Angered by adult Internet chat board comments challenging their streaming media patent claims, and perhaps riled further by the fact of several adult companies joining to help each other challenge those claims, Acacia Media Technologies wants a federal court to let the company add new charges that all but add up to conspiracy charges against those adult companies.
Acacia wants U.S. District Judge Alicemarie Stotler to amend their original litigation against 10 companies, charging unfair business practices, intentional interference with prospective business advantage, trade libel, and patent infringement. Acacia also wants Stotler to issue a permanent injunction against them and for the case to be tried before a jury. The company filed that amendment complaint last week. A hearing on that motion is scheduled for August 4.
Acacia has even suggested the Internet Media Protective Association – the group formed by some of the adult Internet companies to fight back the Acacia patent claims and act as a new interest group for other adult Net issues and concerns – tried to block Larry Flynt Publications from licensing with Acacia, a claim New Destiny Media/Homegrown Video chief Spike Goldberg says is all but laughable.
Acacia vice president Robert Berman told AVN.com July 23 that "certain members" of the Internet Media Protective Association – formed earlier this year to help fight off the Acacia patent claims and to act as an interest group for other adult Internet interests and issues – hit the adult Webmaster chat boards urging affected companies not to license with Acacia without contacting the group.
That, Berman continued, violates California trade and anti-trust law. "You can't go to potential licensees and say ‘Don't talk to them,’" he said. "There is case law that says (those) kind of activities are prohibited. And now it's going to end up costing them a lot more money."
Goldberg, who was instrumental in forming the IMPA with VideoSecrets chief Greg Clayman, told AVN.com Acacia is now trying, essentially, to stop anyone from helping each other challenge the Newport Beach, California company's patent claims, if not trying to choke off public industry discussion of the issue entirely.
"They're trying to say we stopped (companies) from licensing with them," Goldberg said. "Come on, I mean, we're small companies compared to others, how can we affect their decision not to do business? They decided we got together in Vegas. They're trying to shut down our free speech. They don't want anyone to oppose them, and anyone who's together on that, they're going to make you pay."
Goldberg also rejected Acacia's now-formal accusation that the IMPA members pushed at least three named adult companies – Best Adult Content, Wicked Pictures, and New Frontier Media – not to license with Acacia.
Berman said it isn't just a question of free speech or sharing information or even just companies helping each other in a significant litigation. He also called on those challenging Acacia's patent claim to show the evidence.
"If they have any evidence of invalidity, why don't they just sit down and show it to us, and we'll save everybody a lot of time and money," Berman said, adding the reason he thinks they don't is because they have no such evidence. "And, so, my question is, if a lot of these Webmasters have to go back and pay royalties for the past six years, as opposed to licensing with us, is (IMPA) going to foot the bill for that?
"You can rap a guy for expressing an opinion because people who are not sophisticated in the area are believing them," he continued. "And, as a result, it's going to cost these business owners a lot more money in the long run. Is IMPA going to pay that bill?"
But that may not be as simple as it seems to make stand in court. New Destiny made a company counter-filing to Acacia's amendment filing saying California's so-called anti-SLAPP (Strategic Lawsuit Against Public Participation) statute protects defendants in litigation from further or amended lawsuits based on their exercise of their First Amendment rights.
Neither Juanita Brooks of Fish and Richardson, defending New Destiny and others in the patent claim case, nor Acacia attorney Alan P. Block, returned inquiries from AVN.com as this story went to press.
Acacia's amendment request charges that various adult Internet companies contacted about licensing with Acacia began posting chat board messages urging others not to sign license deals as far back as November 2002, as well as meeting on the issue during Adult Entertainment Expo in January, "during which the conspiring defendants told the other online adult entertainment companies… that they vowed never to take a license (with Acacia)… that no other online adult entertainment companies should take a license from (Acacia)… (and) that the (patents) are invalid and that they would 'beat' the patents."
Acacia's filing also accused the companies in question of threatening retribution, including future refusal to do business with any company signing an Acacia license, accusations Goldberg, for one, has denied in the past. He also continues accusing Acacia of using strong-arm tactics in trying to enforce a patent which could still end up being rejected by the courts in the end.
"It is apparent to me," Goldberg said in a July 21 filing opposing the Acacia amendment filing, "from the nature of the allegations… that Acacia is simply seeking to punish… small businesses for daring to band together and fight back… I believe it is Mr. Berman and Acacia's intent to capitalize on the prohibitive costs small businesses incur when defending litigation in order to extract 'licenses' for the (patents)."
Goldberg's filing rejected Acacia's claim that they had met at AEE. "Instead, I and representatives of several other companies met separately, company by company, with (our) attorneys, to discuss legal representation in the event Acacia actually served the complaints we knew it had filed against our respective companies," Goldberg's counter-filing said. "Some of these companies are now members of the joint defense group, while others are not."
The filing also spurned claims that Goldberg's or any of the other businesses in question could have influenced LFP successfully, since their revenues are far beyond even the largest of the companies in question, "and more than five times the revenue of our defense group combined.
"…I am unaware of any members of our defense group refusing to deal, or threatening to refuse to deal, with any company that would take a license from Acacia," the Goldberg filing continued. "While we would certainly welcome other small companies to join our defense group in opposing Acacia's assault on our industry, we respect the right of companies to do what they believe to be in their best interest, even if that means licensing Acacia's patents."
Companies outside adult entertainment who have licensed with Acacia since the streaming media patent claims began last year include Grupo Pegaso, Radio Free Virgin, Radioio, and LodgeNet, though the last-named's business of providing video entertainment to the hospitality industry includes a percentage of adult entertainment.
