Google Sweetened Motorola Deal With Arris By Promising To Cap Liability In TiVo’s Billion Dollar+ Patent Claim

During the analyst conference call discussing telecom manufacturer Arris’ just-announced acquisition of Motorola Home, one of the big topics (to Arris CEO Bob Stanzione’s apparent exasperation) was TiVo’s lawsuit against Motorola Mobility and its owner Google.

In an October court filing, TiVo claimed that Motorola is responsible for “massive production of infringing DVRs” that “dwarfs the numbers of accused products at issue in TiVo’s previous cases.” The filing also states, “TiVo’s damages claim is likely to run into the billions of dollars,” and it says that TiVo will try to get the courts to stop Motorola from selling the allegedly infringing products. (Motorola has its own patent-infringement claims against TiVo.)

The threat of a huge patent lawsuit would probably cast a cloud over any acquisition talks, but Stanzione said Google has actually agreed to cap Arris’ liability in the case to “a very small number.” He didn’t say what that number was, but when one of the analysts on the call asked if Arris might be liable for $1 billion in damages, Stanzione laughed and suggested that it was much lower than that — and he added that TiVo won’t necessarily win the case.

“It’s not something you have to worry about in terms of the financial impact on Arris,” he said, later adding, “Google has taken that risk off the table for Arris.”

Another analyst asked if it was possible that Arris would be threatened if TiVo won an injunction that stopped the sale of certain Motorola products. Stanzione acknowledged that the company would have “exposure” in that situation, “but we think that’s a very remote possibility.”

In addition to taking on the financial liability, Google will also continue to take the lead in the legal case, Stanzione said, while Arris is “going to help them as best as we can or as we’re asked to.”

Also on the patent front, Stanzione reiterated that as part of the deal, Arris is acquiring “a generous patent portfolio” and licenses to a broad range of Motorola Mobility patents.