Claiming recent victory at the USPTO, patent troll again seeks to get radio broadcasters to license automated programming system – but questions still remain
Mission Abstract Data – or, more accurately, its successor (Digimedia), its licensing agent (IPMG AG), and a bunch of very aggressive reps (for simplicity’s sake, we’ll just refer to them all collectively as MAD) – are back, trying to convince radio broadcasters that they should be signing licensing agreements covering certain technology for which MAD claims to be the patent holder. While MAD’s materials do not expressly threaten that non-signing broadcasters will be sued, recipients might still feel the cold chill of potential litigation as they consider MAD’s pitch.
The technology in question involves automated programming systems. MAD itself didn’t create the systems or get them patented. (That honor goes to a gentleman named Robert J. Goldman, who obtained the two patents in 1997.) But MAD acquired the patents and has, for more than a year, been seeking to extract licensing deals from the radio broadcast industry. In March, 2011, MAD sued a passel of very large broadcast groups for patent infringement; soon thereafter it began peppering radio operators large and small with mailings and phone calls. You can read our previous posts about MAD’s activities here.
As we reported last fall, the MAD lawsuit (pending in the U.S. District Court for the District of Delaware) was stayed pending further review of the underlying patents at the United States Patent and Trademark Office (USPTO). The stay made sense, particularly in view of the apparently impermanent nature of the USPTO’s determinations relative to the validity of the patents in question. Those patents were originally approved back in 1997. But then approval of major elements of them was withdrawn in October, 2011.
Undaunted, MAD went back to the USPTO for further reexamination of the patents. With all that going on, any attempt to litigate a patent infringement case would have been problematic, to say the least: if you don’t know for sure that there’s a patent, how can you tell whether there’s been any infringement? Further, why waste everybody’s time in court if the government agency best equipped to answer that question says they aren’t valid anyway?
But there has recently been a new development at the USPTO. As a result, MAD is at it again, dumping yet another aggressive sales pitch on radio broadcasters’ doorsteps. If you’re reading this because you did an Internet search for “Mission Abstract Data” (yes, we know that’s how some of you find us here at CommLawBlog), know this: you are not alone.
The materials with which MAD is now bombarding stations consist (in the instances we’ve seen so far) of about 50 pages’ worth of items, including:
A covering letter (it says “Mission Abstract Data” across the top, but it will actually come from IPMG AG, the Swiss company that bought up the licensing rights for these two patents; the actual ownership rights in the patents are held by Digimedia, the new name under which Mission Abstract Data is operating);
A copy of a “Patent Sub-License Agreement”;
Some materials from the USPTO regarding the validity of the underlying patents.
It’s those USPTO materials that are the catalyst for the latest round of MAD outreach.
According to MAD’s cover letter, the USPTO has now re-thought its action from last October (in which the USPTO tossed many of MAD’s claims of patentability). As a result (still according to MAD), several of the tossed claims have now been un-tossed, which supposedly reinforces the validity of MAD’s patents. Because of that, MAD claims that it will be immediately seeking to have the litigation stay removed in the Delaware lawsuit.
In other words, the threat of litigation – and consequent potential liability – has now been elevated to DEFCON One [Blogmeister Note: Quasi-obscure reference to WarGames, to which CommLawBlog gives multiple thumbs up] . . . or at least that’s what MAD would have us all believe.
How should one respond to MAD’s missives?
First and foremost, don’t panic. As with any such situation, it’s best to maintain a clear head.
Second, get good advice and rely on it. In this case, the ultimate question to be answered is whether MAD really does have a patent that is being infringed by you, the radio station operator. That is a highly technical question with a couple of obvious subparts, those being: (1) Are MAD’s patents valid in the first place, and if so, (2) do those patents cover the particular computerized automated music system you’re using.
The answer to Question No. 1 requires informed input from patent counsel. We here at Fletcher Heald are not patent lawyers, and we are not in a position to evaluate MAD’s patents or the niceties of the recent USPTO actions. Those actions are written in a language that can be fully understood only by experts in the field, people who are familiar with the arcane terminology and concepts of patent law. Before you decide whether to sign up with MAD, you would be well-advised to have your own patent lawyer review the materials and advise you about them. (Heads up: The earnestly expressed beliefs of MAD’s various reps who are calling around do not necessarily constitute “good patent advice”. Our guess is that those folks aren’t expert patent lawyers – in fact, we’d guess they’re not even lawyers – and they have an obvious interest in characterizing the status of the patents favorably to MAD. Take whatever they say with a grain of salt.)
And as to Question No. 2, you would need someone familiar not only with the patents, but also with the particular automation system you happen to be using and any indemnification or insurance to which you might be entitled from third parties (such as the vendor who provided the system or the system’s manufacturer). Again, this calls for input from an expert, as well as some legwork by you.
Once your expert(s) has/have reviewed your particular situation, he/she/they should be able to give you some idea of what, if any, liability you may be subject to. This will likely involve some speculation, but informed speculation from an objective expert is more reliable than the threatening claims of a MAD rep looking to get your signature on a deal.
Once you’re armed with objective input from a knowledgeable expert, you will be in a better position to deal with MAD.
It’s important to bear in mind that the most recent flurry of high pressure contacts from MAD appears to be nothing more than an effort by MAD to capitalize on the one good bit of news they have received in this entire process, i.e., the recent USPTO actions that, according to MAD, put their patents back on track. But from what we can see in the USPTO files, those actions – whatever their actual impact on MAD’s patents – are not final yet. And we have heard some third-hand reports that some folks (possibly including some or all of the broadcasters in the Delaware litigation) are planning to go back to the USPTO to seek further re-examination of the patents.
In other words, the recent USPTO actions may not be the final word in any of this.
And let’s not forget the Delaware litigation. If MAD asks the court to lift the current stay (and we expect such a request to be filed any time now), the resulting back-and-forth arguments could shed considerable light on the strengths and weaknesses of MAD’s claims.
With so much uncertainty already in the air and with more to come in short order, it’s not clear whether MAD’s latest round of contacts is mere opportunism or whether it offers you the last best opportunity to get out before things get really expensive.
But the mere lack of immediate clarity does not mean that you can or should just blow MAD off. Even if you have simply ignored MAD’s communications in the past, that’s not an acceptable response anymore.
MAD’s latest round of salesmanship should be taken seriously. The MAD materials should be read, and efforts should be made to confirm the extent of any available insurance coverage and possible indemnification. There are multiple issues with regard to each, from whether you’re covered at all to whether there is a limit on the amount of coverage to when it kicks in. All such information is necessary to making informed decisions.
Furthermore, only you can gauge your financial situation and your risk aversion/tolerance levels. If you’re concerned about how best to deal with MAD, you should contact your attorney and discuss your situation, with special reference to the documents MAD has sent around. You should also consider seeking specialized patent counsel for expert input about the validity of the patent claims and their applicability to you.
And check back with us here at CommLawBlog.com for updates on further developments.