A Delaware company has sued a number of radio ownership groups and automakers, alleging patent infringement for using voice and data transmission technology for HD Radio broadcasts.
This is the second recent, prominent legal action based on patent claims to be raised against U.S. radio broadcasters; the other involves studio automation technology. There is no known connection between the two sets of suits.
Wyncomm LLC claims the broadcasters are using in-band, on-channel technology and therefore infringing on U.S. patent no. 5,506,866 and several associated patents. Wynncom lists Delaware Radio Technologies (DRT) as the exclusive licensee for its technology, and DRT is listed as a plaintiff in the suit.
U.S. patent no. 5,506,866 has an assignment history that looks like a game of hop-scotch. The patent traded hands at least a half-dozen times in 2013, according to records from the United States Patent and Trademark Office.
The patent, “Side-Channel Communications in Simultaneous Voice and Data Transmission,” was issued to AT&T in 1996 and credited Gordon Bremer, Kurt Holmquist, Kenneth Do and Keith Souders as inventors, according to USPTO filings.
The inventors wrote in the patent summary, “In accordance with the invention, we have realized an advantageous side-channel technique wherein the side-channel is multiplexed with the data signal, and the resultant multiplexed signal is then added to the analog, e.g., voice, signal to provide simultaneous voice and data transmission.”
The patent describes “straightforward telephone technology,” according to one observer.
Bill Ragland, a patent attorney with Womble Carlyle Sandridge & Rice, said, “DRT and Wyncomm are trying to stretch the language of patent claims directed to the copper wire and public switched telephone systems around HD Radio systems.”
Since 1996 the patent has shuffled among a variety of tech groups and holding companies, and the number of reassignments rapidly accelerated in 2013. Clearwater Innovations, Patent Business Development, Paradyne Corp., Zhone Technologies, Wyncomm and Delaware Radio Technologies all have controlled the patent at one point since the beginning of 2013.
“Patents can be bought, sold and assigned like commodities,” Ragland said. “It is certainly common for there to be multiple assignments along the way to a patent assertion entity owning and enforcing a patent. But that many assignments all in one year does seem quite unusual and is hard to read.”
Wyncomm has cited the same ‘866 patent as grounds for suing a number of large electronic firms in other recent legal actions.
The ‘866 patent was applied for in 1993 and granted in 1996. IBOC digital radio technology did not receive FCC approval until 2002.
Attempts to reach Wyncomm for comment were unsuccessful.
The Nov. 1 filing in U.S. District Court in Delaware seeks unspecified damages, according to court papers. The broadcasters were ordered to answer the suit by Nov. 26, though most of the groups received an extension until Feb. 24, 2014, as they requested. Cox Media asked for and received an extension until Jan. 3.
Broadcasters are likely to deny the allegations and ask the judge to set the case aside, observers said. It was assigned to Judge Gregory Sleet.
IBiquity Digital Corp., which developed the type of in-band, on-channel digital radio technology now marketed as HD Radio, is not named nor identified in the lawsuits. IBiquity licenses its technology to radio broadcasters and carmakers, among others. The company declined comment on both sets of suits.
The ‘866 patent is titled “Side-Channel Communications in Simultaneous Voice and Data Transmission.” The United States Patent and Trademark Office originally assigned the patent to AT&T (see sidebar). The plaintiff says the patent specifically describes radio transmission techniques used in the IBOC standard adopted by the National Radio Systems Committee in 2005.
The suit seems to be trying to tie the NRSC standard to HD Radio specifically, stating in the document: “In violation of 35 U.S.C. § 271, Defendant, including its affiliates, has directly infringed and continues to directly infringe, both literally and under the doctrine of equivalents, one or more claims of the ‘866 Patent through its transmission of radio broadcasts using HD Radio transmission techniques further described in the IBOC Digital Radio Broadcasting Standard (the ‘Accused Instrumentalities’).”
An NRSC source told RW that NRSC-5 describes IBOC as a generic term that could apply to any such system from any proponent.
Two other patents — 5,475,691 and 5,642,379 — are cited in the patent infringement lawsuits. Both describe simultaneous voice, data transmission and modulation techniques, according to court documents.
Who Is Delaware Radio Technologies?
Little is known about Wyncomm or Delaware Radio Technologies. Both are based in Delaware and identified as non-practicing entities, which are patent holding companies that typically don’t produce any goods or services but simply manage intellectual property portfolios.
Wyncomm’s approach to litigation has moved some observers to refer to it as a “patent troll.”
The Consumer Electronics Association urged members to support patent reform, including the Goodlatte bill, and ‘Club the Troll’ in this ad.
NPEs often have offices in Delaware due to its desirable corporate taxes and law, observers said. Delaware Radio Technologies lists as it address 1209 North Orange Street in Wilmington, Del., infamous for being home to over 200,000 business addresses as registered agent services.
Several members of Congress have introduced legislation to combat so-called patent trolls. Federal Trade Commission Chairwoman Edith Ramirez has urged an investigation and crackdown on patent exploitation. In May, Sen. John Cornyn, R-Texas, introduced the Patent Abuse Reduction Act, a measure that aims to deter patent litigation abusers.
