A patent entitled " Methods, systems, and processes for the design and creation of rich-media applications via the internet " was granted on Feb 14, 2006 (filed in Feb 2001).

From an Information Week article covering this story:

The patent--issued on Valentine's Day--covers all rich-media technology implementations, including Flash, Flex, Java, Ajax, and XAML, when the rich-media application is accessed on any device over the Internet, including desktops, mobile devices, set-top boxes, and video game consoles, says inventor Neil Balthaser, CEO of Balthaser Online, which he owns with his father Ken. "You can consider it a pioneering or umbrella patent. The broader claim is one that basically says that if you got a rich Internet application, it is covered by this patent."

Oh really?

The Patent is #7,00,180 with the patent here.

"Neil Balthaser, a former VP of strategy for Macromedia, the developer of the Flash rich-media development environment and player, now owned by Adobe, says he will most likely sell the patent rather than enforce it himself. He says he's discussing the sale of the patent to "top-tier players. I don't want to name them but they're fairly obvious, the guys who are investing a lot of money in this rich Internet applications field. They got a lot invested, or they're going to be investing a lot. Anyone of those companies would definitely benefit by controlling a patent like this, both defensively and potentially offensively, and the ability to sublicense it, and make some return on their investment."

In reading the actual patent, rather than the wide-eyed, hopeful interpretations by the inventor and their patent attorney, my conclusions:

This patent is for the creation of "rich media" application via a website.

In my readings, this patent will only affect those that have some kind of web-based application that allows a person to assemble various pieces (ie. music, video, text) etc to make an interactive web interface.

Most designers build their "rich media" stuff on their computer and upload it to the server. the "novelty" of this patent is that you can do it via the website.

myspace.com may be considered to be under this patent since they are homepage tools to allow people to add elements to their myspace page.

If you were to believe the quotes attributed to Mr. Balthaser, you might think he invented "rich media" website. His experience at Macromedia probably led him to the idea that as he saw web designers create these "rich media" websites on their desktop, that it might be novel and interesting to have that abilty to be done via a website.

An investigation for prior art into areas like online e-greeting cards that allowed for "rich media" creation of a card by adding music, text, etc.. could be an area to explore.

While this patent is broadly written, it's not as crazy as Acacia's belief that Yurt and Brown invented the process of downloading audio/video from a website.

I think Acacia should acquire this patent and continue on with the delusions of the inventor.

Most websites use web designers who create the "rich media" websites on their own computers, so this patent covers a small universe of potential infringers, assuming that no prior out can be found.

If this were a broad patent that covered all websites, alot of us amateur prior art searchers would be digging for prior art, but as I see it now.. *yawn*.

.

December 7th, a day that will live in infamy.. for rememberance of Perl Harbor, as well as for the Markman Order that was released yesterday. You can view it here.

For those that want the condensed version and run through my patent-pending patenese translator:

The court ruled back in July 12, 2004 Markman, the term "sequence encoder" that is used in Claims1 (the most important #),7,17,18,32,33 of the '7-2 patent to be indefinite.. meaning it can't be define and Acacia is making up what they want it to mean.

Also back in July 12, the term "identification encoder" in claims 1,5,6,17,19,27,31 were also ruled indefinite.

In the recent testimony, Mr Weiss, expert witness for Acacia, had his own testimony quoted in the Markman Order that was used against Acacia.

Replayed for your own amusement:

..with respect to whether the term "sequence encoder" had an ordinary and customary meaning to one skilled in system design in the television broadcasting industry, Mr Weiss testified:

Q: In 1991, did the term "sequence encoder" have an ordinary meaning to one of ordinary skill in the art?

A: No

(slam #1)

Q: In 1991, would the term "sequence encoder" have been a term of art to one of ordinary skill in the art?

A: No

(slam #2)

Q: Are you aware of any dictionary in 1991 where it would have defined the term "sequence encoder" ?

A: No

(slam #3)

Editorial note, the (slam) comments were added in by me, and were not part of the official transcript

From the conclusion, "The Court concludes that the claim term "identification encoder" is indefinite and renders independant claims 1,17 and 27 of the '702 patent invalid. The Court also reserves for later proceedsing whether the invalidty of the independent claims affect the validity of claims which depend from them."

Meaning that what Acacia started out dreaming 3 years ago that this was the "Perfect Patent" and unleashed their marketing storm, is being whittled away.

Acacia spinners will say that you only need 1 claim for an infringement case.. .that may be true from an academic sense, but I believe in practice, it's buh-bye when you get your made-up believed terms shot down by the court and by your own expert witness.

