Shaky Status of Patent Lawsuit Rocks Gemstar Stock
Updated: Friday, April 26, 2002 2:56 PM
Posted: Friday, April 26, 2002 2:56 PM
Gemstar-TV Guide stock plunged Friday after a report released two days ago said the company may have engaged in "patent misuse" and that its on-going patent infringement lawsuit may be groundless.
On a heavy trading volume of 14.5 million shares, Gemstar stock dropped as much a 19% to $9 during the day. The price recovered some, but was still trading around $9.50, down about 15%, by mid-afternoon.
Gemstar is the parent company of the TV Games Network, a horse racing channel and online wagering service company based in California.
The sell-off was sparked by a 64-page International Trade Commission legal opinion regarding a lawsuit filed by Gemstar against Pioneer Electronics, Scientific-American, and EchoStar Communications, who are accused of illegally importing cable-TV boxes with electronic program guides that Gemstar believes infringes on its patents. The trade commission opinion by investigative attorney Thomas S. Fusco, however, states "none of the asserted claims of the patents at issue are infringed by the accused products," according to a report by the Wall Street Journal
Fusco's report also states: "The staff believes that the evidence will establish that (Gemstar-TV Guide) have engaged in patent misuse."
A Gemstar spokeswoman said the company is –entirely confident about everything weêve submitted,” according to the Journal
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