TiVo rises and falls

TiVo_newDespite winning a total of $490 million from a trio of heavy-hitting lawsuits (with Google/Motorola, Time Warner and Cisco) and seeing its share price rocket more than 10 per cent on June 6th. The market then seemed to say ‘Is that all there is?’ and promptly saw a 20 per cent plunge on June 7th.

Indeed, the consensus is now that TiVo might just have folded a little too early in the multiple poker games that it was playing with its industry rivals. TiVo itself had publicly said that it was looking to win upwards of a $1 billion in its actions with the trio over misuse of its TimeWarp patent. One respected analyst said that Tivo, by common consent, not only had a rock-solid claim as to the strength of its patents but also had a rock-solid attorney playing its hand in the shape of Morgan Chu “so it is surprising that TiVo would not take their chances at trial and hope for a more favourable outcome,” said Thomas Claps of Susquehanna International.

But $490 million is not to be sneezed at, and additional to the lawsuit patents, the various litigants now have to enter into a patent licensing agreement for using aspects of TiVo’s technology.

TiVo has – to date – collected more than $1.6 billion in settlements and judicial awards, and has licensing terms in place with Dish, AT&T, Verizon and plenty of others.

Cisco, in an SEC filing on Friday, said that it will cough up $294 million to TiVo, and this alone will cost its 3 cents per share from its Q4 results.

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