Especially when Claim #1 is being ripped apart, which is the foundation of all the other claims. And those other DMT related patents... all based on the first patent, so I expect there to be a domino effect.

Acacia is busier than ever with its new patents and going about the marketing in the same way... companies are getting leary of their efforts as they are seeing that this company is having a bad track record of not understanding patents, or just looking to use the presumption of validty to make a buck.

The court will hear more discussions on Feb 24, 2006.

In my 16-May posting, I presented news of a challenge to the Acacia Ware patent #4,707,592 for the patent titled: Personal universal identity card system for failsafe interactive financial transactions.

Apparently there was sufficient doubt raised that the USPTO granted the re-exam request!

All those companies that felt it was cheaper to license than to fight it should be paying attention now. The attorney who filed the patent re-exam is listed in the document.

Read the APPROVED re-exam request doc here.

Karlton Butts from Acacia has been sending out a new round of letters inviting all the supposed infringers of their DMT patent to pay the license fees, before they raise them again after Sept. 15th.

Just like the first round of solicitations, their letters have beend filed in the circular filing cabinet, but we were able to get a scan of the pages before they ended up at the bottom of a bird cage. Page1, Page2

The Internet defendants case has been combined with the cable company defendants, and still feel very strongly that the prior art is there (and it is as I and other searchers have found).

For those taking a flashback ride on Nike's commercials, about "Bo Knows...", to build upon that commercial, the updated version would be "Acacia knows...." and this time, they think they know scheduling software patents.

Acacia is sending out their slick patent infringing marketing material for patent #4,937,743 "Method and System for Scheduling, Monitoring, and Dynamically Managing Resources".

Acacia acquired this patent, consistent with their business model of IP licensing of patents that they interpret to mean more than what the patent really says).

The one company that sent me the Patent Wrapper, Patent References, and the Patent PDF, felt very strongly that prior art abounds.

Companies (competitors) that are targetted by this patent can bond together much like other defendants in Cable and Internet sectors against the DMT patent to fight against Patent Abuse. Feel free to contact me so that I may put companies in contact with each other to share their prior art references.

While patents are presumed to be valid, any patent infringement claims from Acacia is presumed to be Bogus.

I just received a Patent Re-examination request against Acacia's "Ware" Patent #4,707,592

The document cites 3 prior art patents that were not cited, thus challenging the patent on 102 for anticipation and 103 for obviousness.

When I chatted with the attorney who filed the report, I asked if the two open cases in GA and TX would cause the patent office to hold off on the re-exam until after the court. His reply was that the opposite may/should happen. That while the patent office is slow on re-exams, that the courts may look to wait for the USPTO decision on a re-exam.

More details and thoughts to come as the document is run through the non-patented "FightThePatent Legalese Translator", satirized for your sanity.

While I am digesting the submission, read if for yourself by downloading it from here.

Declaratory Judgement filed by Circuit City against Acacia's patent infringement claims in Eastern District of Virgina (case 05 CV 496). Read it here.

For those following the Acacia Saga, Round One of their licensing schemes with the V-CHIP patent was knocked down by Sony, though not fast enough to have earned them over $26M in licensing from companies who chose to settle.

Round Two is currently played out with internet and cable defendants over the DMT patent, that has the ludicrious claims to owning the downloading/streaming of audio/video from a (web) server. Much like the truth, the prior art is out there.

Recent Press Releases from Acacia has shown the acquisition of a new portfolio of patents and their focus has been on these new patents. What was once believed by Acacia to be their big hit with the DMT patent, has quickly diminshed as efforts to license their new patents are underway.

Through Press Releases, some large and notable companies have been settling. Big corporations are looking at the costs of settling rather than fighting, rather than the issue of validity.

Someday, Acacia may get lucky and find a patent that actually is a solid patent, until then businesses and innovation are being taxed by the latest fashion business model craze of IP licensing. Acacia is certainly not the only company doing this, but their questionable marketing tactics and aggressiveness in the space has certainly gotten the attention of many people.

One battle erupting with Acacia and their credit card transaction patent (#4,707,592) has many large companies settling, given the air of "validity" to the patent. But not all companies are settling. Open cases in Georgia with Kroeger and Office Depot and open cases in Texas with Linens & Things, Pier 1 Imports, and Costco are fighting.

Large restaurant chains are pooling themselves together to look at this patent issue. They may choose to negotiate a deal that is less expensive than fighting, or take the position to not become a victim of patent abuse.

Anyone that has experience in the credit card processing space back in 1987 that could share some insight into prior art of patent #4,707,592 should feel free to contact me.

