TiVo surges on AT&T settlement

Shares in TiVo (Nasdaq: TIVO) jumped more than 7 percent Wednesday morning after the company announced that AT&T (NYSE: T) will pay the digital video recorder manufacturer at least $215 million to settle a patent infringement lawsuit.

TiVo, which had accused AT&T of violating its intellectual property through the DVR it supplies to subscribers of its U-verse TV service, said AT&T agreed to pay it $51 million, followed by quarterly payments through June 2018 which will total $164 million. AT&T, which counted 3.6 million U-verse TV subscribers at the end of the third quarter, may also pay TiVo additional monthly license fees if its U-verse subscriber base exceeds certain levels that the companies did not disclose.

The AT&T settlement boosts the strength of TiVo's DVR patent portfolio, and could help the company reach similar deals with other pay TV providers and technology companies. Dish Network (Nasdaq: DISH) agreed last year to pay TiVo $500 million to settle a patent infringement suit. TiVo also has also filed infringement suits against Verizon (NYSE: VZ), Microsoft (Nasdaq: MSFT) and Motorola Mobility (NYSE: MMI).

TiVo stock was trading at $9.55 at 10:30 a.m. ET on Wednesday, up 63 cents, or 7.06 percent.

For more:
- see TiVo news release

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