Gemstar-TV Guide went back to its litigious ways this week with an attack on Virgin Media in the UK, which is a cable operator that has traded there for over a decade, alleging that its Interactive or Electronic Programming Guide (EPG) uses three key European patents belonging to Gemstar. While the statement the company issued doesn’t list the complaints in detail it says that they relate to techniques for providing the EPG and for handling recordings from EPGs.
Gemstar names its subsidiary Startsight Telecast, and for those with long memories this was a company that Gemstar acquired, which designed the original sliding grid, and cursor layout of most EPGs, and which used this grid as a basis for recording on VHS players, for accurate and simple recordings.
The Gemstar patents in question have been filed as the European Patent Office, and we wonder if there might be a problem with this, which explains why the UK cable sector has not previously been targeted. The European Patent office has been accepting patents that relate to business models and software patents for some years, and yet the European Parliament voted against accepting these some time ago, leaving the patents system for Europe out of alignment with the US.
There is every chance that these patents are not enforceable, and perhaps Gemstar has lost its patience and decided to try them out.
Virgin came together about a year ago, when the last two remaining UK cable operators merged and then mere yet again with Virgin Mobile in the UK, and became one of the first clear quadruple plays in Europe.
Gemstar-TV Guide is one of the most disliked companies in the entertainment field, having spent much of its early life exceptionally litigious, and trying to establish as many patents as possible. Multiple changes of management left it more conciliatory of late. However its merger with Macrovision, something really unpopular with investors, enough so that it may scupper the deal, may have re-ignited the legal actions of old.
A number of the Gemstar patents must be nearing the end of their useful life and many companies have been tying to get away from the EPG style that the Gemstar patents dictate.
The last legal action of this kind that Gemstar completed was in 2005, when it got $154 million in a settlement with Scientific Atlanta, now part of Cisco.
‘We have worked diligently to license Virgin Media for their distribution of various set-top boxes that contain IPGs covered by our patents, but negotiations did not lead to a resolution,’ said Samir Armaly, executive vice president, intellectual property and licensing, Gemstar-TV Guide. ‘The substantial value of our European patent portfolio has been recognized by leading service providers as well as leading consumer electronics manufacturers in the UK and throughout Europe.’
Content protection business Macrovision is buying EPG and US TV guide business, Gemstar TV Guide for $2.8 billion but Investors trashed both stocks with Macrovision losing $400 million in value to reach a market capitalization of just $1 billion, and Gemstar losing $700 million in value, to $1.9 billion virtually on the day of the announcement.
Meanwhile the same Virgin Media said this week that it would upgrade broadband lines form 4Mb to 10Mb, rolled out by regions from late February for no price increase. This means it will be able to beat out DSL broadband services across the country which have mostly gone to 8Mbps.
It also said that following successful trials in Ashford, Folkstone and Dover, Virgin Media will also be extending its upgrade to a superfast 50Mb and will make the 50Mbps service available to over 9 million homes in the UK by the end of 2008.