In an effort to clear up some misconceptions about our licensing program and our ongoing litigation and related actions, some of which have been published by Kevin Goldberg on his CommLawBlog® (which several trade press articles have repeated), and some of which appear to have been spread by radio industry trade associations, we thought we would clarify a few key points:
Digimedia’s Patents are not about Radio Automation software
One very popular misconception is that the patents apply to broadcast automation systems. Using the claimed inventions does not require a broadcast automation system.
The Digimedia Patents are about how music is stored on hard drives, how new music is acquired across networks digitally, and how music on those hard drives is provided to others. There are no claims in those patents that require what is traditionally known as automation software. If our claims had read upon automation software, we would have contacted those vendors.
It may be that the large corporate radio station conglomerates wish to exert leverage over the automation software providers to pay their bills for them, but it remains a fact that any liability that an automation software provider has (if they have indemnified) is because of what the individual station does in using computer disk drives to store music on from which they broadcast the music over the air.
Use of the inventions claimed in the patents has allowed radio stations to save costs over using CARTs and CDs and to obtain other efficiencies in operating their stations. It is all about how radio stations operate by storing music on computer disk drives. So IPMG AG (a licensee of Digimedia that is authorized to offer sub-licenses) has been offering licenses for these patents to the radio stations.
Issued patents are a legal right
Radio stations in the US have a government granted right to the local radio frequencies they broadcast on, to their radio station call letters (often also trademark), and they choose to exclusively use that radio frequency and those call letters as the vehicles for their copyrighted broadcasts. Radio relies heavily on intellectual property law. Radio station owners can choose to sell part of their copyrighted broadcast (the ads, for compensation) or the owners can sell the station, including rights to the government granted radio frequency, and the call letters as an overall “asset.” The radio station owner is very much reliant on intellectual property law for its business.
An issued US patent grants the owner an exclusive right to the inventions claimed in the patent, that are granted by the US government to the inventor or their assignee (now Digimedia Holdings Group LLC). The patent owner can choose to license those rights to others to use, or can choose to exclude others from practicing the claims. The inventions in the Goldman patents are being widely used, and Digimedia Holdings Group LLC desires to license its patented invention to those that want to respect its intellectual property rights.
The Patent Re-exam process
Of the four patents which Digimedia Holdings Group owns, two of the patents, ‘867 and ‘246 were put into an ex-parte re-exam by Broadcast Electronics Incorporated (BEI) for the benefit of the defendants in the ongoing litigation that Digimedia Holdings Group has with several large corporate radio station ownership groups.
Here are some representative statistics of results of re-exams, in a given quarter (source: USPTO): http://www.uspto.gov/patents/EP_quarterly_report_Sept_2011.pdf
There are some interesting statistics in this document from the USPTO about re-exams.
In this case, the results of the reexamination bore out the truth in these statistics, many claims survived in original form, several others with some amendments, and a few were cancelled. The ultimate result is that the patents and the surviving claims are (again) validated by the USPTO.
The misconceptions of this process have been many, here are but a few of them:
There have been two reexams of each patent: This is of course false. Mr. Goldberg, opined that there were multiple reexaminations one that ended in rejection and an “appeal” that came to the end result noted above. In fact, there was one reexamination for each patent, with the PTO first granting the reexam request, later issuing an office action, our filing a response, the patent office then issuing another office action, our response to that, and then the final decision to issue a reexamination certificate.
Rejections of the claims by the USPTO means that they are not valid: In the course of a patent examination, the patent examiner examines the prior art and the patent and if the examiner has any remaining questions about the issues presented, the examiner rejects the claims. This rejection is the patent office’s mechanism to allow the patent owner/applicant to provide more information about why the invention is different than the prior art. Because the burden is on the owner/applicant to show that the claims are valid over the prior art, rejection merely means that the examiner would like to hear more, at least until the office action is “made final” which indicates that unless something really special is found, at least to the satisfaction of the examiner, the decision is final, at least with respect to the way the claims are then currently drafted. Suggesting that because the examiner rejected some claims early in the process that the claims are not valid is the equivalent of suggesting that every criminal defendant is actually innocent because at the beginning of the trial they are presumed to be innocent.
Reexam requests are made to “settle the issue”: This may be true when there is no litigation ongoing, but when litigation is present, reexam requests are often attempts to introduce delays in an attempt to postpone the trial (and/or licensing).
This is a genuine liability, rather than a potential one
Much of the “positioning” that is coming from the corporate radio conglomerates, the industry trade associations and industry trade press (that depends on those conglomerates), implies that the rights held by Digimedia Holdings Group LLC are somehow not valid, or that somehow Radio Station owners practicing the claimed inventions only potentially have liability. The fact is that many radio station owners do have a liability for using the claimed inventions unless the issued patents are declared invalid (through a process of a re-exam, or by the court), or unless the specific radio station is found to not infringe the asserted claims (by the court).
The only certainty to remove the liability is to enter into a license agreement.
We believe strongly that the direct licenses being offered by IPMG AG are clearly the logical business case. The other options to delay or litigate have greater risk, and more expensive costs, for both parties.
Digimedia’s Patents are not about Radio Automation software
One very popular misconception is that the patents apply to broadcast automation systems. Using the claimed inventions does not require a broadcast automation system.
