Google apparently sweetened the sale of its Motorola set-top box business to Arris in an unusual way -- by largely indemnifying Arris against potential losses in a Motorola-TiVo patent tussle.
According to TechCrunch, which listened to a conference call Arris CEO Bob Stanzione held with analysts yesterday, Google has offered to cap any liability Arris might face in the event Motorola's set-top box business Home is found to have violated patents owned by DVR maker TiVo.
The trouble started in October when TiVo filed a patent-infringement claim against Motorola, saying that the Google-owned company's set-top boxes were infringing its patents related to DVR functionality. If the court rules in favor of TiVo, the company argued that is "damages claim is likely to run into the billions of dollars."
That threat hung over Google as it started shopping Motorola Home. And although most companies would be unwilling to accept a deal with the possibility of paying out serious cash for alleged infringement, Stanzione said that his company's liability in the event Motorola loses will be "a very small number."
"It's not something you have to worry about in terms of the financial impact on Arris," Stanzione said, according to TechCrunch. "Google has taken that risk off the table for Arris."
In an e-mailed statement to CNET, an Arris spokesperson confirmed that Google has capped the liability, adding that any cash the company might have to pay to TiVo is "not a material number" for the purposes of financial reporting to shareholders.
TiVo's threat shouldn't be taken lightly. Over the last couple of years, the company has been winning major settlements from competitors, including $500 million from Dish Network and over $250 million earlier this year from Verizon. TiVo is seeking more from Motorola because the company claims "Motorola's massive production of infringing DVRs dwarfs the numbers of accused products at issue in TiVo's previous cases."
Google announced yesterday that it has sold off Motorola Home to Arris for $2.35 billion. The sum includes $2.05 billion in cash and $300 million in stock, giving Google 15.7 percent ownership in the company upon deal closure.
CNET has contacted Google for comment on Stanzione's statements. We will update this story when we have more information.