Gemstar-TV Guide International CEO Henry Yuen spoke to New America Foundation Wed. about sanctity of patents as company was expecting decision June 21 in its patent infringement case against EchoStar. Gemstar has alleged that EchoStar, Pioneer Corp., Pioneer Digital Technologies, Pioneer New Media Technologies, Pioneer N. America, Scientific-Atlanta and SCI Systems imported set-top boxes containing Interactive Program Guides that it said infringed on patents held by Gemstar and its StarSight Telecast subsidiary. In briefing with reporters at National Press Club in Washington, Yuen said he couldn’t predict which way judge with International Trade Commission (ITC) would decide but said Gemstar could appeal if ruling came down on other side. He acknowledged case had affected company’s stock price adversely. Yuen said company had concluded 180 license agreements without litigation and bemoaned company’s reputation as being litigious. “We are a company that is quite misunderstood,” he said: “We have to sue infringers who are flagrant in these kinds of cases. Otherwise, it would be very, very unfair to licensees who paid.” Although company has 20-year interactive program guide agreement with Adelphia, Yuen said Gemstar’s bottom line wouldn’t be badly affected if Adelphia filed for bankruptcy. There are some accounts receivable, Yuen said, but they aren’t large enough to have significant impact on Gemstar’s balance sheet. He said he was hopeful FCC would change its mind on its decision that Gemstar’s electronic program guide (EPG) data wasn’t “program-related” and therefore wasn’t entitled to must-carry status when it was transmitted by broadcasters. Gemstar filed motion to reconsider, which is pending. Yuen said company officials had met with FCC commissioners. “I clearly cannot predict how they will make up their minds but we are satisfied with how we presented it,” he said. He acknowledged that arguments over transmission of data over vertical blanking interval (VBI) in analog might become moot in coming years as nation transitioned to digital, where there’s no VBI. Nevertheless, he said it was important to argue point because analog probably still would be available for many years.

Take-Two Interactive said it signed definitive agreement to settle class action lawsuit filed against it last year. As part of settlement, it agreed to pay $7.5 million in cash -- $6.1 million of which it said was covered by insurance. Suit had been filed by disgruntled investors after Take-Two revealed it was under SEC investigation for controversial accounting practices that forced it to restate results for 2000 and most of 2001 to delete certain sales it originally had labeled as revenue but that later were returned to or bought back by company (CED Dec 19 p4). Trading in company’s stock was halted temporarily earlier this year as company set out to restate results.

Flap over lack of upgrade to write-once DVD+R for first- generation DVD+RW drives for PCs prompted split approach by Philips for compensating first-adopters of rewritable DVD format. Eindhoven-based spokeswoman told us company would “take corrective action” in U.S. but wouldn’t offer recourse to European customers. Statement had been expected May 7 but spokeswoman said it was delayed 2 weeks in legal review.

Gemstar-TV Guide and Thomson are expected to sign agreement in coming weeks that will expand 3-year-old @TV joint venture to integrate former’s interactive program guide (IPG) in broader range of products and include it in 2-way interactive services, Gemstar CEO Henry Yuen told analysts in earnings conference call late Wed. Companies formed @TV in late 1999 as terms for Gemstar’s IPG were extended to 2010, with Thomson pledging to incorporate it in 30 million TV devices in N. America through contract period, including 19” and up TVs and all digital sets. Thomson had integrated Gemstar’s Guide Plus Gold IPG in 6.5 million sets as of Dec. 31, accounting for majority of 7 million CE products containing technology. Zenith also has deployed Guide Plus in its sets.

NTL Inc. said company, steering committee of its lending banks and unofficial committee of its public bondholders had reached agreement on implementing recapitalization plan announced last month (CD April 17 p7). Under plan, $10.6 billion in debt would be converted to equity of 2 new companies -- NTL U.K. and Ireland, which would hold its main assets in U.K. and Ireland, and NTL Euroco, holding most of its assets on Continent. Plan contemplates receiving $500 million from some members of unofficial committee of bondholders for NTL’s operations in U.K. and Ireland. Separately, steering committee for banking syndicate for Cablecom, NTL’s Swiss cable subsidiary, implemented plan for continued funding of Cablecom. Next step, company said, was for it and certain of its U.S. and U.K. holding companies that had issued publicly traded bonds to file prearranged Chapter 11 bankruptcy cases under U.S. law. Company said that filings were expected May 6 and that none of NTL’s operating companies would be affected.

