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Fighting Acacia

SAN JOSE, California — A small company called Acacia Research Corp. went after some of the biggest names in broadcasting last month, suing nine companies for an estimated $100 million for allegedly violating its patent on streaming video.

That earned Acacia a spot on what the Electronic Frontier Foundation considers a top 10 list of intellectual property ignominy: patents the online civil liberties group is seeking to strike down as unwarranted and harmful to innovation.

“Good luck,” said Paul Ryan, Acacia’s chief executive. “Their chances are pretty remote.”

Part fighting words. Part truth.

Only 614 of the nearly 7 million existing patents have been revoked, according to the U.S. Patent and Trademark Office. Some 3,927 patents have been narrowed since the agency began conducting re-examinations in 1981.

The hardest part for challengers is qualifying for a re-exam at all.

A challenger must find written evidence, called “prior art” in patent parlance, showing others developed the technology before the patent application was filed — a formidable task that consumes a cottage industry of patent researchers and lawyers.

One-time startup BountyQuest set out in 2000 on such a quest. It wanted to debunk questionable patents by letting interested parties offer rewards of $10,000 or more for hard-to-find prior art. But there were few takers and the business failed.

The EFF is similarly relying on volunteers — but without offering rewards. That’s a surefire recipe for limited success, said Bradley Wright, a patent lawyer with Banner & Witcoff Ltd. “There are not a lot of people willing to spend free time to research for prior art.”

Even when prior art is presented, re-exams are rare. The patent office held only 6,136 between the time the agency was authorized to do so in July 1981 and the end of March 2004, said Brigid Quinn, a patent office spokeswoman.

The Acacia patent the EFF objects to is on “the transmission of digital content via the Internet, cable, satellite and other means.”

Another on its list, owned by Clear Channel Communications Inc., covers the distribution of digital recordings right after concerts.

“These companies are trying to claim a monopoly on the tools of free expression,” said Jason Schultz, staff attorney at the foundation.

The group’s list, chosen from 200 suggestions solicited through its Web site, focuses on patents it contends are being unfairly used to demand licensing fees from rivals or individuals.

Acacia and Clear Channel defend their patents and their right to seek royalties for intellectual property they say they spent millions to develop or buy.

Clear Channel bought the so-called Instant Live patent two months ago. It plans to charge an “extremely small” licensing fee — $1 per event in some cases — to artists who want to distribute freshly minted CDs after their concerts.

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 sued the large cable and satellite providers for patent infringement last month.

Ryan rejected the foundation’s charges of bullying. “We’re not trying to restrict anyone’s freedoms, but we’d like to be paid for the use of our technology,” he said.

Schultz and fellow self-anointed patent-busters hope their crusade will raise awareness about concerns the patent office is issuing baseless patents because it lacks the resources to thoroughly investigate patent claims.

“It’s too easy to get a patent and too expensive to defend,” he said.

Greg Aharonian, publisher of the Internet Patent News Service and founder of, questions the validity of a patent granted to Microsoft Corp. in June covering the use of the human body to transmit power and data, or as an “intrabody communications” network.

Even the Federal Trade Commission recommended in an October report that changes in the patent system need to be made, including improvements for challenging patents.

The patent office, under the auspices of the U.S. Department of Commerce, has taken steps to improve the process but acknowledges the system’s shortcomings, including staffing constraints — about 3,500 examiners face nearly 200,000 patent applications every year.

“It’s a balance between devoting the right amount of time and doing a quality job, and unfortunately, they can’t take forever,” patent office spokeswoman Quinn said. “We’re already taking longer than we want.”

Patent specialist Aharonian isn’t satisfied with that response.

“There are plenty of people trying to bust patents. If patents are really stupid, they will go down, but it’ll cost money and take some time. The real question is how do we help the patent office so they don’t issue the crap in the first place?”



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