Streaming Media East 2004: Acacia Still a Hot-Button Issue

The audience asked Berman many questions, but left with no clear answers. As Kaufman himself said in response to almost every query, "It depends." One thing is clear, however: If you receive a letter from Acacia, Kaufman said, "don’t ignore it. They’re not going away." Despite the audience’s requests for Kaufman to clarify specific issues, the panel was set up not to provide attendees with legal advice, but rather to bring clarity to an issue that many end users have incorrect assumptions about–which it helped do.

Kaufman played the middle for most of the panel, after initially outlining the basics of what he called "broadly asserted patents": situations where an individual or company owns several patents, makes many claims of patent infringement, and often is not in the affected industry and so therefore is not liable to be the target of a countersuit for patent infringement. He said many such patent owners engage in an enforcement strategy of going after small parties and offering a "nuisance license fee." If an owner licenses a reasonable number of users, Kaufman said, it helps establish the validity of the patent. Berman strongly denied that was Acacia’s approach to the market, yet their reluctance to approach Microsoft, RealNetworks, or Apple leaves that in question.

Streaming Media, Inc.’s Rayburn says many StreamingMedia.com readers have written him and indicated that they were not concerned about letters they received because the patents would soon be expiring—an incorrect statement, as the U.S. patents don’t expire until 2011. Another misconception, according to Berman, is that Acacia is only targeting companies who charge for their streaming media content. Acacia has sent licensing letters to companies who use streaming media for distance learning and corporate communications, as well as content providers who offer streaming media content with no subscription or PPV model. Additionally, many users who have licensed streaming media technologies directly from Microsoft, Real, or Apple are under the impression that those companies indemnify the customer from such patent infringement cases, a belief that in the majority of cases is not true. "Do your homework and contact your vendors," Rayburn said.

Berman argued that Acacia’s licensing models and fees—some based on advertising revenue generated from the Web site, others on the number of streams viewed—are reasonable. "We are not looking to take these patents and hit people over the head with them. We are looking for modest royalties from a lot of people," Berman said. "It is not like a license from Acacia will or should put anybody out of business."

"Their take on the licensing model seems to be that because they are only asking for a small percentage of your revenue," Rayburn says, "it makes their patents more legitimate."

Regardless your interpretation of Acacia’s motives and methods, the bottom line is that Acacia is working hard to strictly enforce what they feel are legitimate claims. If your company or customers are still not familiar with the patents and what Acacia is doing to enforce them, then education is your first line of defense. Familiarize yourself and your customers with the patents, and then explore the options to determine what course of action you or they might take if a letter comes from Acacia. Simply ignoring it is not an option.

When the session ended, Rayburn asked Berman if he would be willing to accept a limited number of additional questions from users of the StreamingMedia.com website who were not able to attend the session. He agreed to do so, provided the quantity of questions was reasonable.

If you have any questions you would like us to ask Berman on your behalf, which we will then publish in a special Acacia Q&A article, please send them by June 30th to help@streamingmedia.com. We will combine similar questions to avoid redundancy, and then present them to Acacia for response.