Dish Network Corp., the second-largest US satellite-television provider, rose the most since 2008 after settling all patent litigation with TiVo Inc., ending a seven-year legal dispute over video-recording technology.

Dish and partner EchoStar Corp. will pay TiVo $500 million, including an initial payment of $300 million, as part of an agreement to dismiss all pending litigation, the three companies said in a statement yesterday. The settlement gives Dish and EchoStar rights to use certain TiVo patents for video recording.

“We are pleased to put this litigation behind us and move forward,” Dish Chief Executive Officer Charlie Ergen said in the statement. Dish rose $4.75, or 19 percent, to $29.79 on the Nasdaq Stock Market, its biggest one-day increase since Oct. 13, 2008. TiVo added 29 cents, or 3 percent, to $9.86.

Dish also reported first-quarter profit that topped analysts’ estimates. Net income reached $1.22 a share, the company said in a separate statement. Analysts projected 68 cents, the average of estimates compiled by Bloomberg.

Dish will keep some Blockbuster stores as long as movie studios want them, Ergen said on a conference call. Keeping a per-movie DVD-rental business may give studios a way to make more money than streaming content on Netflix Inc., Ergen said.

Last month, Dish agreed to buy nearly all of Blockbuster’s assets for $320 million out of bankruptcy. In February, it agreed to acquire DBSD North America Inc., a provider of voice and data services over satellite, for $1.4 billion.

EchoStar, which today posted a 76 percent drop in first-quarter net income to $17 million, agreed to buy Hughes Communications for about $1.32 billion in February, giving Dish the ability to offer broadband services. In January, EchoStar bought Move Networks Inc., which makes technology for streaming video online.

EchoStar fell $2.09, or 5.6 percent, to $34.99. Shares are up 40 percent this year.