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To: Uncle Frank who wrote (7918)	10/9/1999 12:08:00 PM
From: James Sinclair	Read Replies (1) \| Respond to of 54805

I asked a very similar question over on the Gemstar thread, and got the following response from NY Stew Message 11480511

To: Uncle Frank who wrote (7918)	10/9/1999 7:27:00 PM
From: NY Stew	Read Replies (1) \| Respond to of 54805

Uncle Frank, Gemstar This phase of the arbitration arose from General Instrument's deployment of electronic program guides on its analog cable set top boxes, which the panel found to be willful and malicious misappropriation of StarSight Telecast's proprietary technology and intellectual property. General Instrument The arbitrators rejected StarSight's interpretation of its patents and also found that GI did not commercialize products that incorporate those patents. The bottom line is that someone has roughly $50-60 million more and someone else has less. As to the digital STBs, GI has stopped deployment of a guide service with their newest digital box. This move speaks for itself. Gemstar acquired and was issued numerous patents since the analog arb time frame of early to mid 90's. The acquisition of the Levine Patents was one of Henry's better moves in my view. General Instruments has more cases ahead of it. Somewhere along the line either an arb panel or a judge will hit them with an injunction. In this past analog case they relied upon TV Guide's support but this in no more. AT&T (10 year exclusive TV Guide contract) is by far GI's largest customer. And after July 1, 2000 they will need to compete in retail against the likes of Thomson, Sony, Philips, Matsushita and others ... all of which license Gemstar. The deck is stacked against them and I see a settlement ahead. The odds against it would seem too great for Motorola to risk in their new venture. GI and SFA will be knocking on Gemstar's door soon if not already to get the TV Guide & AT&T business and just as importantly to get into a competitive position for retail launch. Neither SFA or GIC have ever competed in a free market. The CE OEM giants will eat their lunch unless they license Gemstar and offer a competitive retail product. You have already witnessed two major cable contracts won by Philips and Sony. If they cannot defend their own turf what do you expect next year when cable STB functionality is built into DVD's, gameplayers, VCRs and TVs? Just an overview of how I see the bigger picture. Regards Stew

To: Uncle Frank who wrote (7918)	10/11/1999 11:25:00 PM
From: red jinn	Read Replies (1) \| Respond to of 54805

uncle mine: got your message re gmst arb'n verdict; have been out of town, but will look into the matter this week. best, red

To: Uncle Frank who wrote (7918)	10/12/1999 12:40:00 AM
From: red jinn	Read Replies (1) \| Respond to of 54805

uf: i want to see if i can somehow get a copy of the ruling in the gmst/gi matter, but let me at least answer part of your questions. first, your last question: "how binding is an AAA ruling?" here's an unusual answer from a lawyer: it depends. seriously though, the extent to which the AAA ruling is binding depends on what the license agmt said. it might well have said that all disputes will be subject to binding arbitration and that, if push came to shove, the winning party cd go to court to enforce the judgment. the latter is almost certainly in the applicable paragraph in the gmst/gi license. however, some licenses expressly exclude ip issues from the arb'n dispute process, altho, based on the press release, i'm fairly certain that was not the case here. at any rate, without looking at the license/ruling, it sounds like there's a judgment which is enforceable. in a partial answer to question 2: "if gi didn't commercialize products that incorporated gmst patents, why is gi being penalized?", the holder of a patent can prevent others from making, using, and/or selling anything that wd infringe a claim(s) of the patent. even if gi didn't "sell" products that infringed, it cd have "used" products that infringed. however, there may be another more likely reason for infringement and/or the adverse judgment (at least from gi's point of view), i.e., the press release says gi misappropriated "trade secrets." that's certainly actionable and, depending on the circumstances, subject to damages, even punitive damages, altho i must say that conduct usually has to be fairly egregious for punitives to be warranted. i can't know at this point what's meant by "the arbs rejected gmst's interpretation of its patents." presumably gmst was arguing for a certain interpretation of one of more of its claims in one or more patents, but i can't tell without access to the ruling, which may very well be confidential now and forever. at any rate i'd better do some research before i pontificate further. btw, remember i'm not a patent lawyer per se (altho some of my colleagues are). i'm just a technology lawyer with a concentration on licensing and other deals, fully aware of the fact that 99% of the lawyers out there give the rest of us a bad name. the deal in s. calif. hasn't closed yet, perhaps it will later this week. but i hope i get the chance to clink glasses soon in any event. best, red jinn