Acacia claims that, over the past several years, it has acquired
5 US and 17 international patents for its DMT technology, which
"covers the transmission and receipt of digital audio and digital
video content, commonly known as audio-on-demand, video-on-demand,
and audio and video streaming."
Acacia's parent company, Acacia Technology Group, holds
intellectual property rights in several areas. One of its
subsidiaries owns patents covering the technology used in the
television content-blocking V-Chip, which is included in almost all
television sets.
In 2002 alone, the company reportedly earned approximately $25
million from licensing these patents.
The company started a process for licensing its streaming
patents in summer 2002, by approaching adult entertainment
companies which transmit, or provide access to, digital content
on-line.
Acacia has also approached a number of mainstream webcasters,
demanding royalties of up to 2% of the companies' annual
revenue.
Acacia has said that its lawsuit, filed in the District Court
for the Central District of California, names 39 adult
entertainment companies which "were previously notified of their
infringing activity" but which refused to enter into licensing
arrangements.
Concern has been expressed that, if valid, the patents in
question would cover virtually all transmissions of compressed
digital content, not only over the internet, but also over
satellite and wireless services and pay-per-view cable TV.
This would affect any business involved in providing on-demand
digital content, from content companies to software companies and
network service providers.
It is believed that Acacia has filed the lawsuit to test its
patents in court, before approaching major players in the internet
industry.
