Markman Hearing Recesses Until July

SANTA ANA, Calif. – In the ongoing legal battle between Acacia Research Corp. and adult Internet defendants, the Markman hearing recessed around 3 p.m. Wednesday, ending a day early after only two days of patent presentations by opposing attorneys. The pre-trial hearings were recessed until July.

At Wednesday’s hearing, U.S. District Court Judge James Ware considered the language and definitions pertaining to Acacia’s patents. Acacia claims the defendants are infringing on its digital media patents for – among other things – transmitting and receiving content online.

For four hours attorneys for both sides tried to persuade Ware to accept their interpretations of patent components and what they mean. The attorneys and judge spoke in legalese and high-tech jargon, and for the layman, this court case could be called “Dial ‘M’ for Markman – and Meticulous.”

The tedious hairsplitting over language sounded like the parsing of words by nitpickers. During a break, Acacia Vice President Robert Berman likened the process to “watching paint dry.”

Nevertheless, the stakes are enormous, not only for the defendants of the New Destiny Internet Group, but for online adult entertainment in general, and indeed, for e-commerce at large. Nothing less than the Internet as we know may be at stake. How the judge construes the definitions could determine the outcome of the lawsuit and countersuit. And the legal process will determine if adult and many mainstream webmasters infringe upon Acacia’s patents and have to pay licensing fees, which could end the web’s freewheeling ways and days.

A victory for the defense, however, could indicate that Acacia was using the law to coerce adult Internet companies in particular to pay the firm money.

On May 18, the first day of the two-day hearing, the court considered Acacia’s patent "No. 992," while Ware reviewed patent "No. 702" on Wednesday, May 19. Courtroom 9C in Santa Ana’s Ronald Reagan Federal Building was outfitted with three flat-screen televisions for Power Point presentations displaying patent artwork and related text.

Representing Acacia, Roderick Dorman and Alan Block of the L.A.-based Hennigan, Bennett & Dorman law firm faced off against attorney Jon Singer of the patent litigation firm Fish & Richardson. Singer was joined by four other defense group lawyers at the defendants’ counsel table.

Citing various sources, such as “The Dictionary of Computing,” the two sides debated over the definitions of: Identification encoder; expected; popularity code; transceiver; common housing; temporary storage device; etc.

At one point Singer told the judge: “I hope I’m not giving you a headache.”

Noting “Claim construction is a dynamic process,” Judge Ware seemed pensive, and asked opposing counsel numerous thoughtful questions. Ware also said: “You can see why this job is vexing. I go home and sleep like a baby - I sleep an hour and then I wake and cry for an hour.”

In simple language, Acacia contends that the defense is too restrictive in scope, while defendants contend that the plaintiff’s claims are too far-reaching. Disputing his opponents’ use of the word “overwritten,” Dorman argued, “it is too narrow.” On the other hand, Singer complained: “They claim every system on the Internet infringes” Acacia’s patents.

Defendant Spike Goldberg, president of Homegrown Video, who attended the hearing, added in an interview: “Based on their logic, everything in the world is covered by their patent.”

At about 2:30 p.m., Ware dismissed the court reporter who had been recording the proceedings, and turned to administrative matters, such as a hearing regarding Acacia’s class action suit against the adult Internet.

Ware expressed concerns that this may be “too broad. I’m not sure how many people are affected.” Dorman replied: “There are 10,000 alleged infringers in adult entertainment.... There are other industries – such as cable – that are impacted by these patents. Representatives of those industries are sitting in the back,” Dorman said, referring to a handful of people sitting in the spectators’ gallery.

Citing a “busy calendar,” Ware cancelled previously scheduled June dates, and set a classification motion for July. The judge wondered aloud if he needed to “broadcast the class action” to members of the cybersex community, in order to notify them of Acacia’s class action lawsuit.

Singer expressed unhappiness over the delaying of the next hearing until July. “It’s not fair to the defense clients who have been waiting for 16 months. The class action is based on content – [it’s] adult – and has nothing to do with patents,” Singer pointed out. “Justice delayed is justice denied,” the attorney added.

The first Markman hearing was held in February 2004, followed by the next round in April 2004.

Ware declared, “My desire is to give something back to you.... If I have sufficient claim construction, I will start to impose definitions.... independent of the hearing to determine whether to allow the class action.... I may give my [Markman] rulings by July. Maybe sooner. See you in July,” Ware stated, leaving the bench around 2:45 p.m.

Outside the courthouse, Berman, who is also Acacia’s general counsel, told XBiz: “The proceedings went very well. We’re happy. The judge asked good questions.”

One of the defense group’s lawyers, Victor De Gyarfas, of the L.A.-based firm Foley & Gardner, told XBiz, “The hearings are going well. The judge is listening to the attorneys.”

Goldberg added: “It went well,” but observed: “You can’t read what a judge will do.”