Acacia sweetheart deals

[FightThisPatent]

It has not been determined yet if any of the companies that settled got a sweetheart deal.

Hustler has stated, through Ken, that they did not get any kind of sweetheart deal, and they paid the standard rate.

While it is a possiblity that some early licensees got a better deal, here is how a Sweetheart deal might look like, hypothetically speaking:

A sweetheart deal could be perceived by someone looking to license from Acacia by the way they write up the license.

Open up the webmaster license from:
http://www.acaciatechnologies.com/pr...eAgreement.pdf to follow along. Scroll down to Section 3.1

Let's say "Small Webmaster Inc." makes about $55,000 per year in Gross Revenue.

Based on the chart, their "Initial PrePaid Royalty Fee" would be $3,000.

In this example, Acacia writes up a license contract where they put down your estimated Gross Revenue is $45,000 so you only pay them $1,500.

So then you say, that's a good deal, let's sign.... it's cheaper than fighting and its a business decision.

Then Jan 2004 comes around, and then Acacia says, show us your books so we can see what your actual Gross Revenue was for 2003.

You show them your tax return that your accountant prepared for IRS filing, and the tax return says $56,232.18.

Acacia then informs you that according to Section 3.3, your "Additional Royalty" is $4,050 since your actual revenue is higher than the estimated!

Now you are starting to feel screwed.. because they had suggested "fudging" your Gross Revenue number and you thought it made sense and signed the deal. You may also have thought that the effective date of the contract was the date that you signed, so the money you paid covered prior infringements and for another 12 months.

Acacia then points out that the contract you signed in 2003, only covered up to 12/31/2003, one year from the "effective date" of 1/1/2003.

So a NEW yearly license fee is required. Now that you have reported $56,232.18 for revenue in 2003, they ask you what you estimate for Gross revenue in 2004.

You then look back and see that you just got screwed, because if your contract was using $55,000 from the beginning, you would have had to pay $3,000. Since you underestimated the Gross Revenue reported to them, you paid a total of $5,550!

So now you realize, you really didn't get a Sweetheart deal, you got a SourScrew.

You now realize that you should not have accepted the suggestion of using a lower Gross Revenue number just to get your license fee down..... so for 2004, you submit $60,000 for revenue which means you write a check for $3,000 within 30 days.

Since you rushed to take advantage of the "Amnesty Program", you paid:


$1,500 before Nov 30th
$4,050 in Jan 2004, for underestimating Gross Revenue in 2003
$3,000 in Jan 2004 for the 2004 license

--------------------------------------------------------
$8,550 paid to Acacia within 60-90 days



If you had properly stated your estimated Gross Revenue, it would have looked like:

$3,000 before Nov. 30th
$3,000 in Jan 2004 for the 2004 license
----------------------------------------------------------
$6,000 paid to Acacia within 60-90 days



This is all completely hypothetical, and could be my own screwy interpretation of the license...but your attorney would be able to understand all of this...so be sure to point them out to this screwy interpretation and see if it matches what they think.


Fight the Screws!

[Reak]

Fuck Acacia

[FightThisPatent]

[FightThisPatent]

sunday morning brunch bump.

[Reak]

bump

[FightThisPatent]

I talked to a webmaster who was making over $550K/year.... and he was thinking his license fee was like $1,500/year.

After i told him to refer to this article and the licensing schedule, he saw that the fees equal what it would cost to buy into the defense fund to fight against Acacia...should he be served.

For those wanting to play the home version, refer to the Webmaster License Agreement and determine what your payment fees would be based upon the example above.


Fight the Examples!

[rooster]

I highly doubt hustler paid much of anything, definitely not 2%.

[ZoiNk]

One of the radio stations... Online I think? Was quoted with a 0.75% fee. Which sounds like a sweetheart deal.
ZoiNk

[BradShaw]

Originally posted by ZoiNk
One of the radio stations... Online I think? Was quoted with a 0.75% fee. Which sounds like a sweetheart deal.
ZoiNk

.75 is no "sweetheart deal" If you gross $10million, which is easy for many people, thats $75k a year.

[FightThisPatent]

Originally posted by ZoiNk
One of the radio stations... Online I think? Was quoted with a 0.75% fee. Which sounds like a sweetheart deal.
ZoiNk

I talked to the owner of a net radio station like you are referring to and he has not heard back from Acacia since getting his information packet... i think probably because net radio is probably not able to be covered by the patent claims..since people tune in to the stream, rather than select which A/V file to listen to.


Fight the Coverage!

[FightThisPatent]

[Paul Markham]

What is to stop Acaic deciding in 204 that all licensses have to pay 10% or even more? They have now agreed to the license so it's not as if they can turn around and say they do not agree. Or even setting up an auction where they have 10 licences and the highest bidders win?

Also did the licensees plug into there predictions the effect it will have on their business when people stop buying from them or sending them traffic?

Every $ given to a licensee, gives another 2 cents to Acacia to fight the court case. If this is 10 years getting a decision, then turned down how much will Acacia make? How much did they make with the V-Chip technology?

[FightThisPatent]

Originally posted by charly
1) ....Or even setting up an auction where they have 10 licences and the highest bidders win?


2) How much did they make with the V-Chip technology?

1) Yes, exactly.... they could have teamed up with some big players and allowed them to license, and then steamroll over all webmasters and NOT ALLOW LICENSES...and simply tell webmasters to turn off audio/video.

Patents can be used as anti-competitive measures to shut down competition.


2) Around $25M-$27M before Sony knocked the patent down.
(http://biz.yahoo.com/e/021113/actg10-q.html scroll down to ACACIA MEDIA TECHNOLOGIES)


Fight the Measures!

[$5 submissions]

You'll need MILLIONS to fight their patent. They have a HUGE warchest.

[Gramma]

I thought I heard or read somewhere (maybe the radio interview) that it was clarified that it wasn't your GROSS revenue in total - but the gross revenue from sales from products related to their patent. And that they had the right to audit only that portion of your book keeping - either by contacting ibill - jettis - paycom - whomever your process or receive checks from for those membership/sales payouts.
So .. if you GROSS $100000 - but $50000 of it is from something other than selling products that relate to their patent - only the first $50,000 is subject to their audit and fees.

I hope I'm right.

[FightThisPatent]

Originally posted by Gramma
I thought I heard or read somewhere (maybe the radio interview) that it was clarified that it wasn't your GROSS revenue in total - but the gross revenue from sales from products related to their patent. And that they had the right to audit only that portion of your book keeping - either by contacting ibill - jettis - paycom - whomever your process or receive checks from for those membership/sales payouts.

yes, that could be the case....i haven't been able to chat with anyone candidly who settled to see how Acacia performed the audit, and how they were able to line item revenue streams to ones that were directly/indirectly linked to their patent claims.


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