A group of public interest and consumer groups — Public Knowledge, Consumers Union, Free Press, Media Access Project, and New America Foundation — have filed reply comments in the CUT FATT proceeding on digital TV licensing practices at the US Federal Communications Commission, asserting that the Commission should:

• “investigate allegations that existing licenses for patents essential to the DTV standard are unreasonable or discriminatory”, and
• “require disclosure of essential patents, the grounds by which the patents are essential, and the terms under which they are licensed.”

The groups argue that such disclosure of licensing terms is within the Commission’s jurisdiction and in the public interest:

“The public interest requires that the scope and cost of any mandatory standards be clear to those who would adhere to them.  When patent royalties can be openly investigated and compared against known benchmarks, manufacturers and consumers can be assured that licenses, and the costs that go with them, are reasonable and nondiscriminatory.  Not only does disclosure prevent cost-raising abuses, but ensuring that essential patents are known and disclosed will prevent users of the DTV standard from being drawn into disputes over patent scope and validity.  The time, uncertainty, and cost involved in navigating unanticipated patent disputes would also be minimized by further transparency and disclosure.” (emphasis added)

Reply comments here also make the case that “It is Unreasonable and Potentially Discriminatory to Shield DTV Licensing Terms Behind Claims of Private Business Confidentiality”.

Patent holders are resisting public disclosure of patent licensing terms, arguing for example:

“The FCC also cannot order the public disclosure of confidential commercial business agreements, as the Petition requests….Private licensing agreements, especially the financial terms of such agreements, are confidential and proprietary information.”

The CUT FATT coalition itself has claimed in its most recent filing that “patent holders are demanding more than $24 per set – although confidentiality requirements prevent manufacturers from disclosing each demand” and similarly argues that

“confidentiality is inconsistent with a regime requiring nondiscrimination. Indeed, simply banning confidentiality requirements is likely to curtail some of the most egregious demands.”

For more information and advocacy on the CUT FATT proceeding, see here.