[old_tv_nut]

The dispute started because dbx didn't follow the prior usual industry practice of negotiating reasonable licensing fees (although patent law does not require it), but instead demanded what it felt was a justifiable fee. The rest of the industry got a bad taste in their mouths from this, but couldn't find a way around it. The impression I got (not being directly involved in any of this) was that the dbx royalties were about three times that of what many considered reasonable, based on prior cases like FM stereo.

Notice that the lawsuit didn't claim that RCA used the patent without paying, because they didn't. It instead was posed as a suit on behalf of consumers because RCA didn't achieve the implicitly advertised result. If RCA had developed a totally different method of achieving the result (though it is doubtful they could), this suit would have been much weaker. Note that some basic system patents can be so broad that simply receiving the signal and decoding it in ANY way infringes on the basic patent, although it seems this was not exactly the case here.

If usual practice had been followed, dbx would have proposed a licensing schedule, and the potential licensees would negotiate a lower schedule based on similar previous cases, perhaps with some licensees agreeing privately, others going through arbitration, and the most stubborn going to court. This might take several years to settle, but in the meantime, all would be producing product and setting aside funds for the expected fees accrued. Once agreement was reached, the patent holder would then receive back royalties for goods already produced and start receiving royalties for ongoing production, up to the date that the patent expired.