An intellectual property holding company is attempting perhaps the most widespread patent licensing program ever, and any company with a Web site that streams stored audio or video may be contacted next about taking a license. Acacia Technologies Group (Acacia) owns several patents it claims broadly cover the transmission and receipt of video and audio content over the Internet and other media. Acacia reports that it has licensed over a hundred companies so far, including heavyweights such as Disney.

Not all companies who have been contacted by Acacia have acquiesced to its demands to take a license, however. Characterizing certain companies that stream video over the Internet as "low hanging fruit," Acacia sued several such companies in federal court in Orange County, California. Some cable companies have not waited for Acacia to file suit against them. On June 15, 2004, Comcast Cable Communications filed a declaratory judgment action against Acacia in Delaware, and on June 18, 2004, MidContinent Communications, GP, and Coxcom, Inc. filed declaratory judgment actions against Acacia in Minnesota and Georgia, respectively. In response to the lawsuit filed by Comcast, Acacia also sued nine cable companies, including Comcast, for patent infringement in San Jose, California.

Acacia asserts that there are thousands of other infringers, including those involved with the Internet, cable, hotel video, e-learning, and even corporations that merely provide streaming video on their Web sites free of charge. Notably, as part of its licensing strategy, Acacia has so far refused to sue Microsoft, Apple, or RealNetworks, who are the most commercially successful manufacturers of technology used to encode audio and video for transmission over the Internet. Instead, Acacia has chosen to sue those who use the technology made by Microsoft, Apple, or RealNetworks.

Acacia built up a war chest of more than $25 million, licensing several consumer electronics companies for a patent on video and audio censoring technology, which Acacia claimed covered the V-Chip. The V-Chip is commonly used in televisions and allows parents to block violent or sexual television programming. After some major manufacturers such as Sony, Sharp, and Toshiba refused to pay licensing fees, in September 2002 the U.S. District Court for the District of Connecticut granted a motion for summary judgment of non-infringement to the associations representing the manufacturers. Acacia appealed the case, but its censoring patents expired in 2003.

Acacia has touted itself as the only publicly traded company involved exclusively in acquiring patents and then licensing them. Acacia used that business model with its digital media transmission patents, acquiring them from a small company started by the named inventors on the patents.

In its latest attempt to obtain "nuisance" license fees from corporations with Web sites, Acacia is offering a yearly license to corporations providing up to 2,000,000 "free transmissions" for $5,000. This may be an attempt by Acacia to offer license fees so low that a company may feel that it cannot obtain competent legal advice for less than the license fee.

In the ongoing Orange County case, on July 12, 2004, the court issued rulings on the interpretation of certain claim terms. The court determined that it could not define some terms such as "identification encoding means" and invited the defendants to file motions for summary judgment that certain terms are indefinite. If a patent claim term is found indefinite, any claim that uses that term is invalid and cannot be asserted against an accused infringer. After the court’s claim construction ruling issued, Acacia’s stock price dropped 37%, from $6.25 to $3.91. Foley & Lardner LLP attorneys William J. Robinson, Ted R. Rittmaster, Victor de Gyarfas, and Stephen M. Lobbin represent one of the defendants in the Orange County case.

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