Gemstar was dealt serious setback late Fri. when ITC administrative law judge ruled that 3 of its patents for on- screen interactive program guides (IPG) hadn’t been infringed upon. Judge Paul Luckern said “no domestic industry” existed for patents, thus allowing EchoStar, Pioneer and Scientific- Atlanta (SA) to continue importing satellite receivers and cable set-top boxes. All 3 had designed their own IPGs for STBs and Gemstar filed complaint with ITC in 2001 seeking to block import of STBs it said had IPG that infringed on its patents. Ruling could mean end to Gemstar’s headlock on IPG market and it risks licensing agreements with cable TV operators, including Comcast and Charter, to use its program guides.

Gemstar was dealt serious setback late Fri. when ITC administrative law judge ruled that 3 of its patents for on-screen interactive program guides weren’t infringed. Judge Paul Luckern found that “no domestic industry” exists for patents, thus allowing EchoStar, Pioneer and Scientific-Atlanta (SA) to continue importing satellite receivers and cable set-top boxes. EchoStar, SA, and Pioneer all designed own IPGs for STBs and Gemstar filed complaint with ITC in 2001 seeking to block import of STBs it said had IPG that infringed on its patents.

CE industry and investment community were awaiting preliminary decision by ITC judge in Gemstar-TV Guide International patent case that was believed imminent late Fri. (after our deadline) and was likely have future bearing on how interactive program guide (IPG) technology would be commercialized. ITC Administrative Law Judge Paul Luckern, who postponed earlier March deadline for decision, was to rule in case in which Gemstar claimed that EchoStar, Scientific-Atlanta (SA) and Pioneer had violated its patents for IPG and was likely determine whether company built momentum or suffered blow to status as key supplier of IPG technology. Luckern’s ruling will set stage for ITC to complete investigation by Sept. 23.

Nokia trimmed its preliminary outlook for 2nd half of 2002 to sales growth of up to 10% over same period last year, down from previous expectation of at least 15% growth. At midyear investors meeting in Helsinki, Nokia stood behind earlier guidance of 80 cents per share and to estimate that mobile phones would reach 400-420 million handsets, up from 380 million year ago. Nokia has targeted 40% market share for wireless phones and taking leading market position in China. It plans to have first 3G network in operation in Sept. Separately, Nokia signed 3-year agreement with Belgacom Mobile, terms not disclosed, to build 2nd-generation GSM wireless infrastructure in Belgium, providing GSM network infrastructure to carrier, which operates under Proximus brand name.

SES Americom is “trying to sneak in the back door” by using license granted by Gibraltar to place DBS satellite at orbital location that wouldn’t be permitted if license were authorized by FCC, DirecTV Pres. Roxanne Austin said. Citing possibility of interference to DBS subscribers, DirecTV and EchoStar filed opposition at FCC to SES application to launch satellite for competitive DBS service(CD April 26 p3). “Our opposition to SES Americom’s FCC petition isn’t about competition -- we welcome the competition -- it’s about interference,” Austin said. Proposed DBS service offered by SES at 105.5 degrees would cause customers to “suffer significant service interruptions and impede our ability to deliver local channels,” she said. DirecTV said SES satellites would be only 4.5 degrees from DirecTV satellites at 101 degrees and 110 degrees, which would violate 9 degrees spacing established by ITU and FCC.

Adelphia announced Mon. it had fired accounting firm Deloitte & Touche and revised its 2001 subscriber count. In 8-K SEC filing, company said that based on preliminary results of investigation of special board committee, it was making downward revision of its 2000 and 2001 financial results and management’s guidance for 2002 earnings before interest, taxes, depreciation and amortization (EBITDA). Company reduced its 2001 revenue to $3.51 billion from $3.58 billion as reported in March and its 2001 EBITDA to $1.19 billion from $1.41 billion. For 2000, Adelphia lowered revenue to $ 2.54 billion from $2.6 billion and EBITDA to $1.04 billion from $1.2 billion. “Management’s revised preliminary estimate of EBITDA for 2000 and 2001 corrects the items in the previously announced operating results that current management believes were erroneous, and reflects more conservative accounting policies that the company intends to follow in the future,” Adelphia said filing. Citing inaccuracies in previously reported data, company also cut its 2001 basic subscriber total to 5.76 million from 5.81 million.” The company said it was in process of engaging new accounting firm and “information” about termination of old firm would appear in new filings. Meanwhile, Leonard Tow and Scott Schneider, who joined Adelphia board May 24, announced their resignations. In letter to CEO Erland Kailborne, they said “revelations of the unreliability of corporate data, as well as the ongoing serial disclosures of wrongdoing,” had made it impossible for them to contribute “meaningfully” to process of restoring credibility and financial integrity of company.

More bad news hit Microsoft Thurs. as Britain’s Independent TV Commission banned TV ad for Xbox videogame console after it received 136 complaints from viewers who found it offensive, shocking and in bad taste. Action came as Microsoft was mounting uphill battle to compete against Sony’s PlayStation 2 (PS2) in Europe, where it reduced Xbox price before SRP cut in U.S., and less than week after MIT student said he hacked Xbox security system and posted his findings at school’s Web site (CED June 5 p3).

Consumer intentions on buying TV sets fell in May from April, according to preliminary data in Conference Board monthly survey. Of 5,000 households polled, 6.5% said they planned to buy TV set in next 6 months, vs. 7.2% in April, 6.3% in March, 7.0% in May 2001. Consumer Confidence Index edged up 1.3 points from April, Conference Board saying: “Consumers’ upbeat mood about current business and labor conditions underscores the economy’s continuing recovery.” But it said slight decline in Expectations Index suggested “that the pace of economic growth will not accelerate in the months ahead.”

Federal judge denied preliminary injunction in Starband’s breach-of-contract suit against EchoStar. U.S. Dist. Judge Claude Hilton, Alexandria, Va., issued order denying request for injunction May 24, day after Starband filed suit (CD May 28 p11), court said. Starband, jolted by EchoStar’s decision in March to end distribution agreement, charged in suit that it was owed “millions of dollars” in monthly and wholesale service fees by DBS provider. Starband contended that as result of EchoStar’s failure to turn over collections and billings functions it was suffering damages of $385,000 per week. “As a growing business, we couldn’t financially wait any longer to receive payments for the services we provide,” Starband Chmn. Zur Feldman said in May 24 e-mail to customers. “It’s unfortunate we were forced to take this legal step. It was a last resort for us to resolve these issues. We always prefer to settle business matters in a business environment, not in a courtroom.”

Contributory and “vicarious” copyright infringement were among allegations in 76-page suit filed Fri. by RIAA and National Music Publishers’ Assn. (NMPA) against Napster-like file-sharing service, Audiogalaxy.