A suburban Philadelphia firm whose sole business is to buy up technology patents 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.
If successful, the firm, Rembrandt IP Management, could pull in big money from the enforcement of patents related to the cable industry’s standard for connecting customers to the Internet and potentially throw a financial monkey wrench into the broadcast industry’s mandate to transmit all TV signals in digital form by a year from now.
In the worst-case scenario, Rembrandt’s litigation may undermine the ability of industry bodies to set technical standards whose uses are meant to be widely available for “fair and reasonable” patent-licensing fees.
In cases originally spread across federal courts in Delaware, New York and Texas, Comcast, Time Warner Cable, Charter Communications, Cox Communications and Cablevision Systems face claims that their cable-modem services infringe eight patents now held by Rembrandt, and that their video services violate a ninth one related to digital-TV transmission.
Separately, ABC, CBS, NBC Universal and Fox — as well as manufacturer Sharp Electronics — face suits alleging infringement of Rembrandt’s patent on digital TV transmission.
Rembrandt is hoping to win hundreds of millions of dollars from the suits, which have been previously reported by Forbes, EE Times and others.
According to an attorney close to the litigation, the firm has sought to collect half of 1% of all revenue generated from services that allegedly infringe on the data and video patents.
From the broadcasters, that could start at $90 million per year or more. Beginning Feb. 18, 2009, all over-the-air TV programming will be transmitted in digital form. And, in 2006, broadcasters took in $18 billion in advertising on the shows they sent to company-owned and affiliated stations, according to PricewaterhouseCoopers.