Some analysts had expected a settlement of up to $1.7 billion with Motorola Mobility, Cisco Systems Inc and Time Warner Cable Inc.
TiVo's shares rose 8 percent on Thursday after Motorola Mobility said it had reached an out-of-court settlement with TiVo, days before the case was to go to trial. Motorola did not disclose details of the agreement.
Lazard Capital Markets analyst Barton Crockett, who had expected a $1.7 billion settlement, cut his rating on Tivo's stock to "neutral" from "buy."
J.P. Morgan analysts said they had expected more than $400 million from Motorola alone.
"The settlement will eliminate legal expenses, but it also removes a future positive catalyst (the Cisco trial)," they said in a research note, adding that the share selloff may have been overdone.
TiVo has turned to litigation to generate revenue from licensing fees as it struggles with intensifying competition.
Satellite TV provider Dish Network Corp and its sister company EchoStar Corp paid TiVo $500 million to settle a lawsuit two years ago.
TiVo settled a patent dispute with AT&T Inc for $215 million in January 2012 and with Verizon Communications Inc for $250.4 million in September.
Motorola had accused TiVo in February 2011 of infringing its patents for digital video recorders. TiVo filed a counterclaim in March last year.
TiVo said it would enter into patent licensing arrangements with Arris Group Inc, Cisco and Google as part of the settlement.
"TiVo's legal victories enhance its ability to monetize its intellectual property in alternative channels," Janney Capital Markets analyst Tony Wible said in a client note.
TiVo said it would recognize a portion of the payment as past damages during the current quarter and the remainder over time. All pending litigation will be dismissed, it said.
The company also said it would double its stock buyback plan to $200 million and extend it for two years until August 29, 2015.
Cisco, which expects to take a charge of about 3 cents per share in the current quarter due to the settlement, will pay TiVo $294 million and receive a perpetual license to the patents, it said in a regulatory filing. (http://r.reuters.com/meb78t)
Cisco and TiVo will also enter into a limited cross-license agreement and cross covenants not to sue each other for patent infringement for five years.
The patent trial was scheduled to begin on Monday.
TiVo shares were down 18 percent at $11.25 in morning trading on Friday, making them the second-biggest loser on the Nasdaq. The stock has traded as low as $7.75 in the past year before hitting a 12-month high of $14.10 on Thursday.
The company has a market value of about $1.4 billion.
The case was re Motorola Mobility Inc et al vs. TiVo Inc, case number 11-00053, U.S. District Court, Eastern District of Texas.
(Reporting by Neha Alawadhi and Sayantani Ghosh in Bangalore; Editing by Stephen Coates, Maju Samuel and Ted Kerr)