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Gemstar takes it on the chin

Thu, 08/29/2002 - 8:00pm
Susan Rush

The U.S. International Trade Commission dealt Gemstar-TV Guide International Inc. another blow yesterday, denying the interactive programming guide developer's request to review an earlier decision.

In June, an ITC judge ruled that Gemstar competitors did not engage in unfair trade practices with regards to Gemstar's patented IPGs. Gemstar had alleged that EchoStar Communications Corp., Pioneer Corp. and Scientific-Atlanta Inc. were illegally importing set-top boxes that infringed on its patents.

In the June ruling, the ITC also said that one of the three patents in question is unenforceable for failure to name a co-inventor. Gemstar immediately sought a review of the decision, but that request was denied yesterday.

EchoStar said it has been "vindicated" by the decision. "Although the ITC found it unnecessary to take a position on the patent misuse issues, we are also pleased they chose not to overturn Judge Luckern's ruling which found Gemstar guilty of patent misuse," said David Moskowitz, senior vice president and general counsel of EchoStar. The satellite provider said plans to continue to defend itself against Gemstar's patent infringement claims.

Gemstar plans to take its appeal of the ITC's decision to the U.S. Court of Appeals for the Federal Circuit. The company has lawsuits pending regarding the three patents in question as well as other patents in an Atlanta court. EchoStar, Pioneer and Scientific-Atlanta are among the parties named in the proceedings.

Earlier this week, the Nasdaq put Gemstar on notice for failing to file its Form 10-Q reflecting its second quarter results in a timely fashion. Gemstar's stock faces a possible delisting from the Nasdaq National Stock Market. The company has said it needs more time to review the impact of recent patent infringement decisions on its Q2 numbers. It also plans to restate its full-year 2001 results to reverse the recognition of roughly $20 million in revenue related to its TV Guide subsidiary.

Gemstar shares were down 11 cents to $4.11 as of 12:15 p.m. EDT.

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