Legal battles among leading giants set scene for new licensing environment

A recent decision by the Patent Reexamination Board of the State Intellectual Property Office on a standard essential patent in the television industry has once again set the spotlight on a string of legal wrangles that first hit the headlines last year.

Standard essential patents are required in industrial technical standards, meaning an upcoming court ruling could have a major impact on patent license fees and future industrial policies.

Guangzhou Digital Rise Co Ltd filed patent complaints against major electronics manufacturers Tianjin Samsung, Hisense and Skyworth in Beijing and Guangdong province in 2017, claiming combined damages of hundreds of millions of yuan.

Digital Rise developed a multi-channel digital audio coding technology called Digital Rise Audio, with proprietary intellectual property. The Guangzhou-based company has filed 52 applications for invention patents in China and abroad relating to its DRA technology, with 25 of them already granted, according to its official website.

The DRA technology was published as an international standard for digital audio interface by the International Electrotechnical Commission in 2010 and was adopted as a necessary audio standard in the Specification for National Digital Television Receiver, also known as the DRA audio standard, in 2011, the company said.

In July 2017, Digital Rise initiated legal procedures with the Beijing Intellectual Property Court against Skyworth and its subsidiary Skyworth-RGB Electronics, as well as home appliance retailer Gome.

Digital Rise alleged the companies infringed two of its audio decoding patents, both related to the DRA technology, and claimed 192.2 million yuan ($30.35 million) in damages.

In the ensuing lawsuits, Hisense, Tianjin Samsung, Gaochuang Electronics (Suzhou) and Shenzhen Suning Cloud Commercial Sales Co Ltd were added to the list of infringers.

In response, Tianjin Samsung filed a patent invalidation request with the Patent Reexamination Board, concerning the audio decoding patent involved in the cases. The board recently decided to void Digital Rise's patent.

Skyworth has also filed an invalidity request with the board for another patent, the audio coding and decoding system, pending final ruling.

Digital Rise and the electronic manufacturers cooperated prior to turning to legal action, which probably came about because they failed to agree on new license deals after the previous one expired. As such a crucial patent has been voided, Digital Rise is likely to be driven into an unfavorable situation in the ongoing legal procedures. At the same time, for others that have already acquired licenses to use the patented technology, the licensing cost could be adjusted.

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