Gemstar Patent Claims Revived

A U.S. appeals court on Thursday revived Gemstar-TV Guide International Inc.’s bid to block U.S. imports of television set-top boxes made by electronics maker Scientific-Atlanta Inc. Shares of Gemstar rose 9% on the news.

The Appeals Court for the Federal Circuit ordered the U.S. International Trade Commission to reconsider whether Scientific-Atlanta infringed two Gemstar patents on television on-screen program guides. The Washington-based court said the commission misinterpreted the patents in a 2002 ruling.

The decision may encourage a settlement between the companies. Scientific-Atlanta is the only company that Los Angeles-based Gemstar is still suing for patent infringement after Jeff Shell became chief executive in 2002 and settled suits with companies including satellite TV service EchoStar Communications Corp., which agreed to pay Gemstar $190 million in March.

The dispute centers on interactive program guides in digital television set-top boxes that let viewers select shows to watch or record. In addition to the trade commission complaint, Gemstar is suing Scientific-Atlanta in Atlanta, accusing it of using Gemstar’s patented technology without permission.

Gemstar, the biggest maker of software that runs electronic television-program guides, said last month that its legal expenses in the first half of this year totaled $36.7 million, 13% less than a year earlier.

Gemstar said the ruling was “consistent” with its position that the Washington-based trade commission incorrectly dismissed the infringement claims. The decision “reaffirms the company’s belief in the strength of its patent portfolio,” Gemstar said.

Scientific-Atlanta, in a statement, said it “continues to believe that it does not infringe any claim of any valid and enforceable Gemstar-TV Guide patent.”

Gemstar shares rose 47 cents to $5.71 in Nasdaq trading of 5.1 million shares, almost four times the three-month daily average. It was their biggest one-day jump since March. The shares have risen 12% this year.

Shares of Lawrenceville, Ga.-based Scientific-Atlanta rose 14 cents to $27.16.

Scientific-Atlanta was the only company remaining in Gemstar’s trade commission complaint. EchoStar, which uses the boxes, agreed to pay $190 million to Gemstar a month after the Federal Circuit revived a patent lawsuit filed in North Carolina. Pioneer Corp. agreed to pay $14 million to Gemstar and pay licensing fees on certain products it sells using Gemstar’s technology.