Gemstar Wins Major Arbitration Award Against General Instrument|
PASADENA, Calif.--(BUSINESS WIRE)--Oct. 6, 1999--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
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
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
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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Gemstar International Group Ltd., Pasadena
Linda Lloyd da Silva, 626/792-5700