TiVo shares gained some considerable ground on Friday, helped by a court ruling which went in favour of TiVo in its patent infringement claim against AT&T’s U-verse digital TV service.
US District Court Judge David Folsom issued what is seen as a major victory for TiVo and according to analysts covering the sector, will probably result in AT&T coming to the negotiating table for a settlement. Judge Folsom, in his ruling, laid down clear guidelines as to how courts should be reading key disputed terms and passages in the three DVR patents TiVo asserts AT&T has violated.
“Most importantly, the judge sided with TiVo and did not change any meaningful definitions for the ‘389’ patent that was at the center of prior litigation. Seeing this, we believe AT&T will be incented to settle, as the risk of losing is too high,” said Lazard Capital’s Barton Crockett in a note October 14.
The judge’s ruling is bound to affect another key case, that of TiVo against Verizon, in a similar action given that Judge Folsom is also handling that action.
There are about 4.5 million to 5 million DVRs installed with either AT&T or Verizon, and an analyst at Janney Capital (Tony Wible) believes that at about $1 a month, this U-verse decision, plus a probable Verizon decision, would put annually $54 million to $60 million a year into TiVo’s bank account.
Tivo ended the day up 65 cents (6.6 per cent) at $10.56.