Rough waters for streaming video? Company says no pay, no play

University Business, Sept, 2004

A California company has demanded that universities that use streaming media technology pay for the right--or risk legal action. Acacia Media Technologies (www.acaciaresearch .com) has sent letters to dozens of colleges and universities, claiming that their use of streaming media for distance learning and video lectures violates its patents. The company owns five U.S. and 31 foreign patents, which, it argues, cover all forms of Internet-based audio and video streaming.

Some have suggested that schools stand to lose much more in a protracted legal battle rather than paying a licensing fee. James Dias, vice president of marketing and sales for Sonic Foundry (www.sonicfoundry.com), a company that makes streaming media devices, said he thought it "very unusual" that Acacia would choose to go after the end-user.

"It's a very deliberate strategy," Dias told University Business. "They're making patent claims and sending letters to colleges and universities claiming some patent violation, but they have not directed those claims at manufacturers of the technology, like us."

It's not clear how many schools have been sent letters, but the American Council on Education (www.acenet.edu) reports that nearly 50 schools have contacted the organization asking how to respond.

Billie Dodge, director of Information Technology at Washington College (MD), says Acacia demanded an annual licensing fee of $5,000, although that price would go up if the agreement hadn't been reached by September 15. Robert Berman, vice president and general counsel for Acacia, likened the firm's claim to that of a university research department. "On the one hand, they like the revenue they make from their patents," he says. "On the other hand, they're saying we should allow them to ignore ours."