The Digimedia Patents are about how music is stored on hard drives, how new music is acquired across networks digitally, and how music on those hard drives is provided to others. There are no claims in those patents that require what is traditionally known as automation software. If our claims had read upon automation software, we would have contacted those vendors.
It may be that the large corporate radio station conglomerates wish to exert leverage over the automation software providers to pay their bills for them, but it remains a fact that any liability that an automation software provider has (if they have indemnified) is because of what the individual station does in using computer disk drives to store music on from which they broadcast the music over the air.
Use of the inventions claimed in the patents has allowed radio stations to save costs over using CARTs and CDs and to obtain other efficiencies in operating their stations. It is all about how radio stations operate by storing music on computer disk drives. So IPMG AG (a licensee of Digimedia that is authorized to offer sub-licenses) has been offering licenses for these patents to the radio stations.
Issued patents are a legal right
Radio stations in the US have a government granted right to the local radio frequencies they broadcast on, to their radio station call letters (often also trademark), and they choose to exclusively use that radio frequency and those call letters as the vehicles for their copyrighted broadcasts. Radio relies heavily on intellectual property law. Radio station owners can choose to sell part of their copyrighted broadcast (the ads, for compensation) or the owners can sell the station, including rights to the government granted radio frequency, and the call letters as an overall “asset.” The radio station owner is very much reliant on intellectual property law for its business.
An issued US patent grants the owner an exclusive right to the inventions claimed in the patent, that are granted by the US government to the inventor or their assignee (now Digimedia Holdings Group LLC). The patent owner can choose to license those rights to others to use, or can choose to exclude others from practicing the claims. The inventions in the Goldman patents are being widely used, and Digimedia Holdings Group LLC desires to license its patented invention to those that want to respect its intellectual property rights.
The Patent Re-exam process
Of the four patents which Digimedia Holdings Group owns, two of the patents, ‘867 and ‘246 were put into an ex-parte re-exam by Broadcast Electronics Incorporated (BEI) for the benefit of the defendants in the ongoing litigation that Digimedia Holdings Group has with several large corporate radio station ownership groups.
Here are some representative statistics of results of re-exams, in a given quarter (source: USPTO): http://www.uspto.gov/patents/EP_quarterly_report_Sept_2011.pdf
There are some interesting statistics in this document from the USPTO about re-exams.
- Twice as many patents have all of its original claims confirmed than those that have all claims cancelled.
- Almost 90% of patents reexamined have either all or some of their claims confirmed in original form or with changes. This is true even when you consider only those patents going through reexamination at the request of a 3rd party requester such as BEI.
- 92% of reexamination requests are granted even though almost 90% of the patents survive the process, indicating that the decision to grant the request is much more of an administrative decision (was the paperwork completed correctly and the fee paid) than it is any real determination that the request has any chance of ultimate success.
In this case, the results of the reexamination bore out the truth in these statistics, many claims survived in original form, several others with some amendments, and a few were cancelled. The ultimate result is that the patents and the surviving claims are (again) validated by the USPTO.
The misconceptions of this process have been many, here are but a few of them:
There have been two reexams of each patent: This is of course false. Mr. Goldberg, opined that there were multiple reexaminations one that ended in rejection and an “appeal” that came to the end result noted above. In fact, there was one reexamination for each patent, with the PTO first granting the reexam request, later issuing an office action, our filing a response, the patent office then issuing another office action, our response to that, and then the final decision to issue a reexamination certificate.
Rejections of the claims by the USPTO means that they are not valid: In the course of a patent examination, the patent examiner examines the prior art and the patent and if the examiner has any remaining questions about the issues presented, the examiner rejects the claims. This rejection is the patent office’s mechanism to allow the patent owner/applicant to provide more information about why the invention is different than the prior art. Because the burden is on the owner/applicant to show that the claims are valid over the prior art, rejection merely means that the examiner would like to hear more, at least until the office action is “made final” which indicates that unless something really special is found, at least to the satisfaction of the examiner, the decision is final, at least with respect to the way the claims are then currently drafted. Suggesting that because the examiner rejected some claims early in the process that the claims are not valid is the equivalent of suggesting that every criminal defendant is actually innocent because at the beginning of the trial they are presumed to be innocent.
Reexam requests are made to “settle the issue”: This may be true when there is no litigation ongoing, but when litigation is present, reexam requests are often attempts to introduce delays in an attempt to postpone the trial (and/or licensing).
This is a genuine liability, rather than a potential one
Much of the “positioning” that is coming from the corporate radio conglomerates, the industry trade associations and industry trade press (that depends on those conglomerates), implies that the rights held by Digimedia Holdings Group LLC are somehow not valid, or that somehow Radio Station owners practicing the claimed inventions only potentially have liability. The fact is that many radio station owners do have a liability for using the claimed inventions unless the issued patents are declared invalid (through a process of a re-exam, or by the court), or unless the specific radio station is found to not infringe the asserted claims (by the court).
The only certainty to remove the liability is to enter into a license agreement.
We believe strongly that the direct licenses being offered by IPMG AG are clearly the logical business case. The other options to delay or litigate have greater risk, and more expensive costs, for both parties.
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