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More than 200 lawyers worked on the Gemstar-TV Guide International Inc. complaint, the largest patent case ever taken up by the International Trade Commission. An administrative law judge issued a ruling on June 21 that could break the company’s hold on television program guide technology and derail about a dozen infringement suits pending in federal courts. Attorneys squaring off against Gemstar questioned the company’s legal strategy in having so many firms and lawyers dealing with the case. “Gemstar used separate lawyers for almost every witness,” says one attorney involved in the case. “It was a disaster in the courtroom.” Robert Krupka, a partner at Kirkland & Ellis who represented Pioneer Corp., a defendant in the case, says companies might sue multiple respondents hoping that they can’t cooperate with one another. But that strategy “backfired on Gemstar,” says Krupka. “It seemed the respondents cooperated more with each other than the various attorneys representing the complainant.” Gemstar, based in Pasadena, California, filed a complaint with the ITC in February 2001 that asked the agency to block four companies from importing set-top boxes into the United States. Gemstar claimed the products, which incorporate interactive program guide software, infringed three of its patents. The defendants in the complaint — Pioneer, EchoStar Communications Corp., Scientific-Atlanta Inc. and SCI Systems Inc. — all market or manufacture the cable and satellite set-top boxes. Administrative Law Judge Paul Luckern found that while Gemstar’s patents were valid, they had not been infringed. Perhaps more importantly, the judge ruled that Gemstar had misused one of the patents. “Gemstar felt they had monopolized the portal to the information superhighway,” says Harold McElhinny, a partner at San Francisco’s Morrison & Forester who represents EchoStar and SCI Systems in the ITC case. “This decision cripples them. Unless they can turn it around, this drives a wooden stake through their business plan.” Gemstar plans to appeal Luckern’s ruling. “We may be disappointed, we may be righteously indignant, but we are not disheartened,” Mark Samuels, a partner at O’Melveny & Myers and the coordinator of Gemstar’s outside legal team, told investors during a conference call. In addition to the ITC case, Gemstar has filed numerous patent infringement suits in federal courts involving a variety of patents related to interactive program guide technology. Gemstar has issued more than 180 licenses for its technology, products and services. The company said last year that more than 13 million households have access to its interactive program guides. Gemstar had intended the ITC case to bolster its infringement suits. Litigation between Gemstar and EchoStar, Scientific-Atlanta, SCI Systems and Pioneer and its subsidiaries is pending in federal courts in California, Georgia and North Carolina. EchoStar and SCI Systems also have an antitrust suit pending against Gemstar in Atlanta. “There is only one purpose to filing in the ITC,” says MoFo partner Rachel Krevans. “That’s to shut rivals down.” A favorable ITC ruling prohibits companies from importing products or servicing any products that have been imported, says Krevans. But lawyers at MoFo say the ITC ruling may boost the antitrust suit against Gemstar. The complaint says Gemstar has tied several requirements to the licensing of its patents. Licensees, for example, must use specific advertising content on their interactive program guides and agree to purchase other Gemstar products. Defendants in the ITC case also claimed Gemstar unfairly bundled its patents, requiring licensees to take licenses for patents they didn’t want, and requiring companies to forfeit rights to their own patents on similar technology. In addition to O’Melveny, Gemstar’s legal team included attorneys from Boston’s Fish & Richardson; San Francisco’s Townsend and Townsend and Crew; Pasadena’s Christie, Parker & Hale; and both Washington, D.C.’s Hogan & Hartson and Sutherland Asbill & Brennan. The firms on the other side of the table included MoFo, with Krevans and McElhinny working with Stephen Dunham, in the firm’s Denver office, and Charles Barquist, in the Los Angeles office. MoFo’s co-counsel was Washington, D.C.’s Miller & Chevalier for EchoStar and SCI Systems. Chicago-based Kirkland & Ellis represented Pioneer; and Atlanta-based King & Spalding and Washington, D.C.’s Banner & Witcoff represented Scientific Atlanta.

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