e.Digital Corporation (fka EDIG)

[Cassandra]

LGJ: That is a "guest post" written by Paul Schneck on Eric Savitz's blog. Most of the posts on his blog were guest posts: http://www.forbes.com/sites/ericsavitz/. Savitz left Forbes over 3 months ago.

Paul Schneck is chairman of Rembrandt IP Management LLC, which is a PAE/NPE funded by Hedge funds. Of course he's going to defend what he's does. http://www.rembrandtip.com/about.php Hedge-funded PAEs are part of the upcoming FTC investigation. The FTC wants to see how much, if any, of the awards collected make their way back to the original inventors.

In April 2007, an actual Forbes article authored by a Forbes staff writer, called Rembrandt and other NPEs funded by hedge funds "patent pirates." An excerpt:

Paul Schneck has a more audacious plan, buying up patents and launching suits from scratch. A computer scientist who once worked for the National Security Agency, the U.S. Navy and NASA, Schneck heads up Rembrandt IP Management. His $150 million war chest has helped him pick up 200 patents; he is currently suing 15 companies and plans to go after more. “We are focused on obtaining jury verdicts,” he says. “That’s why we put our own money at risk, all the way from acquisition through appeal.”

First target: the cable industry. In 2004 Rembrandt spent $1 million for a patent portfolio from Paradyne, once a unit of Lucent Technologies, in order to challenge the most fundamental part of the cable business: how cable companies and TV networks receive and transmit digital broadcast signals. It has sued Comcast, Time Warner, Walt Disney ‘s ABC and others, all of which deny any infringement. Some defendants claim the technology was set by a group that included AT&T, which agreed in the early 1990s not to assert any patents and to license them for a reasonable fee. “The patent system is designed to allow people to protect the fruits of their invention,” says Daralyn Durie, a lawyer for Comcast. “But this seems to be a perversion of what the system was designed to accomplish.”

Schneck is also going after the vision business, laying claim to the treatment of contact lens surfaces, which determines the gas permeability of soft contacts. He bought the patents from inventor Sing- Hsiung Chang and last year sued Bausch & Lomb and Novartis ‘ Ciba Vision unit. Both companies say that Chang didn’t invent the technology. But Schneck has them seeing double–and tied up in court for years.

Source: http://www.forbes.com/forbes/2007/0507/044.html

Rembrandt is different than e.Digital in that they intend to go the distance to prove infringement and get as large an award as possible. They file bad-faith shake-down suits against dozens of defendants looking for quick less-than nuisance value settlements like e.Digital and Handal are doing. They also don't always win.

Rembrandt lost the cable modem suit: http://www.heavyreading.com/document.asp?doc_id=184209&site=cdn

But won the contact lens suit: http://www.forbes.com/2008/02/11/patents-legal-rembrandt-biz-cz_nv_0212patent.html

Related entity Rembrandt Socia Media, LP, sued Facebook over the "Like" button in Feb. 13 but Facebook's motion to dismiss was granted on June 12, 2013: http://www.law360.com/articles/450127

Ruling: http://scholar.google.com/scholar_case?case=14288467088581045460&hl=en&as_sdt=2&as_vis=1&oi=scholarr