USPTO Rejects Funai Claims

The United States Patent and Trademark Office has issued a second rejection of all claims in one of Funai Electric Co.’s patents.  This decision comes on the heels of a Vizio request, where the company asked the FCC to require that Funai comply with patent licensing conditions imposed by the FCC.  Vizio claimed that Funai is practicing unreasonable and discriminatory policies by charging excessive DTV patent licensing fees.

Vizio had also told the FCC that if it does not act, Funai will continue threatening to exclude Vizio televisions from the market before the completion of the U.S. transition to digital television.  Yet, this recent USPTO decision leads some to believe that the Funai patent may eventually become invalidated.  As Vizio stated in their press release:

We are pleased that after reexamination of Funai’s claims, the USPTO has issued a second rejection of Funai’s ’074 patent just as they had done earlier with their 5,329,369 patent. These decisions reaffirm our policy to respect the rights of intellectual property holders, thoroughly investigate all claims, and vigorously defend our legal rights when we feel a claim is invalid or not infringed. Unfortunately, we are not immune to lawsuits and we will vigorously defend ourselves in actions such as these as we see appropriate.

DTV Petition has FCC Thinking Reform

The Federal Communications Commission has invited the public to comment on a petition asking for reform of the DTV receiver patent license sharing system.  The petition was made by the Coalition United to Terminate Financial Abuses of the Television Transition (CUT FATT), and it alleges the current practice of unmonitored patent licensing of gouging American digital television makers, thereby increasing DTV retail prices.

As reported by Ars Technica, the petition filed on January 2nd says “Licensors in the United State operate freely in an unregulated ‘Wild West’ without supervision or accountability.  As a result, American consumers pay $20 to $30 per television for intellectual property rights that cost about $1 elsewhere in the world.”  The group predicts that the digital transition in the United States will overcharge consumers by a billion dollars.

The group also points to Japan and Europe, where patent pool systems make licenses available and cheap for manufacturers.  “There is no uncertainty, no cause for endless litigation, and most important, there is no price gauging,” the petition stated.

The group hopes to get new policies from the FCC, that would make royalty demands for essential patents violate reasonable and non-discriminatory standards.  Therefore, a company would be fined if their royalty demands exceeded international or industry comparables by more than 50%.  The group also wants the burden of proof of proving reasonableness to fall on the patent holders.

If you would like comment on the CUT FATT petition, you have until April 27.  To file comments you need the docket number (09-23), and the available form.

Vizio Throws Support around ‘CUTT FATT’ to Reduce DTV Patent Fees

Vizio is reportedly petitioning the Federal Communications Commission to lower patent fees for digital TVs.  In addition to petitioning, Vizio is also supporting the Coalition to Terminate Financial Abuses of the Television Transmission.  The coalition, otherwise known as CUT FATT, was formed to protect Americans from the current, excessive fees surrounding the FCC-mandated switch to DTV, states the International Business Times.

On July 1st, 2007, the FCC required that all televisions sold in the U.S. include a digital tuner built to the requirements of the Advanced Television Systems Committee.  The current holders of the patents surrounding these TVs are currently demanding $20-$30 per television.  The same patents that currently cost $1 or less in Europe or Japan.

“This is the great untold story of the transition to digital television,” said Amos Snead, spokesman for CUT FATT. “Since 2007, American consumers have been paying more than twenty to thirty times what consumers in Europe and Japan pay in royalties for basically the same technologies. What’s worse, patent holders bundle allegedly essential technology with worthless patents, jack up the rates, and stick consumers with the bill. The FCC created this system, and it’s time for the FCC to fix it by establishing basic rules that make pricing fair and transparent.”

This petition brings up the great dilemma about the prices of patented products.  Since a patent grants a company the exclusive right to sell a particular invention or product, the companies are free to charge whatever price they feel.  If the FCC does lower the fees, will it open the door for the FCC to do the same on a product such as prescription drugs?