Acacia Research Corp., a company based in Newport Beach, Calif., has sent a “second wave” of letters to dozens of colleges in recent days. The message: Pay up, or risk getting sued. In spite of a legal setback in July, Acacia is escalating claims that schools’ use of streaming video for purposes such as distance learning and video lectures violates the company’s patents.
“Certainly for colleges that do a lot of distance education, this could be a major problem,” said Steve Worona, director of policy and networking programs at EDUCAUSE, an association of campus information technology centers.
Several colleges say the letters make even broader claims, extending beyond distance learning to cover almost anything a college does that involves moving audio and video files on computer networks.
Acacia reportedly told Washington College in Chestertown, Md., that a minimum annual license fee of $5,000 was likely to cover what the company claims it’s owed. But Acacia said the deal is only on the table until Sept. 15. Afterward, the price might go up and Acacia might sue for past infringement.
Some educators liken it to extortion–or worse.
“I think it’s kind of like highway robbery or blackmail,” Billie Dodge, director of information technology at the 1,400-student college, told the Associated Press. Washington College uses streaming video for things like making lectures available online and showing alumni sports highlights.
Some companies have agreed to pay Acacia licensing fees amounting to hundreds of thousands of dollars per year, according to Bob Berman, Acacia’s general counsel, but he said he doubts any university streams enough video to owe that much.
It’s only fair, he contended, that colleges pay up.
“Many colleges have patented technologies that their research departments have gotten issued,” he said. “On the one hand, they like the revenue they make from their patents. On the other hand, they’re saying we should allow them to ignore ours.”
Acacia’s digital media patents, granted to the founders of Greenwich Information Technologies in the 1990s, weren’t enforced until Acacia bought them in 2001. Acacia has since secured dozens of licensing deals with companies ranging from adult entertainment sites to The Walt Disney Co. It has also sued large cable and satellite providers.
Last year, Acacia sent an initial round of letters to a number of colleges, seeking similar licensing deals (see “Schools targeted in streaming video patent claim,”). A handful signed agreements, but most have resisted.
Now Acacia appears to be making another big push. Berman declined to say how many schools had been sent letters in what he acknowledged was a “second wave.” But as of Aug. 6, at least 48 colleges had notified the American Council on Education (ACE) that they’d received letters and asked for advice on how to respond.
ACE and the Electronic Frontier Foundation, a legal group that opposes Acacia’s patent claims, are both advising colleges not to pay.
“There’s a lot of scared schools out there,” said Sheldon Steinbach, general counsel for the ACE.
In a preliminary ruling in Acacia’s dispute with adult entertainment sites in July, a federal judge found that several terms in Acacia’s patents were indefinite, a verdict that could weaken potential Acacia cases against other streaming video users.
Now, critics of the company are saying that it’s trying to make a fast buck off schools nervous about litigation before a federal judge makes a final, potentially crippling ruling in that case.
“Honestly, I think it’s a sign of desperation,” said Jason Schultz, a staff attorney at the Electronic Frontier Foundation. “Acacia knows the hammer is coming down on its patents, and it’s going to extract as much as it can before the apocalypse.”
Berman denied that, noting several of the company’s claims were not hindered by the ruling.
Schultz called the company’s tactics “a threat to the future of education.”
“Acacia wants to extract a toll on each and every lesson that a student learns over the internet,” he said. “I think that’s despicable. Universities are under enough pressure in their budgets right now to try to pay for everything. The last thing they need to do is give a pound of flesh to some tech company that doesn’t even make a product.”
Acacia Research Corp.
Acacia patent information (from independent firm Streaming Media Inc.)
American Council on Education
Electronic Frontier Foundation