Acacia Technologies Still in Red With Filing

NEWPORT BEACH, Calif. — Acacia Technologies posted a gain Thursday in revenue that was 35 times more than the same quarter last year, according to a filing with the Securities and Exchange Commission.

But Acacia Technologies, a division of Newport Beach, Calif.-based Acacia Research Corp., said it still lost $1.15 million in the last three months.

The second-quarter results revealed revenue of $666,000 compared to $19,000 from last year’s figures. Its net losses declined to $1.05 million, down from $1.58 million in the comparable period in 2003.

Acacia, which has licensed some $2 million in 160 deals with various media companies, owns five patents for digital media transmission technology.

Shares of Acacia fell earlier this month after a “Markman” order by U.S. District Court Judge James Ware, who sided with more than a dozen adult entertainment companies in some of his decisions over patent claims.

A Markman order allows the judge overseeing a patent dispute to clarify some of the terms used to define the scope of a patent.

The Markman order gave an apparent unfavorable pre-trial ruling over Acacia’s patents after Ware said that the term “identification encoding means” cannot be defined. If the order stands, some of the company’s claims for its patents could be tossed.

But the battle for more than a dozen online-adult companies continues and legal bills mount at nearly $100,000 a month, and the odds are high patent claims can be beaten — only 614 of the nearly 7 million existing patents have been revoked, and 3,927 patents have been narrowed since the U.S. Patent and Trademark Office began conducting re-examinations in 1981.

In the adult case, Ware called into question some of the company's video-streaming patents that the defendants, New Destiny Internet Group, have called “overly broad.”

Ware invited the defendants to seek a final decision that could invalidate some of Acacia's patent claims, which the company says cover the distribution of digital content through the Internet, cable, satellite and wireless systems.

The Newport Beach, Calif., company has filed similar patent infringement suits against nine cable and satellite firms, including Comcast Corp., DirectTV Group Inc. and EchoStar Communications Corp.

The next step in the ongoing adult litigation case will be an Aug. 17 hearing to schedule additional motions with Ware.

“We are in the very early stages with litigation for unlicensed defendants,” CEO Paul Ryan said in a conference call Thursday.

In Thursday’s filing with the SEC, Acacia revealed that it inked nine new licensing deals in the last 10 days after the Markman order, none involving adult companies.

Ryan and Robert Berman, Acacia’s general counsel, said that the company doesn’t expect a trial for the adult entertainment litigation case until about a year from now.

On Thursday, Acacia Technologies’ stock closed at $3.29 on the Nasdaq exchange, up 16 cents. Its 52-week high was $8.58.

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