Love Not War for TiVo and Gemstar

Battling interactive television players Gemstar-TV Guide International said they’re not only burying the hatchet, they’re getting in bed together.

In an agreement announced Monday, Gemstar will drop its patent infringement lawsuit against TiVo, while TiVo will give the company prominent placement on its interface. Los Angeles-based Gemstar develops, licenses and distributes technology and content such as interactive television program guides. TiVo, the San Jose, Calif.-based maker of personal video recorders and software that let users record and playback television programming, developed its own proprietary software and program guides.

Gemstar believes it has a patent lock on electronic programming guides — it’s been a pit bull about defending its patents. In October 1999 Gemstar merged with TV Guide in a $9.2 billion stock deal. TV Guide at the time was the leading provider of digital program guides, while Gemstar provided technology to let viewers record and view TV shows. Soon after the merger, erstwhile-CEO Henry Yuen told the press that he was in talks with TiVo; then, in January 2000, Gemstar dropped paper on it. It’s also sued satellite TV operator EchoStar Communications and lost a complaint to the International Trade Commission about infringement by drop suits against each other for patent infringement. (SONICBlue, maker of the competitive RePlayTV PVR, later went bankrupt and sold its assets to Digital Networks North America.)

Making nice will make it nicer for still-struggling TiVo. Says a company spokesperson, “For larger companies, doing business with us while we were in a patent lawsuit could have made them parties to litigation. Now, as a Gemstar license holder, it makes it much easier for TiVo to do business with other Gemstar license holders. Now, this is one of those hurdles or bumps that just goes away.”

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