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Technology Stocks : Gemstar Intl (GMST) -- Ignore unavailable to you. Want to Upgrade?

To: shamsaee who wrote (3504)	7/30/2000 9:29:03 AM
From: Mike Buckley	Read Replies (2) \| Respond to of 6516

Shamsaee. I'm going to jump in here also, not to pre-empt Stew but to simply add my opinion to whatever he mentions. May I ask why you are so sure as courts cases always make me nervous. They make me nervous too. I'm much less nervous in this situation for many reasons. One is that Henry Yuen is a lawyer, a particularly good discipline to have when building an IPR company which is the only thing Gemstar was prior to the e-book acquisitions. He has a history of vigorously pursuing protection of the IPR, structuring the IPR in such a way that, indeed, the IPR can be protected. As for the outcome, there are companies such as AOL, Sony and Microsoft (not to mention a long list of others) that have agreed to turning over millions of dollars to Gemstar because they saw no way around the company's IPR. If anyone could have gotten around it, Microsoft certainly would have at least tried. They didn't. Last and perhaps most important is the history of past litigation. TV Guide was under pressure of Yuen's suit and tried to get out of it by buying Gemstar. It was so important to them that they offered what they thought was a high price at the time. That didn't work so the litigation continued. To finally get out from under it, they themselves agreed to be acquired. And don't forget that the contingency agreement called for TV Guide license IPR from Gemstar. I don't believe any of that would have happened if TV Guide really believed they were going to win in court. SFA (or was it GIC?) already lost the analog portion of the arbitration. Remember though that they didn't just lose over an issue of a very grey area about who owns what IPR. Instead, the ruling clearly stated that the strength of the IPR was so self-evident that the arbitrator believed the company knew at the time it was violating Gemstar's patents and proceeded to do so with that knowledge. Could Gemstar be in a better position for the digital portion of the case? I don't think so. In the end, not once has Gemstar been forced to capitulate by means of a huge compromise to settle a case nor has the company ever lost a court or arbitration battle. Combining that with Yuen's credibility, remembering that he was emphatic that his legal team was confident there was no legal basis for preventing the merger, leaves me with the best possible feeling I could ever have with a company embroiled in IPR protection. --Mike Buckley