This is Part I of a IV part series on Acacia Research Corporation, the relevance of Acacia’s patents to IPTV, and what IPTV providers can do to defend themselves.

As the IPTV industry continues to grow, attracting increasing numbers of subscribers and investors, it may also attract the attention of the Acacia Research Corporation with its portfolio of patents relating to streaming media. 

As one of the world's first publicly traded companies whose sole business is the acquisition and licensing of patents, the Acacia Research Corporation, through its subsidiary Acacia Technologies Group (Nasdaq: ACTG), manages the rights to a group of patents that relate to the streaming and downloading of digital media. In essence, if your digital media is streamed or downloaded through the Internet it may infringe on Acacia's patents. At least that is what Acacia believes. 

Digital Media Transmission (DMT®) technology is the term used by Acacia to describe a portfolio of patents that Acacia has asserted covers on-demand audio and video, audio and video streaming, and audio and video downloading via TV, satellite TV, Internet, fiberoptic, and wireless. Currently, Acacia has five U.S. patents relating to DMT® all claiming priority to a single application filed with the United States Patent and Trademark Office by co-inventors inventors Paul Yurt and H. Lee Browne on January 7, 1991. These include U.S. Patent 5,132,992, U.S. Patent 5,253,275, U.S. Patent 5,550,863, U.S. Patent 6,002,720, and U.S. Patent 6,144,702. Moreover, the USPTO has published nineteen pending applications assigned to Acacia Media Technologies Corporation having the same title, the same co-inventors, and apparently the same subject matter.

Acacia has also acquired corresponding patents in many other countries.

A search of the European Patent Office's esp@cenet database indicates national patents corresponding to U.S. Patent 5,132,992 have been issued in Austria, Australia, Germany, Denmark, Spain, Greece, Japan, and Mexico. There are nine corresponding European Patents and a PCT application. 

According to information obtained from the website of the Acacia Technologies Group (http://www.acaciatechnologies.com), Acacia has entered into 296 DMT® license agreements, including 108 cable TV licenses, and 183 Internet licenses. The agreements generally demand royalties based on the files transferred, with a minimum annual royalty of $5,000. The majority of Internet licensees are operators of adult entertainment sites, including Playboy Enterprises, Inc., but even the Walt Disney Internet Group, which operates the Disney, ESPN, and ABCNews websites has signed up for a license. 

Acacia are now expanding their licensing efforts. A number of universities have reported receiving an "online learning license agreement" offer from Acacia. According to the National Association of College and University of Attorneys, the agreement demands 2% of distance learning fees, with a minimum initial sign-up of $1,000 and a maximum of 25% of the anticipated annual royalty. 

While Acacia has yet to generate large revenue streams, license fees received during the three months that ended June 30, 2005 were just over $2.5m, the company has a strong cash position well in excess of $40m, little or no debt, and low fixed operational costs. 

Acacia is not shy about using litigation, or working with law firms on a contingency basis. In February of 2005, a judicial panel on multi-district litigation ordered that dozens of individual lawsuits over DMT® be consolidated into two actions in the Northern District of California. One case is against cable TV operators: 

Acacia Media Technologies Corporation v. Comcast Cable Communications, LLC Charter Communications, Inc., The DirectTV Group, Inc., Echostar Communications Corporation, Cox Communications, Inc., Hospitality Network, Inc. (a wholly owned subsidiary of Cox that supplies hotel on-demand TV services), Mediacom, LLC, Armstrong Group, Arvig Communication Systems, Block Communications, Inc., Cable America Corporation, Cable One, Inc., Cannon Valley Communications, Inc., East Cleveland Cable TV and Communications, LLC, Loretel Cablevision, Massillon Cable TV, 

Inc., Mid-Continent Media, Inc., NPG Cable, Inc., Savage Communications, Inc., Sjoberg's Cablevision, Inc., US Cable Holdings LP, and Wide Open West, LLC, Time Warner Cable, Cablevision Systems Corporation, Insight Communications Company, Cebridge Communications and Bresnan Communications.

And the other is against operators of adult entertainment and gaming sites: 

Acacia Media Technologies Corporation v. New Destiny Internet Group, Inc., Audio Communications Inc., VS Media Inc., Ademia Multimedia, LLC, International Web Innovations, Inc., Offendale Commercial BV, Ltd., Adult Entertainment Broadcast Network, Cybertrend, Inc., Lightspeed Media Corporation, Adult Revenue Services, Innovative Ideas International, AskCS.com, Game Link, Inc., Club Jenna, Inc., Cybernet Ventures, Inc., ACMP, LLC, Global AVS, Inc. d/b/a DrewNet, ICS, Inc. / AP Net Marketing, Inc., and National A-1 Advertising.

As IPTV begins to generate revenue, owners and operators of IPTV sites may likely come into Acacia's focus. In this series IPTV magazine will provide more information about the Acacia DMT® patent portfolio, the collective attempts that have been made by others to combat it, and what you should do when, and if, you receive a license offer from Acacia.