Patent Battles Rage Anew

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In the latest of a seemingly unending round of intraindustry lawsuits, EchoStar Communications Corp. last week filed a countersuit against a patent infringement suit filed by Gemstar-TV Guide International Inc. in October.

No stranger to litigation, EchoStar also hit Gemstar with an antitrust suit, claiming Gemstar was seeking monopoly control of the interactive programming guide market.

Also last week, Pegasus Communications Corp. filed suit against DBS partner DirecTV Inc., claiming patent infringement of certain technologies that Pegasus acquired from Personalized Media Communications LLC earlier this year. Hughes Electronics Corp., Thomson Consumer Electronics and Philips Electronics North America Corp. were also named as defendants.

PMC had filed a similar suit against DirecTV in the mid-1990s.

In its antitrust suit, EchoStar claimed that Gemstar uses its large number of patents and history of litigation to intimidate would-be IPG competitors into signing anti-competitive license agreements with Gemstar.

In a press release last Wednesday, Gemstar called the EchoStar suit "unfounded and frivolous." The company named at least 20 IPG customers, including cable MSOs Adelphia Communications Corp., AT&T Broadband, Charter Communications Inc., Comcast Corp., Cox Communications Inc. and Time Warner Cable.

But Gemstar is involved in patent suits-and countersuits-against other companies, including TiVo Inc., Scientific-Atlanta Inc. and Pioneer Electronics Corp. And in the past, the company has acquired other IPG and EPG patents through sometimes-hostile mergers or takeovers of license holders, including Video Guide, StarSight and even TV Guide Inc.

In the lawsuit filed last Monday in U.S. District Court in Colorado, EchoStar wrote that through Gemstar's litigation and other means of anticompetitive coercion, the direct-broadcast satellite provider has become "Gemstar's latest target."

EchoStar claimed that if it signs a licensing agreement with Gemstar, it must also agree to give the EPG provider and any of its licensees access to EchoStar's own guide technology, in which the company said it has invested heavily.

The DBS provider also complained that Gemstar wants to tie its technology license to an agreement to replace EchoStar's current Dish Network IPG with a TV Guide-branded IPG, which devotes 30 percent of its main menu to advertising. Dish currently does not place ads on its IPG.

According to EchoStar, Gemstar would also take 85 to 90 percent of advertising revenues from the TV Guide IPG, as well as similar shares of television-commerce revenues derived from the guide.Both EchoStar and DirecTV were served in late June with patent suits by Shelby, N.C.-based SuperGuide Corp., which claimed the DBS providers infringe on three electronic programming guide patents that date back to 1991. Gemstar has the rights to license those SuperGuide patents to the cable industry, an outside attorney for SuperGuide said last week.

SuperGuide has delivered an EPG to C-band satellite customers since the mid-1980s.

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