Report in Patent Case Hits Shares of Gemstar

Gemstar-TV Guide International Inc. shares fell 16% after the publication of a report saying its rivals didn’t steal Gemstar technology and the company misused patents to thwart competition.

The stock fell $1.77 to $9.37 in Nasdaq trading. The shares have lost three-quarters of their value in the last year.

Pasadena-based Gemstar, a publisher of on-screen television program guides, had accused Pioneer Corp., Scientific-Atlanta Inc. and EchoStar Communications Corp. of illegally importing cable-TV boxes with guides that infringe its patents. It asked the International Trade Commission to block the imports, and a hearing is scheduled for June, when a final determination is expected.

“None of the asserted claims of the patents at issue are infringed by the accused products,” Thomas Fusco, a trade commission investigative attorney, wrote in an opinion submitted to the agency, an autonomous body that measures the effect of trade on U.S. companies.

A public version of the opinion, dated Nov. 28, was posted on the trade commission’s Web site last week.

Robert Stone, an analyst at SG Cowen, called the report “very old news” because the attorney’s report was first filed in November. He said the report doesn’t include information submitted before the commission in an evidentiary hearing. That hearing was in December, according to the Web site.

“There is nothing new here,” said Lauren Snyder, a spokeswoman for Gemstar. She said the company disagrees with Fusco’s position. “We have confidence in our case and eagerly await the judge’s ruling.”

Fusco wrote that even if there were infringement, Gemstar has “engaged in a pattern of aggressive business behavior and that at least some of their practices rise to the level of patent misuse.” Thus, it shouldn’t be allowed to enforce its patents against competitors.