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What: Shares of TiVo
So what: The two companies have entered into a mutual patent licensing arrangement. Under the deal, Ma Bell will pay $51 million to TiVo up front and subsequently fork over recurring quarterly guaranteed payments through June 2018, totaling another $164 million. Together, it all adds up to a minimum of $215 million in payments.
Now what: On top of that, AT&T will pay incremental recurring license fees per subscriber monthly through July 2018 if the company's DVR subscriber base exceeds certain thresholds. The pair are dismissing all pending litigation between them as part of the settlement, and they will cross-license patent portfolios related to advanced television. Verizon also currently has pending litigation with TiVo, so it may be the next to reach a settlement.
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Fool contributor Evan Niu owns shares of AT&T and Verizon Communications, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.