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The deal signals the end to a legal battle that began in 2009 and was scheduled to go to trial October 1.
Under the terms of the settlement, Verizon will initially pay $100 million, followed by quarterly payments. The agreement settles all litigation between the companies.
The two companies are also considering deals to work together to make Verizon’s Redbox content accessible to TiVo users.
The news sparked an upturn of 10 per cent in the value of TiVo’s shares.
Tom Rogers, CEO and president of TiVo said: ”We also look forward to working together on a variety of future opportunities as we continue to expand the content choices available to TiVo subscribers.
“As with prior settlements, we also benefit by being able to operate our business under license from Verizon and by avoiding future legal expenses that we would have incurred during and after trial. Furthermore, we believe this settlement positions us well with respect to future enforceability of our patents.”
A Verizon spokesman said the company was pleased to have reached the settlement.