A subsidiary of Alcatel-Lucent is broadening its campaign to get royalty payments from companies in the digital video business. Multimedia Patent Trust, a holding company set up during Alcatel-Lucent’s long patent battle with Microsoft (NSDQ: MSFT), has used four digital video patents to file a lawsuit [PDF] against Apple (NSDQ: AAPL), Canon, LG (SEO: 066570), and TiVo (NSDQ: TIVO).
MPT says that these four patents entitle it to royalties on a wide variety of video compression standards, including MPEG-2 and two different varieties of MPEG-4 encoding. It’s asking for royalty payments on every Apple device that can produce video-iPhones, iPads, etc. The patents, which were filed between 1989 and 1994, originated at AT&T’s Bell Laboratories, one of the most famous U.S. research laboratories.
There’s already a group-MPEG-LA-that’s been set up to collect royalties on all relevant digital video patents, and distribute the proceeds to the dozens of patent owners in that space. All companies that want to make devices that have digital video abilities, from DVD players to iPads to desktop computers, already pay into the MPEG-LA patent pool.
But that doesn’t stop other patent holders, such as Alcatel-Lucent in this case, from coming around many years after those negotiations have been completed and asking for several years’ worth of royalty payments. That practice has led to a problem that some in the patent world call “royalty stacking.”
AT&T (NYSE: T) spun off Bell Labs, along with other assets, into a new company called Lucent Technologies in 1998. In 2006, not long after it launched a patent suit against Microsoft, Lucent merged with French telecom company Alcatel.
The company has already fought major patent battles over digital video and MP3 audio technology with Microsoft and computer makers including Gateway and Dell, that have been settled under confidential terms. In 2007, one of Alcatel-Lucent’s lawsuits resulted in a huge $1.5 billion patent verdict from Microsoft-at the time, the largest patent damages award ever. But the victory was short lived, because a judge scuttled the win, and Microsoft ended up paying nothing in that case.
In January, Alcatel-Lucent fired up its patent litigation campaign again, using six patents-including three of the ones now being used against Apple and others-to sue a big swath of entertainment companies, including NBC Universal (NYSE: GE), ABC (NYSE: DIS), ESPN, Miramax, Pixar, the Walt Disney Company, Hulu, Oxygen Media, Universal Studies, and Fox Entertainment. That suit is still pending. Like the one filed this week, it was filed in San Diego federal court.