Gemstar-TV Guide Ends Legal Battle with Scientific-Atlanta
Gemstar-TV Guide International and Scientific- Atlanta’s (S-A) agreement to cross-license electronic program guide (EPG) technology marks the end of a multi- year legal battle that wound through federal district and appeals courts as well as the International Trade Commission. Gemstar’s patent infringement suit against S- A, which dates from the late 1990s, also involved EchoStar and Pioneer, both of whom reached multi-million dollar settlements with Gemstar last year. The agreements take effect July 1, CFO Brian Urban said.
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Under a series of 3 agreements with S-A, which run for up to 9 years, Gemstar will receive a minimum $154 million in license fees. If the minimum is reached in less than the term of the contracts, they can be renegotiated, a spokeswoman said. Gemstar expects to recognize the first revenue from the agreements in the 4th quarter as part of its CE license fees, Urban told us at the company’s annual meeting in N.Y. Thurs. The annual fees S-A pays to Gemstar will be on a per unit basis and apply to products that S-A ships containing Gemstar’s EPG. For its part, S-A will receive a total of $89 million in annual payments. The worldwide cross-license agreements give Gemstar and S-A access to their respective EPG patents and S-A will make the former’s guides available with its Explorer set-top box platform.
“One of the real opportunities is the porting portion of the agreement so that we can integrate our guide with Scientific-Atlanta’s platform,” Gemstar CEO Richard Battista said. “MSOs want to create a unified guide and this gives us an opportunity to do that.” S-A is a set- top box (STB) supplier to Cablevision, Cox Communications and Time Warner Cable, among others.
Gemstar also expects to release Version 9 of its TV Guide on Screen EPG by late summer, company officials said. Version 9 adds compatibility with satellite services. It will be available only in new products and existing models can’t be upgraded to use it, Urban said.
Gemstar also plans to begin rolling out its TV Guide Spot on-demand network to Comcast and Time Warner digital subscribers starting in midsummer, Urban said. It expects the network to be available to 14 million cable subscribers by year-end, about 60% of which will likely come from Comcast, while Time Warner accounts for the remainder, Urban said.
Also in development is an EPG for cellphones and handheld PCs that’s expected to be available in early 2006. The EPG is designed to enable users to gain remote access to TV listings and program PVRs. A basic EPG is being tested in Japan in partnership with Dentsu using NTT DoCoMo’s cellphone service, but it has yet to generate any revenue, Urban said.