HD Radio Patent Case Dismissed

Broadcast groups appear off the hook; lawsuit cannot be reintroduced
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Broadcast groups appear off the hook; lawsuit cannot be reintroduced

A federal judge in Delaware has dismissed the long-running HD Radio patent infringement suit against 14 radio ownership groups after an apparent settlement. A related suit brought by HD Radio developer iBiquity Digital Corp. also was dismissed, suggesting a comprehensive but undisclosed resolution to this patent dispute.

Attorneys consulted for this article believe it is likely iBiquity’s involvement was the catalyst for the most recent developments. However, they said it is impossible to determine exactly how the cases concluded without details of a possible agreement. The parties involved all have declined comment.

Wyncomm LLC and its subsidiary Delaware Radio Technologies LLC had filed the original suit in 2013, targeting the terrestrial HD Radio data and voice transmissions of the radio companies. The patent firms sued in federal court, claiming the 14 broadcasters’ HD Radio technology infringed on U.S. patent 5,506,866 and two associated patents that Wyncomm and DRT control.

Wyncomm and DRT said the ’866 patent — “Side-Channel Communications in Simultaneous Voice and Data Transmission” — describes radio transmission techniques used in the in-band, on-channel digital radio broadcasting standard adopted by the National Radio Systems Committee in 2005. The suit appeared to attempt to tie the NRSC standard to HD Radio specifically, though NRSC-5 describes IBOC as a generic term that could apply to any such system from any proponent.

The broadcasters named as defendants in the federal lawsuit were Beasley Broadcast Group, CBS Radio, CC Media Holdings (now iHeartMedia), Cox Media Group, Cumulus Media, Entercom, Entravision, Greater Media, Hubbard Radio, Radio Disney, Radio One, Saga, Townsquare Media and Univision.

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Intellectual property attorney Scott Daniels of Westerman, Hattori, Daniels & Adrian said if there was a settlement, it does not appear to have been disclosed to the judge. The judge acted after the parties requested dismissal and agreed to cover their own costs, expenses and attorneys’ fees, according to court documents. The Wyncomm suit was dismissed with prejudice, meaning it cannot be reintroduced in any court of law, according to legal observers.

These developments coincide with dismissal of a separate suit in the same court that iBiquity filed in 2014 against Wyncomm and DRT, claiming the patents were invalid and that iBiquity had “prior art” to prove it.

IBiquity licenses the HD Radio technology to broadcasters; court records show that iBiquity had asserted that it had a “contractual obligation to indemnify” the broadcasters. The judge had agreed, stating earlier: “The court is … convinced by iBiquity’s showing that a contractual indemnity obligation existed as to at least some, if not all, of the broadcast defendants.”

The indemnity clause suggests that a settlement — if one was reached — would have been between iBiquity and the patent holders, according to observers.

Court documents indicate iBiquity’s suit was dismissed at the request of the parties by U.S. District Court Judge Gregory Sleet without prejudice in early May. A dismissal “without prejudice” leaves the parties free to litigate the matter in a subsequent action, observers said.

“It is very likely that iBiquity reached some settlement with Wyncomm,” said Scott Daniels, an intellectual property attorney with Westerman, Hattori, Daniels & Adrian LLP, who is not part of the case but has been following developments.

He said that Wyncomm and DRT “obviously went to enormous expense to sue so many accused infringers, they must have had an enormous incentive to stipulate the dismissal of those cases, either a generous royalty or a strong argument by iBiquity that the patents were invalid or not infringed.”

Daniels, who heads the firm’s litigation department, said if there was a settlement, it does not appear to have been disclosed to the judge.

“It’s customary for the parties to withhold details of a settlement [from the judge],” Daniels said. “The court is typically just pleased to remove the case from the docket.”

The fact that Wyncomm and DRT’s claims were dismissed with prejudice while iBiquity’s claim was dismissed without suggests that the presumed settlement was favorable to iBiquity, according to Daniels. He declined to speculate further without knowing details of any arrangement.

But broadcasters likely have iBiquity to thank for the conclusion of their cases, Daniels said, since Wyncomm’s suit against the broadcasters was likely weakened after iBiquity filed its suit.

“It’s even possible that Wyncomm let the cases and patents go for nothing at this point, especially if it appeared iBiquity had the prior art,” Daniels said. He doubts iBiquity would have engaged the case if its plan “was to enter settlements favorable to the patentee.”

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Womble Carlyle’s Bill Ragland said even though the lawsuits did not progress very far, the “expenses nonetheless could have still been significant” for broadcasters. Bill Ragland, an intellectual property litigator with Womble Carlyle Sandridge & Rice, said, “The fact there was a voluntary dismissal of all claims and counterclaims by both Wyncomm and iBiquity signals a settlement of some sort.”

Ragland, who is not involved with the HD Radio case, said he can’t tell what the terms of the presumed settlement are from the dismissal papers filed with the court. “We really don’t know whether there is money flowing in either direction.”

Once Wyncomm’s request to dismiss iBiquity’s declaratory judgment was denied and the judge consolidated and stayed the broadcasters’ cases, it was probably a good time to begin settlement talks, Ragland said.

“Wyncomm and iBiquity did leave open the possibility of future litigation between themselves over the patents, but at least for now the case is over,” Ragland said.

Even though the lawsuits did not progress very far, the “legal expenses nonetheless could have been still been significant” for broadcasters, Ragland said.

Observers describe Delaware-based Wyncomm and DRT as patent-holding companies and “non-practicing entities,” meaning the companies neither manufacture a product nor provide a service. Wyncomm and DRT have aggressively defended the patents. They also sued nearly 20 large auto manufacturers over the HD Radio technology used in their cars citing patent ’866. Those suits were dismissed in similar fashion in late 2014.

IBiquity addressed those auto patent infringement complaints in its filing against Wyncomm. The HD Radio developer wrote in the documents: “IBiquity has a contractual obligation to indemnify the broadcasters and suppliers to the car manufacturers against any losses incurred as a result of being sued over their use of HD Radio technology.”

Ragland said it is not uncommon for vendors, in this case iBiquity, to stand behind their products if they become embroiled in lawsuits.

All along iBiquity pushed forward the argument that patent ’866 and the others were invalid, according to court documents. “Had the patent examiner known or been made aware of prior art references, the claims would not have been allowed and the ’866 patent would not have issued,” according to iBiquity’s court filings. The original patent holder was AT&T Corp.