27 January 2008

Gemstar EPG patent strategy, sue first then talk

Our prediction on December 8, 2007 what would happen after the acquisition of Gemstar by Macrovision proved right (see “Macrovision acquires Gemstar, a more aggressive IP policy ahead”. Last week Gemstar sued Virgin Media for patent infringement before a UK court.

Gemstar holds IP rights to a number of “interactive television”, or, more precisely, EPG (Electronic Programming Guide) patents, in the US also known as “interactive programme guides” or IPGs. Through that interactive television entry, many players looking into expanding their video-on-demand, television commerce, Internet access, gaming and other interactive applications. Some predict interactive television will provide the exchange of millions of euros in goods and services via the television. Gemstar has the patents to technologies that would allegedly provide the gateway to this future income streams. Gemstar, focused on the programming guide as the springboard to interactive activities alleges that the electronic programming guide for a long time will be where the consumer moves to interactivity.

Gemstar by acquiring TV Guide of the US consolidated its hold on the electronic programming guide space. Gemstar owns the patent that allows viewers to record a TV show by inputting into the VCR a number listed in a television guide. The navigational devices in tomorrow's interactive TV will prove to be the next battle ground in IP in Europe, taken the vast market it covers. The guide not only lists shows to watch, but provides the gateway for consumers to order movies, record programs and purchase a pizza or other goods and services via a remote control.

When Macrovision acquired Gemstar, it anticipated synergies with another of its recent acquisitions: Mediabolic, a company whose technology enables interoperability of content on multiple devices in the networked digital home. Gemstar's EPG technology could be combined with Mediabolic to create tools for users to find, move, and play content on different devices on their home networks from one convenient user interface. This makes the EPG technology strategic to Macrovision's business on more than just an IP level.

As a result it seems logical that Gemstar will extend their aggressive IP approach to other EPG players in Europe.


Anonymous said...

It's a bit silly to be proclaimimg that your prediction proved right. Your conclusion assumes Macrovision has acquired Gemstar and Gemstar's recent patent litigation action is a result of that acquisition.

However, Macrovision has not yet acquired Gemstar. The planned acquisition hasn't even been put to sharelholders of the respective companies and will require 66% Gemstar agreement and 50% Macrovision.

In fact there is some speculation that the proposed acquisition will fail to get shareholder approval, though that is based mainly on one Macrovision institutional holder publicly stating it will vote no to the proposal.

IPEG said...

Silly or not, Gemstar has been approaching parties in Europe more than 1 year ago, doing nothing. Only after the Macrovisiondid they change their policy for obvious reasons. Macrovision's approach is clear as well, if you act as a company with only IP assets you have no choice but to be assertive.