As you all know, or should know, our industry is in the middle of a fight against a company called Acacia. They claim to have a patent on the process of downloading audio and video files from a Web server.As you all know, or should know, our industry is in the middle of a fight against a company called Acacia. They claim to have a patent on the process of downloading audio and video files from a Web server. Whether Acacia’s patent will ever hold up in court has yet to be decided. Many think it will not be upheld; with a mountain of “prior art” being found showing this technology existed before Acacia’s patent was granted, this patent is unlikely to survive, in my opinion.
Patents were originally meant to protect inventors and innovators from doing research and ground work only to have their work stolen and used by other companies without permission. However, for some companies like Acacia, patents are purely a way of making money. To my knowledge they have no media streaming product or service to protect; they are purely in the business of licensing patents. They do this by telling people it’s cheaper to license than to fight.
To fight a civil court battle is expensive; to fight one over a patent is extremely expensive. This is the truth that companies like Acacia exploit. Acacia targets those people too weak to resist plus companies who see it as beneficial to let others handle the fight. Companies like Acacia can potentially collect millions in license fees. So long as they spend less finding licensees and defending and losing a court case, they end up with a profit. Acacia was able to generate over $27 million in licensing fees from their V-Chip patent, which was eventually taken to court by Toshiba and Sony and knocked down, stopping the revenue flow.
NOTHING NEW HERE
Is Acacia a unique kind of company? No, suing over patents is an industry now, and there are more companies like Acacia watching intently at how this battle is fought. There is USA Video and SightSound, both of which could be waiting to see if Acacia wins. Or, if they make a profit. Then they could know how and when to make their moves. They will know who to target first – who will resist, and who will pay up. They also will pay attention to how the rest of this industry reacts to a legal threat.
Acacia is very proud of saying is has over 60 licensees, but they only tell us the names of a handful. The reasons for this could be that some of the licensees are so small they are not worth telling us about; or that some insisted on a confidentiality clause. I know some signed up in the early stages because there was no organization established then to collectively resist Acacia and to fight this alone is expensive. However, some who signed were big enough to resist, but they signed nonetheless after the organization of the Defense Group. We can only speculate why. Did they see it as the cheapest way out? They knew this was going to be fought in court; did they think it would be prudent to let someone else pay for the court case, assuming they wouldn’t need to pay anymore after the case was won? Or did they see Acacia as a way of removing competition to change the industry in their favor? Did they think an industry with only 100 companies able to supply video would be beneficial to them? Did they do it to protect themselves and their affiliates or clients? Well, without handing over a list of these contacts, how were they protecting them? Did some of the licensees get a better deal by giving up their mailing lists? Armed with such a list, Acacia could have been mailing thousands of people and their companies ever since. We know mailing is one of their marketing strategies, but we can only speculate from where they got the list of Webmaster names and addresses.
Today we have companies that will stand up and fight for the rest of us; those who signed up for Acacia’s license also benefit. How many times they can afford to fight Acacia, or how long they will maintain the will to fight, has yet to be seen. Wars are won by wearing down the opposition until there is no one left to fight. Poorly supported, those resisting today may not want to fight next time, and it’s my opinion that if we do not show Acacia and all those waiting in the wings we are not “low hanging fruit” then there will indeed be a next time.
ACACIA INTERNATIONAL?
Acacia’s DMT patent has been filed in about 17 countries. Will Acacia pursue them in these countries? Well they might do it, but would they do so before they had good knowledge of the country they were moving into? Remember, the first thing is to sell licenses, not go to court. They will have to start sending out the packages and letters in different languages and from an office based in that country, because I doubt if many in Berlin, London or Paris will take notice of a letter from California.
Acacia is also dealing with a different character than that found in the US; generally speaking, Americans are more worried about going to court than elsewhere, and easier to threaten with court action in America. Also, Europeans are not as secretive about being in the porn business as Americans are. Remember, weak patents make money for the holders by selling licenses, not by going to court.
