The ultimate resolution of the adult Internet’s challenge to Acacia Research Corp.’s Digital Media Transmission streaming media patent claims is still a very long way off, Acacia said July 13. But Acacia also said they’re ready to see it through to the end, and that they expect to continue signing DMT licensing deals in the coming weeks and months.
“Nothing in this ruling,” executive vice president Robert Berman said during a late-morning conference call from Acacia’s offices, “would prevent us from approaching potential licensees that we have already defined as potential infringers.” He also said that the only way one would stop paying fees or royalties for existing DMT licensees and agreements would be if all the applicable patent claims are held invalid in due course.
“We’re not even close to getting a decision on validity with respect to all the patents,” he said. “We expect others to sign licensing deals. The only adjustment that we’ll make is that rates will go up over time, and we certainly plan to continue to raise our licensing rates over time.”
Acacia also said appealing any portion of U.S. District Judge James Ware’s tentative Markman ruling, handed down July 12, isn’t a topic for now.
“We’re not at the point where [the Markman order] is subject to appeal or is even necessary to appeal,” said Berman. “Over 50 percent of the Markman rulings at the trial level are overturned by a court of appeals, but it’s premature at this point to talk about an appeal.”
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But Berman also said Acacia is very well prepared to continue fighting for the validity of the DMT group of five streaming media-related patents. “The Markman process isn’t even completed, and we are not necessarily unhappy with the judge’s decision,” he told the conference callers. “But we are well capitalized, and have the ability to appeal any decision if the court makes it necessary, and we have shown in the past that we have the capability to [do so]…. There is nothing in this Markman ruling that indicates to us that we are not going to make it all the way through this proceeding.”
New Destiny/Homegrown Video chief Spike Goldberg said earlier July 13 that it’s still a long haul but he was pleased with the first Markman order overall. “[T]his certainly is going to put Acacia into a very defensive mode instead of an offensive mode,” he told AVNOnline.com. “For those people who have seen [the challenge] this far, they should be very proud of themselves.”
Acacia chief executive Paul Ryan opened the conference by reviewing the Markman order and reiterating what Berman told AVNOnline.com earlier July 13: Acacia believes there are at least six claims in the patents currently under court discussion that several adult Internet companies are infringing; and, that a ruling of infringement requires only one claim showing infringement.
Ryan also echoed Berman’s earlier comments that Ware had found it clear enough that the DMT patents do apply to the Internet, by way of his finding regarding the definition of remote locations.
“The judge has raised issues of indefiniteness,” Ryan told the conference, “and he wants to hear expert testimony. The parties weren’t allowed to introduce such testimony [in the earlier Markman sessions], and our goal is to convince the court that these terms in the claim are not indefinite. Regardless of the outcome of these terms, we have several other claims that are not indefinite and we believe are being infringed.”
Berman told the conference Acacia is reluctant for now to discuss specifics involving those claims until their legal team can study the Ware ruling further. But he did say that favorable claim constructions in the adult Internet cases “suggest we will receive favorable claim construction on similar claims asserted against cable and satellite companies.” Acacia sued nine such companies in June, with one, Central Valley Cable TV, settling and signing a DMT licensing deal with Acacia earlier this month.
“We anticipate a similar Markman process in the cable litigation,” he said, “and it’s also quite possible that the cable litigation would be in front of the same judge. The way the judge is interpreting some of the claims is advantageous to [us].”
Ware set an August 17 date for a conference call with both sides in the adult Internet’s challenge to the DMT patents, which will include briefings and oral arguments on motions both sides might want to file. Berman said he expected both sides to make such motions, and that there could be oral arguments in open court in the fall with more decisions in the coming months.
“It is typical for both sides to win certain issues and lose certain terms,” Ryan said, echoing comments Berman made to the press earlier in the day. “This is one step in what is typically a long process. But we continue to believe we have strong arguments of infringement against cable, Internet, and satellite providers.”
The Ware ruling came down in the early evening of July 12, and Acacia wanted its legal team to review the ruling as fully as possible before speaking publicly, Berman said on the conference call.
Foley & Lardner attorney Ted Rittmaster, one of the challengers’ legal team, told AVNOnline.com the July 12 order is “a very interesting order. Markman claim construction orders can set the tone for the entire case.”
Rittmaster noted Ware had difficulty construing several of the claim terms and invited the defendants to submit motions for summary judgments on invalidity, on some of the terms being deemed indefinite. He also said he believes that where Ware held in favor of Acacia’s construction, they were minor as far as the challengers’ standing was concerned.
“I see that it’s going to be a very busy summer for the parties in the case,” he said. “I think that it’s going to be a very interesting and busy next several months. We could see some motions for invalidity and some for non-infringement, and we will see Acacia move to address the adverse to them rulings that the court set forth.”
He said the challengers had high expectations anyway going into the process. “We looked at these patents very closely,” he said. “We felt all along that there are serious invalidity and non-infringement issues and we feel the [first Markman order] is validating some of those issues.”
