December 16, 2004 12:44 PM PST

Acacia purchase creates Net patent powerhouse

In the streaming media business, a letter from Acacia Research usually means one thing: the threat of a patent lawsuit.

Now, the little-known but litigious company is expanding its horizons with a move that promises to substantially increase its profit potential while bringing new patent headaches to the high-tech industry at large.

On Thursday, the company agreed to buy Global Patent Holdings, an umbrella company whose various divisions, including TechSearch, have sued or struck patent licenses with Intel, Sony, Samsung and a myriad of smaller technology companies.

The deal would create a patent powerhouse that would own small pieces of dozens of different technologies, many of which are fundamental components of everyday Internet and personal technology businesses. The company said more acquisitions are likely.

"We will continue to acquire additional portfolios, as Acacia moves towards its goal of becoming the leading technology licensing company."
--Paul Ryan, CEO, Acacia

"We will continue to acquire additional portfolios, as Acacia moves towards its goal of becoming the leading technology licensing company," Paul Ryan, Acacia's chief executive officer, said in a statement.

Acacia's intellectual property division produces no products and runs no services, although an associated company does create biotechnology and genomics products. But it has largely become famous in streaming-media circles for its litigiousness, cutting a swath through the online porn industry and even taking on cable giant Comcast in pursuit of licensing fees over technology it says covers the basic method of delivering video bits over the Net.

Those efforts have been largely successful. Although many of the lawsuits remain outstanding, it has settled with more than 227 companies, including Disney.

Patent experts said the company's actions are part of an evolution in the technology world, where large, diverse patent portfolios are being consolidated into new licensing-focused businesses whose sole purpose is to extract fees from other going concerns.

Former Microsoft Chief Technology Officer Nathan Myhrvold has founded a secretive Seattle-based company called Intellectual Ventures that, according to Newsweek, has raised $350 million to pursue a similar strategy. It has already accrued close to 1,000 patents.

The last few years have seen an upswing in patent lawsuits brought on the basis of basic Internet technologies, ranging from buying music using a computer to Acacia's own assertion of rights to Web streaming technology.

Most of these have been launched singly, by independent companies with just one or a few individual patents. While potentially quite profitable, these lawsuits are expensive to pursue, and companies such as Acacia and TechSearch may be seeing efficiencies in consolidation.

"This is becoming a business in the sense of products, markets, and supply and demand," said Greg Aharonian, a patent consultant who is a frequent critic of overreaching patent demands. "It will attract new entrants, with consolidation, and winners and losers like any business."

TechSearch has been a persistent figure in intellectual property

CONTINUED:
Page 1 | 2
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.