To serve a court order in a foreign country with a foreign language (and most importantly foreign courts with foreign laws) is going to be far more expensive than in the US. In the US they employ American lawyers practiced in American Patent Law. Overseas they will have to start employing people, and legal firms do not come cheap. So the real profit is in the US.
It is easier to investigate who owns a company in the US. Acacia must have taken precautions to avoid any criminal element that might threaten its safety in the US. However, by moving overseas, it may serve notice on a company not used to going to court to settle differences. It is, after all, Mr. Bush and Mr. Ashcroft who are continually telling everyone of the organized crime elements in the porn business. I’m sure this is something Acacia has looked at, and I’m sure it has taken measures to protect itself. It might prove harder to do so by going overseas.
LINE DRAWN IN AMERICA
So this battle will be fought in the US first; if it is ever won there and they have exhausted that market, then Acacia will consider how to increase its profits. Would it be more profitable to look at a new industry within the US, or try to start the move overseas? Acacia has already started to send packages to colleges and universities in the US. Enforcing and licensing a patent overseas is going to be far more expensive, and profit is what this is about.
So what can we all do to fight this?
We have eleven defendants in court contesting the validity of the patents. How long it takes to get a decision is in the lap of the judge, but the first signs are good. These companies are spending time, effort, and a lot of money to fight this on behalf of all of the industry, so it’s important we support them. We need to send a very clear message to all the other holders of weak patents: this is not an industry to extort.
We can all support the defendants even if we do not have money to give. Acacia is doing this purely to make a profit; they have no websites, they are not streaming anything themselves, they have no product or service to protect. They are simply in the business of selling licenses, even though they will put a different twist on it. They are fueled by the license money they collect, and the longer this continues the more money they make.
We can make this less profitable for Acacia; they are on a percentage of the licensee’s revenue. If we are buying content or sending traffic via a licensee then we have to make the decision ourselves whether we should support a company contributing to Acacia or cut them out. Every dollar sent to a licensee has a percentage sent to Acacia, adding to their ability to take more from the rest of us. This is also encouraging the other companies with patents the profits to be made in the porn industry.
If you do not know whether your sponsor or content provider is a licensee, and you want to make the decision for yourself whether to support Acacia or not, simply ask. If they refuse to tell you or say it’s not your business, make your own conclusions why and ask yourself if these are people you want to do business with. You cut off the supply of money and you slow this case down. You also show others thinking of signing the problems that could cause to their business; and you send a clear warning to others that this is not an easy industry from which to extort.
If every company had stood up from the beginning and said “See you in court!” they would have probably moved to another industry; even Acacia’s Berman, when he was interviewed, inclined it was anyone’s guess which way the courts would decide. Would Acacia have gone to court with a weak patent and the prospect of spending money to get it invalidated with no one paying it a license fee? You go to court with a weak patent and you risk losing and the license money stops coming. If you have no licenses bringing in money then it’s going to just cost you money to lose.
The Defense Fund is the pooling of the financial resources by the eleven defendants to pay for attorneys to defend against Acacia. Companies like Home Grown Video, AEBN, LightSpeed and more are paying out of their own pockets to protect their companies and all adult Webmasters from this patent case.
In order to help support the Defense Group with their fight we have started an auction site, Patent This, where you can bid for items, get some great deals, and know your money is going to a good cause. We donate all the proceeds, less the cost of processing the payments, to the defense fund. We also have a raffle where, for as little as $5, you can buy a set and get a free ticket in a drawer for a prize. So everyone can help. We are also looking for people to donate auction items.
United we can defeat this; their tactic is to divide and conquer.
For those that want to know more the Acacia fight, I recommend IMPA and Fight The Patent.
Paul Markham is a well-known adult industry photographer whose work has appeared in numerous print publications and adult Web sites. His content store, PaulMarkham.com, offers competitively-priced quality content for adult Webmasters.
