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Sex.com CEO joins fight against Acacia

Gary Kremen donates cash to the defense fund for adult-media sites targeted in patent dispute over video streaming.

Tech Industry
Adult Web sites involved in a patent dispute with Acacia Research have gotten a boost from the owner of Sex.com, an aficionado of long-shot court battles.

Sex.com CEO Gary Kremen, who spent much of the last decade winning back his domain name from cybersquatters and then seeking damages for his loss, said he had donated $10,000 to a defense fund set up to help adult-media companies fend off legal challenges from Acacia, which claims to own the patent rights to any process that streams on-demand video over the Internet, cable TV and even satellite networks.

That's a drop in the bucket for a case that has already cost more than $1 million, but the defendants say every bit helps.

"This case is going to set an important precedent for all the other (patent holders) that would like to exploit the same business model as Acacia," Kremen said in a statement. "The defendants need the help, and I am happy to support their efforts."

The adult-media sites fighting Acacia's patent claims are facing a pair of impending court decisions, each of which will likely be felt well beyond their traditionally insular industry.

Earlier this month, Acacia argued in court that the cases should be consolidated into a rare "reverse class action," in which, instead of many people suing a single company, a single company sues many dispersed defendants.

Acacia attorneys have said they want to use this strategy only inside the adult Web industry. Acacia is also suing and seeking license revenue from a wide variety of other companies, including Internet radio stations, cable TV and satellite networks, and hotel video-on-demand services.

A ruling is expected on that issue in the next few months.

Additionally, in December, the adult companies will go to court in an attempt to have the bulk of Acacia's patent claims dismissed. If they win, much of the danger will have passed, they say.

In the meantime, Acacia has made significant strides in signing licensing deals without litigation.

The company has reached agreements with more than 177 companies, including large ones such as Walt Disney. It still faces legal challenges from some of the largest companies it has sued, including cable giant Comcast, however.

Porn site Homegrown Video operator Spike Goldberg, who is taking the lead in the adult companies' legal battle, said Acacia miscalculated by suing so many in the industry all at once. Many of the triple-X companies have settled, but a group of 12, along with some financial supporters, have dug in their heels to fight and have already spent more than $1 million in the dispute, he said.

"There was a unique moment where they could have divided and conquered, and anyone could have come and done the same thing again," he said. "But what Acacia did militarized us all, and now we'll always have each other's backs."

Acacia could not immediately be reached for comment.

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