Press Releases

FOR IMMEDIATE RELEASE | FEBRUARY 23, 2009

CUT FATT Stands with Consumers to Lower
Costs of Digital TVs

Patent holders charging excessive fees, driving up costs of DTVs

Washington, D.C. – The Coalition United to Terminate Financial Abuses of the Television Transition (CUT FATT) today announced its support of VIZIO’s request to the Federal Communications Commission (FCC) to stop Funai Electric Co., Ltd., from charging excessive licensing fees and driving up the prices of digital TVs in the United States.

The VIZIO Request for Temporary Relief is made pending FCC action on CUT FATT’s January 2, 2009, Petition for Rulemaking and Request for Declaratory Ruling. CUT FATT petitioned the Commission to determine that some holders of digital television patents are charging excessive licensing fees and to take action to prevent further abuses of the monopoly power those patentees possess.

“On one hand, the DTV Delay Act highlights the importance our government leaders place on a digital TV transition that avoids imposing enormous burdens on American consumers. On the other hand, some patent holders are being allowed to impose excessive licensing fees that are being passed along to U.S. consumers at a cost of more than $1 million per day,” says CUT FATT spokesperson Amos Snead. “Funai is one example of a patent holder that is exploiting the transition to digital to make exorbitant profits on digital television sales.”

California-based VIZIO, maker of one of the leading brands of digital televisions in the United States, submitted a request to the FCC to require Funai to license its digital TV patent (United States Patent No. 6,115,074) on FCC-required “reasonable and non-discriminatory” — or “RAND” — terms. According to Commission Rules, Funai is required to respond to VIZIO’s Request within seven calendar days.

Funai is demanding an inflated fee for the use of its patent, a rate many, many times the fees charged by other holders of Advanced Television Systems Committee (ATSC) standard patents for even large pools of multiple ATSC patents. Because VIZIO has refused to agree to Funai’s excessive demands, Funai is seeking an order from the International Trade Commission (ITC) to exclude VIZIO digital televisions from the United States. The FCC’s failure to act affirmatively on VIZIO’s request, combined with a decision against VIZIO and other manufacturers in the ITC, could mean American consumers will face a shortage of the leading low-priced digital TVs before the digital conversion concludes in June.

CUT FATT was formed in 2008 to raise awareness among Members of Congress and the FCC concerning uncontrolled price gouging by ATSC patent holders and to protect American consumers. When the FCC adopted the ATSC standard, it promised to protect consumers from unreasonable and discriminatory patent fees. CUT FATT believes the FCC should scrutinize the demands of patent holders who charge American consumers far more than consumers pay in other countries.

For more information or for copies of the Request for Temporary Relief, contact Amos Snead at amos.snead@fd.com, 202-715-1531.