Acacia Research says it was prompted to seek a class-action assignment for its litigation against two defendants in order to "more efficiently" reach all adult entertainment companies using their claimed streaming media patents without a license.
"This fits in with our previously announced strategy of reaching all infringers," Acacia executive vice president Robert Berman told AVN Online, four days after the company filed suit against eight new defendants. The company didn't name those eight defendants but has named Global Media Resources (the parent of Python Video) and Cybernet Ventures (which includes Adult Check) as the companies they want to have represent the class, if a federal court assigns class action to the litigation.
"(They) don't represent the new eight," Berman emphasized about Global Media and Cybernet. "We want them to represent the entire class – those entertainment companies whose sites can be accessed from Central District of California. (But) we added additional defendants because so many of the original defendants have settled that we wanted to make sure we had enough defendants that we could continue the case."
Acacia had considered a class-action assignment "early on" in the litigation over the streaming media patent claims, Berman said, but the company wanted to see how the case progressed before actually seeking that assignment.
Customarily, class-action status is done when cases involve a large number of plaintiffs. Doing so when it involves a large number of defendants is "not done as frequently in plaintiff cases," Berman said, "but it has been done before, and it has been done in patent cases when there are a large number of similarly situated defendants. Unusual, somewhat. But it's certainly been done before."
U.S. District Judge Joseph Ware will not only decide whether to certify the class-action assignment but whether the new filing against the eight new defendants would affect a previously-scheduled February 6 Markman hearing between Acacia and several adult companies – led by New Destiny/Homegrown and VideoSecrets – challenging the Acacia's patent claims.
Delaying the Markman hearing is exactly what New Destiny/Homegrown chairman Spike Goldberg thinks Acacia's latest moves might be designed to do. "I think it's their desperate attempt at putting off the Markman hearing," he told AVN Online. "I would believe Acacia would want nothing more right now than to have a Markman hearing to clarify the case, but instead they're delaying and slowing the process down."
Berman also said those companies who might still be awaiting the final outcome of the litigation would pay higher royalties "if we elect to license them at all," saying that those who can't afford the royalty and fees, or those whom Acacia chooses not to license, would "have to remove all access to digital audio/video content" from their Websites.
He also said, however, that Websites who live by sending traffic to sponsor programs that have licensed with Acacia don't have to worry about being reached for any infringement warning or licensing proposal. "We have now licensed many of the top sponsor programs…. If you send traffic to a licensed sponsor, and don't otherwise use our technology, you don't need a license from Acacia," he said.
Goldberg doesn't believe Acacia would actually reject a prospective licensee. "I think based on the amount of licenses they've gotten they would be happy to pick up any licenses at this point," he said. "I don't think they would turn away somebody right now. But there are chances with everything. I can't see into a crystal ball."
He insisted, however, that his own outlook isn't changing because of Acacia's new defendants or seeking a class-action assignment, saying Acacia's case remains weak in his view.
"Their greatest weapon is making people spend money; our greatest weapon is the truth," Goldberg said. "We're all going forward. We're not concerned about these minor distractions. It hasn't changed our feeling about the case. All this amounts to is a distraction. And nobody's going to buy it. Much like anything else Acacia's trying to sell, I don't think anybody will buy this either."
But Berman is equally confident. "If you go back and look at our previous interviews," he said, "everything that we have said to the adult industry has come true. We have been successful in licensing many adult companies, the litigation is continuing as expected, and our royalty rates have begun to increase."
Earlier in December, Acacia signed its 100th licensing deal. The company also said they would not apply royalty and fee increases to any adult Webmasters or other companies who had contacted the company about licensing deals before a November 30 deadline imposed by Acacia.
Those who did not try to contact Acacia before the past-due waiver deadline, but who signed licensing deals during December, Berman said at that time, would pay the new rates. But he added that they would not have to pay a new contract administration fee that will begin in January and will rise each month. "So, there's still the incentive to license with us sooner than later," he said.
That contract administration fee – which a licensee will be required to pay only once – will be $500 for the entire month of January 2004. From Feb. 1-29, it will be $750; from March 1-31, $1,000; from April 1-30, $1,250; from May 1-31, $1,500; from June 1-30, $1,750; and, from July 1-31, $2,000.
