Patent Law

Anti Trust

By Gary Odom and Jordan Kuhn

The American Antitrust Institute (aai) is a lobbyist corporation backed by undisclosed lucre, doubtlessly large corporations. Their spiritual mentor is Teddy Roosevelt: rough rider, trust buster, who once observed: "Every reform movement has a lunatic fringe."

The aai is having a go at putting 5,243,627 patent owner Rembrandt up for FTC proctologic examination.

The FTC are the cluster clowns whose shambolic report on patents is frequently quoted by patent netherworlders hoping to give the patent system an Abu Ghraib going over.

'627 was originally owned by an AT&T spin-off. According to Rembrandt, '627 got rolled into the U.S. HDTV standard. Rembrandt is suing major players in the TV industry for patent infringement. Hopefully you are connecting some dots about aai funding.

aai alleges that AT&T, a member of the HDTV standards committee, promised to license germane patents "under reasonable and nondiscriminatory (RAND) terms." aai:

Soon after it acquired the rights to the '627 patent, Rembrandt unequivocally denied that it has - or that AT&T ever had - any RAND commitment to the ATSC, refused to license on RAND terms, and began pursuing extensive litigation in which it alleges that various end-users, including cable companies and the broadcast networks, are infringing the'627, demanding royalties from such end-users based on their total digital television revenues.

Rembrandt assumed the obligations of AT&T IPM with respect to the ATSC upon the assignment of the '627 by Paradyne to Rembrandt on December 24, 1994.

Rembrandt's refusal to license on RAND terms constitutes exclusionary patent hold-up. Rembrandt has thereby willfully obtained - or at least has a dangerous probability of achieving - monopoly power that it would not otherwise possess.

aai's arguments are an echo of the Rambus affair. Rambus was cleared of antitrust allegations for holding patents overlapping computer memory standards.

aai would like to oblige non-practicing patent holders (NPE) to RAND license any patents they may own that apply to any industry standard.

NPEs in particular can significantly undermine standard setting by acquiring intellectual property rights at a premium with the goal of enhancing licensing revenues by repudiating RAND obligations. A legal test requiring deception or bad faith at the time a RAND commitment is given would countenance such exclusionary and competitively harmful conduct.

The FTC is a sparrow at killing patents. Everyone with a lick of sense about patents knows: if you want a patent crushed under a rock, all you have to do is give a call to Patent Hawk.

Full post as published by The Patent Prospector on March 31, 2008 (boomark / email).