We’d never heard of Acacia Research Corporation before, but it got our attention when the company announced that it had acquired a patent which purports to cover audio ad insertion to replace over-the-air ads with different ads for Internet streaming. It turns out that the company is already a target of the Patent Busting Project at the Electronic Frontier Foundation (EFF) for another patent of interest to broadcasters.
Acacia is a publicly traded company whose only business is holding patents and trying to collect royalties for them – royalties that it splits with the original patent applicant. One holding in its portfolio, which EFF derides as a “laughably broad patent,” purports to encompass the entire idea of sending and receiving streamed audio and video on the Internet. The company claims that anyone and everyone streaming anything on the Internet needs a license from them, quite apart from any software license from Microsoft, Real Networks or anyone else.
So why hasn’t Acacia sued Disney, CBS, Viacom, NBC Universal and all of the other media giants who are streaming on the Internet? Some have quietly signed licensing agreements and Acacia has, indeed, sued some of the major cable and satellite TV companies, including Comcast, DirecTV and EchoStar. A bunch of patent infringement cases have been consolidated to be heard in a federal court in San Jose, CA.
It appears the strategy was to first go after small, independent companies to build a legal framework before going after big fish. So, the firm first targeted online porno distributors and sued some who refused to buy a license. They’ve had some success, although not all of their patent claims were upheld. Now Acacia is going after the big fish.
The latest patent acquisition should be particularly worrisome to broadcasters, since it deals only with radio stations who are simulcasting their on-air signal on the Internet with different ads inserted. No doubt many radio companies, and their lawyers, will soon be very familiar with Acacia.