Many amateur volunteer arm-chair prior art searchers like myself have contributed solid prior art leads for defendants. The information is passed on to defense attorneys AT NO COST.

Patents without prior art, are ones that are consistent with the intent of Patent Law. Patent Abuse is when the patent holder (more popular now is to just acquire the patent from the inventor) takes patents and tries their "shotgun" approach to getting companies to license, without doing thorough research into the actual validity of the patent claims to the claims of infringements.

While patents are being looked upon negatively by innovators, it still has to be acknowedged that there are "valid" patents out there with truly novel and new inventions, and it is also the case where mightier corporations could attempt to rollover the lesser equipt inventor. Patent Law has a place to protect innovation, but the abuse of it greater tarnishes and disprects the original intents.

I call out to innovators, entrepreneurs, business people, and concerned individuals, to "Get Informed, Get Mad, Get Active" and to participate where possible.

Patent infringement may not have landed in your backyard, but its effects can be felt by all.

Update: 11-Mar

The outcome (court doc) of the multi-district panel is that all the cable lawsuits are rolled up under Judge Ware in Northern District.

Judge Ware is currently handling the porn/internet defendants in Central District, and it seems up to him about whether he will combine the cases or not since there are many overlaping claims, and the fact that prior art for the internet claims will apply to the cable ones.

Next court date is March 24th, where the judge will probably be exploring the cable and internet cases and decide how to proceed from there.

Now that this stalling action has been resolved, the defendants can push forward and resume their filing for Motion for Summary Judgement.

For those that read the Markman, Judge Ware said TWICE that the defendants should file for Summary Judgement.

---------------------------------------

It turns out that Homegrown Video / New Destiny, who is being sued by Acacia for patent infringement, actually has a patent license (though unbeknowngst to them until recently).

The company that was managing their operations negotiated a license that included HomeGrown Video.

It remains to be seen why Acacia didn't drop HomeGrown from the lawsuit.

Besides not understanding technology and making up interpretations of patent claims, it appears that Acacia has sued a company that has a license.

Ranks right up there with the RIAA suing a dead person.

In this Press Release:

"Microsoft Corp. (Nasdaq:MSFT - news) will pay Burst.com Inc. (Nasdaq:BRST - news), a developer of software for streaming audio and video over the Internet, $60 million to settle a patent infringement and antitrust lawsuit, the world's largest software maker said on Friday.

Santa Rosa, California-based Burst said in a 2002 lawsuit that Microsoft had infringed on its patent for sending audio and video content over the Web....."

Hey there, Burst's patent was for sending audio and video content over the web.... isn't that what the DMT patent is about?

Oh the paradox.

What is burst.com doing that ACTG not doing?

Spending over $3M in legal fees to deal with pornographers and here comes Burst.com to swoop in and get a whopping settlement.

Maybe having Microsoft settle, will mean Microsoft would be easy to rollover with the DMT patent.

The adult entertainment defendants court session to present their Motion for Summary Judgement (which the judge suggested they do TWICE in the Markman Order) had been put on hold due to waiting for the outcome of a Multi district panel case.

Any day now, the Multi District Panel should be giving a ruling as whether or not the internet defendants should be rolled in with the consolidation of the cable companies.

Acacia doesn't want the internet folks to be rolled up, knowing that they are very close to knocking out the infringed claims.

The defendants were supposed to have filed for Motion for Summary Judgement back dec 2-3, but has been stalled until the outcome of the Multi Distict Panel.

The prior art has been ready for over a year for its day in court. Acacia claims to welcome their day in court... so stop the stalling tactics and get what you ask for.

Acacia's move to acquire the 27 new patents is an interesting one, because it helps to focus attention on the new patents.. knowing full well that DMT will suffer the same fate as V-CHIP.. and probably banking on the day traders and larger block investors to not have a memory of those events, and only look forward to the new "pie in the sky" possosibilites for patent infringement..

Remember, they felt that EVERY website that has audio/video would have to license for them, and that spurred all the early buying of the stock.. if you can "own" the internet, why bother with other patents... DMT could be the gravy train that immortalizes Yurt and Browne as the fathers of downloading/streaming audio/video from the web

Some large investors are looking at DMT to see if they can win in.. confidence in Acacia will surely be lowered once DMT fails to deliver what management has claimed.. Some will find other IP licensing firms who have better technology savvy and understanding to invest in, others will gloss over VCHIP and DMT has a probability gamble... where most companies will end up licensing than fighting the patent claims (which most likely would be broad and imagined as history as shown).

