Patent Troll Attacks Cable, Digital TV Standards

DavidGarganta writes "A patent troll firm in suburban Philadelphia, Rembrandt IP Management, is trying to force large cable operators and major broadcasters to pay substantial license fees on the transmission of digital TV signals and Internet services. The firm is apparently trying to get 0.5% of all revenues from services that supposedly infringe on the patents. The targeted companies include ABC, CBS, Fox, NBC, Comcast, Time Warner, Cox, Charter and Cablevision. According to MultiChannel News, Rembrandt's assault is especially aggressive, even for a patent troll: 'It is attacking two key technology standards used by the cable and broadcast industries, CableLabs' DOCSIS and the Advanced Television Systems Committee's digital-TV spec. "If they're successful, this could affect everything from the cost of cable service to the price of TVs," said the attorney close to the litigation, who spoke only on condition of anonymity.'"

Comments

What the hell...

[kaos07]

What the hell is a patent troll?

When I first read it I assumed it had something to do with internet trolling but the articles describes it as some sort of legitimate enterprise.

Re:What the hell...

[betterunixthanunix]

Not sure if you are joking, but for anyone who is wondering what a patent troll is, it is a company that makes money simply by suing other companies for patent infringement. This is different from a company like Microsoft, that creates and sells other products, and is therefore stuck in a mutually-assured-destruction situation that prevents them from suing others for key patents. The problem with patent trolls is that they add absolutely nothing to society; most don't even invent the patented idea, they just buy it from someone else.

Re:What the hell...

[Anonymous Coward]

While I think all this patent troll stuff is bullshit, it is worth pointing out that if I accept your last statement, patent trolls ARE providing a service. By purchasing patents, these patent trolls provide a market for patents which puts money in the hands of small time inventors, who don't have the resources to commercialize their inventions. Without a patent market, it would be more difficult for small inventors to get paid. (Inventors inside companies already have R&D resources to convert patents to products.)

The fact that these companies didn't invent the idea does not negate their claim. As long as we treat ideas as property, then people should be free to buy and sell that property. You can own your TV despite having not created it. You exchanged money for it in a mutually agreeable transaction.

The real problem is the patent itself, not the troll. The troll just highlights the underlying problem. If every patent were as efficiently enforced as the few that fall into the hands of patent trolls, commerce would grind to a halt, and we would have to do something about it.

Re:What the hell...

[baboo_jackal]

By purchasing patents, these patent trolls provide a market for patents which puts money in the hands of small time inventors, who don't have the resources to commercialize their inventions.
That's an interesting take on patent trolls. But it's kind of like a guitar player selling his guitar to pay for a kick-ass amp... Whoops.

Without a patent market, it would be more difficult for small inventors to get paid.
How about this instead? Just make and sell your damn invention. If it's that good, I should think you'd have no problem. Want to sell out, but just a little? OK, how about selling exclusive licensing rights to a bigger company for royalties? I don't know. It seems to me that there are a *lot* of other ways small inventors can profit from a good idea that *don't* include selling the exclusive rights to create their widget to a company who intends to not make the widget and just sue others who do.

Maybe this is an oversimplification, but if you don't intend to make the damn thing you want to buy the patent to, you shouldn't be allowed to buy it in the first place.

Ahhh

[cloakable]

Aren't patents wonderful? Spreading innovation everywhere!

Re:Ahhh

[betterunixthanunix]

I've said for a while that patents should be non-transferable and automatically revoked if the patent holder does not market the idea. Lawsuits are, of course, not a form of marketing. Patent trolls add nothing to society, and therefore defeat the point of the patent system. Why do we still tolerate them? Virtually every company that produces something is threatened by patent trolling, and patent royalties significantly increase the price of consumer goods. We can have a patent system, we just need to completely reform it.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Old news now?

[betterunixthanunix]

SCO isn't a patent troll. SCO does have a business that is not based on suing others for patent infringement, and that's why they are in so much trouble now: countersuits. A patent troll is immune to being sued because it does not distribute anything, it just makes money through royalties and lawsuits, and so can't really be sued for anything. It is actually a very dangerous entity, because it has nothing to lose.

Innovation

[vtcodger]

Isn't it remarkable how patents stimulate innovative litigation? Think of the tragedy if we just junked the whole nutty system. Imagine the packs of feral, unemployed lawyers roaming the streets attacking innocents.

Sooner or later, we'll save ourselves untold trouble if we vastly scale back the notion of Intellectual (imaginary) property to something relatively sensible.

