In the digital world, it seems that everything is reinvented, and someone claims that they have a patent on that reinvention. In the last few weeks, we have seen news about patent claims asserted against radio broadcasters for their digital music storage systems, against public broadcasters for podcasts, and even against companies trying to comply with the FCC’s new guidelines for E-911 (emergency communications over wireless and VoIP networks) providers. These claims highlight that media companies and others in the communications industry have to be prepared for patent litigation almost as a cost of doing business – and need to consult with patent lawyers about strategies if they are faced with such claims, and consider the potential of concerted defenses with others similarly situated if the defense does not violate other laws (such as the antitrust laws). What claims have been raised recently?
Over the last two years, thousands of radio stations across the country have received letters claiming that their digital music storage systems violated a patent from a company called Mission Abstract Data. While the patents in question have a checkered history at the Patent Office – after being issued, they were reexamined and their basis questioned, with the Patent Office ultimately agreeing that the patents, as limited through the reexamination, were in fact valid. But that decision was itself challenged by equipment manufacturers whose music systems could infringe on the patent. That further reexamination is still underway. Nevertheless, as that reexamination continues, the company that currently has rights to the patent, Digimedia, has sued four radio station owners in Texas claiming that they are violating these patents controlled by the company. These suits are in addition to a long-pending case against a number of large broadcasters, which has been stayed pending the outcome of the Patent Office reexamination (though the patent holder has asked that the stay be lifted – an argument to be considered later this month). Some observers have suggested that these new suits may be a precursor to other actions to try to convince reluctant broadcasters to take out a license rather than fight a lawsuit.
Public radio, and other media companies, are also facing another patent claims that may have relevance to many other broadcasters. This claim comes from a company claiming that its technology covers podcasts – as it has a patent from 1996 covering a system that allows for the identification and retrieval of media content is a series automatically as new episodes become available. Current, the magazine of public broadcasting, recently ran an article on that patent, a blog post from EFF – the Electronic Frontier Foundation – lists a number of other prominent podcasters who have been hit by the claim. EFF has been acting as a clearinghouse on the claims, gathering and sharing information among those who have been subject to it.
Even the FCC has gotten into the act – though in an area not directly relevant to broadcasters. Last week, the FCC issued a public notice asking what it can do as companies using the E-911 system authorized by the FCC have recently been hit by claims that these systems infringe on a patent and must be licensed.
How can users of technologies that are widely in use, using systems sold by reputable vendors, end up facing these kinds of lawsuits? As we have written before, a patent gives the inventor the right to bring an action against anyone who uses the patent without permission – giving them the right to sue both manufacturers and users. And, under the current system, a patent can be issued to a company or individual who comes up with an invention, even if they are making no attempts to actually use their invention themselves through the manufacture and sale of a product using their technology. Thus, these companies are often called "Patent Assertion Companies," or "Non-Practicing Entities" or, more pejoratively, "patent trolls." In essence, these companies use their "inventions", or ones that they have purchased, not to build or market products, but to obtain licenses from as many users as they can get to sign agreements.
We are not patent attorneys, and the patent law system is one that is very complex. Experts are needed to navigate through the maze of processes and possible defenses that can be raised if you end up at the end of a complaint from one of these companies. As has been the case with the Mission Abstract Data/Digimedia patent, claims can be made at the patent office to invalidate the patent. Engineers can review your systems to make sure that you really infringe on the terms of the patent, as some of these, like the Digimedia patent, have been limited and only cover systems that store and retrieve music in a specified way. Parties may also get together to defend themselves against a patent – if that joint defense does not itself create issues under the antitrust laws or other laws. But, as the suits against the stations in Texas make clear, these claims should not be ignored – as the threats made in the demand letters that many entities receive are real, and can lead to a real legal action.