Acacia is the poster child for patent reform.

What we need to see is more focus on patent-only federal courts (with more resources), which could be partially subsidized by the "loser pays" idea that Europe has.

This would help to prevent "frivilous" patent infringement lawsuits, where if a defendant prevails, they don't get their money back for attorney expenses.

Patent and civil abuse is what taxes innovation and businesses from bogus patent claims where there is very little recourse or retribution for the ordeal they go through to be proven right.

USA Video's Markman Hearing went very badly for them, so their efforts to follow in Acacia's footsteps with their "downloading video faster than real time patent" will go the same way as Acacia's DMT patent... into the circular filing cabinent.

These guys keep going and going and going.

Recent PR about their pending acquistion of a patent portfolio company.

TechSearch is one of the acquisitions, Check out their portfolio of patents:

-data transmission on the Internet
-data transmission over satellite and cable broadcast channels
-information distribution and processing systems
-computer based distance learning
-noise reduction systems for video signals
-television de-scrambling smart card
-resolution enhancement for printers and other display devices
-MP3 CD players and their methods of operation

2005 is the year of wild-west patent infringement lawsuits!

A bid of $15.5M for the bankrupt Commerce One patents has been won by an enigma of a company.

Expect broad patent claims and patent infringement cases for next year. 2005 will be the year of patent infringements as a viable business model (not for Acacia who still struggles to convince people to part money from their wallets for their *cough* bogus *cough* DMT patent claims and technology/patent ineptitude).

Companies that are targeted by patents can take a stand by banding with other companies. Take a "sweetheart deal" and mark yourself to be a serial victim to be rolled over by the next broadly interpreted patent.

Read the details about the patent auction here.

USVO's lawsuit against MovieLink.com has picked up as they entered the start of their Markman Hearing. This Dec 3 Hollywood Reporter article summarizes their dreams of grandeur.

USVO's patent claims the "pioneering" invention of Video On Deman with their transmission of video "faster than real time".

Read the patent on my USVO page. For those reading the patent and thinking they invented faster bandwidth.. ayup.

A flashback to an earlier article I wrote, a satirical piece about a fictious company's patent on VOD (and video on the internet).

The patent paradox revisited with SightSound, USVO, and Acacia all claiming similar things in this Highladeresque title "There can only be one" article.

Court has been postponed awaiting the outcome of the multi-district panel ruling about combining cable and adult online.

Acacia was trying to keep the two cases separate, but Judge Ware kept asking what's the difference in infrigements, if it's only the content being distributed

A different spin on patent abuse with a David and Goliath type story about patents involving the invention of writing to a CD-R like it was a hard drive. Article.

USA Video's case against MovieLink.com beginning tomorrow. Docket-by-Docket blows located on their website.

Latest round of Acacia "marketing" for licensing of patents has begun. So much to write about, that it became its own article.

Companies targetted by Acacia for the HotSpot patent are welcomed to share and learn information with what I am tracking on the Round3 Article.

All information received is held confidential. Anonymous feedback can be sent via the Contact Form.

More info here.

AJjones2156 on the Yahoo Board wrote:
"is it possible that the nflx and tivo deal will now infringe on acacias patents???"

My answer:

It's possible if Acacia stuck to what the patent actualy said, rather than what they were interpreting, that it could apply and here's why:

The DMT patent, in my interpretation, was designed with the idea that someone could be at work, and using a telephone, order a movie that would be played at a "remote location", meaning watching the movie at home.

The movie would be delivered to the set-top back and the person could enjoy the movie.

i believe the aspect of ordering the video to the "remote location" was what made the patent unique.

In the Markman Hearing and Order, Acacia argued that the term "remote locations" means the server that you want the video from, is in a "remote location" from the person making the request.

The judge sided with Acacia on its definition. Going off on a tangent now... it was disappointing for the judge to agree to their definition, because it went away from what the spirit of the patent design, but then it opened up all the prior art where a person at one location (ie. on a computer) to request and download a video (ie. from a BBS) that was in a "remote location".

Returning back to the Tivo/Netflix answer....

So with NetFlix, a person selects their video from their website, and the video is transferred to the "remote location".

To me, this is what Yurt and Browne had envisionsed, since video on demand was around prior to their invention date, and videos were being downloaded from BBS prior to the invention date.

One of the ironies here is that because Acacia has defined "remote locations" differently than the patent, they can't just go back and revert to the original definition (then again, knowing how bogus of definitions they made up in Markman, they could try).

Ordering video from the Netflix/Tivo service would not be like traditional "video on demand", since there is not a direct connection between the person ordering a video, and then the video playing.. there is a third party service that causes video to be directed to the video subscriber.

