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June 3, 2005
ATLANTA -- Scientific-Atlanta, Inc. today announced a series of agreements with Gemstar-TV Guide International, Inc. that provide licenses to certain intellectual property assets and facilitate product development and deployment for both companies. The companies entered into a long-term worldwide patent cross-license agreement, granting each access to the other's interactive program guide (IPG) patents. The companies also entered into a porting agreement under which Scientific-Atlanta will assist Gemstar-TV Guide to port the Gemstar-TV Guide's IPGs onto the Scientific-Atlanta Explorer® set-top platform.
Under these agreements, which have a term of up to nine and-a-half years, Scientific-Atlanta will pay approximately $154 million to Gemstar-TV Guide, and Gemstar-TV Guide will pay approximately $89 million to Scientific-Atlanta. The agreements resolve pending patent litigation and license Gemstar-TV Guide's IPG patents for future use on those Scientific-Atlanta products that are not covered by existing or future network operators' Gemstar-TV Guide licenses. The license agreements also provide Gemstar-TV Guide with a license of certain Scientific-Atlanta IPG patents and certain satellite transmission patents.
Scientific-Atlanta expects to incur a charge estimated at $30-$50 million in the fourth quarter of fiscal year 2005 related to the settlement. The preliminary estimate of values to be expensed is based on a range of estimated values for past and future units. These estimates are subject to further review and may change.
"We are pleased to have agreed on a settlement with Gemstar-TV Guide. We see these agreements as a significant step forward that will have positive benefits for both companies." said Jim McDonald, Chairman, President and CEO of Scientific-Atlanta, Inc.
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