The Los Angeles Times from Los Angeles, California • Page 46

"C2 SATURDAY, NOVEMBER 20, 1999 LOS ANGELES TIMES Genentech, UC Settle Long Patent Dispute BRIEFLY Courts: $200-million payment, the largest legal restitution to university system, includes funds for research lab. ENERGY Chevron Dealers Decry Possible Rent Increase Chevron Corp. has told some service station operators that it will raise rents if dealer-backed legislation touted as increasing market competition passes. The dealers are upset and contend that their rents could double, thereby adding several cents to gasoline prices. Sen.

Ron Wyden (D-Ore.) has called for an investigation by the Federal Trade Commission. Chevron acknowledged that it sent a letter to 860 dealers nationwide detailing a new lease agreement that would end subsidies if certain legislation passes, including Senate Bill 123, a bill in the California Legislature that would eliminate the practice of "zone" pricing and would require a uniform wholesale price for gasoline. The new lease agreement is necessary to comply with the legislation and to respond to market conditions, a Chevron spokesman said. Will Woods, executive director of an Irvine-based dealer trade group, called the move "extortion" and an attempt to squelch dealers' rights to free speech. Chevron termed that claim "ridiculous" and said such legislation would cause gasoline prices to rise.

(Nancy Rivera Brooks) UC President Richard C. Atkinson said. During negotiations, which excluded the trial lawyers involved in the case, the university suggested that part of the settlement include a donation toward a large research laboratory. "We proposed this as a gesture of goodwill a symbol we are looking to the future," said UCSF Vice Chancellor for Research Zach W. Hall on Friday.

"We were pleased with the gesture and honored to accept it," added Genentech Chairman and Chief Executive Arthur D. Levinson. Both sides described the dispute as "an old story" that began when UCSF scientists determined the makeup of the gene for human growth hormone while the company was racing to insert the same gene into bacteria to produce large amounts of the hormone. The five university scientists who contributed to the discovery will each receive about $17 million from the settlement. One of those researchers, Peter H.

Seeburg, now at the Max Planck Institute in Heidelberg, Germany, admitted in an initial jury trial that as a Genentech employee he returned to the university and took copies of the human growth hormone gene. Genentech scientists denied that the material was used to develop human hormone products. The civil trial ended with jurors' agreeing that the university growth hormone patent was valid but falling one vote short of finding the company guilty of infringement. Sales of Genentech's growth hormone drugs, including Protropin and Nutropin, accounted for $214 million of its 1998 revenue of $1.15 billion. Though Genentech has more than $1 billion in cash, the settlement amount is more than the $182 million in net income the company reported for 1998.

Investors reacted positively to the settlement, which the company will write off in its fourth quarter. San Francisco-based Genentech's stock closed at $87.06 Friday, up $5.50. whether Genentech had infringed on a university patent in developing genetically engineered human growth hormones. But university officials noted that a trial was risky for both sides and that there might have been no payment at all. "A bird in the hand is worth two in the bush, and the bush might have never showed up," UCSF Chancellor J.

Michael Bishop said. He pointed out that the $200 million was in line with 3 royalty payments plus interest terms similar to those negotiated with companies when the growth hormone gene was discovered two decades ago. But there were hints Friday of some internal debate over whether the sum was large enough. "I'm sure there were people who questioned whether we might have done better in court, but there is some value in getting it behind us," TECHNOLOGY Friday, Nov. 19, 1999 First Martha Stewart, Now 'Punky Brewster' Survey Finds Growing Confidence About Y2K Nine out of 10 U.S.

bank customers believe that the banking system is ready for the year 2000, and a majority believe there will probably be no problems with ATM machines, direct deposit payments or credit card systems, according to a survey by the Gallup Organization. The poll, sponsored by the Federal Reserve System and the Federal Deposit Insurance found less concern about the year 2000 problem among bank users since the last time the poll was conducted in March. Nearly two-thirds of those polled in October and November were either not too Concerned or not concerned at all about the year 2000 computer glitch. That figure marked a turnaround from March, when a majority of people surveyed said they were very or somewhat concerned about the glitch. In the latest poll, nearly 40 said they would probably have some extra cash on hand, but most said they would take out less than $500.