Given the patent version of the invention, it would appear that netflix/tivo could be infringing on that patent, but the internet and cable world of "video on demand" services that Acacia has broadly interpreted from the patent, would not. A Federal Judge will make that determination.

In later patent filings, the abstracts now read:

"A system of distributing video and/or audio information employs digital signal processing to achieve high rates of data compression. The compressed and encoded audio and/or video information is sent over standard telephone, cable or satellite broadcast channels to a receiver specified by a subscriber of the service, preferably in less than real time, for later playback and optional recording on standard audio and/or video tape."

In USA Video's (USVO ticker) July 14, 1992 patent, it's abstract reads:

"A system and method for transferring video programs from a first location to a remote location provides for communication of the programs over selected commercial telephone networks. The program signals are digitized, compressed, and stored at the first location, and transferred to the remote location on request of a viewer. Due to the compression of the program, the time required for electronically transferring the program to the remote location is much less than the viewing time for such program. The compressed program is reconstructed at the remote location for viewing on available video display devices. "

Where their patent basically covers the transmission of video "faster than real time"

I wrote about this issue many months ago, being the classic Highlander event.. that these two patents will need to fight each other.

Having two broad patents covering the same topics, will confuse licensees and potential licensees of being a serial licensee.

A company like CinemaNow.com (which licensed from Acacia), is ripe for licensing solicitations by USVO since USVO is currently suing their competitor, MovieLink.com

I would imagine CinemaNow looking to Acacia to "protect its licensing agreement and value" by beating down USVO's patent claims.

Neither patent is prior art to each other, since they were approved within a year of each other.

It will be interesting to see this story develop, in particular, to a company that already licensed with Acacia to then be the same target by USVO.

A recent court doc released on 31-Aug details the next court schedule that I posted previously.

The court dates of December 2-3 will be for Summary Judgement for invalidity of claims. The outcome of that court session should be the ruling of invalidity of most of the claims. What will survive are 6 claims of the patent (no idea of what those claims are).

The next step will be for the defendants to file for Summary Judgement for Non-Infringement.

There would be some limited discovery and then a ruling by end of first quarter (speculation).

Since the judge ruled on many claims as being indefinite, it sets up the end result of non-infringement by the defendants, and basically a conclusion that the patents claims were bogus.

Companies like Bloomberg, who probably paid next to nothing in a license (maybe even just $1), will have to continue to pay the license since a non-infringement verdict is not a invalidation of the patent verdict, and the licensing agreement would still continue.

The share price goes up a few days prior to a Press Release.

This would mean that inside information is known/leaked to traders who are buying shares based on that info. Deals in progress are surely shared with outsiders along with a time line to closing, so plenty of time to buy shares.

But the ironic thing is that when a PR comes out, it's not super exciting news, and the stock actually goes down.

The Bloomberg PR is a great example... share price was up a few days prior with no news, then PR hits, stock goes down. Stock closed down -4.52%.

I'm thinking that maybe these traders who are getting some advanced word could be making more money by shorting the stock on word of an upcoming Press Release.

This trend has happened quite a few times. Early on, when things were much more speculative and pie-in-the-sky, the share price would actually go up on the news of signing... but i think savvy investors are seeing that all these sweetheart deals are not amounting to much.

If you price the licensing fee at a level low enough to be more of a nuisance fee, companies will just settle, paying a lower cost than engaging in more attorney time.

This strategy could work well if thousands and thousands of companies paid the "nuisance fee", but the problem with that strategy is the fact that their are defendants in litigation who are challenging the validity of the patent. The other problem, is there is only 175 licensees after almost 2 years of "soliciting" instead of thousands.

Given the very positive outcome of the Markman Order, in favor of the defendants, the days of companies making a "business decision" to take out a license is numbered.

In this Acacia PR , Bloomberg News has signed a license.

A company would have to pay atleast $10K to a patent law firm to get an opinion paper as to whether they are infringing on a patent or not. The way the licensing is going, paying less than $10K is cheap in the form of paying a license (ie. nuisance fee) and making Acacia go away.

Robert Berman, executive vice president and legal counsel for Acacia, said in an Xbiz interview:

""If the adult entertainment litigation is so close to being over, as some would like to believe, then one has to ask why so many Internet companies continue to sign DMT licenses?" said Robert Berman, executive vice president and legal counsel for Acacia. "The fact is, those companies outside of the adult industry that are represented by counsel and that are monitoring the litigation know the facts. "

Exactly, and that's why only 175 have signed.

