Once upon a time somebody smart developed/invented/improved upon a technology. The use of that process made it easier for surfers to view digitized video and film on the web. The development was much like when early motion picture inventors progressed from jerky flip-card movies to film on a reel. The digital technologist figured out how to compress digital movies so that they downloaded faster and smoother. The developer patented the process.

Then the developer sold the patent to another company. The company who bought the patent soon obtained other patents, which filled in the holes of the original patent. This collection of patents -altogether combined- supposedly encompasses all processes of streaming video or Digital Media Technology. DMT.

The company decided they would make huge money from DMT if they sued the right people. They formulated a plan that they were sure would work. They knew that if they initially took on mega-companies like Microsoft and AOL, they would probably lose or be bought out. Instead the patent holders decided to take an easier route to riches.

The company chose to go after little companies and individuals in order to gain legal precedent. They wanted to target businesses which were making money from streaming video yet weren’t large enough to afford extensive litigation. They looked for a niche on the web they believed would be disorganized as a whole. They looked for a group who were making money but would have an image that could be demonized. They found what they were looking for in the adult Internet industry.

Last year the patent company sent packages to businesses, which they believed to be infringing on their DMT technology. Over eighty percent of those “infringers” dealt in streaming adult content. The patent company informed these small streamers that not only were they infringers but they owed money for the use of DMT. The small streamers were told that if they settled, they might not be charged retroactively for six years of infringement.

The patent holders stated they wanted a percentage of gross profits from anyone using their DMT regardless of how much the technology was actually implemented. The patent holders also wanted complete access to the records of the small streamers, including client lists and financial transactions.

A few small streamers went ahead and settled with the patent holders. Some ignored them altogether. The remainder did something unexpected. They did something the patent holders depended on them not to do. This patent company built their case on the belief that the adult Internet community was not a community. The patent holders were sure the adult net was comprised of lone wolfs, unable to unify as a whole. They were wrong.

The Internet Media Protective Association (www.impai.org) came about because of patent infringement lawsuit brought against roughly forty adult Internet companies. However, the IMPA has the future of our field as its mission. This not-for-profit group states:

“Our goal is to help fight against predatory practices that impede lawful commercial efforts while seeking to standardize the way we conduct these efforts within our industry.”

The IMPA intends to “…act(s) as an advocate for the online industry and proposes standardized business practices to provide greater accountability for member companies.”

While the IMPA itself is not going to court against patent company ACACIA, some of its members are. These members have hired the legal firm Fish and Richardson P.C. to represent them in defense against Acacia’s claim.

Acacia didn’t like that some adult webmasters banded together. The amended their lawsuit to punish members of the IMPA. So far, Acacia has won a default judgement against five adult companies who failed to appear at the initial court hearing. At least one of those five was forced to forfeit their domain to Acacia. An adult company (who settled with Acacia) has filed an additional case against the patent company for revealing details of the settlement to the public.

The upcoming case with Acacia is important to every adult webmaster. From the lowest affiliate to the largest paysite operator, if Acacia wins, all of us will have to pay. I decided that this issue needed more exposure. Quite a few in our industry are concerned but we all need to be concerned. I decided to get some answers from IMPA representative Spike Goldberg. Spike is also the CEO of HomeGrown Video, one of the companies named in the Acacia lawsuit. Here’s what Spike has to say:

QUESTIONS FOR IMPA:

Titmowse: A good friend of mine compared the IMPA to David and Acacia to Goliath. Religious sentiments aside, do you think it's a fair comparison?

Spike: First I should clarify, the IMPA it is not taking on Acacia. A defense group of companies that are all being sued by Acacia is who actually battles with Acacia. The IMPA was formed to help the community as a whole. Although it is helping with the Acacia matter, it is also working on dealing with others that are seeking to do the same thing as Acacia. Its unfortunate but this has opened the flood gates and more will be coming.

As for the defense group vs Acacia I would say your analogy is a good one. The difference is they have to deal with multiple David's. And perhaps one rock doesn't hurt them but 20 will.

Titmowse: AVN first reported your court case would take place on August 4, 2003. I was told that the date has been moved to mid-late September. When is the court date and why was it changed in the first place?

Spike: I don't want to speculate on what the judge is doing but this is merely a pre-trial hearing and there will be many more before were done. People should understand that under the best of circumstances we will still have to deal with Acacia if they appeal etc. This will go on for years.

Titmowse: Your defense team is Fish and Richardson. Can you tell us about them?

Spike: They are one of the top patent firms in the nation. They were the firm that patented the Wright Brothers Airplane, and Thomas Edison's inventions. The firm is highly reputable. Our attorneys are at the top of their game and that is a huge comfort.

Titmowse: Tell adult webmasters what you feel will happen to them if Acacia were to win their patent suit?

Spike: We will all end up paying Acacia yearly. Further others that are watching this happen would get in line to do the same thing.

Titmowse: How can we help fight Acacia?

Spike: Thank you for asking. (go to) www.impai.org or e-mail me at spike@homegrownvideo.com.

The story I told at the beginning of this article is a true tale. What comes next is up to you. You can stand idly by and allow others to decide your fate or you can stand and fight. The story is not over. There will be others who want to extort us out of money and bulldoze over our rights to do business. If we don’t organize now, how will the story end?