Cybernet Counters Acacia

Gretchen Gallen
ENCINO, Calif. -- Cybernet Ventures, Inc. filed a counter claim this week in response to Acacia's December class action lawsuit in which Cybernet and seven other defendants were accused of patent infringement.

In addition to denying any knowledge of infringement in a response filed by Fish and Richardson, the operator of AdultCheck lodged allegations against Acacia that the inventors of the 992 and 702 patents, only two of five U.S. patents that Acacia has so far asserted against the adult industry, had not been honest in their representation of prior art at the time of filing the patents in 1992 with the U.S. Patent Office.

"I don't want to misstate anything or steal our lawyer's thunder," Timothy Umbreit, vice president and chief operating officer for Cybernet Ventures, told XBiz. "The defense group took this opportunity to raise these very serious allegations at this point in time. From what I understand, there was not disclosure of prior art during the "Petition To Make Special" process."

As part of its affirmative defense, Cybernet claims that Acacia's 992 and 702 patents are "invalid" because of numerous undisclosed prior art references. Additionally, Cybernet claims that the 992 patent is "so general, vague, and ambiguous" that Acacia has no right to enforce it.

Cybernet and the defense group now claim to possess information and proof that the inventors of the patent, among them Paul Yurt and H. Lee Brown, "violated the duties of candor, good faith, and honesty" owed to the U.S. Patent Office by intentionally not disclosing all prior art on the patent application.

The 992 patent was filed in July 1992, and a "Petition To Make Special" was filed in 1991, in which the applicants are being accused by Cybernet of making "false and misleading" statements concerning material prior art references to 992's patentability.

Cybernet is also alleging that H. Lee Brown and others "knowingly concealed such material information, analysis, and references and did so with intent to deceive the Patent Office…for purposes of procuring the 992 patent."

"For the foregoing reason," Cybernet claims, "the 992 patent is unenforceable due to inequitable conduct." And consequently, the 702 patent is also unenforceable due to the inequitable conduct in the prosecution of the 992 patent.

Cybernet Ventures has been part of the defense group since December 2003, but this week's filing is in response to the being named as a class representative in Acacia's class action lawsuit.

According to Spike Goldberg, the defense group will eventually file amendments to include Cybernet's allegations in the group's argument against Acacia's patent procuring process.

"The defense group is consistent and on the same page in terms of their allegations against Acacia," Goldberg told XBiz. "I am curious to see what the investors think about Acacia's due diligence, or lack thereof," he said referring to Acacia's corporate earnings announcement scheduled for Feb 19.

The class action status on the lawsuit filed in December against the eight defendants, among them Cybernet Ventures, is still pending certification from the District Court for the Central District of California.

If approved, however, the class action status could serve as a revolving door of defendants and over time could include all adult companies whose streaming content can be accessed in the Central District of California.

Seeking class action status was part of Acacia's earlier strategy to include hundreds, if not thousands of potential defendants in one lawsuit in order to avoid pursuing individual patent infringement cases.