As its licensing push gathers momentum, Acacia Technologies is setting
its sights on the telecommunications and wireless industries.
Newport Beach, Calif.-based Acacia began making waves
last summer
when it claimed it pretty much owned streaming media. Ever since,
it’s been on an aggressive licensing campaign, moving steadily up the food
chain.
Acacia said its digital media transmission (DMT) patents cover the
transmission and receipt of digital
content via the Internet, cable, satellite and “other means”; it believes
they apply to such things as some basic programming functions, pay-per-view,
audio and video on demand, streaming audio and video, and digital ad
insertion.
In May, Verizon began rolling out
fiber-to-the-premises technology in a Dallas suburb, promising
to deliver high-speed data, voice and video products to customers. It plans
to move the service into nine states by year’s end, according to a
spokesperson, and to introduce video products in some form next year.
Video on demand could be a moneymaker for Verizon and other telcos, but
it put the company squarely in Acacia’s sights.
Acacia CEO Paul Ryan said his company already had contacted Verizon about
licensing DMT, because its former parent, Bell Atlantic, had licensed the
patents in 1994 when it was doing field trials for video on demand in
Virginia.
Verizon Wireless was on Acacia’s hit list, along with the rest of the
wireless industry, as it moves to deliver mobile media to cell phones and
other handheld devices over next-generation networks.
With Verizon’s announcement, Ryan said, “It looks like the telcos will
come in.”
Last year, Acacia caused panic when it
got an
injunction shutting down five X-rated sites featuring streaming video.
By now, the company claims it has licensed approximately 95 percent of
the
hotel in-room entertainment industry, along with the top adult entertainment
players. Next, it focused on news, sports and information Web sites, with
the Walt Disney Co. and Playboy Enterprises
inking licenses. The company charges either 1 percent of revenues or $1 per
subscriber, and boasts some 123 license agreements.
Earlier this week, Acacia filed patent infringement suits against nine
cable and satellite
companies, saying their services rely on technology covered by its DMT
patents.
The latest companies to receive Acacia’s paper include Comcast, Charter
Communications , The DirectTV Group, Echostar
Communications , Cox Communications
and
its wholly-owned subsidiary, Hospitality Network.
While Ryan believes the patents apply to software, such as Windows
MediaPlayer and RealPlayer, Microsoft and RealNetworks
dont need to lawyer up. Acacia considers them contributory
infringers, but he said, “The people really making money are the media
companies. The proliferation of the RealNetworks and Microsoft players is
obviously an advantage to our licensees and us.”
Ryan said Acacia tries to make it easy for licensees by providing full
documentation of the DMT patents, along with an analysis of how their
specific operation infringes.
“We go to them and say, ‘If you disagree with
our analysis, let us know and we’ll go away.'” Ryan said. “We haven’t had
any companies that were able to demonstrate we were wrong.”
Ryan said it typically takes six months to a year to go through the
process. Sometimes, he said, a company is willing to go to court and fight
the patent in the hope that its claims might at least be narrowed a bit.
Meanwhile, other companies wait to see the result of the suit before they
make their licensing decisions.
“Until there’s a lawsuit on the table forcing the decision, the
proclivity is to just wait and see if they ever sue us,” Ryan said.
“Oftentimes, the legal process is part of the negotiating process.”
Acacia also handles licensing of the V-chip technology, which lets people
block violent programs from their televisions. Without Acacia’s
help, Ryan said, “The inventor of the V-chip would have been stonewalled by
the industry and never made a penny off this technology that saved them
millions.”
Look for more waves from Acacia this year. Ryan said Acacia is
negotiating with other intellectual property owners looking for some legal
muscle.
“There are many tech companies,” he said, “that started in the Internet
craze that have important [intellectual property] and busted business
models.”
