An attorney representing Voice Media, Trade News, and Internet Business Services (IBS) in a copyright and trademark infringement suit from New Destiny Internet Group and Xplor Media has suggested the core motive behind the lawsuit may be New Destiny's alleged displeasure over CECash.com's decision last year to sign a license for Acacia Research's claimed streaming media patents.
New Destiny Internet Group and Xplor Media filed a complaint in February over the Homegrown Video Website Tour, alleging the tour had been copied unlawfully. Voice Media, Trade News, and Internet Business Services filed a court response March 22 rejecting New Destiny's copyright and trademark infringement and unfair business practice claims against the three.
"We disagree with the theories they're suing under," attorney Ira Rothken told AVN.com. "We believe they've concocted a claim of copyright infringement when there's nothing more than a mere disagreement on contract. We are confident we will prevail on the merits."
Rothken said the lawsuit stems from "hostilities" over CECash.com’s decision to license Acacia's Digital Media Transmission patents. "It appears as though relations went downhill after [we] did that," he said. "The irony of the… license is that it actually covers the Homegrown Video Website. And [we were] doing what we believed was the responsible thing to do, which was to remove the risks and peril on behalf of affiliates. Apparently, Homegrown disagrees."
New Destiny co-leads a group of adult Internet companies challenging the Acacia streaming media patent claims in court, with proceedings known as a Markman hearing – in which a trial judge hears evidence and definitions and determines asserted patent claims as matters of law – having begun in early February.
New Destiny chairman Spike Goldberg rejects any suggestion that the dispute with Voice Media and Trade News has any roots in the Acacia battle.
"We feel strongly about the merits of this case," Goldberg told AVN.com. "This has nothing to do with Acacia. Our problems with CECash have more to do with the way they do business and the way they treat customers. All this is a bunch of fluff they just threw at the court, and I have faith in the judicial system."
New Destiny and Xplor Media accuse Voice Media and Trade News of infringing Homegrown's copyright by making a copy of the Video Website Tour available online without Homegrown's direct permission. New Destiny also accuses Internet Business Services of contributory copyright infringement because, the court filing says, IBS "collect(s) income generated by Trade News' infringement as its agent, providing the market and environment for the infringement to thrive."
Among the unfair practices alleged in the lawsuit are the directing of traffic to other Websites with pop-ups without sending traffic back to New Destiny's site; creating other Websites "with content that competed with the content on the New Destiny site" and directing traffic to those other sites; and co-mingling credit card processing for New Destiny's account with other sites.
Voice Media chief Ron Levi has dismissed the suit as "preposterous." Rothken said the only thing Voice Media and Trade News were trying to do was "the responsible and prudent thing, and that is to protect affiliates downsite.
"At this point," Rothken continued, "it appears as though Homegrown has decided that, apparently, they don't care about their affiliates. They're wrong about their patent theories and not only put themselves in peril but all those who are making money off sending traffic to them. The right thing here is to maintain the Acacia license while the patent litigation plays out."
But he said if New Destiny/Homegrown proves right about the Acacia patents, "at that point we will have done two things: One, we will have taken the correct business step, that during the litigation [we] would not be sued over the Acacia issue as it relates to CECash sites; and, number two, to the extent that there is an adverse finding against Acacia, that it's not likely that any further patent licensing fees would have to be paid. [Our] decisions are driven not by litigation crusades but by prudent balancing of the risks and benefits. This industry does not need further litigation."
