You know that guide menu you get when you are changing channels when watching satellite or cable TV? The man with the patent for that technology made a lot of money as you can guess. Henry Yuen is a brilliant man with several PHDs, and built the company Gemstar from nothing into a several billion dollar company in a few years.
The company went from some 15 employees to several hundred employees when it acquired TV Guide. Macrovision acquired Gemstar in December 2007 for $2.8 billion.
And Now, as Paul Harvey would say, The Rest of The Story. . . A close associate of mine knew Henry quite well. He worked for Henry as a consultant for several years. The story goes that this fellow was offered a high level position by Henry at Gemstar – all the benefits, salary, stock options, and even “golden parachute” were worked out. But there was one last i to be dotted. This fellow needed to be able to hire and fire people. Henry assured him he had that authority, but would not sign such authority into the employment contract. So this fellow heeded sound legal advice that had been offered him years before – if a verbal promise is made, but the promisor will not sign it into a legal document, something is wrong. The fellow refused to take the position.
For several years the company stock went through the roof, and this fellow was kicking himself for not being on the bandwagon. The company was valued at $20 billion in early 2000.
But Some would say that dear Henry was a rather slippery fellow. Litigation erupted between Henry and News Corp (Rupert Murdoch), who owned 41% of Gemstar by this time. It seems Henry had been known as a “patent terrorist” for his willingness to sue potential partners to protect his patents. Henry was finally ousted from Gemstar by Murdoch. News Corporation’s involvement with Mr. Yuen resulted in 2002 in a $6 billion write-down. Henry Yuen was also found guilty of accounting fraud in a civil suit brought by the SEC. Now Henry has been charged by the Justice Department with obstruction of justice. But it seems that Henry is out of the country, with over $150 million of his cash having been moved to offshore accounts, and it doesn’t look like he intends to pay the $22.3 million judgement against him in the SEC civil suit.