A fearsome secretkept by cable operators and equipment vendors alike at last week's National Cable Television Show in Las Vegasis quietly surfacing in the form of multiple patent-infringement lawsuits by Rembrandt Technologies against U.S. cable companies.
Rembrandt, a patent-trolling company, is going after cable's big guns, including Charter, Cox, Cablevision, Comcast and Time Warner. Rembrandt alleges that by offering digital cable programs, those companies infringe a portfolio of Rembrandt's patents related to the reception and transmission of signals based on the U.S. digital HDTV standard.
The worst possible outcome for cable operators, as the cases go to court, would be a preliminary injunction ordering them to stop distributing digital HDTV signals to subscribers. The players involved in such cases are keeping mum, but a cable industry insider told EE Times, "As the case develops, [it] will hit the fan."
The cable guys aren't the only quarry. Late last year, Rembrandt fired off a separate set of infringement complaints against the big four TV networksABC, CBS, NBC and Fox.
Armed with eight U.S. patents covering varying aspects of the U.S. digital TV standard, Rembrandt has filed a barrage of complaints. According to court documents, the two most often-cited patents are for Rembrandt's "signal point interleaving technique" (U.S. patent No. 5,243,627) and its "system and method for establishing link-layer parameters based on physical-layer modulation" (No. 5,852,631).
The technologies in Rembrandt's patent portfolio had their genesis at AT&T Bell Labs, and the portfolio is believed to have come from Paradyne, once a unit of AT&T/Lucent Technologies. AT&T was a member of the HDTV Grand Alliance, established in the early 1990s to develop U.S. HDTV specifications by pooling the best technologies from various companies. Other members included General Instrument, MIT, Philips Consumer Electronics, David Sarnoff Research Center, Thomson Consumer Electronics and Zenith Electronics.
While declining to discuss specifics of the complaints while they are under litigation, Paul Schneck, CEO and president of Rembrandt IP Management LLC (Bala Cynwyd, Pa.), said all the cases "are not yet progressed in a substantial manner." Nonetheless, Schneck added, "Our chances of winning are very good."
Schneck confirmed to EE Times that the first complaintfiled in September 2005is scheduled for a hearing soon. It's a case against Comcast, filed in the U.S. federal court for the Eastern District of Texas.
Different sets of complaints currently stand at different phases, he said, some in the midst of scheduling conferences and others in discovery. Rembrandt's strategy leans heavily toward jury trials.
Industry observers, while speaking on the condition of anonymity, are not treating Rembrandt's claims as nuisance suits. Indeed, the complaints "related to the transmission of digital data over band-limited channels" are "relevant enough" to cause concern for cable operators, said Richard Doherty, director of the Envisioneering Group consultancy.
But "the devil is in the details," he added. "It's unlikely that either CBS or Cox actually manufactured the equipment that uses or abuses such techniques." Thus, Doherty noted, "It may come down to whose equipment they use and whether they have a license. And does the manufacturer promise to in- demnify their customers?"
According to a few other cable industry sources, it's customary for equipment makers like Motorola or Scientific-Atlanta to indemnify customers. So in the end, it may not be cable operators but equipment vendors that suffer the financial liability, one source opined.
But cable operators can still be held liable, another source said, for infringing the patents' "method of sending and receiving HD signals." Worse, in the early phases of a trial, or if no settlement is reached, a judge could enjoin operators from delivering HDTV.