HotMovies.com Joins Acacia Patent Claim Challenge

Saying they spent months pondering how best to deal with the issue, adult video pay-per-minute Website HotMovies.com has joined the group of adult Internet companies challenging Acacia Research Corp.'s streaming media patent claims.

Acacia is not the inventor of the patents," said Richard Cohen, co-owner of HotMovies.com and its parent, National A-1 Internet, announcing HotMovies.com’s decision to join the challengers. "They bought them and are now taking advantage of many companies who cannot afford to litigate. Acacia is taking advantage of a patent system that is flawed. Patents were designed to reward inventors, not those who purchase patents invented by others.

The news came a week after adult Webmaster affiliate TopBucks withdrew from the challenge and signed a Digital Media Transmission license with Acacia. TopBucks said they made the move because they determined continuing their part of the challenge would prove too expensive for them continue doing their normal business.

"It is hard to believe and embarrassing to many of us in the industry, that many companies have chosen to settle even though, in their hearts, they know Acacia is wrong," Cohen continued in his statement, though making a point not to criticize the companies themselves or their individual motives. "These companies also know that Acacia has a reputation for bullying defendants into settling. Companies that have settled now look at the royalties they must pay to Acacia as just another cost of doing business."

Acacia executive vice president Robert Berman declined to comment on Cohen's statements when reached by AVN.com.

A little less than a year ago, New Destiny Media/Homegrown Video chief Spike Goldberg and VideoSecrets chief Greg Clayman brought together a group called the Internet Media Protective Association. Though their first focus was the Acacia patent challenge, both men have also said they want the group to continue beyond that litigation and address all critical issues for doing business online.

Goldberg told AVN.com that HotMovies.com joining the challenge group was more than welcome. "I think it sounds great," Goldberg said. "I think that they've made the tough but righteous choice."

Clayman agreed. "We're super confident in our positions," he said. "We don't think they're valid patents."

A so-called Markman hearing, in which a federal trial judge hears evidence and definitions and determines asserted patent claims as matters of law, is set for early February in the litigation between Acacia and the challenging adult Internet companies.

Cohen said that even if HotMovies.com comes out on the losing side in the end, they know "in good conscience" that they "did the best (they) could" to challenge and stop what they consider unfair and unjust patent claims.

"We believe that pay-per-minute is the future of the Internet," he said, concurrently praising Adult Entertainment Broadcasting Network, another early DMT patent challenger, for first offering pay-per-minute streaming video. "Since streaming (media) is the key to HotMovies.com's performance, we will strongly defend our right to present this technology to a public who has demonstrated that this is their preferred method to view adult entertainment."