HDMI ‘Wrongfully’ Demanding $905,000 in Back Royalties, Says ADB

HDMI Licensing “wrongfully” demands $905,000-plus in back royalties and interest from Advanced Digital Broadcast, a Swiss-based supplier of HD set-top boxes, residential gateway devices and other products to pay-TV operators, ADB alleged in a breach of contract complaint filed Tuesday in U.S. District Court in San Jose. ADB seeks a declaratory ruling that it doesn’t owe the money. HDMI Licensing threatened to cancel ADB’s license agreement at the close of business Tuesday and alert customs authorities globally to seize ADB shipments as “unauthorized” goods, the complaint said. The complaint doesn’t seek a preliminary injunction, only a “declaration” that HDMI Licensing “is precluded” from notifying customs that ADB goods “are unauthorized and subject to seizure because they are not.” Neither side commented Wednesday. Under its November 2005 HDMI license agreement, ADB dutifully paid the 4 cents per unit royalty it owed for every licensed “end-user cable, component, connector, repeater, source or sink” it shipped between January 2010 and December 2012, the complaint said. An independent HDMI Licensing auditor found in late 2014 -- incorrectly, ADB alleged -- that ADB failed to “reasonably incorporate” the HDMI trademarks into the product documentation materials that accompanied those shipments, the complaint said. That failure gives HDMI Licensing the authority to charge an additional 10 cents per unit royalty, and it’s that differential royalty that ADB said it doesn’t owe. "Solely in an effort to resolve the dispute," ADB "changed the way it reasonably incorporates the HDMI alleged trademark into its related materials,” the complaint said. “ADB licensed products implement any and all changes in marking” that HDMI Licensing suggested, yet the licensor won't relent, it said.