(Ashley Dunn) Ziff-Davis to Sell Stake in ZDTV Ziff-Davis Inc. agreed to sell its 64 stake in the ZDTV interactive cable television channel to Paul Allen's Vulcan Ventures getting $204.8 million from its partner in the venture to help reduce debt. The computer magazine publisher, a unit of assets to help boost its share iii l.nHnn Japan's Softbank is selling rm. jjuue. me tuiiijjduy i iiwuc a Dublic in April 1998.

The unprofitable ZDTV channel, launched in --) I 11,700 High" I 11,03967 i 11,600 Close c(vl Low I 10,976.06 ",500 11,400 zi 11,200 u.ioo 1 1 i ft 11.000 I I 10.500 10,400 111 I 10,300 -1 0,200 -I I 1 uw i 10,000 9900 4 11 18 2 5 1 8 15 s' 1.400 i Kj i 1,200 Jlllllllll ll i ll 1998, focuses on computing, technology and the Internet. Viewers can interact tnrougn its web site and video mail and appear on air as part of the programming. New York-based Ziff-Davis rose $1.06 to close at $17.81 in heavy trading on the New York Stock Exchange. (Bloomberg News) COMPANY TOWN ANNEX Wynne to Resign as COO of Sony Pictures Sony Corp. said Bob Wynne will step down as co-president and chief operating officer of its Sony PiGtures Entertainment division when his contract expires at year-end.

Wynne said he'll pursue other opportunities and will continue to consult the movie studio on financing and other transactions. The move comes just two months after SPE rehired Mel Harris, giving him the same titles as Wynne, and promoted Masayuki Nozoe to co-president. The three execu-', tives have been running the studio's day-to-day operations, reporting to SPE Chairman John Calley. Wynne, a lawyer, joined the movie studio as a corporate executive vice president in November 1995. (Bloomberg News and Reuters) TRADE jjiuiu since selling aucuea iu uie to Be Corrected By PAUL JACOBS and KENNETH R.

WEISS TIMES STAFF WRITERS Ending one of the most contentious legal disputes in its history, the University of California Board of Regents on Friday unanimously agreed to a $200-million settlement of a long-running patent infringement case against Genentech Inc. The lump-sum payment is believed to be the largest legal settlement for the university system and includes a $50-million "donation" toward construction of a building to be named by Genentech on UC San Francisco's new Mission Bay research campus. Despite its size, the settlement falls short of the $2.8 billion that the university might have received in a federal jury trial scheduled for January that would have decided Daily Diary Aug. Sept. WILSHIRE 13,126.150 This figure is now composite volume, which includes trades of Highs and rows shown are now actual and not theoretical.

Ongoing Tech Nasdaq to Yet From Times Wire Services U.S. stocks wrapped up a week of gains with a mixed performance as tech shares propelled the Nasdaq composite index to its 13th record in 16 sessions, but the Dow industrials fell. "If you're not exposed to technology stocks, you're compelled to buy them to keep up with your competitors," said Mark Dawson, a money manager with Seattle-based Rainier Investment Management. Nasdaq rose 22.14 points, or 0.7, to 3,369.25. The Dow Jones industrial average fell 31.81 points, or 0.3, to 11,003.89, dragged down by Caterpillar.

The broader Standard Poor's 500 index dipped 2.94 points, or 0.2, to 1,422.00. Three stocks fell for every two that rose on the New York Stock Exchange. For the week, Nasdaq climbed 4.6, the 500 1.9 and the Dow 2.2. Caterpillar, the world's biggest construction-equipment maker, slumped $6.75 to $49.19 after warning it will earn only slightly more this quarter than its third-quarter profit of 61 cents a share because of slumping machinery sales. The average estimate of analysts surveyed by First CallThomson Financial was for Caterpillar to earn 97 cents.