Re:Innovation

[Firethorn]

Imagine the packs of feral, unemployed lawyers roaming the streets attacking innocents.
Step 1: Open a limited hunting season
Step 2: Open a general hunting season
Step 3: General bounty
Step 4: Hire professional hunters for extreme or dangerous areas.

Personally, given the urban nature of feral lawyers I'd propose at least an initial hunting season be limited to experienced bow hunters.

opened a can

[phrostie]

just look at the list of companies.
they may not get along with each other, but the last thing you want to do is force them to unite against a common enemy.

i think they just opened a can of woop-ass.

Look at their "Careers"

[SerpentMage]

In their careers section they have the following description.

http://www.rembrandtip.com/careers.html
"
Analyze markets and companies to assess IP commercialization opportunities

Develop and model business cases and royalty analysis for specific licensing opportunities or industries

Perform competitive analysis breakdown and strategic direction of leading industry companies

Supporting analysis for new business opportunities around targeted patent acquisitions
"

Give me a freaken break! This company goes out looks at what are up and coming industries. Then it "creates" ideas and patents the heck out of them so that they can license and throttle an up and coming industry.

This is not even funny. Imagine coming up with some really cool idea, but to have it patented away from you. This is how industries are broken. Part of the problem with this is that lawyers can sue without restrictions. Lawyers can go fishing in the industry. They can patent, sue and see what sticks.

To make that go away, you can do the following:

1) Make lawyers work pro-bono (as they do in many countries). That is they can only charge so much.
2) Make lawyers pay if the lawsuit fails. For example, if say somebody brought up a lawsuit where they wanted 50 billion say, "if you loose you need to come up with say 1%". That way you can still sue, but you better have a good case. Otherwise it is going to cost you quite a bit.

Re:Look at their "Careers"

[DustyShadow]

This company seems interesting to me. After viewing their biographies and the "Working With Rembrandt" page, it sound like a law firm that is willing to work on a contingency basis:

If your patent or portfolio of patents is being infringed, Rembrandts stands ready to pursue the infringement and allow you to see the real value of your invention. Our process is comprehensive. There is no fee to patent holders. Simply:
1. Click here to notify one of our market analysts of the nature of the infringement, info@RembrandtIP.com or call us at 888-736-4947.
2. Once you notify us, we will immediately issue you a non-disclosure so that we can begin to collaborate with regard to the nature of the infringement.
3. After review, we will notify you of our opinion regarding your patent and the implications of the infringement. All patents are reviewed by Rembrandt's executive staff, headed by the company's Chief Executive Officer Paul B. Schneck, Ph.D.
4. If your patent is accepted, we will work with you to acquire the patent and structure the terms of the deal.
5. Once acquired, Rembrandt's in-house staff and outside consultants go to work building, strengthening, articulating and focusing the claim.
6. Throughout the procedure, Rembrandt collaborates closely with inventors to keep them apprised of the process.
7. Rembrandt invests its own capital to retain non-contingency legal support in order to pursue patent pirates and deliver the value of an invention to an inventor.
8. Rembrandt attorneys bring litigation against patent pirates and support the claim through litigation including possible appeals.
9. Awards and settlements are shared with the inventor, Rembrandts investors and the Rembrandt charity. This is interesting to me as a law student because I once worked on a case where the other side's attorney took payment by obtaining partial rights in the patent. I was told by the lawyers in my firm that that is a very sketchy thing to do and it borders on being against ethics rules that lawyers have to follow. It almost looks to me like these guys are trying to hide their attorney status so they can slide by the ethics rules.

perhaps property law could provide a solution...

[voss]

The concept is called adverse possession. In real property someone can aquire possesion of abandoned property
by open and continous use. Now you wouldnt want someone becoming the new patent/copyright holder but the negative part
"extinguishing the rights of the prior holder" would make perfect sense and help deal with both the problems
of patent trolls and abandoned copyrights as well as legalizing abandonware.

If a reasonable person knows or should have known their patent or copyright was being infringed on and takes
no action within say 3 years, their patent or copyright becomes null and void. Also a system could be set up
to allow "notices of intended infringement" to be filed with the copyright office, if the copyright or patent
holder does not respond within the required time then the copyright or patent would lapse and the work
would go into the public domain.

How Rembrandt Works

[Anonymous Coward]

I knew this girl from my college that worked at Rembrandt.