More recently, the House passed and sent to the Senate the Innovation Act of 2013, sponsored by Judiciary Committee Chair Virginia Republican Bob Goodlatte. The bill seeks to curb vague “demand” letters that patent trolls send to end users that place the burden on users to prove they’re not infringing on a patent, rather than on the sender to prove they are. Among other things, the bill requires lawsuit plaintiffs to specify which patents are at issue and what products allegedly infringe.
Paul Schneck, chairman of Rembrandt IP Management LLC, recently testified at the Government Accountability Office summit on NPEs in Washington as the GAO released its congressionally-mandated report on the role of NPEs on the U.S. economy. In a blog post, he wrote: “The trolls can be recognized by their actions: broad assertion of dubious patents against large numbers of defendants. These are transparent efforts to shakedown companies for settlements, with no intention of engaging in the expensive process of litigation culminating in a trial.”
Schneck’s firm invests in intellectual property with the goal of maximizing the value of infringed intellectual property, according to its website.
Ironically, Rembrandt IP Management at one time apparently owned one of the patents involved in the Wyncomm suit, according to USPTO data. Patent no. 5,642,379 was acquired by Rembrandt in 2004 as part of a patent portfolio purchased from Paradyne Corp. (once a unit of Lucent), according to a Forbes magazine story headlined “Patent Pirates.”
However, a Rembrandt spokesman said the company and affiliates are not, and never were, associated with Wyncomm nor Delaware Radio Technologies.
The filing names Beasley Broadcast Group, CBS Radio, Clear Channel parent CC Media Holdings, Cox Media Group, Cumulus Media, Entercom, Entravision, Greater Media, Hubbard Radio, Radio Disney, Radio One, Saga, Townsquare Media and Univision as defendants in the federal lawsuit. Many of these groups are also named in the apparently unrelated DigiMedia/Mission Abstract Data lawsuit.
Shortly after the slate of suits against broadcasters was filed, Wyncomm along with DRT filed a second set of lawsuits in U.S. District Court in Delaware alleging that Ford, Chrysler, General Motors, Toyota, BMW and 13 other car companies are infringing upon patent patent ‘866 as well.
Wyncomm is asking for a jury trial and is seeking damages from the broadcasters and carmakers.
The company is identified by several observers as a patent monetization entity, a type of business that critics deride as a “patent troll.” The plaintiff, also described as a “non-practicing entity” — typically a company that hold patents but produces no goods — has been aggressive, according to court records, using the ‘866 patent as grounds to sue electronic firms Samsung, Sony, LG, Vizio, Toshiba and dozens of others earlier this year. Wyncomm is listed as a party in 113 cases filed in U.S. District Court in Delaware (see sidebar).
Of the defendants contacted by Radio World for comment, only Ellen Rubin, vice president and general counsel for Greater Media, replied. In an e-mail she confirmed the company had been served with the suit but declined to comment further on the case.
For now, said legal observers familiar with the suit, broadcasters involved in the case should prepare for litigation.
The first step for the radio industry is to assess whether there are potential violations of the claimed patents by the HD Radio system in use at radio stations, said John Garziglia, a communications lawyer with Womble Carlyle Sandridge & Rice.
“The hiring of legal counsel who are both familiar with our radio industry and patent litigation, either individually or as a group, is prudent in order to seek advice as to the potential liability incurred by radio stations that are using the HD Radio system,” Garziglia said.
“It is only in the past decade or so that businesses such as radio broadcasting have had to give patent issues serious consideration,” Garziglia said.
“Prior to that time, there was a transmitter, an exciter, an audio processor, turntables, cart machines, microphones and such. If someone came along and claimed that a patent was being infringed through the use of, for instance, a particular microphone, the immediate remedy was easy: Get another microphone.”
Things are more complicated now, and companies are more litigious, Garziglia said.
The patents at the center of the HD Radio suit are ancient, according to Bill Ragland, a patent attorney with Womble Carlyle Sandridge & Rice.
“Two of [the patents cited in the HD Radio case] expired in November [of 2013] and the other expires on June 24, 2014. Even with regard to the one patent that expires in next summer, it would be unlikely a court would issue a preliminary injunction requiring the broadcasters who were sued to stop broadcasting in HD.”
Ragland said it appears DRT and Wyncomm have not requested an injunction in their lawsuit. Instead, the patent holders are seeking royalties for broadcasting in HD Radio in the past up until the patents expire, Ragland said.
“The statute of limitations is six years. Therefore, patent holders may only claim royalties going back six years from the filing of the lawsuit,” Ragland said.
It’s not clear if iBiquity would have a legal responsibility to indemnify users if the patents are upheld.
“Indemnification would likely depend on the purchase agreement that iBiquity has with the defendants,” said Scott Daniels, an intellectual property attorney with Westerman, Hattori, Daniels & Adrian LLP. “Usually, a large customer, like CBS, insists on indemnification in its purchase agreements. Even if there is no indemnification requirement in the purchase agreements in this case, iBiquity might, for business goodwill, feel obliged to defend the defendants to maintain good relations.”
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