Antitrust Group Requests FTC Investigation of Rembrandt DTV Patent Conduct

March 28, 2008
Remember Rembrandt? It’s the company that holds critical patents for U.S. ATSC DTV transmission system, as well as digital cable TV. I covered Rembrandt’s patents and their battle with DTV manufacturers and broadcast networks in detail in RF Report for July 5, 2007.

The American Antitrust Institute (AAI) sent a petition to the Federal Trade Commission calling on them to “to initiate an investigation of anticompetitive conduct by Rembrandt, Inc. that will increase the costs of the conversion to digital television for millions of consumers.”

“It appears that Rembrandt has violated the ATSC and FCC policies,” said AAI President Bert Foer. “Enforcement action by the FTC is necessary to protect the millions of consumers who will ultimately pay for the excessive royalties Rembrandt is demanding.”

The AAI news release states, “Rembrandt Inc. has engaged in anticompetitive conduct that may significantly raise the cost of digital television for tens of millions of consumers when the FCC deadline for conversion arrives in February 2009.”

The AAI says that Rembrandt “has repudiated an obligation to license intellectual property on a reasonable and nondiscriminatory basis” and that the company had initiated 14 patent-related suits, which named NBC, CBS, ABC and FOX, as well as five major cable systems and television and equipment makers.

“The patents in dispute were originally owned by AT&T, which had participated in the ATSC process and agreed to the obligation to license the intellectual property on a reasonable and nondiscriminatory basis,” AAI said. “In adopting the ATSC standard, the FCC confirmed this licensing obligation. Rembrandt acquired those patents in December 2004, and less than a year later it repudiated the licensing obligations and commenced litigation seeking to enjoin these firms from implementing digital television and asking for millions of dollars in royalty fees.”

The AAI has requested that the FTC take action to prevent “substantial consumer harm and protect the effective conversion to digital television.”

“In less than 330 days, by Act of Congress, the entire U.S. television marketplace will convert to digital systems,” said AAI president Bert Foer said. “Rembrandt’s patent holdup will cause substantial harm to consumers purchasing new equipment and, ultimately, to all consumers of television.”

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