The seemingly never-ending court saga of DISH Network (Nasdaq: DISH) versus TiVo (Nasdaq: TIVO) is finally coming to an end. In true Hollywood fashion, the final scene will feature some combination of squealing tires, panic attacks, and gold-dust glitter storms.

After a crystal-clear final ruling in TiVo's favor, Dish is scrambling to avoid shutting down every digital video recorder (DVR) across its network of 14 million subscribers. "Hundreds of thousands, if not millions, of subscribers would likely disconnect service within days," the Dish spokespeople claim. I think they're right, too.

So now Dish has to choose between a few options, all pretty bad:

  • Pay the $300 million it already owes to TiVo in court-ordered penalties and damages -- plus another few million in interest and infringement charges since last July -- and then shut down those pesky, allegedly patent-infringing DVRs come hell or high water. This one would hurt Dish the most, while giving TiVo plenty of ammunition to go after other DVR copycats like Verizon (NYSE: VZ) and AT&T (NYSE: T).
  • Pay as above and then cut a licensing deal with TiVo. This will keep recorders humming along at a cost of a few dollars per month and DVR box. TiVo gets richer, and Dish slinks away with its tail tightly tucked. Once again, the endgame would entail TiVo going bounty-hunting for license agreements and legal settlements elsewhere.
  • Pay up, or not, while keeping unlicensed DVR boxes active everywhere. Depending on what the court does next, this one has the potential to become severely expensive in the long run, thanks to further penalties and contempt-of-court issues.
  • Dish could offer to buy TiVo outright, obviating any and all legal tussles and payments. Then Dish would have TiVo's intellectual property portfolio, and wouldn't it be fun to receive royalties from rivals like Comcast (Nasdaq: CMCSA) and DirecTV (Nasdaq: DTV)? Problem solved!

But if $300 million and change was an expensive choice, TiVo has a $1.55 billion enterprise value before considering the buyout premium you'd need to lock in approval from TiVo's shareholders. With more debt than cash, Dish can ill afford to blow a couple of billion on an acquisition.

The one option that stands out to me as making the most sense is the simplest one: Dish settles its accounts and signs on the dotted line for a license to use TiVo's patents. For Dish and sister company EchoStar (Nasdaq: SATS), it's probably the cheapest option and also the most realistic.

For TiVo, most of these choices open the door to a whole new world of patent-licensing goodness. That would be the gold-dust glitter I'm talking about.

What do you think Dish should do next? Discuss in the comments below.