Surprise patent claim riles webcaster:
- Michael Roe, proprietor of the small RadioIO Webcasting station, got a surprise FedEx package this week, containing a notification that he was violating patents owned by a company he’d never heard of.
That’s not uncommon in the technology world–the surprise was the scope of the claims. The sender, a company called Acacia Media Technologies, said it owned patents on the process of transmitting compressed audio or video online, one of the most basic multimedia technologies on the Net.
Roe, who recently finished fighting an expensive legislative battle over copyright fees for the music his station plays, was flabbergasted. Acacia only wanted three-quarters of a percent of his revenue, but every bit hurts at this point, he said.
“It’s extortion,” Roe said. “It’s just another example of someone seeking to extend patents for an old technology to…cover completely new technology. It’s absurd.”
This week’s letter to RadioIO is just a small part of an expanding licensing campaign by Acacia, which confidently says it holds sweeping patents likely to cover the activities of a huge swath of Internet multimedia companies, ranging from Microsoft to America Online. They could even cover pay-per-view movies on cable TV and in hotel rooms. On Wednesday, the company signed up its latest licensee, Mexican satellite telecommunications company Grupo Pegaso.
….Zack Zalon, general manager of Virgin’s Net radio site, says he gets wheelbarrows full of patent claims on a routine basis. This was the first one he and his attorneys took seriously enough to sign a license.
“We did research on the claims and found that they were pretty clear–somewhat broad, but specific enough to cover us,” Zalon said. “We realized that they were tight enough that a license would be substantially less expensive in the long run than litigation.”
Indeed, patent experts say, those are the ground rules for a game that is being played with increasing frequency online and elsewhere, as more companies attempt to turn intellectual property into royalties in a time of economic malaise.
A rash of instances in which seemingly basic Web technologies and practices have been subject to patent claims has come up over the past year. Telecommunications giant SBC Communications is claiming rights to Web site “frames.” Another company says it has rights to the e-commerce site staple known as the shopping cart. And a myriad of Web streaming and multimedia patents have surfaced in recent years, ranging from SightSound Technology’s claim to hold rights in the process of selling downloadable music to Intouch Group’s claim to patents on putting snippets of music on Web sites as samples.
Acacia initially decided to contact solely content providers, reasoning that they were the ones with end-customer billing relationships, and would provide recurring revenue streams.
Its first targets, beginning late last year, were adult Web sites. It sent letters similar to the one RadioIO received this week to 27 pornography-related sites, asking companies to take out licenses worth 1 percent to 2 percent of the streaming-related revenue. The adult companies were shocked and banded together to find strategies to combat Acacia’s claims.
Berman said a few of the companies have signed licenses, but others are holding out. The company is about to initiate patent infringement suits against several of these holdouts, he said.
The next step was Web companies.. [CNET]