JDS Uniphase rocketed $10.75 to $213.81 after Soros Fund Management, the money management company controlled by billionaire George Soros, said its investment funds recently held almost 440,000 shares of the world's biggest maker of fiber-optic equipment parts. BAJA Continued from CI calmer mode," said Yuma, retiree Alex Sanchez, one of the residents on Punta Banda, a scenic peninsula 15 miles south of Ense-nada and about 85 miles from the U.S.-Mexico border. "We know we aren't out of the woods, but at least we don't have anyone breathing down our necks." Mexican officials tried to carry out the initial eviction order between Oct. 8 and 11, but were kept off the property by a sand barricade erected by the Ejido Coronel Este-ban Cantu, the peasant community that has controlled the beachfront acreage since 1973. Since taking possession of the land, the ejido has leased lots there, mostly to Southern California resi- my I' I Dow Jones DOW 30 lrSuBS 11,00389 -3181 jif i'll I 1 1 i sp 500 I Hi I- v.

1 'Wi NYSE 646.12 -218 Uj jV UI iA, fc I i i NASDAQ 3,369.25 2 3 30 6 13 2 0 2 7 22.14 New York Volume 1.093.03 million shares I Vl Imports Rise at Long Beach, L.A. Ports The ports of Long Beach and Los Angeles received more imports in October than a year earlier, as retailers continued to stock up for the holiday shopping season and build inventory before 2000. Exports were also up, for the fifth straight month in Los Angeles and the third consecutive month in Long Beach. Shippers brought 204,000 containers last month into the Port of Long Beach, up 13 from October 1998, as imports of toys and other consumer goods rose. Imports to Los Angeles jumped 23 to 199,000 containers.

Exports from Los Angeles were up 16, while Long Beach exports rose 9.3. The rise in exports still wasn't enough to match the volume of imports, forcing shippers to send empty containers back to Asia. The "number of empties exported from Long Beach was up 20, and empties shipped out of Los Angeles were up 33. (Bloomberg News) 'MEDICAL SERVICES Oct. Nov.

11,900 NYSE stocrs on other exchanges. Los Angeles Times Boom Propels Another High Crude oil soared 3, briefly trading at its highest price since the Persian Gulf War in 1991, on expectations that four more months of low production from OPEC will deplete world inventories. Crude for December delivery settled at $26.58 a barrel on the New York Mercantile Exchange. Bond yields dipped slightly. Among the equity highlights: Tech gainers included Microsoft, up $1.06 to $86.

It rose to $89.50 in after-hours trading on the news that an arbitrator was appointed in the government's antitrust case. Chip leader Intel gained $1.38 to $79.88, while wireless giant Qualeomm rose $11.25 to $367.06. IBM jumped $5.94 to $103.94, limiting the Dow's loss. Sun Microsystems gained $3.81 to $129.56, and Compaq climbed $1.19 to $26.25. CacheFlow (ticker symbol: CFLO) soared $102.38 to $126.38 in its first day of trading, the sixth-best debut ever.

The Sunnyvale, company specializes in equipment that speeds delivery of Web pages. Among other new offerings, SciQuest.com (SQST) rose $14 to $30 and Exactis.com (XACT) gained $10 to $24. China.com, a Hong Kong-based Internet company focused on electronic commerce, jumped $24.31 to $117.69 after announcing a 2-for-l stock split, effective Dec. 6 for shareholders of record Nov. 23.

In foreign trading, Mexico's main index climbed 1.5 to its third straight record, while Brazil's main index vaulted 2.9. Market Roundup, C4 dents and retirees who then built houses ranging in value from $50,000 to $1 million. The ejido also sold or leased land to an Ensenada developer who built the Baja Beach" and Tennis Club hotel and an adjoining subdivision. The ejido and the residents have defied the formal eviction notice, issued by Mexican courts last summer after the Mexican Supreme Court ruled that the ejido's possession of the land was invalid and that the pre-1973 owners should retake control. Those owners have been trying to reclaim the land ever since the ejido was formed.

