Trade Commission Opens IPG Hearing


Opening arguments began at an International Trade Commission hearing to settle a patent dispute between Gemstar-TV Guide International Inc. and defendants EchoStar Communications Corp., Scientific-Atlanta Inc., Pioneer New Media Technologies Inc. and SCI Systems Inc.

Gemstar filed the ITC complaint in February seeking to force EchoStar,
S-A and Pioneer from importing set-top boxes with what Gemstar
called "infringing" interactive program guides.

The stakes in the case are huge. Gemstar hopes a successful ITC ruling will
help it to win separate patent-infringement suits it is waging in federal courts
against EchoStar, S-A and Pioneer. Gemstar also hopes an EchoStar defeat would
force the direct-broadcast satellite company to pay millions of dollars for offering
subscribers a competing IPG.

If Gemstar loses the ITC case, S-A and Pioneer -- which have had difficulties
selling IPGs to cable operators since the patent suits were filed -- could bring
more competition to Gemstar in the IPG sector.

During his opening argument Monday, Gemstar attorney William Haigney disputed
claims that Gemstar's complaint is an attempt to drive the defendants out of the

"We're not out to put anyone out of business, nor could we if we tried," Haigney said, insisting that the case is about protecting Gemstar's patents, which
are the company's lifeblood.

An S-A attorney noted during his opening argument that no court has ever
ruled that Gemstar's patents are valid. Gemstar has settled patent-infringement
cases before such rulings could be reached, or merged with companies it sued for
infringement, as was the case with its unions with StarSight Telecast Inc. and
TV Guide Inc., the S-A attorney said.

"For nearly a decade, Gemstar has engaged in a campaign of litigation that has
plagued the entire IPG business," S-A's attorney added.

EchoStar attorney Harold McElhinny argued that one of the Gemstar patents the
ITC is considering only applies to analog cable, suggesting that the IPG used by
Dish Network subscribers doesn't infringe on the patent.

About 75 people -- mostly attorneys from the companies involved in the case --
packed a courtroom at the ITC's headquarters to capacity Monday.

The evidentiary hearing is scheduled for completion by Dec. 14. ITC
administrative law judge Paul Luckern has said he plans to rule on the case by
March 21, when an initial determination will be released.

Within 45 days of the initial determination, six ITC commissioners will vote
to either accept Luckern's decision or modify it, ITC spokeswoman
Peg O'Laughlin said.