Scott Daniels | July 28, 2011
In March, Mission Abstract Data (which also does business as Digimedia) sued a host of broadcast companies in Delaware – including CBS and Cox – for infringing two patents, U.S. Patent Nos. 5,629,867 and 5,809,246. The ‘867 and ‘246 patents concern the selection and retrieval of music from databases; specifically, music to be broadcast over the air waves is stored and played from a computer hard drive rather than a CD player. According to assignment records at the PTO, Mission Abstract obtained the ‘867 and ‘246 patents in 2007, assigned them in February of this year to Intellectual Ventures who reassigned them back to Mission Abstract seven day later.
Yesterday, Broadcast Electronics – who is not a party to the infringement action – requested reexamination of the ‘867 patent, and this morning it sought reexamination of the ‘246 patent. Also yesterday, the Defendants moved to stay the case pending completion of the two reexamination proceedings.
In their Memorandum supporting the stay motion, Defendants assert that they “are mere users, or customers, of computer automation music systems specifically designed for the broadcasting industry by several third-party vendors.” Defendants fault Mission Abstract for suing them instead of the third-party vendors “who have a motivation to defend their accused music automation products” and are more likely to have better prior art against the ‘867 and ‘246 patents. Defendants hypothesize that Mission Abstract sued them “to position itself to maximize the potential for fast, non-merit based settlements and to avoid the prior art that the third-party vendors could bring forth to invalidate” the patents.
In support of their motion, Defendants note that “[n]o discovery has been served and no initial disclosures have been exchanged.” They also argue that a stay would not prejudice Mission Abstract whose “sole business is the pursuit of monetary licensing fees (or a royalty damages award) from radio stations that use automated music systems,” and that a stay would likely simplify issues for trial. On the latter point, they cite AIPLA published data for the proposition that an ex parte reexamination costs $14,395 in contrast to the $2.5 million average expense for a litigation of the present size.
The infringement case is before Judge Leonard Stark who might wait until the PTO determines whether to grant reexamination of the patents before he rules on the stay motion.