Settlement Talks in HD Radio Suit?
     

 
credit: iStockphoto/stuartbur
Court filings in an HD Radio patent suit indicate broadcasters’ willingness to at least consider settling before trial.

The situation is hard to gauge, with broadcasters not commenting and the patent holder difficult to track down. But information has emerged that suggests a settlement could be in the offing.

Wyncomm LLC sued 14 radio ownership groups in November 2013, claiming that the voice and data transmission technology broadcasters use for their HD Radio broadcasts violates the patents it owns.

Named as defendants in the federal lawsuit were Beasley Broadcast Group, CBS Radio, Clear Channel parent CC Media Holdings, Cox Media Group, Cumulus Media, Entercom, Entravision, Greater Media, Hubbard Radio, Radio Disney, Radio One, Saga, Townsquare Media and Univision.

Now court documents give a brief glimpse inside the lawsuit between radio owners and a company that some consider a “patent troll.” The documents show an intention to discuss a settlement while delaying the date broadcasters are required to reply to the lawsuit filed in federal court.

“The reason for the request is to allow parties additional time to discuss settlement,” according to a letter cosigned by both sides filed with U.S. District Court in Delaware in early February. The request was accepted by the court; that delays broadcaster responses until April 25. Originally, responses were due in late February.

Bill Ragland, a patent attorney with Womble Carlyle Sandridge & Rice, which is not affiliated with the case, said it’s not unusual for opposing parties to request additional time to file responses to a complaint to allow for settlement talks.

“The fact that the request is made jointly by the patent holder and the broadcasters is an indication that settlement discussions are underway or planned at the time of the request,” he said.

Radio World contacted several of the broadcast groups for comment, including Beasley, Clear Channel Media & Entertainment and Greater Media. The companies said they do not comment on pending litigation.

Attempts to find contact info on the Internet for Wyncomm were unsuccessful; and emails to Wyncomm’s legal counsel were not returned. Wyncomm’s business address is listed in court documents as 113 Barksdale Professional Center in Newark, Del.

HD Radio developer iBiquity Digital is not named nor identified in any of the lawsuits. The company licenses the technology used by radio broadcasters; it has consistently declined comment on the suit and did so again for this article.

NONDISCLOSURE IS TYPICAL
Approximately 76 percent of patent lawsuits end in some sort of settlement, according to Thomas Ewing, a patent attorney and IP consultant for Avancept LLC. “What’s impossible to tell is who is getting the better deal in this case, [Wyncomm] or the broadcasters.”

Because most actual settlements include nondisclosure agreements, Ewing said often it’s impossible to determine who settled for what amount, even afterwards.

Wyncomm LLC claims the broadcasters are using in-band, on-channel technology, and therefore, infringing on U.S. patent 5,506,866 and two associated patents it owns. Wyncomm lists Delaware Radio Technologies as the exclusive licensee for its technology. DRT is also listed as a plaintiff in the suit.

The ‘866 patent, “Side-Channel Communications in Simultaneous Voice and Data Transmission,” was issued to AT&T in 1996, but its ownership has changed hands many times since. The patent expired in November 2013.

Expiration means the patent owner cannot obtain an injunction, sharply reducing stakes for the accused infringers, said Scott Daniels, an intellectual property attorney with Westerman, Hattori, Daniels & Adrian LLP. “The patent owner may still seek damages for acts of infringement occurring for a period up to six years before the filing date of the complaint,” he said.

There is a second patent — 5,642,379 — cited in the lawsuit; it expires in June 2015. “That is far too soon for injunctive relief to be a possibility,” Daniels said.

The third patent, 5,475,691, expired last fall. Titled “Voice Activated Data Rate Change in Simultaneous Voice and Data Transmission,” it was granted to AT&T in 1995.

One broadcast source characterized the first two patents as “clearly written for telephony,” discussing predecessors to DSL and covering the digitization of voice and data for a phone network. The third patent is a little more broad and “does not specifically refer to a phone network,” according to this source, who emphasized that none of the patents specifically refer to RF and finds “nothing” in these patents “that expands the scope sufficiently to cover HD Radio.”

MONEY DAMAGES
Daniels said the lawsuit could be a deterrent to broadcasters using HD Radio technology and those considering adopting it.

As things stand, the case is purely one for money damages, according to Daniels, who said: “The individual broadcasters, sued for infringement, will want to settle provided that Wyncomm offers them “an amount below their legal costs in defending against the lawsuit.”

Meanwhile, Wyncomm and Delaware Radio Technology will hope to settle with at least a few broadcasters to obtain funds to finance the litigation against the others and encourage those radio groups to settle as well, Daniels speculated.

THE MAIN PATENT

The abstract description of U.S. patent no. 5,505,866, “Side-Channel Communications in Simultaneous Voice and Data Transmission,” details the technical aspect of the patent:

In a simultaneous voice and data communication system, a stream of signal points is portioned into a plurality of symbol blocks, each symbol block including a data segment and a control segment. The data segment carries information from a user, i.e., user data, while the control segment controls segment information. A voice signal is then added to at least a portion, or all, of the signal points of each symbol block to provide simultaneous voice and data transmission o an opposite endpoint. The control information from a secondary data source, and/or may include information from a secondary data source, and/or may include information about the characteristics of the succeeding block, e.g., the user data rate, and information pertaining to characteristics of the communication channel.

While the mindset of broadcasters about settling is difficult to determine, it’s obvious the case is likely moving in that direction, according to another court observer.

Gregg Skall, a communications attorney with Womble Carlyle Sandridge & Rice, LLP, said plaintiffs typically consider “the nuisance value” when thinking about settling, especially in patent matters where the expense of litigation can be quite large.

“We must assume that such [resolution] discussions are underway and are sufficiently serious to warrant a delay in the process so that the parties can focus on the terms of a possible settlement.”

Wyncomm and DRT are based in Delaware and identified by legal observers as “nonpracticing entities,” patent holding companies that typically don’t produce goods or services but manage intellectual property portfolios.

NPEs often have offices in Delaware due to its desirable corporate taxes and laws, observers said. For instance, Delaware Radio Technologies, according to Hoovers, lists as its address 1209 North Orange Street in Wilmington, Del., known for being home to 200,000 business addresses as registered agent services.

Some industry observers have speculated that broadcasters are hoping to avoid a possibly contentious trial, especially considering Wyncomm’s history. Its aggressive approach to litigation-seeking infringement damages has moved some to refer to it as a patent troll. Wyncomm, along with DRT, filed a barrage of suits against electronics companies asserting the ‘866 patent. Late last year, the entities filed a similar suit alleging Ford, Chrysler, General Motors, Toyota, BMW and 13 other car companies are infringing on the patent. That suit remains active.


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