Acacia Research Corporation, “an obscure but well-financed company in Newport Beach, Calif.,” has assembled a portfolio of broadly worded patents that it claims entitle it to licensing fees from many if not all entities that provide streaming audio and video over the Web. It has sent out demand letters to a wide variety of recipients including news organizations and colleges both large and small. “Johns Hopkins University received a letter last year from Acacia, which asked for what would amount to 2 percent of the university’s revenues.” In June it sued nine cable and satellite companies.
Critics say Acacia has no interest in manufacturing things, just in asserting legal claims. “Acacia appears to be the first publicly traded company whose sole business is the licensing of patents. ‘They are not a technology company; they are just a company full of lawyers,’ said Dan Rayburn, executive vice president of StreamingMedia.com, a Web site and industry association. ‘They acquire patents and then sue.'” Defenders, including some not employed by Acacia, say its patents appear solid and that it legitimately purchased enforcement rights from original inventors. “Last week, the United States Court of Appeals for the Federal Circuit in Washington, the nation’s highest patent court, upheld a ruling that [television manufacturers Sony, Sharp and Toshiba] do not infringe the V-chip patent and thus owe Acacia no royalties. The companies that have already paid Acacia $26 million in V-chip royalties, however, will receive no refund.” (Teresa Riordan, “Internet Patent Claims Stir Concern”, New York Times, Aug. 16; Daniel Terdiman, “EFF Publishes Patent Hit List”, Wired News, Jun. 30). Update: Feb. 18, 2007 (Acacia has prospered through licensing deals, though it hasn’t yet faced its toughest courtroom challenges).
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