Gemstar Loses ITC Case

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An International Trade Commission judge ruled against Gemstar-TV Guide
International Inc. late Friday in a patent suit the company had brought against
Scientific-Atlanta Inc., EchoStar Communications Corp. and Pioneer New Media
Technologies Inc.

The decision -- which found that EchoStar, S-A and Pioneer did not illegally
import set-tops that infringed Gemstar's patents -- is a major setback for
Gemstar. The company had hoped that an ITC victory would help it to win
settlements from the other three firms in a separate federal patent suit.

'It is the administrative law judge's final initial determination that there
has been no violation by any of the respondents,' Paul Luckern, the ITC
administrative law judge, wrote in his decision. Luckern also found that Gemstar
misused one of its IPG patents.

Luckern's decision still must be approved by a vote from the ITC
commissioners. But in previous cases, the commission has almost always agreed
with the ALJ.

While Gemstar has already signed several major MSOs to long-term
interactive-programming-guide-license agreements, the decision will likely spark
more competition in the IPG sector. Some operators have been waiting for a
decision in the ITC case before cutting deals with Pioneer or S-A.

Gemstar still hasn't reached long-term IPG deals with Time Warner Cable, Cox
Communications Inc. and Cablevision Systems Corp. But it does have agreements
with Charter Communications Inc., Comcast Corp. and AT&T Broadband.

Unless Gemstar prevails in a separate patent case it is waging in an Atlanta
court, the decision will likely allow EchoStar to continue distributing its own
IPG to subscribers.

The decision will also hurt Gemstar's ability to generate ad revenue from its
IPG, since its 'TV Guide Interactive' IPG will be available in fewer
homes.

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