StarSight (now Gemstar) has to show that the original contract calling for no payments but exclusive deployment was breached. IR for both MOT and SFA have refused to discuss it with me. But from a different perspective, if Gemstar felt that this StarSight EPG infringed on any Gemstar patents, Gemstar would have to litigate against StarSight, not GIC or SFA. Interesting no?
cybervcr.com
Gemstar Wins Major Arbitration Award Against General Instrument
PASADENA, Calif., Oct 6, 1999 (BUSINESS WIRE)
-- Gemstar International Group Ltd. (Nasdaq:GMST) today announced that a panel of the American Arbitration Association issued a partial ruling against General Instrument Corp. and awarded Gemstar's wholly owned subsidiary, StarSight Telecast Inc., an award in the multiple tens of millions of dollars in compensatory and punitive damages, together with attorneys' fees and costs as a result of General Instrument's breach of its contract with StarSight and its misappropriation of StarSight Telecast's proprietary technology and intellectual property in the electronic program guide (EPG) area.
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.
The compensatory portion of the award is set at the greater of StarSight's lost profits or General Instrument's unjust enrichment based on a disgorgement theory. In addition, the panel also awarded StarSight punitive damages of 50 percent of the compensatory award, plus costs and attorney fees.
The exact amount of the multimillion dollar award is being calculated by StarSight and will be submitted to the American Arbitration Association for the panel's approval.
A second phase of the arbitration, which is expected to commence in approximately three months, will focus on the digital set top boxes deployed by General Instrument. The panel will be presented issues similar to those decided in the first phase of the arbitration, but the focus will be directed on whether General Instrument also breached its contractual duties with respect to digital set top boxes that are capable of supporting an EPG, and if so, determine the appropriate award.
This arbitration is a contract dispute between General Instrument and StarSight. Gemstar and StarSight still have pending litigation against General Instrument for patent infringement which will be vigorously pursued.
Stephen A. Weiswasser, executive vice president and general counsel of Gemstar, stated: "We are pleased with the arbitration panel's decision that General Instrument wrongfully breached its contract with StarSight and misappropriated StarSight's confidential information, and that General Instrument's conduct was sufficiently egregious to warrant a significant punitive damage award. This award reflects Gemstar's unwavering commitment to defend its rights, including intellectual property rights, against those who breach or infringe."
Gemstar develops, markets and licenses proprietary technologies and systems aimed at making technology user friendly for consumers. Gemstar's technology and intellectual property are licensed to major companies in the consumer-electronics, satellite, cable and personal- computer industries, including Aiwa, Akai, America Online, Americast, Cox, Daewoo, Funai, GTE, Hitachi, Hughes Network Systems, JVC, LG Electronics (Goldstar), Matsushita (Panasonic, Quasar), Microsoft Corp., Mitsubishi, Orion, Philips (Magnavox, Philips), Quadravision, Samsung, Sanyo, Scientific-Atlanta, Sharp, Shintom, Sony, Southern New England Telephone, Thomson multimedia (GE, Proscan, RCA, Thomson), Time Warner, Toshiba, U.S. West, Uniden and Zenith.
Gemstar has more than 75 issued U.S. patents in the general area of audio-visual technologies, containing more than 1,500 claims and 70 foreign patents, containing more than 1,000 claims. The company continues to pursue a worldwide patent prosecution program, and has more than 130 pending U.S. patent applications and more than 160 pending foreign patent applications.
Gemstar is a leading provider of electronic-program-guide services, which allow a user to view a television-program guide on screen, obtain details about a show, sort shows by themes or categories, and select shows for tuning or recording, all through the remote control.
In the United States, data for Gemstar's electronic-program- guide services are carried on the ABC, FOX, CBS, NBC, UPN and PBS networks by hundreds of over-the-air broadcast stations and on a number of cable networks. Gemstar's electronic program guide has been built into a number of models of new televisions, VCRs and TV/VCR combination units.
Gemstar's electronic program guide is also licensed to cable, telco, and MMDS service providers, and has been integrated into direct-broadcast-satellite receivers, digital and advanced analog cable set-top boxes, PCTV and other Internet devices, and computer- operating systems such as Windows 98.
Gemstar's VCR Plus+(R) instant programming system is a world standard for VCR programming. VCR Plus+ allows a user to record a television show simply by entering a number -- the PlusCode(R) number -- printed in television-program guides. The PlusCode numbers are published by more than 1,800 newspapers and television-program guides worldwide, with a combined circulation of more than 330 million.
The VCR Plus+ system has been licensed to virtually every major television and VCR manufacturer and is now available in 40 countries and 6 continents, including the United States, Canada, the United Kingdom, continental Europe, Japan, Southeast Asia, Australia, New Zealand, South America and South Africa.
Except for historical information contained herein, the matters discussed in this news release contain forward-looking statements that involve risks and uncertainties, including the timely availability and acceptance of new products, the impact of competitive products and pricing, the management of growth, and the other risks detailed from time to time in the company's Securities and Exchange Commission reports, including the report on Form 10-K and 10-Q.
NOTE: GUIDE Plus+, VCR Plus+ and PlusCode are registered trademarks of Gemstar. Other product names used herein are for identification purposes only and may be trademarks of their respective companies.
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