The Radio Music License Committee reached a settlement in its antitrust case with the Society of European Stage Authors and Composers, said RMLC, which represents the vast majority of the nation’s commercial radio stations, in a news release Thursday. The settlement ends nearly three years of antitrust litigation between the groups, said RMLC. Under the settlement, SESAC must negotiate rates industrywide, the parties will have to undergo binding arbitration when they can’t reach a voluntary agreement, and SESAC’s current rates are frozen at their 2015 level until negotiations for the 2016-2018 term are resolved, it said. The settlement also gives SESAC more ability to license works directly to radio stations and requires SESAC to reimburse RMLC for legal fees from the antitrust case. The agreement’s “immediate impact” is that stations “will not have exposure to further SESAC rate increases and the industry now has the opportunity to obtain sustained SESAC fee relief,” RMLC said. In its release on the settlement, SESAC said it "guarantees a level playing field in establishing the fair market value of our creators’ musical works for the broadcast radio industry." The new agreement has “many benefits” for radio stations, said Wilkinson Barker radio station lawyer David Oxenford in a blog post Friday. One such benefit is that SESAC will publicize its catalog online and not take action against radio operators over SESAC music licenses unless that music has been in the online database for 45 days, he said. This will make it easier for radio operators to avoid inadvertently playing SESAC music and incurring SESAC license fees, Oxenford said. Radio stations need to have current SESAC licenses and “affirmatively opt into coverage” to benefit from the deal, Oxenford said. “RMLC is to provide each station a letter which will provide a general estimate of the fees for the current license term before the station makes the decision.”
The market, not the patent pool, “ultimately determines” whether a patent pool strikes a “fair balance” between patent holders and patent users, and “reasonable royalties are key,” an MPEG LA spokesman emailed us. He was responding to HEVC Advance’s disclosure Wednesday of its patent pool royalty and pricing terms (see 1507220001) that were multitiered and much more expensive than what the MPEG LA patent pool charges for the use of the HEVC codec. Like the other patent pools that MPEG LA runs, the MPEG LA spokesman said, the goal of its HEVC patent pool “is to incorporate as much essential intellectual property as possible under one license for the benefit of the marketplace.” Participating licensees and patent holders “are required for a pool license to be widely accepted,” and to “achieve wide acceptance, both must receive value,” the MPEG LA spokesman said. “Patent holders must receive value in order to be willing to make their valuable intellectual property widely available under a pool license, and licensees must receive value in order to be willing to pay for its use.” MPEG LA manages licensing programs with 10,000 patents in 80 countries with 200 patent holders and 6,000 licensees, the representative said.
Building HEVC’s 10-bit HEVC profile into smartphones, tablets and other mobile devices will incur an 80-cents-per-unit royalty, while shipping “other devices,” such as a Blu-ray player, set-top box or videogame console with HEVC Main 10 will cost $1.10 per unit, HEVC Advance’s pricing sheet said. Cents-off hardware discounts prevail for using less-robust HEVC profiles, while additional charges accrue for using HEVC format extensions from the patent pool. Video content providers will be called on to foot the royalty bill -- 0.5 percent of “attributable revenues” -- for streaming or broadcasting HEVC content. Royalties will be about half for devices shipped to outside the U.S. and EU and some industrialized Middle East and Asia-Pacific countries than to those nations. HEVC Advance will offer hardware licensees no yearly cap or royalty-free allowance, newly named CEO Pete Moller told us Monday. He acknowledged the HEVC Advance royalty rate structure is much more expensive than MPEG LA’s, but “we frankly believe that we got it right,” said Moller, former executive vice president at GE Licensing. “Ours balances the rights of patent owners and essentially patent users. We don’t think the MPEG LA pricing structure, frankly, is as optimal for that balance between users and owners.” MPEG LA representatives didn’t comment. Its patent portfolio numbers some 850 patents, said a patent list posted this month to the MPEG LA website that shows Samsung as holding roughly 53 percent. The five founding members of HEVC Advance -- Dolby Labs, General Electric, Mitsubishi Philips and Technicolor -- expect to launch later this year with more than 500 patents worldwide, “and that number will increase substantially as time goes on and more and more patents are deemed essential,” Moller said. He also expects additional licensors to join the pool.
Nintendo didn't infringe on a patent held and asserted by Quintal Research Group, a U.S. District judge in Oakland, California, ruled. Quintal's infringement claim alleges the disputed patent addresses the positioning of buttons and controls on several of Nintendo's handheld gaming devices. Friday, Judge Saundra Armstrong granted Nintendo's request for summary judgment, saying Quintal failed to sufficiently prove the alleged infringement. “The result in this case continues to prove that Nintendo will vigorously defend its innovations against patent lawsuits and will not pay to settle cases simply to avoid litigation," Nintendo General Counsel Devon Pritchard said in a statement. Quintal didn't comment.