If the thousands of companies that they contacted knew the same "facts", then more would be signing. I get many anonymous feedback from my website from attorneys who have been hired by their clients in response to recent acacia solicitations, and they are seeing no need to take a license since Acacia hasn't sued anyone recently and that the Markman Order went very bad for them. The companies that are signing, like Bloomberg, are doing so because it's cheaper for them to have their name tossed out in PR than to pay for lawyers on fear of being sued.

The downside to paying a cheap license fee is that the company name gets to be dragged out in PR. Imagine the situation come next Q1 or so, that the current defendants in litigation against Acacia are found to be not-infringing.

The companies that signed that were projected as being companies with big time lawyers end up looking not too smart.

I understand the economics of settling for a bogus patent, but will these companies understand the economics of the negative badwill and setting themselves up to be serial patent licensees for anyone else who has a patent (ie. USA Video) and looking for easy prey.

Oct 13-14 will be to hear Acaca's class action proposal against all adult entertainment websites using 2257 requirements as the class definition.

Most likely this will get denied by the judge due to the logistical problem of being able to notify every company in the class, so they can decide to opt-out, etc.

Another possibility for denial is there is already a pending case with a negative Markman Order against Acacia.

Dec 2 - Motion for Summary Judgement by the defendants will be heard.

Most likely it will be granted by Judge Ware, given the fact that he said on TWO accounts in the Markman Order that the defendants should file for Summary Judgement.

In today's Acacia PR release, iFilm has signed up for the DMT patent license.

From the PR:

Paul Ryan, Chairman and Chief Executive Officer commented, "Each month, iFilm is recognized as one of the top streaming companies on the Internet. We are pleased to have iFilm as a licensee because it further demonstrates the execution of our strategy to sign license agreements with all of the leading streaming companies."

Having iFilm sign up demonstrates Acacia's execution strategy that it's cheaper for a company to license than it is to fight. A very understandable business decision made by iFilm, but also very disappointing given the Markman Order setback to Acacia as well as the ability to have banded with other companies to fight.

Acacia listed iFilm's investors ( Axiom Ventures, Inc., Eastman Kodak Company, Liberty Digital, Rainbow Media, Sony Pictures Entertainment and Vulcan Ventures, Inc. ) as if to show that their patent must hold some validity if these top-notched VC firms are involved.

VC's have their liabilities capped by their investments, so iFilm could have faught. One possible reason for their taking a license is that they don't generate enough revenue to even worry about the cost of the license (ie. another license paid in peanuts).

iFilm shows previews of videos and movies and looks to have an advertisement-based model. If their licensing structure is simiar to e-learning and corporate websites, expect very little financial contributions to Acacia's warchest and bottom line.

One last reminder, the current defendants against Acacia will be going to Summary Judgement with expectations of a non-infringement verdict in Q1 '05.

Companies that license the DMT patent will have to continue to pay licensing WHEN the defendants are found to be not-infringing.

From a recent NY Times article:

"However, he said [Berman], anyone viewing stored streaming video or listening to
stored streaming audio on the Internet using the most common media players - those
produced by Apple Computer and RealNetworks, for example - are probably
violating his company's patents. "

Interesting that Berman did not mention Microsoft's Windows Media Player.

Part of what Acacia is claiming is using timecodes that match up the audio to video due to different compression methods use.

MP3 does not use timecodes, and being a digital format, should not be covered. If Virgin Radio uses shoutcast or other mp3 delivery systems (and most do), then they may not be infringing, but since they signed a license it doesn't matter anyways.

Quicktime (and Mpeg) uses timecodes, and my guess is that Real must do the same.

Could it be that Windows Media Player does things differently, such that use of Windows Media encoded files (ie. WMV) are not infringing the patent??

Why would Berman be specific enough to list Apple and Real, and leave out Microsoft?

Most of the current defendants use Microsoft Windows Media....so some investigation is definitely needed to understand why Microsoft was left out.

Would be rather ridiculous if Acacia realized now that they sued the wrong people.

From the PR spin on trying to recover from the loss of appeal on v-chip:

"The ruling has no impact on the revenues that Acacia has previously recognized from licensees of the V-chip patent. "

The $25M that was collected by Acacia from TV manufacturers that settled instead of fighting is something that those manufacturers can't get back. Companies like Sony who prevailed, could get their legal expenses back if they decide to file countersuits..much like the current defendants against acacia with DMT.

Once summary judgement goes their way, and getting the non-infringement ruling like with v-chip, expect to see ACTG management to be held accountable for their very questionable marketing and licensing tactics.

