Dish Network and EchoStar reached a $500 million settlement with TiVo over a patent lawsuit on digital recording technology, the companies announced Monday.

The agreement dismisses all pending litigation between the companies and removes a legal burden that threatened to shut down much of the nation’s second-largest satellite television provider DVR business.

Dish, which recently acquired Blockbuster from bankruptcy, hopes to move from satellite TV company to a competitor to Netflix, which offers videos streaming over the Internet.

“We are pleased to put this litigation behind us and move forward,” Dish chief executive Charlie Ergen said in the statement. “Our agreement with TiVo provides us a competitive advantage as one of the few multichannel operators with rights to operate under TiVo’s Time Warp patent, which ultimately will allow us to enhance the performance of our award-winning DVRs.”

Dish appointed Michael Kelly, executive vice president for commercial and business services, as head of Blockbuster. Ergen said in the release that TiVo will help promote and develop Blockbuster’s online video service, but he did not offer further details. Dish will hold a conference call at 10 a.m. Monday to discuss its first-quarter earnings. There, he might go more into details about Dish’s online service strategy.

“We are excited to work with TiVo to help develop our Blockbuster video service,” Ergen said. “Resolving the patent infringement case allows us to further engage with TiVo on a variety of exciting strategic initiatives, like Blockbuster, where we are uniquely positioned to collaborate.”

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