Patently Absurd? Streaming Users Face Acacia Patent Fight

Companies Pay
As of January 2004, Acacia has been successful in convincing 114 companies to pay them a licensing fee. The majority of those companies have been small radio webcasters like Radio Free Virgin but also larger companies like hotel video delivery companies LodgeNet. Acacia is currently in litigation over the matter with several adult content Internet companies, many of which are fighting back and have banded together to form the Internet Media Protective Association (IMPA) and FightThePatent.com. The IMPA is backing a group of defendants that have hired Fish & Richardson, P.C., one of the top intellectual properly law firms in the world, to defend against Acacia's claims.

Perhaps the most disturbing thing about this patent, according to Edward Goldberg, Chairman of the IMPA, is that "The royalties vary but they are based on gross revenue on all business that you do, streaming or not. Further, in the case of some companies, they are asking for client lists, the right to do quarterly audits, and they want you to embed code in your media player in order to track your streaming. Make no mistake," he continues, "Acacia is interested in everyone whether you stream or just have links to streams, and they are coming after everyone."

To date, it appears that Acacia hasn't faced off against streaming industry leaders like Microsoft, RealNetworks, Apple or AOL. But their time may come. As Acacia continues to railroad small companies into paying licensing fees, and winning injunctions in court, it is only a matter of time before they will feel strong enough to tackle the big boys.. "If the company can set a precedent against the smaller players", says Goldberg, "the company would be better able to press its case further up the line."

Pay Attention
The impact of Acacia's actions should not be underestimated. This is not simply an adult-content related lawsuit or another lawsuit that only impacts radio webcasters. These patents have the potential to put companies in the streaming media space out of business. Since the beginning of the year, many industry people I have spoken to are not even aware that there is a real potential for our industry to be greatly hindered by these patents and the legal battle that is ensuing.

Since January of 2004 numerous Fortune 1000 corporations and universities have received letters from Acacia and, not knowing what to do or where to get more information, reacted by removing all of the streaming from their websites. These are not small fry, but billion dollar companies that have decided it makes more sense to just remove the video until their lawyers figure out what they want to do. This causes a formidable ripple effect: Service providers no longer get revenue for delivering this content, universities no longer purchase streaming hardware, content portals lose syndicated content, and content creation tools no longer are bought.

To date, the press has pretty much covered Acacia's actions as an "adult thing," since most of the first lawsuits were directed at adult related websites because, as Acacia put it, "they are the low hanging fruit." The radio webcasting space has also been effected and websites like Kurt Hanson’s RAIN have been doing a great job of covering what is taking place with radio webcasters.