The non-infringement verdict on v-chip signifies two things:

1) Acacia management does not understand their own patents and are interpretting the patents to mean more than what it says (interpreting the patent through legal wishful thinking, rather than technical reality).

2) Large companies (especially public ones) are easy targets to rollover and pay licensing.

Any time an IP licensing company uses the pitch that it would be cheaper to license then fight in court, it should alert you that they are pitching you a bogus patent.

The marketing pitch above was used by acacia on DMT, and most likely learned from v-chip marketing campaign.

From Acacia PR:

"United States Court of Appeals for the Federal Circuit has affirmed the U.S. District Court for the District of Connecticut ruling in September of 2002 that television manufacturers named in the Connecticut lawsuit do not infringe the Acacia Technologies group's V-chip patent. "

August 17th is the next court action with a telphone conference of the parties.

Acacia will submit their class action proposal, which most likely will be denied. The judge will probably find the logistics of running the class action (notifying all effected parties, logistics, coordination, schedule,etc) to be too burdensome, given the fact that the Markman Hearing went badly for Acacia.

The defendants will submit a Summary Judgement motion, which most likely the judge will grant, given that he suggested TWICE in the Markman Order for the defendants to file it.

The countdown to non-infringement will soon start after the grant of summary judgement.

When the defendants are found to be not infringing, they may turn around and file some lawsuits against acacia for its inequitable conduct, bad business practices, and various other claims in order to recoup their money in the frivilous lawsuit.

Expect legal fees by Acacia to continue to increase to support the current dual legal front (porn and cable).

Acacia was granted a court order yesterday against Defendant company Carpe Diem to "refrain from directly or indirectly suing or causing to be used any system or method emboyding any of the claims of US Patent 5,132,992....."

The Order is against Carpe Diem (there is also another one coming), who did not defend themselves in court, and research shows that the company doesn't exist anymore.

If you recall, Acacia received default judgement against some web companies a year ago for their failure to not show up in court, and released a big PR bragging about it.

Expect similar spin. While true that Carpe Diem was sued, they were never part of the Defense Group and the company doesn't exist anymore. It's almost like winning a political race against a dead guy.

Acacia Research Corporation Earnings Conference Call (Q2 2004) Scheduled to start Thu, Jul 22, 2004, 4:30 pm Eastern

Click here to listen to the spin. Expect more focus on Combimatrix and the newly acquired patent. Supposedly, five new licensees of the patent post-Markman.

Acacia announced today in a Press Release, the acquisition of a patent from Lodgenet. For those that recall this name, Lodgenet was one of the early licensees of the DMT patent.

"Acacia Research Corporation (Nasdaq:ACTG - News; Nasdaq:CBMX - News) announced today that its Acacia Technologies Group has acquired U.S. Patent No. 6,226,677 from LodgeNet Entertainment Corporation (Nasdaq:LNET - News).

The newly acquired patent has several potential licensing opportunities, including DSL registrations, wireless "hotspots", and hotel high-speed Internet access (HSIA). The patent covers technology and methods for redirecting users to a login page when accessing the Internet.

Acacia expects to launch a licensing and enforcement program for the redirection patent in the third quarter, and will continue to separately license its Digital Media Transmission (DMT®) patent portfolio."

Who said Lodgenet didn't get a sweetheart deal???

Looks like it has been revealed what Round 3 for Acacia will be.

I took a quick read at the patent (6,226,677), looks to be a very broad process based on TCP/IP routing that tons of prior art can be found.

ISP, DSL providers, Cable, etc should be paying attention to this. Starbucks should probably also worry about being a "contributory infringer" with WiF hot-spots. Given Acacia's "marketing" tactics, they may go after folks like Starbucks, Borders, etc rather than take on the big boys.

You heard it here first.

Berman taking a pot shot at my efforts in this Forbes.com article. Here is an excerpt:

Acacia's Berman dismisses such criticisms as a "byproduct" of the fact that it first targeted porn peddlers, a noisy industry that predictably draws "eyeballs" to its cause in more ways than one. He also suggests some gadflies have attempted to profit from the fight. Berman singles out the individual behind Fightthepatent.com, for instance, for having tried to raise $250,000 from porn companies so he could agitate about Acacia full time.

"Cottage industries have formed," Berman marvels.

"Completely ridiculous," huffs Brandon Shalton, a fledgling Internet entrepreneur who started Fightthepatent last August out of his home near Austin, Tex., to publicize the Acacia battle. While acknowledging that he did try to raise $250,000, he says it was for the purpose of starting a foundation, not for his personal benefit. Whatever the case, he dropped the idea after finding lukewarm support.

