Finally, it’s official. TiVo’s (Nasdaq: TIVO) patents related to digital video recording are not only defensible -- they’re worth at least $500 million.

After a seven-year court battle during which the DVR pioneer traded barbs with DISH Network (Nasdaq: DISH) and EchoStar (Nasdaq: SATS), the parties have agreed to a settlement that pays TiVo $300 million up front and $200 million more over six payments made between 2012 and 2017.

For TiVo, the settlement builds on $104.6 million in damages awarded to it by a federal court in 2008. For Dish and EchoStar, the agreement brings an end to an ugly battle that consumed resources and worried consumers.

TiVo is the bigger winner here, but not because of the size of the windfall. Dish’s payments -- at best -- offset hundreds of millions in legal fees paid by TiVo since the company first accused EchoStar of infringement in 2004.

We can’t say how much exactly. All we know for sure is that TiVo has paid $274 million in general and administrative expenses since 2005, and that $14.1 million of last year’s $14.7 million rise was directly attributable to an “increase in legal spending” for litigation against EchoStar, AT&T (NYSE: T), and Verizon (NYSE: VZ).

The settlement repays TiVo for its trouble and then adds a kicker. What matters to shareholders -- and why they’re bidding up shares of TiVo by more than 5% as I write this -- is the precedent. Now that its highest-profile patent opponent has opted to open its wallet, others may as well.

Do you agree? Disagree? Tell us what you think about the settlement and TiVo’s legal strategy using the comments box below. You can also rate TiVo in Motley Fool CAPS.

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