A Tiny Giant In Video Patents
The powerhouses of cable and satellite TV are starting to feel the presence of tiny Acacia Research-Acacia Technologies (ACTG), which owns 127 patents covering digital media transmission, mainly video on demand. According to CEO Paul Ryan, Acacia has licensed 294 cable-TV and Net outfits -- including Bloomberg and Disney (DIS ) -- to use Acacia technology. Acacia has filed lawsuits against Comcast (CMCSA ), Cox, DirecTV (DTV ), EchoStar (DISH ), and Charter (CHTR ) on alleged patent infringement. "Experts believe Acacia will prevail," says Paul Haber, an investment adviser at Leeb Group. If so, he sees revenues of about $100 million a year through 2011, based on recent six-year licensing pacts. The stock, now at 5.55, is worth more, he says. Still in the red, Acacia posted revenues of $4.3 million in 2004. Ryan sees a jump in revenues from any settlement or court victory alone. DirecTV (DTV ) says it will vigorously fight the suit, as it believes it has no merit. Comcast didn't return calls; the other companies declined comment.
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By Gene G. Marcial