US DTV Patent Royalties Range From $24 to $40

Filings last week in the CUT FATT proceeding at the US FCC on patent overcharging in the US digital TV transition claim that royalty demands for US ATSC-standard television receivers range from $24.10 to $40.10, depending on the size of the TV receiver.

The numbers in the table to the right appeared in the Reply Comments of the Coalition to Terminate Financial Abuses of the Television Transition dated May 27, 2009 in a declaration by Douglas Woo, president of Westinghouse Digital Electronics, one of the two members, along with Vizio, of the CUT FATT coalition.

Interestingly, Woo, a Harvard law graduate, was a partner at Pillsbury, Madison & Sutro focusing on intellectual property matters, before joining Westinghouse.

The table mentions a license fee to Thomson, it might be speculated though it is not directly indicated in the filings that this is Thomson’s “NAFTA Digital Television” patent license that Thomson mentioned in its own filings in the CUT FATT proceedings as containing essential ATSC patents.  Thomson is a member of the MPEG-2 patent pool required in the ATSC standard, but is not a member of the ATSC patent pool.

The filings have brought claims of on-the-edge patent licensing strategies like “multi-dipping” (participating in multiple methods to gain licensing revenue or advantage on the same standards group) and “accretive disaggregation” (increasing the cost of a patent portfolio by selling some patents to other entities).

Consumer groups and others have requested the FCC look further into US DTV licensing practices.  More background on the CUT FATT proceeding is available here.

REFERENCES

“Thomson licenses its entire patent portfolio on a product-type basis, including its “NAFTA Digital Television” patent license for the sale of DTVs in North America. This license includes, among many others, patents that are essential to practice the ATSC terrestrial broadcast standards. Virtually all leading brand manufacturers, and the majority of the rest of the DTV industry (including VIZIO), are licensed under this program. By offering very reasonable royalty terms, Thomson has achieved this success in its DTV licensing program without filing a single enforcement action in the courts or the International Trade Commission (“ITC”).

Thomson Comments Petition for Rulemaking and Request for Declaratory Ruling Filed By the Coalition United To Terminate Financial Abuses of the Television Transition, LLC, MB Docket No. 09-23, dated April 27, 2009.

“[A]ccretive disaggregation”— increasing the cost of a patent portfolio by selling some patents to other entities — is plainly inconsistent with RAND pricing.”

CUT FATT Coalition filing at 12-13, May 27, 2009.