[opendtv] Re: ATSC Patent Suit Threaten Nets, Transition

  • From: "johnwillkie" <johnwillkie@xxxxxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Thu, 28 Jun 2007 16:18:47 -0700

IP attorneys who practice in this area tell me that not "ALL" of the
essential MPEG-2 patents are part of the MPEG-LA patent pool, and IIRC,
MPEG-LA makes no assertion that ALL the patents necessary for MPEG-2 are
part of their MPEG-2 patent pool.

And, I should note that there is a pool for most of the essential ATSC
patents, like there is a pool for most of the essential MPEG-2 patents.

Also, I should note that there was no transfer of any patents involved in
the MPEG-2 patent pool.

I should also note that the MPEG IPR process until recently was markedly
more open than that of the ATSC, and I should note that in the past year,
the ATSC IPR process has become more inline with that of MPEG, and
participation in at least some ATSC work is conditional on providing IP on a
fair, reasonable and non-discriminatory basis.

I've never heard of any party making a legal claim that there was anything
wrong with the ATSC or MPEG IP process.

But, other than that, I agree with John's commentary.  :-)

John Willkie

-----Mensaje original-----
De: opendtv-bounce@xxxxxxxxxxxxx [mailto:opendtv-bounce@xxxxxxxxxxxxx] En
nombre de John Shutt
Enviado el: Thursday, June 28, 2007 1:27 PM
Para: OpenDTV
Asunto: [opendtv] ATSC Patent Suit Threaten Nets, Transition

This is old news, so I'm not sure what new development made TV Newsday 
decide to run this story today, other than a need to fill up white space.

All of the relevant patents for ATSC should have been transfered to a 
holding company for nondiscriminatory licensing terms, ala MPEG LA, before 
the FCC ever adopted ATSC for transmission.

I wonder if DVB is also affected by this patent?




TVNEWSDAY, Jun. 28, 8:29 AM ET

Philadelphia-based Rembrandt Technologies is suing ABC, CBS, NBC and Fox 
claiming that their DTV broadcasts infringe on one of its patents and 
demanding heavy license fees. It's also battling Harris in court over the 
same patent. Will the FCC intercede?

By Harry A. Jessell

It might not be technical gremlins that cause the DTV transition to stall, 
but patent trolls.

Rembrandt Technologies, a Philadelphia-based firm derisively dismissed by 
some of its targets as a patent troll, is suing ABC, CBS, NBC and Fox, 
claiming their stations are infringing one of its patents by their use of 
the ATSC standard and demanding heavy license fees.

The firm, which says it has raised $150 million to "acquire patents and 
pursue infringement," is also deep in litigation with Harris, a major 
supplier of DTV transmitters to TV stations, over the same patent.

Concern about the patent and its impact on the ability of TV stations to 
make final switch to digital on in 2009, has bubbled up to the FCC.

And the challenges are causing growing headaches at the networks and 
transmitter manufacturers.

"It's a huge problem," said one network lawyer involved in the fight with 
Rembrandt. "If the networks and stations have to pay for what could amount 
to tens of millions of dollars in royalties for a standard that was supposed

to be free, it will significantly impact the cost of the transition."

Even without license fees, the source said, "nobody has figured out how to 
even make back the money we have to spend to transition to digital. It's a 
lot of equipment with no return.

"Certainly, small stations would have to think twice before they transition 
to digital," the source added.

Rembrandt has not yet sued any broadcaster other than the Big Four, but it 
certainly could-and probably would-if successful in its initial round of 
litigation, the source said.

Rembrandt's complaints against the networks do not mention what licenses 
fees it has asked for.

But, according to a filing in the Harris case, Rembrandt's demand for 
license fees from the networks are substantial-0.5% of "all revenue derived 
from the use of the ATSC standard by your company as a broadcaster licensee"

per year.

Combined revenue of the four networks' TV stations was $7.3 billion in 2006,

according to BIAfn, and all of that will become "revenue derived from the 
use of the ATSC standard" in 2009. One-half of 1% of $7.3 billion is $36.5 

It is unclear whether Rembrandt also wants a piece of the networks' 
programming revenue, which would amount to tens of millions more.

At the same time the networks are litigating the patent infringement suits, 
they are trying to shift responsibility for any infringement to the 
transmitter manufacturers.

