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Ending a three-year legal spat, TiVo Inc. and Gemstar-TV Guide International Inc. on Monday settled their dueling lawsuits over the electronic program guide built into TiVo’s digital video recorders. Under the deal, TiVo will license a patent from Gemstar-TV Guide, which in turn will provide some content to TiVo’s service. Terms of the settlement were not disclosed, but both firms said it would not affect their previous financial forecasts. The agreement clears a major obstacle for TiVo, which sells its own recorder as well as its service to cable and satellite set-top makers, which would be reluctant to include legally disputed technology in their offerings, said TiVo spokeswoman Rebecca Baer. “The main beneficiary is our licensing business,” she said. Gemstar-TV Guide CEO Jeff Shell, who described himself as a “loyal TiVo subscriber,” said the agreement “underscores the strength of our technology and intellectual property.” TiVo charges $12.95 per month, or users can pay a one-time fee of $299 for a subscription that lasts the lifetime of the product. Gemstar filed its patent infringement claim against TiVo in January 2000, and TiVo countersued. Gemstar also filed suit against other companies that incorporated guides into their boxes, including Pioneer Corp., Scientific-Atlanta Inc. and Dish Network parent Echostar Communications Corp. The deal indicates a shift from Gemstar’s past aggressive practice of suing the makers of rival program guides, said Josh Bernoff, a Forrester Research analyst. “Gemstar specifically had a very strong patent position with regard to anything with respect to program guides,” he said. “They had patents on the advertising, the grid-based display and also the one-touch recording.” But that position was weakened last year when an administrative law judge with the U.S. International Trade Commission ruled against some of Gemstar’s patent claims against EchoStar, Scientific-Atlanta and Pioneer. Later, then-Gemstar CEO Henry Yuen was ousted amid widening losses and accounting irregularities. Shell, a former Fox cable executive, was named his replacement by Rupert Murdoch’s News Corp., which had a 42 percent stake in Gemstar. “The attitude of Gemstar toward everybody in the business was, ‘You do it our way and you pay us or we’ll sue you and make your life very difficult,’” Bernoff said. “That has changed very much in the last 12 months.” Shares of San Jose, Calif.-based TiVo fell 17 cents, or 1.8 percent, to close Monday at $9.54 on the Nasdaq Stock Market. Shares of Pasadena-based Gemstar-TV Guide slipped 24 cents, or 4.8 percent, to end at $4.78, also on the Nasdaq. Copyright 2003 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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