Suing for fun and profit: this time it’s cable and broadcasters

There is a relatively new breed of American business that exists only to acquire obscure patents and use them to extort money from otherwise productive enterprises via the court system. One such firm, Rembrandt IP management is intent on ravaging the cable and broadcast industries with a barrage of suits:

If successful, the firm, Rembrandt IP Management, could pull in big money from the enforcement of patents related to the cable industry’s standard for connecting customers to the Internet and potentially throw a financial monkey wrench into the broadcast industry’s mandate to transmit all TV signals in digital form by a year from now.

In the worst-case scenario, Rembrandt’s litigation may undermine the ability of industry bodies to set technical standards whose uses are meant to be widely available for “fair and reasonable” patent-licensing fees.

In cases originally spread across federal courts in Delaware, New York and Texas, Comcast, Time Warner Cable, Charter Communications, Cox Communications and Cablevision Systems face claims that their cable-modem services infringe eight patents now held by Rembrandt, and that their video services violate a ninth one related to digital-TV transmission. (from Multichannel News)

Unfortunately, the IP shakedown business is an explosive growth industry in the US. With the patent office firmly planted in the 19th century, and a court system that has far too many judges with no technical knowledge the shakedowns are likely to snowball. There’s too much money to be made. Even otherwise productive companies like Verizon have turned the lawsuit into a profit center. That’s bad. If want want the American economy to grow, we need fewer obstacles to operating a business, not more. It will take more than a few competent elected representatives to resolve this problem. Unfortunately, Americans excel in electing vast numbers buffoons.