Gemstar Loses Patent Dispute
Gemstar-TV Guide International shares fell sharply following a ruling by an International Trade Commission panel that set-top box manufacturers Scientific Atlanta, Pioneer Corp. and Sanmina SCI Corp and satellite broadcaster EchoStar Communications had not violated any of the three patents under dispute. Gemstar holds numerous patents concerning software running interactive TV menus.
The initial determination has to be evaluated by the full commission before being upheld. The commission is likely to uphold the ruling. The ruling is a major boost for EchoStar.
William Kidd, a satellite equity analyst at Lehman Brothers, said in a research note: “The reality is that there is clearly an overhang on EchoStar shares from this situation, and we feel an excessive one, which should now be lifted away in light of these favourable rulings. The ruling is somewhat of a surprise as EchoStar was widely perceived as being the underdog in this case.”