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Spike Speaks Out

Spike Speaks Out

November 4, 2003
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" At the end of the day you may come to the same conclusion that I and others in our industry have reached — that Acacia’s licensing program is not based on legitimate claims of patent infringement.  Instead, it relies on the fact that patent litigation is expensive and that for most, it is simply easier to pay than it is to fight.  "

Editor’s note: Shortly after a recent XBiz story about Acacia’s proceedings against Webmasters, I was contacted by Spike Goldberg, CEO of HomeGrown Video – and one of Acacia’s most vocal opponents – who wanted a forum to address statements made by Acacia. In the interests of fair and balanced journalism, and providing our readers with as many viewpoints as possible, I agreed. Here is Spike’s response to this issue of concern to all in our industry ~ Stephen

While Mr. Berman’s most recent interview in XBiz is simply more of the same — trying to convince businesses in our industry to pay Acacia regardless of whether they infringe Acacia’s patents and regardless of whether those patents are valid and enforceable — given the confusion that his statements have created among some, I thought it worthwhile to make a few comments and to provide an update regarding the pending litigation.

Berman’s latest tactic appears to be to convince affiliates to stop doing business with sponsors who have not taken a license from Acacia.  His motives are obvious, to try to take business away from those who have decided to challenge Acacia’s licensing plans.  His comments that "In most cases, if the sponsor licenses from Acacia, the affiliate will be covered" and "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" are misleading at best and are even inconsistent with other statements Berman makes in the same interview.  For example, under Berman’s view of things, if a webmaster provides previews or offers its own content, it will need a license from Acacia regardless of where it sends its traffic.  This is why Berman stated that, “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.”

It appears that in Berman’s mind anyone at all involved in the sale of video or audio files over the Internet needs to pay Acacia, regardless of whether their website has such files or not.  Of course, Berman simply ignores the fact that Acacia’s patents cover very specific systems and methods for the creation of those files and that few, if any, in our industry use those systems and methods. 

I understand that Acacia has contacted more than one thousand companies in our industry, including those who make little if any profit from their websites.  It is hard for me to believe that Acacia will file suit against hundreds or thousands of companies that make a few hundred or a few thousand dollars through their Internet businesses, but ultimately that is up to Acacia’s shareholders to decide.  Because my company is involved in this litigation and because of my involvement in the IMPA, I have been asked by many of these companies what they should do if contacted by Acacia.  In addition to contacting a qualified patent attorney you may wish to consider asking Acacia to explain, in writing, precisely what it is that your company does that infringes the claims of Acacia’s patents.  Given that Acacia is asking you to pay for property rights it allegedly owns, shouldn’t you be entitled to know exactly what that property is and how it is that Acacia believes you are using it?  I leave you to decide whether to accept or reject any effort by Acacia to tell you that transmitting audio or video files over a network like the Internet, or sending traffic to websites that do so, is covered by its patents.  That technology was well known before the filing date of the patents that Acacia purchased.  Ask Acacia for copies of the file histories for its patents and the cited prior art and you will see for yourself that the gentlemen Acacia bought its patents from were forced to narrow their claims substantially to get around even the prior art that the Patent Office found.   

At the end of the day you may come to the same conclusion that I and others in our industry have reached — that Acacia’s licensing program is not based on legitimate claims of patent infringement.  Instead, it relies on the fact that patent litigation is expensive and that for most, it is simply easier to pay than it is to fight.  If caving into this sort of get rich quick scheme does not bother you, then you should write Acacia a check.  If it does, or if you are not sure who is right in this fight, then you should do your homework.  Read the patents, the file histories, the prior art, and talk with others who have studied the issues, and most importantly talk with a qualified patent attorney. 

When I look at these documents, and when I read Berman’s ever shifting comments about what Acacia’s patents cover, his inconsistent comments about who needs a license, and when I hear the complaints from companies that decided to pay Acacia, I become even more convinced that my decision to fight this battle was justified. 

Turning now to the litigation, we have recently learned that the pending cases have been reassigned to a new judge, Judge James Ware from the Northern District of California.  Judge Ware will be holding a hearing on Nov. 7 to discuss the case and to put in place a plan to efficiently resolve the issues of infringement and validity of these patents.  I look forward to Acacia’s allegations being put to the test before this well respected judge.


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