position, according to Lazard Capital Markets analyst Barton Crockett.

"It also potentially sets the stage for a similar settlement with Time Warner Cable over the next year or so," Crockett said.