IT Confidential: Lawsuits, Not Video, Killed The Internet Star - InformationWeek

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Commentary
10/21/2005
07:23 PM
John Soat
John Soat
Commentary
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IT Confidential: Lawsuits, Not Video, Killed The Internet Star

For those of you wondering what all the fuss is about over intellectual property, let me offer Exhibit A: Acacia Research. Acacia is No. 3 on Deloitte's 2005 Technology Fast 500, a ranking of the 500 fastest-growing technology companies in North America. According to Deloitte, Acacia's revenue grew 41,874% from 2000 to 2004.

And for those of you not yet convinced that lawyers are more important to the technology industry these days than developers, I offer Exhibit B: Acacia Research. Despite the fact that Acacia is third from the top in a list of technology companies, Acacia doesn't make anything. Or at least, most of Acacia doesn't. Acacia Research consists of two entities: CombiMatrix Group, a biotechnology company that accounted for about one-fifth of Acacia Research's $8.2 million third-quarter revenue, and Acacia Technologies Group, which acquires patents and other intellectual property and then threatens to sue other companies if they don't pony up for licenses.

In particular, Acacia Technologies owns a patent (No. 5,132,992) for video streaming, a patent the Electronic Frontier Foundation refers to as "laughably broad," that has been licensed by the likes of Disney and Playboy. Now, I'm not particularly a fan of the EFF (what does it make again?), but if the shoe fits--you know. Patent Troll is a term gaining traction these days, and it refers to a growing number of companies that do nothing but acquire broad, mostly Internet-related patents and troll for licensees, usually among small companies ill-equipped financially to fight threats of litigation. Acacia caused a stir a few years back by threatening a group of adult-oriented Web sites with its streaming-media patent, which is feeding pretty much off the bottom of the pond. So, despite some high-profile licensees, if it quacks like a duck, or a troll--well, you know.

Exhibit C: Lawyers still rule the technology industry. Motorola filed suit against its former president and chief operating officer, Mike Zafirovski, for taking the job of CEO of Nortel Networks, a Motorola competitor. Zafirovski hasn't even started yet--his first day at Nortel is supposed to be Nov. 15. Motorola is seeking an injunction to stop Zafirovski from working for Nortel--exactly what Microsoft did to try and stop its speech-recognition expert, Kai-Fu Lee, from going to work for archrival Google. Job hopping in the technology industry is nothing new, but employers are getting irate about it, especially about IP assets walking out their front doors and in their competitors'. Problem is, if you were looking for another job, where would you look? Chances are it would be in the very small pool that values your expertise--namely your competitors. Microsoft recently won a victory in its litigation when a California judge ruled that the case should proceed in Washington state; Google had countersued in California, where noncompete clauses aren't recognized.

Actually, I've been thinking about a career change. But what? I'm too old to be a rock star, too young to be a philosopher. How about a politician? Nope, too honest. An airline pilot? Too sober. Wait, I've got it--a lawyer! I'm qualified: I know how to make something out of nothing, play both ends against the middle, and let the ends justify the means. If you have career advice, or an industry tip, send it to [email protected], or call 516-562-5326.


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