The formation of ejidos, or cooperatives, has been a means of land redistribution since the 1910 Mexican revolution. But many ejidos have come under legal challenge in recent years, creating enormous legal problems for U.S. Insulin Pump Problem Mill! A Briefing for Investors If Martha Stewart can go public, why not "Punky West Hollywood-based Inc. co-founded by 23-year-old actress Soleil Moon Frye to develop an entertainment and chat site aimed at young people filed Friday with the Securities and Exchange Commission for an initial stock sale valued at up to $36 million. The company is banking on the entertainment industry connections and popularity of Frye who played the precocious Punky Brewster on the 1980s NBC television series of that name to attract a target audience of 13- to 35-year-olds.

The company plans to launch its site next year, offering live programming, e-mail, personal Web pages, chat rooms, entertainment news and electronic-commerce links. "Many members of our target market will remember Ms. Frye" from her TV series, the company said in its filing. "We believe we will derive significant benefits from Ms. Frye's extensive Hollywood experience and contacts." Webstation.com plans to use the Internet to broadcast movie premieres, fashion shows, skateboard competitions, surfing events, concerts and backstage parties.

The company will also produce special events such as college spring break activities in Daytona Beach and Key West, and Cancun, Mexico. It also plans to target Spanish-speaking communities in the U.S. The company plans to offer 3 million shares at $10 to $12 each under the Nasdaq ticker symbol VIEW. First Financial Equity Corp. will underwrite the stock sale.

(Bloomberg News, Times Staff) Mattel Insiders in a Buying Mood Five Mattel Inc. executives and directors bought $3.1 million in stock last month, three weeks after shares of the world's largest toy maker had their biggest drop in almost 17 years, new filings show. The biggest buyer was director John Vogelstein, vice chairman and president of Warburg Pincus who paid $1.9 million for 150,000 shares at prices as low as $12.75. Shares of the El Segundo-based maker of Barbie dolls and Hot Wheels cars tumbled 30 on Oct. 4 after Mattel warned that its third-quarter profit would miss forecasts because of slow software sales at its Learning Co.

unit. Some analysts said the buying may indicate that the shares, which have lost two-thirds of their value in the last year, have bottomed. "When they have bought this much stock, it's a pretty strong statement that the stock is oversold," said David Coleman, editor of residents who have bought or leased lots in Mexico. Punta Banda residents admit they are confused by the legal issues, but they remain hopeful they will be allowed to stay. Some say a recent spate of bad publicity for Baja California will somehow result in their getting a break.

Residents say that Baja tourism has declined noticeably with the widely publicized eviction squabble, a recent wave of violent crime, a new rule requiring $800 deposits on U.S. vehicles in Mexico, and recent traffic accidents in which injured Americans have had difficulty returning to the United States for treatment. "Everyone is confident that something reasonable will be worked out because of all the bad publicity. Mexico doesn't want to shoot itself in the foot, over this," Vickers Weekly Insider Report. "This is particularly aggressive buying by Vogelstein." On Friday, Mattel's shares (ticker symbol: MAT) eased 31 cents to close at $14.06 on the New York Stock Exchange.

But not everyone is convinced the stock offers great value. "Insider buying is a plus and they likely think the stock is cheap," said money manager L. Roy Papp, chairman of L. Roy Papp Associates. But he said some of the buying could simply be a symbolic show of support for beleaguered Mattel Chief Executive Jill Barad.

"I'm not convinced" it's time to buy, he added. "Some of the brands aren't worth as much as they used to be, especially Barbie." (Bloomberg News) Al Frank Sells a Controlling Stake Al Frank, one of the nation's top-ranked investment newsletter writers, has sold a 70 stake in his Laguna Beach-based company, Al Frank Asset Management to a group of Minneapolis investors. Frank, 69, will continue to write the newsletter, the Prudent Speculator, and help run the company's small-cap mutual fund and its private investment accounts, which manage about $60 million. "I'll be doing many of the same things I do now," said Frank, who has been overseeing the business from his home in Santa Fe, N.M. "I just won't have the day-to-day responsibilities.

