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Gemstar, Pioneer settle IPG flap

Thu, 02/26/2004 - 7:00pm
Jeff Baumgartner

Gemstar-TV Guide International and Pioneer Electronics (USA) Inc. have finally ended their lengthy legal battle over interactive program guide (IPG) technology.

In an agreement that resolves all outstanding litigation between the two companies, Pioneer has obtained the right to incorporate Gemstar's IPG in digital TVs and digital recorders tagged for North America, Japan and Europe. Under the deal, Pioneer will pay license fees to Gemstar and make a one-time payment to Gemstar of $14 million.

"Now we can devote 100 percent of our attention to providing the best technology and entertainment experience to the end users of our products," said Paul Dempsey, president of Pioneer's business solutions division.

On the cable front, Pioneer has developed IPG set-top products under the "Passport" brand for digital cable networks based on Scientific-Atlanta and Motorola Broadband conditional access platforms.

"For Gemstar-TV Guide, this is another signal that our new approach to creating true partnerships across the consumer electronics, cable and satellite industries is working, and it is another important step in firmly establishing the company as the premiere source of television guidance and information," said Jeff Shell, CEO of Gemstar-TV Guide.

The mending of fences could lead to calmer waters in the historically litigious IPG sector.

For Gemstar, the agreement with Pioneer could pave the way for legal settlements with EchoStar and S-A, Citigroup Smith Barney analyst Niraj Gupta wrote in a research note. The deal will also cut Gemstar's legal expenses, which reached roughly $70 million in 2003, he added.

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