Digging Deeper Into Rembrandt Patent Claims
July 5, 2007
Last week, several articles appeared warning that the DTV transition could be delayed due to a claim by Rembrandt Technologies that DTV set manufacturers, TV transmitter manufacturers, and even TV networks are infringing on its Patent number 5,243,627 Signal Point Interleaving Technique. A little research showed Rembrandt’s collection of patents could have an impact well beyond over-the-air ATSC transmissions. Rembrandt has also filed patent infringement cases against cable companies. One of these, filed on Sept. 13, 2006, alleges that Time Warner Cable infringed on certain patents related to cable modems and voice-over-IP. Scroll down through Terayon Communication Systems 10-Q filing under legal proceedings for a description of the case against cable companies and their equipment suppliers.
How great is the risk? Patent number 5,583,889 Trellis-coded modulation system for HDTV dated July 8, 1994 from inventors Richard Citta and David Willming, and assigned to Zenith Electronics Corp., references the Betts et al patent 5,243,627 currently held by Rembrandt. An EE Times article “Patent troll casts shadow over cable” notes that the Grand Alliance and ATSC were unable to create a patent pool, adding “The informal understanding at the time was that members would not assert any patents and would license them for a reasonable fee.”
The TVNewsday article said Rembrandt was asking TV networks for 0.5 percent of “all revenue derived from the use of the ATSC standard by your company as a broadcaster licensee.” While this may seem simple, consider that the majority of TV viewers watch network TV over cable or satellite or analog TV, not off-air digital broadcasts. If the 0.5 percent fee is applied to all programming, whether received via ATSC or not, it might provide an incentive for networks and stations to negotiate deals to go cable and satellite only (perhaps giving them the 0.5 percent) and shut off free off-air DTV before it has a chance to get started. While this is unlikely, it would not only save broadcasters the cost of transmitter maintenance and power, but would also free these “nonbroadcast” stations from dealing with many FCC requirements that apply to broadcasters, but not cable or satellite, program providers. TV set manufacturers looking for ways to reduce costs could see this as an excuse to eliminate digital tuners.
Will the U.S. Congress and the FCC allow this to happen? That remains to be seen, although given the government’s need for the income from auctioning returned analog TV channels and the public safety need for additional spectrum that will be freed after the transition, I wouldn’t be surprised to see Congress step in if Rembrandt and the cable and broadcasting industries can’t come to an agreement soon.
The disputed patents only apply to the transmission and reception of the DTV signal. The alleged patent infringement would only occur in the transmitter modulator or the TV demodulator, not at the network level or at the broadcaster’s studio. Many transmitter sales agreements indemnify the purchaser against patent infringements by the manufacturer. The TVNewsday article noted that Harris Corp., one of the major U.S. DTV transmitter manufacturers, had counter sued Rembrandt. In that suit, Harris points to a 1995 letter in the ATSC files in which AT&T said it would license patents “essential to the implementation of the [ATSC] standard on a nondiscriminatory, nonexclusive basis.”
If the Rembrandt patents are found to be valid, and reasonable licensing deals aren’t possible, could the ATSC standard be modified to avoid infringement? Perhaps, but any changes would likely make all existing ATSC tuners obsolete.