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A company that has been attempting to obtain licensing fees from adult companies, as well as other providers such as Internet radio stations and leading satellite and cable companies such Echostar, DirectTV, Time Warner Cable, and CSC Holdings, Inc., has had its patent thrown out by the U.S. District Court for the Northern District of California.

Acacia Research's patent on streaming media technology had been targeted by the Electronic Frontier Foundation as part of its Patent Busting Project for being overly broad. "Laughably broad patent would cover everything from online distribution of home movies to scanned documents and MP3s," the EFF described it.

The company systematically acquired a number of patents on streaming media, with an eye toward making money on licensing fees, according to a 2003 CNET article.

"The company's digital media strategy began in earnest several years ago," the article said. "It had determined that it owned about a third of the patents it needed to mount a licensing strategy for Web streaming, and its attorneys spent considerable time researching the rights held by another set of companies that Acacia ultimately purchased in 2001. By the time Acacia finished, it owned five U.S. patents and 17 international patents dating back to 1991."

Acacia started with the adult website market. "The case reaches all the way back to 2002, when Acacia began sending out media packets to online adult companies asserting that the companies were violating patents associated with its Digital Media Transmission technology, which Acacia claimed covered virtually any manner of transmitting and receiving digital and audio content over the Internet," according to an article in XBIZ Newswire. "Although Acacia was able to secure settlements from a number of adult companies, other companies fought back, and eventually coalesced into the united Adult Defense Group effort, spearheaded by Homegrown Video parent company New Destiny Internet Group."

In 2003, the company began targeting Internet radio providers, and obtained licensing fees from a number of them, including Radio Free Virgin, the online music division of Richard Branson's Virgin corporation.

In 2004, it moved on to colleges and universities, sending letters demanding licensing agreements of a minimum of $5,000 to more than 100 of them.

The company has not yet commented but is expected to appeal the ruling.

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Last Post by MktgRob
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I have seen similar actions attempted by companies in terms of supposedly trademarked terms. One company I have worked with received a letter from a law firm that threatened them with a possible cease and decisit order if they did not stop using a specific term or paid an annual fee to keep using it. It turned out to be a fishing trip to generate revenue for a dubious claim of trademark infringement. The company I was working with had their lawyer send a reply inviting the cease and decist action and received no response. Acacia is operating at a much hgher level but it sounds like the only business they are in is a form of extortion using unsubstantiated claims.

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