Acacia Releases Second Wave Aimed at Colleges and Universities

Acacia is now leveraging its DMT patents in an effort to convince colleges and universities to enter into licensing agreements. Letters that were sent out to at least 50 schools offer a discounted rate but with a catch: The "amnesty" offer expires on September 15, and if you wait too long, future agreements may not be as agreeable.

The licensing fees vary based on the size of the school. Sheldon Steinbach, vice president and general counsel at the American Council on Education (ACE), says $5,000 is the amount he’s most frequently heard from the 50+ schools that have already come to ACE for more information and guidance. Actually, according to one recipient of Acacia’s letter—an online course system administrator of a liberal arts college who wishes to remain anonymous—$5,000 is the minimum annual license fee. In an email to the EDUCAUSE listserv, Seton Hall University’s CIO reported that Acacia is seeking royalties of 2% of revenues from all courses that include digital media.

Some observers speculate that Acacia is using this second wave of letters to schools—the first came a year ago—as a way to replenish their depleted "war chest," and others suggest that Acacia is using scare tactics to pressure schools into hastily agreeing to a deal. "The uninformed may very well fall into this extortionary trap," says Steinbach. Actually, Acacia has yet to play its most powerful cards, official cease-and-desist letters. But they are applying a large amount of pressure to schools’ legal teams who now must try to unravel a complicated matter in a short amount of time.

"Complying with the reporting requirements of the license could possibly violate the Federal Education Records Privacy Act," says the anonymous college staff member. "The course delivery system we use doesn’t just show how many times any streaming element was viewed, but who accessed which element in each course. That could be considered an academic record under FERPA, and it’s a great big ‘Bozo No-No’ to let unauthorized people view a student's academic records." This could mean that Acacia’s traditional model of charging fees based on the amount of digital media used might not work from campus to campus if they demand to see usage reports that contain this sensitive information. (Contrary to some people’s perceptions, Acacia’s patents don’t just cover streaming media; they’ve been interpreted by Acacia as applying to any digital content that has first been stored in a media library. This means that a live-class Webcast would not be covered, but making that same lecture available at a later date online would violate Acacia’s DMT patents.)

The problem extends even further, as digital media is used in diverse ways at schools across the country. "Campuses are such complex entities," says Steinbach, "that it’s hard to determine who is using what process, and whether it’s for business or education purposes." This is why Steinbach finds it unlikely that any future litigation by Acacia would turn into a class-action lawsuit.

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