Indeed, Harris, in one of its court filings, said the networks have asked to

be indemnified.

Rembrandt filed its lawsuits against the networks last December in the U.S. 
District Court in Wilmington, Del. There, the cases have all been moved to 
the court of Judge Gregory M. Sleet.

In its complaints, Rembrandt alleges that the networks are infringing on one

of its patents by broadcasting ATSC DTV signals.

It identifies the patent as No. 5,243,627 entitled "Signal Point 
Interleaving Technique," which it said was "duly and legally issued" on 
Sept. 7, 1993, to AT&T Bell Laboratories. In the court papers, Rembrandt 
doesn't explain how the patent ended up in its portfolio.

In the related Harris case, Rembrandt is the defendant, not the plaintiff.

In something of a preemptive move, Harris sued Rembrandt in May in the U.S. 
District Court in Orlando, Fla., claiming that Rembrandt had ignored its 
offer a month earlier to license the technology on "fair, reasonable and 
nondiscriminatory [FRAND] terms" and instead had gone after potentially more

lucrative fees from Harris' broadcast customers.

One source close to the litigation said that patent law bars a patent holder

from simultaneously licensing both the supplier and user of a technology.

According to the Harris complaint, Rembrandt is bound to license the patent 
on FRAND-that is, modest-terms because the original patent holder, AT&T, had

promised to do so in 1995 when it joined the Grand Alliance. By not doing 
so, Rembrandt is breaching its contract with ATSC and the other members of 
the Grand Alliance, Harris says.

The Grand Alliance was the group of system proponents that came together 
under the aegis of the Advanced Television Systems Committee in May 1993, 
combined their various technologies and produced a single digital 
broadcasting system, now commonly known as the ATSC standard.

The Grand Alliance comprised AT&T, General Instrument, North American 
Philips, Massachusetts Institute of Technology, Thomson Consumer 
Electronics, the David Sarnoff Research Center (now Sarnoff Corp.) and 
Zenith Electronics Corporation (now LG Electronics).

Supporting Harris' position is a 1995 letter still in the ATSC files in 
which AT&T says that it will license patents "essential to the 
implementation of the [ATSC] standard .under reasonable terms and conditions

on a non-discriminatory, non-exclusive basis."

In its suit, Harris is not only seeking an injunction against Rembrandt, but


"Harris is suffering harm to its relationship with its customers in the 
marketplace," the Harris complaint says. "Moreover, Harris has a reasonable 
apprehension of imminently being sued for infringement of Rembrandt's . 

The FCC interest in the litigation is not surprising.

Nearly a decade ago, the FCC gave every station a second channel so they 
could offer HDTV and other advanced services. To insure a smooth transition 
to digital, the FCC allowed the stations to continue broadcasting on their 
conventional analog channels.

But time is running out on the analog-digital simulcasting. By law, stations

must switch off their analog service on Feb. 17, 2009.

The FCC is under heavy Congressional pressure to make sure the analog 
switch-off happens on schedule so that the government can reallocate some of

the recovered analog spectrum for public safety uses and auction off the 
bulk of it. By some estimates, such an auction could raise as much as $20 
billion for the federal treasury.

When the FCC adopted the ATSC standard as the national standard in 1996, the

agency said the move was based on the assertions of Grand Alliance members 
to license their patents "on reasonable and non-discriminatory' terms.

"We remain committed to this principle and if a future problem is brought to

our attention, we will consider it and take appropriate action," the FCC's 
1996 order says.

But it's not clear what the FCC can do or whether it even has any authority 
to weigh into the middle of a patent dispute.

Staffers in the FCC's Media Bureau and in the Office of Engineering and 
Technology met with executives of at least two transmitter manufacturers in 
Washington two weeks ago to try to get a handle on the situation, according 
to one source following the cases.

Mary Diamond, a spokesman for the FCC Media Bureau, declined all comment, 
refusing even to confirm that a meeting had taken place among transmitter 
manufacturers and agency staff.

Broadcasting is not the only TV medium in the sights of Rembrandt.

Since last summer, the firm has also sued at least four major cable 
operators-Charter, Cox, Cablevision and Time Warner-claiming that they have 
infringed at least four patents, including the "Signal Point Interleaving" 
patent at issue in the broadcasting cases.

Harris and Rembrandt said they were not prepared to comment for this story 
prior to this morning's deadline.

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