US District Judge Leonard Stark (pictured) has granted a motion by seven major radio groups to stay proceedings in the lawsuit brought against them by Mission Abstract Data LLC, d/b/a DigiMedia, which claims to own the patent rights to the whole idea of accessing music from hard drives for broadcast on AM and FM stations. The case is on hold while the US Patent and Trademark Office (PTO) continues its review of the validity of the patents.
As first reported by RBR-TVBR last month, the PTO reexamination had rejected the patent claims relating to radio, although DigiMedia has until December 7th to appeal that decision. The reexamination of the patents was sought by Broadcast Electronics Inc. (BEI), which is not a party to the lawsuit.
In his ruling this week Judge Stark noted that the PTO is moving quickly and that the passage of additional time is not likely to have a big impact on DigiMedia’s case. He also noted that DigiMedia and the seven broadcasters are not direct competitors – indeed, DigiMedia has no operations.
“Mission Abstract argues that its right to enforce the patents, if a stay is granted, will be hindered because of the ‘cloud’ Defendants and BEl have put over Mission Abstract’s patents, which ‘have essentially been stripped entirely of their licensing value.’ But, as Mission Abstract acknowledged, that cloud can be at least largely removed by Mission Abstract prevailing before the PTO, something which could occur more expeditiously, under the circumstances, than a resolution of the instant litigation. Moreover, because the PTO reexaminations will proceed whether or not this case is stayed, the cloud cannot be entirely removed until the reexaminations are concluded,” Judge Stark wrote in granting the stay.
“This is very good news for radio broadcasters, including those broadcasters who received letters asking for licensing fees,” said a source familiar with the case. While DigiMedia sued only Beasley Broadcasting, CBS Radio, Cox Radio, Cumulus, Entercom, Greater Media and Townsquare Media, it has apparently been sending dunning notices to other radio stations demanding patent royalty payments.
RBR-TVBR observation: The real shame is that so much money is being spent by broadcasters and broadcast equipment makers for both the court case and at the PTO over the dubious claims to have invented technology that was already in widespread use. It will be interesting to see if the broadcasters stick to their guns and press their demand that the court order DigiMedia to pay all of the defendants’ costs because the plaintiff “knew or should have known” that its patent claims were bogus.