Rembrandt: We Agreed To Drop Patent Claims On Cable Modems

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Is there a greeting card that says, “Sorry for suing you. You were right, your products don’t infringe our patents”? Maybe with a sad little puppy on it.

Rembrandt IP Management — the patent-licensing firm that had sued the five largest U.S. cable operators and sought millions of dollars in royalty payments — claimed in a statement Monday that it withdrew its legal claims voluntarily, after reviewing the source code of the targeted cable modems and realizing the products do not actually violate its patent rights.

A federal judge in Delaware last month dismissed the patent-infringement actions brought by Rembrandt against Comcast, Time Warner Cable, Cox Communications, Charter Communications and Cablevision Systems, after the patent firm agreed to not seek royalties or sue the companies over eight patents allegedly related to the industry’s DOCSIS cable-modem standard (see Court Throws Out Cable-Modem Patent Claims).

The cable operators subsequently requested indemnification from their suppliers, leading six manufacturers — Cisco Systems, Motorola, Arris, Thomson, Ambit Microsystems (now called Ubee Interactive) and Netgear — to countersue Rembrandt and seek a ruling that their products don’t infringe the patents.

In a statement Monday, Rembrandt said that “characterizing the action as merely a dismissal is incomplete and misleading.”

According to the firm, after it “was able to wrest from the cable companies, the modem manufacturers and third parties the source code and additional evidence which revealed that it was not appropriate to continue to pursue the cases, Rembrandt voluntarily provided the covenant not to sue, and stipulated to the dismissal of Rembrandt’s claims.”

Prior to its review of the accused products, the Bala Cynwyd, Pa.-based company said, it was “confident in its belief that the patents were infringed and spent millions of dollars in prosecuting its claims.” According to Rembrandt, one of the cable-modem manufacturers (which it didn’t identify) even purchased a license for the eight patents.

In December 2004, Rembrandt paid a reported $1 million for the patent portfolio of communications-equipment maker Paradyne that included the eight patents at the heart of the cable-modem litigation. Paradyne, once owned by AT&T, is now part of Zhone Technologies.

Rembrandt has acquired more than 200 patents and attempts to collect money from that portfolio via licensing agreements or patent-infringement verdicts — a type of business derogatorily referred to as a “patent troll.”

The firm defends itself as providing “an opportunity for patent owners to receive a return on their creativity by investing significant resources to enforce intellectual property rights against those who infringe their discoveries.” Rembrandt said its failure to win the DOCSIS case “has no bearing on Rembrandt’s and its affiliates’ continued commitment to advocate fiercely on behalf of patent owners whose rights have been violated.”

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