She explained that the way that these operations work is they hire students with slightly above rudimentary technical skills from the local universities in technical courses of study. Their "discovery" process simply entails these students trying to reverse engineer the mechanisms that they hold patents for. However, since they're not trying to actually build the device, they usually stop when they have a guess that suits their needs.

To put it bluntly, they do not really know; it is a wild guess, and hope that they can litigate it successfully.

Re:New system

[xigxag]

I agree. What makes this troll particularly disgusting (for the benefit of the non-RTFA'ers) is that it is based upon patents originally owned by AT&T which had agreed to license the patents to all for Fair, Reasonable And Non-Discriminatory (FRAND) terms. The patents got bought up by this troll company which is now refusing to honor those terms. If this is allowed to stand, then no company can ever rely on FRAND as a business assurance. Any patented process could get sold to an IP management company and be fair game for extortion.

I propose two short-term fixes.

First, FRAND terms should be able to be added to the patent itself, either originally or through some amendment process. That way, if it gets bought or sold, the IP holding compnay has to adhere to the original terms.

Second, companies that are developing open standards should be allowed some kind of superpatent, where (presumably for higher fees) there is a public hearing at which the final standard is vetted, and challengers are given sufficient time to come forward with their own patents which may encumber upon the proposed open standard, and they can negotiate whatever terms are in their best interest, without restriction. Afterwards, though, if the superpatent is granted, no more challenges will be entertained. Anyone who finds a prior patent in their closet or falling out of their portfolio five or ten years hence will be out of luck.

Re:This is a Bad Thing ?

[arivanov]

I do not know what their patent is, but the ideas from the DOCSIS MAC layer are also used in all 802.11 standards as well as satellite modem standards. The MAP metod to mix CSMA-CD and mandatory transmit opportunities is the de-facto method for managing Layer2 QoS in all subscriber oriented tech that has hit the market for the last 10 years. There are other places where other network standards have heavily borrowed from DOCSIS.

So if their patents are anywhere close this it will get extremely entertaining...

This is perfect. No, really...

[ehrichweiss]

This is exactly what we need at this moment. This might be the straw that broke the camel's back because with so many potentially affected, and with HDTV the new "standard", we are going to see a backlash not from a single company but an entire industry that is now being forced to pay ransom to stay in business thanks to that standard. The way I see it is that the FCC(and any other FCC-like organizations in other countries) will take a decent portion of the heat for forcing the industry to use a non-open standard, that will then put pressure on the USPTO to make some real reform. Where it goes from there is a bit cloudy but I suspect this will be enough to force the Supreme Court to rule on this type of behavior; after all, patents are supposed to promote innovation, not stifle it.

Re:The patent doesn't generate Ad revenue...

[Bigglare]

Everyone keeps talking about redesigning patent laws to stop this. The federal government has the right to take patents away for the public good. For example if there was a patent on say Flu vaccinations, and the company wasnt producing enough or charging too much. The government can take that away and have other people manufacture the vaccine. Just write your senator and representatives and have them void these patents on the grounds they infringe and hamper on a standard mandated by congress for broadcasting. Congress requires that broadcasters use this standard, it was one of several options they considered. They chose the ATSC format and therefore should convert the patents to Public Domain or take the patent away as emminent domain.

Oh perhaps this is a good thing, considering....

[3seas]

Analog TV is set to be turned off, rendering many TVs useless next year, unless a convert is purchased.

So instead of turning off Analog and going all digital, leave analog on until the patent expires.

I'm sure a lot or Analog TV owners will be happy.

not haha

[sohp]

A number of people are saying that this patent troll company will get its ass whooped because of the companies they are trying extort. Perhaps. But here's a rather more cynical view that I consider at least as likely. It has to do with the other end of the incentives -- profit and loss.

Most if not all the cable and media companies have a virtual monopoly on providing you service. Consider, how many of us have any choice in which cable provider to bring service to the home? So, what happens in this situation is that because the company can pretty much raise your rates or reduce your service by say, shifting channels currently on the cheap "Basic" bundle over to the pricier premium bundles. They can pretty much write their own profits. So now patent troll company comes and wants $X piece of the pie. As a cable provider, they'd look at the cost and risk of legal action vs. shelling out the money for a new agreement. Result: they just jack up rates for the consumer and pay off the extortionist, safely keeping the patent system alive for their own future interests.

We the consumers would see another jump in cable rates or some such service change, but there's not going to be a straw to break the patent camel's back on this one.