“Reexaminations” could put the kibosh on MAD patent infringement claims against radio stations

Has the United States Patent and Trademark Office (PTO) upended a litigation strategy threatening to upend the radio broadcast industry? It’s still too early to tell, but word out of the PTO could be bad news for Mission Abstract Data. You remember the folks at Mission Abstract – they’re the ones looking to obtain “licensing fees” from radio broadcasters using automated programming software (which at this point can be defined as “all radio broadcasters”).

I wrote about Mission Abstract (we called them “MAD” back then – we’ll keep doing it here) a couple of two months ago. To recap: MAD claims that it has patents covering pretty much any kind of computer-based radio program automation. Wielding that impressive claim, MAD filed a patent infringement lawsuit against several of the largest radio broadcast groups in the country. The case is still in its early stages. 

But MAD may be looking to invite a lot more folks to its little party. As I reported, MAD had already been contacting a “second round” of broadcasters, mainly smaller station groups, to offer a “licensing agreement” containing a release from any legal action. And more recently, we understand that yet a third round of broadcasters have lately been receiving similar come-ons from MAD. (The third round includes smaller broadcasters, even some single station licensees.) While no overt threats of new lawsuits are made, it’s not too hard to get the impression that declining the offer of a licensing agreement could get you a seat at the defendant’s table if another round of lawsuits gets filed.

Best I can tell, none of the “second round” broadcasters have signed the proffered licensing agreement.  (I’d have expected a MAD-issued press release issued by MAD if that had happened – what better way to spur others to go with the flow?)  

Meanwhile, the patent infringement lawsuit against the really big broadcast groups has inched forward with no real surprises or important action points: discovery’s gotten started, some court-ordered settlement conferences, too – but there’s been no indication that either side has gained any advantage.

Until now.

Acting on a couple of requests for “reexamination” of the two MAD patents (those would be Patent Nos. 5,809,246 and 5,629,867), the PTO is taking another look at those patents. In my last post I noted that one of the principal litigation defenses against MAD’s claims is that the patents on which MAD is relying are invalid. With the PTO reopening the issuance of those patents, we are now moving toward an authoritative resolution of that question.

The reexamination requests lay out what many have claimed all along: MAD should not have been issued patents because there already was similar technology in place by the time applications MAD sought patent protection. After all, a patent is supposed to be issued only to the guy who “invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” – so if the same (or closely similar) technology were already available before MAD made its patent claims, then MAD might not be entitled to the patents it received. No patent = no patent infringement = no lawsuit.

I’m not a patent attorney, so I’m not in a position to opine on the likely result at the PTO. But I can for sure speculate about the likely impact of PTO action on the existing lawsuit and the licensing agreements MAD has continued to put before broadcasters. 

The simple answer is that the outlook is likely bad for MAD.  

Of course, the PTO could ultimately declare MAD’s patents to be valid. That would be big but would not, in and of itself, mean MAD will win its patent infringement lawsuit. 

But the fact that PTO is taking another look at the patents strongly suggests that the PTO has serious questions about the validity of these patents. If those questions go the wrong way for MAD, the patents could get invalidated. And that would almost certainly put an end to the lawsuit and any other MAD efforts to put the squeeze on the second and third groups of broadcasters already in their sights (not to mention any others that could get dragged in later). At the very least, it seems likely that the U.S. District Court in Delaware, where MAD’s lawsuit is pending, will put a hold on the case until the PTO completes its reexamination of the patents. (The big broadcaster defendants have requested that the case be stayed for that reason.) A hearing on that stay request had already been scheduled for October 27. A stay, if granted, could last for months or even years – easily enough to seriously hinder MAD’s momentum. 

I’m guessing that many of the second and third groups of broadcasters will be way less enthusiastic about signing the licensing agreements currently sitting on their desks, while the defendants in the lawsuit will view settlement with similar skepticism.

Of course, anybody receiving a communication from MAD should not ignore it. Rather, if MAD contacts you, it’s probably best to reach out to your own attorney (or lawyer yourself up if you haven’t already). Also, make sure you collect all relevant information, including invoices and licensing agreements already in place with your current software provider (the idea there being to invoke indemnification by that software provider if that becomes an issue). 

But make sure your attorney knows about the PTO’s reexamination of the MAD patents and the impact that reexamination is likely to have on MAD’s bargaining position.