Acacia On Contributory Infringement

NEWPORT BEACH, Calif.— Acacia Technologies Group continues to send the adult entertainment industry spinning on its heels, most recently with a flurry of letters regarding the fuzzy matter of contributory infringement.

Acacia is generally known throughout the adult entertainment industry as the licensor of its DMT technology patents – five in the U.S. and 17 internationally -- that cover the transmission and receipt of digital audio and digital video content, more commonly known as audio-on-demand, video-on-demand, and audio/video streaming.

In recent days and weeks, many adult entertainment sponsor and affiliate sites have been the recipients of letters from Acacia stating that they must fork up royalty payments or risk being dragged into litigation with the patent holder.

The issue, according to Robert Berman, senior vice president of business development for Acacia, is whether those sponsors and affiliates provide streaming audio or video feeds and whether those feeds are relayed onto other sites. If so, states Berman, then those affiliates and sponsors are liable for patent infringement.

"In most cases, if the sponsor licenses from Acacia, the affiliate will be covered," Berman told XBiz. "In order to avoid liability for patent infringement, it is in the best interest of affiliates to send traffic to sponsors that have licenses with Acacia."

Many members of the adult industry are beginning to realize the cost of long-term litigation with Acacia versus just paying the fees required to utilize DMT technology with Acacia's blessings.

"I've only seen a handful of sponsors sign licenses, and I don't think any of them 'caved,' they made a business decision to spend a few grand and protect their affiliates instead of fighting and possibly losing millions of dollars," stated a community board member.

However many members of the industry still feel that Acacia's patent claims are far too broad to be valid and many webmasters are holding out until either time runs out or someone proves that Acacia's patents are not what they seem.

"I don't think this is a valid patent at all, and I hope it's proven so in court," stated another community board member. "From what I've read, the U.S. Patent Office was deluged with phone calls about this yesterday and one patent attorney there felt the patent did not cover webmasters…We're all backed up against a wall without a lot of choices here. You can pay. You can fight it in court if you have $100k in cash available. You can ignore it and have your sites shut down."

According to Berman, sponsors and affiliates are currently being looked at in terms of their affiliation with each other and with sites that have either licensed Acacia's DMT streaming media technology, or are using that technology illegally.

Berman dismissed the suggestion that this recent letter-writing campaign is a new tactic on Acacia's part to either increase licensing profits or partake in what many industry insiders are calling "double-dipping."

The idea of double-dipping is if the sponsor has paid Acacia and the affiliate has also paid Acacia. But according to Berman, Acacia only requires both the affiliate and the sponsor to pay for licenses if there is a separate infringing act in the use of Acacia's technology by one of the affiliate's sites that is streaming audio/video.

The breakdown for sponsors and affiliates who are unclear about whether or not they need to license from Acacia is confusing, but deals only with sites that are transmitting or receiving audio/video content.

According to Berman, if a webmaster has their own audio/video content that is accessed from their site, then plain and simply they need a license, whether they are a free site or a paysite and regardless of whether they send traffic to other Acacia licensees or not.

If that site doesn't have audio/video but sends traffic to a sponsor site that does have streaming media, but no license, then that site needs a license from Acacia. If that sponsor signs up with Acacia later on, then the affiliate does not have to pay royalties on the revenues received from the Acacia-licensed sponsor.

"We are not licensing content providers to stream to the webmaster, we are licensing the webmasters for that activity," said Berman. "In a regular situation where a content provider hosts content for the webmaster, that activity is covered under the webmaster agreement, not the content provider."

According to Acacia, the webmasters that don't need a license are the ones that don't have any audio or video access from their site and that send traffic only to a sponsor that is licensed by Acacia.

"Our patents are a real issue that is not going to go away," Berman told XBiz. "The best thing is for people to deal with it. We are honest business people and if adult sites are going to fool us by being dishonest, the truth will eventually reveal itself."

In late September, Acacia announced a Nov. 30 deadline for companies accused of infringement, after which fees and liability will go up substantially. Berman told XBiz that many webmasters have since stepped forward to reconcile with the patent holder.

"If these sites are dealing in audio/video then no matter what, they need a license from Acacia," Berman said.

According to Berman, of the 39 original adult entertainment industry defendants that Acacia has been in pursuit of since July, only thirteen defendants remain and many of them are in serious talks with Acacia regarding settlements.

"They are finally getting a sense of the strength of our patents and what it will take to try and prevail in court," Berman told XBiz.

Last week during Acacia's third quarter earnings report, the company reported annual revenue of between $1.1 million and $1.5 million from licensing agreements executed to date.

For the three months of the quarter ending on Sept. 30, Acacia's 16 newly acquired licensing agreements brought in revenue of $186,000, although a significant portion of Acacia's revenue will not reflect until the fourth quarter of this year.

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

LaBellaDX Launches New Site Through YourPaysitePartner

Content creator LaBellaDX has launched her new official website through YourPaysitePartner (YPP).

Clip Page Launches 'Creator Analytics' Feature

Custom content marketplace Clip Page has launched the Creator Analytics feature on its platform.

BBWXXXAdventures Relaunches Through Grooby's Blue.xxx

Paysite BBWXXXAdventures has relaunched under Grooby's new website management company Blue.xxx.

Flirt4Free Announces 'Tease the Season' Holiday Contest

Flirt4Free has announced its Tease the Season promo and model contest, which will run Dec. 21-25.The competition is led by the return of the Snowflake Contest, where models can be gifted digital snowflakes by their fans. The models who collect the most snowflakes by 11:59 a.m. on Christmas Day will win cash prizes.

SWR Data Publishes 2024 'Top Creator Platforms' Report

Adult industry market research firm SWR Data has published a report on the Top Creator Platforms of 2024.

MintStars Joins Pineapple Support as Supporter-Level Sponsor

Content platform MintStars has joined the ranks of over 60 adult businesses and organizations committing funds and resources to Pineapple Support.

Politicians Aim to Study Effects of FOSTA-SESTA on Sex Workers

In an encouraging sign for sex workers, California State Representative Ro Khanna and U.S. Senator Elizabeth Warren of Massachusetts have reintroduced the SAFE SEX Workers Study Act, which aims to study the effects of FOSTA-SESTA.

Pornhub to Shut Down Access in Florida Over Age Verification

Aylo will geoblock Pornhub across Florida starting Jan. 1, when HB 3, the state's age verification law, goes into effect.

AEBN Publishes Popular Searches by Country for October, November

AEBN has released the list of popular searches from its straight and gay theaters by country in October and November.

Jacquie et Michel Acquired by 'International Fund'

French adult studio Jacquie et Michel has been acquired by an international fund, marking a significant development for the well-known brand.

Show More