Acacia Media Technologies claims to own five US and 17 international patents for its DMT technology which claims to cover:
"... 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."
The company started a process for licensing its streaming patents in summer 2002, by approaching adult entertainment companies that transmit, or provide access to, digital content on-line.
Acacia has also approached a number of mainstream webcasters, demanding royalties of up to two percent of each companies' annual revenue.
Last February, Acacia sued 39 adult entertainment companies which "were previously notified of their infringing activity" but which refused to enter into licensing arrangements. By the end of September, 23 of these companies had obtained licenses, but the case was continuing against the remainder.
In February this year, the US District Court for the Central District of California began a series of technical sessions, known as Markman hearings. At such hearings, the judge determines the extent and definition of the patent claims to determine whether there may have been an infringement.
On Monday, Judge James Ware issued his first ruling on the issue, dealing with claims from two of the five US patents under consideration.
Speaking to StreamingMedia.com, Robert Berman, executive VP of business development and general counsel for Acacia, said, "For seven of the terms, the court adopted Acacia's proposed definition; for five they adopted the defendants'. For three, the court said that they needed more information from experts. For four they came up with their own definitions."
According to Acacia, the terms that have been defined give it reason to believe that the entertainment companies are infringing six of the claims asserted in the case.
The company is also encouraged that the interpretation given to the claims by Judge Ware will be followed in another infringement case that Acacia filed against nine cable and satellite companies in June.
The significance of Acacia's patents transcends adult web sites. If their validity stands, they potentially cover almost all transmissions of compressed digital content, not only over the internet, but also over satellite and wireless services and pay-per-view cable TV.
Consequently, any business involved in providing on-demand digital content, from content companies to software companies and network service providers, will be affected.
Civil rights group the Electronic Frontier Foundation recently named the company as the holder of one of the ten worst software and business method patents. The EFF hopes to persuade the US Patent and Trademark Office to re-examine the patents and declare them invalid.