The U.K. IP Office sought comment by Aug. 17 on a proposal to raise the maximum penalty for online copyright infringement at a 10-year prison sentence. The proposal would equalize the penalty for online infringement with the current maximum penalty for physical infringement; the current maximum penalty for online infringement stands at a two-year sentence. U.K. government officials have been exploring raising the penalty for online infringement since 2005, with a 2006 independent review of the nation’s IP laws recommending equalizing the sentences because “the intention and impact of physical and online infringement are the same.” The maximum fine for online infringement has steadily increased since 2005 and is now open-ended. Increasing the possible prison sentence for online infringement would “have a deterrent effect on criminals seeking to make money in this way,” the IP Office said Friday.
World Intellectual Property Organization (WIPO) member nations and nongovernmental organizations should strengthen IP rights in all new and existing treaties, said a coalition of 85 free market-oriented groups Monday in a joint letter to WIPO Director General Francis Gurry. The letter, organized by Americans for Tax Reform affiliate Property Right Alliance (PRA), urges the European Commission, WIPO, other intergovernmental organizations and NGOs to protect IP rights in all trade agreements, protect IP rights on the Internet and enhance IP rights as a tool to promote free markets. “Advanced societies have long understood that by protecting the proprietary rights of artists, authors, entrepreneurs, innovators, and inventors, they were promoting the greater public welfare,” the PRA-led coalition said in the letter. “The continued protection of these fundamental rights is essential to global innovation, creativity and competitiveness.” The coalition wants the letter to “encourage the leaders of international organizations and governments to work together to promote the rule of law and protect strong IP rights as the engine of fair, prosperous and transparent societies,” PRA Executive Director Lorenzo Montanari said in a statement. “Ensuring that intellectual property rights are respected and protected in every nation will promote prosperity, innovation and creativity around the globe.”
Google released an updated version of its Google Patents tool, a company blog post said Thursday. The revised search tool contains an updated classification tool, using cooperative patent classification codes to classify everything found in Google Scholar, the company said. It said that Google Patents now contains a simplified user interface and the option to search for foreign patent documents using English keywords.
Abuse of the patent litigation system by patent assertion entities (PAEs) “is the most significant problem facing the patent system and innovation more generally,” Mark MacCarthy, vice president-public policy at the Software & Information Industry Association, wrote to House leadership Thursday urging support for the Innovation Act (HR-9). “Patent trolls do not innovate, make or sell anything, but exist simply to buy patents from others for the sole purpose of suing legitimate businesses of all sizes and kinds for alleged patent infringement, leveraging the very high cost of defending against such lawsuits to obtain ‘hold up’ settlements,” MacCarthy said. "Action needs to be taken now to stop these abusive tactics.” MacCarthy cautioned lawmakers not to be taken in by “a hail-Mary mudslinging campaign” mounted by HR-9 opponents and “designed to obfuscate the purpose and effect of the Innovation Act.” Statements in that campaign that “China loves” HR-9 or that “inventors fear it” are “nothing more than scare tactics from groups that have no substantively compelling arguments on which to base their opposition,” he said. An American Conservative Union-led ad blitz launched last Monday through Washington-area newspapers urged defeat of HR-9 on the grounds it will harm American inventors and small businesses.
Chairmen and executives from the nation's largest Internet companies, including Google, Etsy, LinkedIn, Pinterest and Yahoo, submitted a joint letter Thursday to House leadership urging the passage of the Innovation Act (HR-9). "As inventors ourselves, we support the Innovation Act because it strikes a reasonable compromise between protecting patent holders' rights and removing the threat of frivolous patent troll litigation," the letter said. The reforms in HR-9 are "not silver bullets," the letter said, but they "help remove factors that make the patent troll business model a no-risk, high-reward enterprise. The Innovation Act is a positive step in the right direction for our economy."
Google needs to take a consistent position on the International Trade Commission’s role in IP rights enforcement, said Free State Foundation President Randolph May in a blog post Tuesday. Google had said in 2014 comments on the Align Technology-ClearCorrect patent case that ITC authority to prevent infringing imports doesn’t extend beyond physical goods. The ITC voted 5-1 that digital goods like the digital scans of dental appliances at issue in ClearCorrect’s case constitute “articles” that are within the commission’s purview under Section 337 of the 1930 Tariff Act. Align’s appeal of the ITC ruling is set for oral arguments Aug. 4 at the U.S. Court of Appeals for the Federal Circuit. Google and allies claimed during the 2011-2012 debate over the Stop Online Piracy Act (SOPA) that online infringement “should be treated as an international trade issue,” May said. “For well over 80 years, the independent International Trade Commission (ITC) has been the venue by which U.S. rightsholders have obtained relief from unfair imports, such as those that violate intellectual property rights. Under Section 337 of the Tariff Act of 1930 -- which governs how the ITC investigates rightsholders' request for relief -- the agency already employs a transparent process that gives parties to the investigation, and third party interests, a chance to be heard,” Google and other SOPA opponents said in a fact sheet supporting the alternative Online Protection and Enforcement of Digital Trade Act. “In light of these statements touting the efficacy of international trade remedies, and the fact that SOPA and the OPEN Act obviously were all about protecting digital data, not physical goods, it's hard to believe that Google is now arguing that the imported ‘articles’ over which the ITC possesses authority do not include digital content,” May said. Google didn’t immediately comment.