It's been a good run for 22 years." Frank founded his newsletter in 1977 after being bitten by the investment bug while studying for his doctorate in education at UCLA. His investment philosophy consists primarily of finding undervalued stocks and waiting patiently for prices to rise. The Prudent Speculator was ranked the No. 1 investment newsletter, on a total return basis, for the eight-year period ending Sept. 30, according to Hulbert Financial Digest, which ranks investment newsletters.

But in recent years, Frank's investment strategy has lost followers, particularly as the market has focused less on fundamental financial analysis and more on fast-moving Internet and technology stocks. Frank's newsletter dropped from about 6,000 subscribers last year to 3,000 today. The new owners hope to change that trend with increased marketingsomething Frank rarely did. "We're excited about introducing his philosophy to more and more people," said James J. "Jamie" Dlugosch, an Minneapolis investment banker who leads the group that bought the company.

The sale price was not disclosed. Dlugosch, 34, will take over as president, working from a new office in Minneapolis, (Edmund Sanders) said Grant Hoel, 78, a Punta Banda retiree from San Juan Capistrano. But Mireya Sandez, a Tijuana attorney representing several of the seven pre-1973 landowners trying to retake the property, was adamant Friday that the Agrarian Reform Ministry abrogated its re-' sponsibility in failing to carry out the eviction and that her clients are hopeful that the order will soon be reinstated. Sandez dismissed the possibility that her clients will reimburse residents for their property. "The owners don't have the obligation to reimburse anything," she said.

About half a dozen residents have already abandoned and boarded up their property after stripping the interiors of anything of value, fearing imminent eviction, Hoel said. "They should have waited," he said. MiniMed Inc. said it is upgrading its insulin infusion pump Model 508 because of a software programming problem that could result in a diabetic patient receiving an incorrect dosage. MiniMed said it is sending a notice of the problem to purchasers of the pump it distributed from Oct.

4 until Thursday. The Sylmar-based company said the "rare and minor" error has been addressed, and all products shipped beginning Friday contain an upgraded version of the software. The device is used by patients who treat diabetes with continuous insulin infusion. "Our independent medical monitor confirmed for us that this anomaly does not represent an urgent matter," said Terrance Gregg, MiniMed's president and chief operating officer. The company expects the upgrade to cost between $1 million and $1.5 million, which could lower its fourth-quarter profit by 1 or 2 cents a share.

Analysts are expecting earnings of 24 cents a share for the quarter. Shares in MiniMed fell $5 to close at $80 on Nasdaq. (Bloomberg News and Reuters) FOOD Ocean Spray Decides Against Sale Ocean Spray Cranberries Inc. said it is not putting itself up for sale or pursuing a merger, two months after it hired a financial advisor to explore its options. The Lakeville, cooperative of cranberry and grapefruit growers will pursue "substantive" changes to the company, including selling or closing some businesses or product lines and changing the board's structure, said spokesman Chris Phillips.

Profit at Ocean Spray has been hurt by competition from PepsiCo which last year acquired Tropicana Products, and by a glut in the cranberry market that has cut prices. The company said that new marketing initiatives and new products have improved sales in the last five months. Ocean Spray is still looking to hire a chief executive to replace Thomas Bullock, who is retiring, Phillips said. (Bloomberg News) Also. Five private lawyers hired to represent Texas in the state's lawsuit against the tobacco industry agreed to accept $3.3 billion for their work instead of seeking more money from the state.

The five attorneys were under a federal judge's order to decide by Friday whether to accept the amount, set by a national arbitration panel, or try to collect under their original state contract, which called for them to get 15 of whatever Texas receives from the tobacco industry. Abercrombie Fitch said it will verify that buyers of its racy Christmas catalog are at least 18, in a response to complaints from Michigan's attorney general over the catalog's sexually explicit articles and nude photos. The policy will be implemented nationwide at 230 stores by the end of next week. -iGuide to Our Staff: Need to reach Business section reporters 'or editors? A euide to the section's staff can be found at lfhttp: 1 www.latimes.combizstaff..