My Story, AT&T to pay TiVo $215M to settle patent lawsuit

AT&T has agreed to pay TiVo at least $215 million to settle a patent-infringement lawsuit involving the digital video recorder pioneer.

AT&T will pay TiVo more than that minimum amount should AT&T's DVR subscriber base exceed certain levels, the companies said in a statement announcing the mutual licensing pact. The announcement sent TiVo shares up $1.38, or 15.5 percent, to $10.30 in after-hours trading.

TiVo CEO Tom Rogers said in a statement he was pleased with the settlement.

"The combination of guaranteed payments and future additional fees paid to TiVo in the event that AT&T's pay TV business continues to grow in-line with consensus analyst expectations, represents hard-earned compensation for our IP enforcement efforts," Rogers said. "The settlement also provides us rights to innovate TiVo products and services under license from AT&T and allows us to avoid significant legal expenses that we expect would have been incurred by us during and after trial."

The settlement with AT&T is the second TiVo has secured in the past 12 months. In May, Dish Network and EchoStar agreed to pay TiVo $500 million to settle a 4-year-old patent-infringement case involving TiVo's patent for a "multimedia time warping system."