A finding by a US District Court late last week could potentially invalidate one of five streaming media-related patents owned by an Acacia Research Corp subsidiary.
The California company is suing 25 cable companies, 18 Internet companies and two satellite companies for allegedly infringing on IP it claims to own that covers streaming media over the Internet.
The court found three out of 22 terms of digital media transmission patents owned by Acacia Media Technology Corp were indefinite, which means one potentially invalid DMT patent.
If or when the case goes to trial, it would mean the company has one fewer patent in its arsenal.
Chief executive Paul Ryan said the terms that the court said were indefinite are not in some of its other DMT patents. So that limitation would not even be a matter of issue, he said, but as a patent owner, you always want to preserve all the claims of all your patents.
Ryan also pointed out that the vast majority of cases of this sort never make it to trial. Typically these kinds of cases get settled, he said.
He declined to say whether Acacia was in settlement talks with any parties named in its suit.
Deals often get done during these pre-trail phases, he said. From a practical standpoint, litigation often serves as a backdrop for business discussion, he added.
We would settle immediately, he said. There’s nothing vindictive here.
A high-profile suit that patent house NTP filed against Research in Motion, in which a court ruling last week threatens to shut down RIM’s US BlackBerry operations, has underscored that technology IP lawsuits have teeth.
More than 300 companies already license DMT technology from Acacia, Ryan said. They comprise 108 cable companies, including Comcast, Charter Communications, Cox Communications, Time Warner, EchoStar Communications and DirectTV. They pay roughly $1 per year per subscriber in royalties to Acacia, Ryan said.
And about 200 Internet-related companies also have licenses with Acacia, including Disney, Playboy and Bloomberg, he said.
We have to litigate otherwise it would be unfair to these companies, Ryan said.
He declined to comment on whether Acacia plans sue other companies in the future.
However, he said Acacia is in licensing discussions with companies that recently announced plans to use DMT technology.
There are many new users of our technology that are emerging, Ryan said. Obviously, the largest ones are the telcos, who have now announced digital media on-demand through fiber optics systems, as well as several recent announcements through [devices such as] the iPod.
The lawsuit was filed in February 2003 and initially involved only Internet companies. The cable and satellite companies were later named.
If the suit is not settled, Ryan said the company does not have a calendar date for trail. But the case is expected to take between three to five years in total.