Many radio broadcasters have recently received a notice from a company called Mission Abstract Data, asking to begin discussions about royalty payments for the use of digital music storage systems, which that company claims fall under a patent they control. This claim seemingly covered systems used by most music radio stations – systems sold by several well-known companies in the broadcast industry. Before blanketing the country with the demands a few weeks ago, the company had initiated similar actions against several of the largest broadcast companies, filing a lawsuit against a number of them. After that action was filed, challenges to the underlying Mission Abstract Data patent were filed with the Patent and Trademark Office ("PTO"), arguing that the patents should be invalidated as there was “prior art”, i.e. there were other systems in existence at the time that the patent was filed and thus the technology on which the patent was filed was not a new invention warranting patent protection. Last week, a unit in the PTO tasked to review challenges to existing patents issued a preliminary decision agreeing with the challengers that many (but not all) aspects of the patent were improperly granted and thus should be invalidated.
This is a preliminary ruling to which the patent holder can respond (with an early December date set for the filing of such responses). Nevertheless, it does seem to be an important decision for the many radio broadcasters who received the notice. As we wrote several weeks ago, if you are one of the stations that received that notice, be sure to consult an attorney to determine your potential liabilities in this situation and how this PTO decision may affect the demands made by this company. More and more claims like this are arising throughout the digital media landscape so, even if this one goes away, don't be surprised to see some other claim cross your desk at some point in the not too distant future.