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The company's profit potential has helped propel Acacia shares close to their 52-week high, this in an otherwise ragged stock market.
But Acacia's activities have inevitably raised hackles in some quarters of the technology business. The Electronic Frontier Foundation, for instance, has lampooned Acacia on its Web site for "crimes against the public domain" because of what the Internet rights organization terms "laughably broad patents."
No doubt the company has acquired a reputation for hardball tactics, ultimately settling lawsuits against more than 200 companies to protect patents that it says it owns. Ryan, who dismisses suggestions that Acacia is simply in business to extort fees from other companies, recently spoke with CNET News.com.
We ran a profile on your company about a year ago and the lead paragraph was something to the effect that in the streaming media business, a letter from Acacia usually means one thing: the threat of a patent lawsuit. Does it bother you that Acacia has earned that sort of reputation?
Ryan: Well, that's not our reputation among large companies. We recently did three licenses with IBM, three with Sony, we announced one with Intel, and with Lenovo. So, we are licensing the major companies in the world. Patented technologies that we have partnered with the small companies that have developed these patented technologies but simply don't have the scale or the expertise or experience to go out and license the patents themselves. So, we're an outsource patent licensing company. We have the same people in place that IBM's licensing department would--except we're available on an outsource basis, and we're serving a large need for those companies.
Would it fair to say that Acacia builds portfolios in order to later extract settlements from others?
Ryan: No. Actually companies come to us who have patented technologies but who simply do not have the scale or the experience to license themselves, and they engage us basically on a partnership basis. We go out and perform that function and split the revenues with them. So, we're not targeting any particular areas, it's the companies that come to us with their patented technologies and if we feel that there's significant opportunity for licensing for that company to generate revenues for them, then we will become their partner.
Pardon me, but there are those who believe that there are entities--they call them patent trolls. This is used as a derogatory adjective, but I'm sure you're familiar with the term.
Ryan: Sure, absolutely.
Do you think those entities exist?
Ryan: Well, there are various definitions. I think it's a little bit disingenuous for companies that, in effect, steal other people's property by not licensing it to then call the party that developed the technology, "the bad guy." It kind of turns the world upside down...The term has been widely disseminated and used against companies generically that own patented technologies, which I think is a little unfair.
You guys are a patent licensing company. I've lost count, you've got currently how many patents now?
Ryan: It's over 150. There's a total of 47 different patent portfolios, and we've begun generating revenues from 17 of those so far.
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