EchoStar said first-quarter loss narrowed to $38.6 million from $169.8 million year earlier as it posted better- than-expected gain in subscribers. Revenue increased to $1.1 billion from $861.9 million. EchoStar added 335,000 net new subscribers in quarter, surpassing analysts’ estimates of 313,000, but down from 460,000 additions year ago. It ended quarter with 7.1 million subscribers, is targeting 8 million by year-end.

EchoStar said first-quarter loss narrowed to $38.6 million from $169.8 million year earlier as it posted better-than- expected gain in subscribers. Revenue increased to $1.1 billion from $861.9 million. EchoStar added 335,000 net new subscribers in quarter, surpassing analysts’ estimates of 313,000, but down from 460,000 additions year ago. It ended quarter with 7.1 million subscribers, is targeting 8 million by year-end.

No comment was available from Midway Games at our Wed. deadline on its victory in Conn. case that found Chicago game maker defending itself against mother of 13-year-old boy Noah Wilson who was stabbed to death 4-1/2 years ago by playmate. Mother claimed young killer had been addicted to playing Midway’s Mortal Kombat and company wasn’t entitled to First Amendment protection because its ad campaign for game violated unfair trade practice law by targeting children. Mother -- Andrea Wilson -- was seeking damages for loss of parental consortium and emotional distress, Connecticut Law Tribune reported. Report said “in 34 pages touching on Shakespeare, Marshall McLuhan, the Columbine massacre and a flawed guide to poison mushrooms, [U.S. Dist. Judge Janet] Arterton held the videogame is not a ‘product’ and is shielded by the First Amendment.” New Haven judge predicted that if Conn. Supreme Court were to rule, it would not allow parents consortium damages from death of child. Wilson was represented by Hartford lawyer Joseph Moniz, whose case was dismissed on all counts. Report said that in Midway’s motion to dismiss, it contended state products liability act “cannot be contorted to include ideas or expression” in definition of “product.” Wilson’s unfair trade practices claim was filed in court within 3 years, but papers were served on Midway later, barring recovery under applicable state rules, report said. Victory came none too soon for Midway, which is gearing up to release its first Mortal Kombat title -- Deadly Alliance -- for next-generation game consoles this fall.

Saying copyright was under attack, Register of Copyrights Marybeth Peters last week urged copyright community to make its voice heard in case set for review by Supreme Court. Peters’s comments came at American Intellectual Property Law Assn. spring meeting in N.Y.C. Implementing Digital Millennium Copyright Act (DMCA), which was enacted to bring the U.S. into line with World Intellectual Property Organization treaties, gets more controversial, Peters said, spurred in part by furor over law’s anticircumvention provisions. Copyright Office thought situation was bad several years ago, she said, but it “got worse” as Internet shifted public perceptions toward viewing content owners as greedy corporations and copyright itself as suspect, she said.

Two weeks after receiving 15-day extension from SEC to file its annual 10-K report, Adelphia said it wouldn’t meet new deadline (CD April 2 p2), which was end of day Tues. Company said it still was working with its auditor, Deloitte & Touche, to review how it treated its co-borrowing agreements for accounting purposes. Adelphia said it would file its 10-K “as soon as practicable.” Company disclosed earlier in conference call with analysts that certain subsidiaries of Adelphia were parties to co-borrowing agreements with several business entities that were owned by Rigas family, which founded Adelphia. Company officials said co-borrowing arrangements totaled $2.3 billion, but analysts now say those pacts could put Adelphia on hook for $2.7 billion or more. Adelphia said Tues. it didn’t believe its review would result in other material changes in its 4th quarter or full-year results for 2001, as reported March 27. However, company said that “in light of the review process,” it intended to re-evaluate its previous guidance for 2002.