"I didn't take a dime from anyone for this," Shalton says. In the meantime, he continues to run the Web site while skewering Acacia on the company's Yahoo! (nasdaq: YHOO - news - people ) stock message board.

What Berman has ignorantly failed to interpret properly (consistent with their DMT claims) is an understanding of what I was proposing.

Fight The Patent Foundation was proposed to be a non-profit organization to focus specifically on patent abuse, modeled after the ACLU and EFF at a time when no one was focusing on this issue. More info can be found here.

I contacted many large internet companies, and the support for the idea was lacking.

There are many more Acacia-like companies coming forward (joining the many that already exist). Patent abuse will become more rampant and businesses will be faced with even more litigation and extortion like tactics to tax innovation and businesses with broad and bogus patents.

I finally got my hands on a copy of the Sarnoff Report.

These few sentences from the document summarize it all up:

"Based on our review of published materials on this topic [see reference list & attached papers], we do not consider the overall system architecture to be novel in a scientific/technological use. Similar concepts for storing, accessing, transmitting and displaying compressed video and audio information are widely understood by researchers in the telecommunications and multimedia fields".

*ouch*

I believe the story behind this report is that it was not a published paper, therefore the inventors did not present this to the patent examiner on the first patent.

Later on, the document was submitted into later patents but the way it was done was an attempt to "hide it" as one observer remarked while reviewing the patent wrapper (the notes by the examiner during the patent application process - which i also have).

Scroll down to this entry:

6-Jun: Acacia does the Kerry Flip-Flop

To read the court docs filed by Acacia to not have the Sarnoff Report submitted for review by the judge.

The Markman Order, while a signficant blow to Acaca's claims, is not the end of the road.

As the judge stated twice, for the defendants to file for summary judgement.. which they will.

So it will come down to a court case where the prior art and expert testimony can be presented for the judge to make his final ruling on the case.

Presuming a non-infringement verdict, I am sure Acacia will file an appeal (no different than the history of v-chip) and would continue to feel they have a solid patent.

The realistic and logistical effect of the Markman Order is that companies being solicited to license the patent will either blow off Acacia or be able to negotiate a "nuisance license" that is low enough to make Acacia go away and not tie up corporate resources with legal fees.

A revenue stream of patent licensing at pittance levels will surely not fuel investor confidence in the patent until a lawsuit has been won by Acacia.

Given prior art and narrowing of the definitions due to Markman Order, the chances of an Acacia win is a pipe dream.

What is of greater concern are new companies being formed that have IP licensing as its product and business model.

A bunch of former Intel execs have gotten together with hundreds of millions of dollars backing them and they are gobbling up patents.

This new group in particular is tech savvy (unlike Acacia) and has alot of money in the bank.

Look for them to come out swinging with an array of broad (ie. claimed foundational) patents.

After almost 1 year of being publically critical and observational about Acacia's methods and tactics, it's funny for Berman to be taking the time now to take a potshot against me. This only ligitimizes my efforts, and gives me a forum to respond.

Didn't your stock cheerleaders do a good enough job with their name calling and efforts to discredit me?

Clearly they have failed that the General Counsel now feels he must come to bat.

Take my satire, observations, and facts for the black and white letters that they are, just like you expect others to do the same with your Press Releases.

Diving into personal attacks creates the david and goliath situation that can only shed darker light upon the company.

I'll post up a link to the article for all to read should the writer include your comment and my response.

Markman Order is out! Click here to read.

Commentary on it will come later, just wanted to let everyone read it for themselves first.

Very bad news for Acacia's DMT patent.

Judge Ware has postponed the class action hearing scheduled for July 7th. It appears that he has some issues to consider in making his Markman Hearing ruling, due anytime now and July 31st.

If the judge makes a ruling that knocks out some of the claims, then that would obviously have an impact on his decision about the proposed class action lawsuit by Acacia against adult entertainment websites.

The judge may require an additional hearing to help clarify some points as he weighs in the facts from both sides to make his ruling.

Acacia PR announces that Central Valley Cable TV has licensed the DMT patent.

In researching Central Valley Cable in one of their FCC filings, it shows they have a subscriber base of less than 5,000.

Central Valley Cable was listed in the lawsuit filed in Northern CA District, but Acacia had not served papers due to waiting to see what reaction it would get from companies.

Looks like they picked off the smallest of the cable providers listed.

Now that's 'low hanging fruit'.

Funny how the stock price surged up a few days prior to today's PR with no other news previously.