Does Acacia Own Streaming Media?

A court battle between a California holding company and more than a dozen online adult entertainment companies opening today could have far-reaching implications for the streaming media industry.

Acacia Media Technologies, a division of Acacia Research , sued a group of porn producers in the U.S. District Court in Calif. for allegedly infringing on its patents. The company says these patents give it the right to charge licensing fees to anyone who streams media via the Web.

Newport Beach, Calif.-based Acacia is a holding company apparently set up to buy patents and collect licensing fees — or conduct court battles to extract the fees. The paper pushing between the plaintiff and defendants has gone on for years, but Friday marks the first step of the court battle.

“Today’s hearing will not result in a ruling. It is only talking about initial terms. It’s the first hearing on the first step,” said Roderick Dorman of Hennigan Bennett & Dorman, attorneys for Acacia Media Technologies Corp.

Friday’s court appearance is for a so-called “Markman” hearing in which Judge James Ware will determine the scope and meaning of Acacia’s patent claims. This means Ware will interpret the language in Acacia’s patent to determine what it means and how far-reaching it is. While it’s only the first step in the process, this determination will be key to the second step — deciding whether the technology used by the defendants falls within the scope of the patent.

While the legal battle has caused an uproar in the adult entertainment industry, the outcome of the case has far-reaching implications for a much wider world of companies. If Acacia is shown to own the rights to the technology, anyone streaming media on the Web would theoretically owe it a licensing fee.

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