Acacia - Hustler and Vivid Joint Statement
 

As most of you know, Hustler and Vivid recently signed a licence agreement with Acacia. After spending a large sum of money fighting this lawsuit, they settled for one simple reason, because it was the right business decision. It was the right decision for them and for their affiliates.

Hustler and Vivid have built their companies into what they are today by making a series of good business decisions over a long period of time. Some of these decisions have allowed others (including most of you) to greatly profit from the adult industry. There is a time and place to fight and it would be wise to have more faith in companies who have proven themselves over the course of time, rather than make uninformed decisions based on very limited information.

Hustler and Vivid share one common goal. That goal is to be a stable force in this very unstable industry and to provide affiliates with a "safe haven" for their traffic. Safe from attacks by Acacia or anyone else who might want to harm their businesses.

As part of their settlement agreements, all FlyntDigital and VividCash affiliates are indemnified from paying Acacia fees for traffic they send to these programs. This was a condition that was not given up easily and that Hustler and Vivid spent a lot of time and money negotiating for. Therefore, if Acacia decides to go after affiliates for "contributing" to the infringement of their patents, Hustler and Vivid affiliates will already be protected.

In addition, Hustler and Vivid are simply absorbing the additional fees they have to pay Acacia and will not pass on any of these fees in the form of lower payouts, etc. Therefore, the "attack" by Acacia will have no financial impact on Hustler and Vivid affiliates. That was their goal and it has been accomplished.

Having said that, the settlement by Hustler and Vivid by no means validates Acacia's patents. That can only be done in a court of law. Hustler and Vivid respect and support the decisions of the groups who have decided to fight Acacia. We hope they achieve their end goals, whatever they might be. We have achieved ours in our own way, which we ultimately believe will best serve our affiliates and business partners.

A few months ago, when other programs tried to lower payouts because of new Visa/MasterCard regulations, what did Hustler do? They raised payouts, which caused most of their competitors to back peddle and keep their payouts the same. That single decision on the part of Hustler, put hundreds of thousands of extra dollars back in the pockets of affiliates. Why? Because Hustler made the right business decision for them and for their affiliates, which caused their competitors to remain competitive. Who was the big winner from Hustler's decision to raise payouts? Affiliates were......many of which were not even our affiliates.

In these uncertain times, Hustler and Vivid are companies that affiliates can depend on over the long term. This industry is under attack from every angle and it's going to get a lot worse before it gets better. Who do you think will survive and who will be able to make their affiliate payouts, regardless of what comes their way?

My money is on Hustler and Vivid....

Wait so if we our one of your affiliates they can not touch us? So umm as long as any of our sites promote you two, we are safe?

Oh please please post the actual textual agreement in this. Purty please, I think someone fucked up.

"This industry is under attack from every angle and it's going to get a lot worse before it gets better."


And caving like the bills in the super bowl opens the door for every Acacia wannabe to step right in and try the same thing.

Surely companies the size of hustler and vivid have the means to fight a lawsuit by a company that is losing money every quarter and has a total of 30million in the bank with not much coming in.

Heres the real dope with no spin. Taking a sweetheart deal was alot easier than fighting and spending the money to do it.

i think this only applies to Hustler and Vivid traffic specifically

It means that basically the only thing you're safe promoting now is hustler and vivid.

This is very disappointing.

Are Hustler and Vivid giving a lot of money to the fight against the patent or not?

CE Cash signed, but I believe they also said they would help fund the fight against the patent.

Ken, please tell us that Hustler is doing the same.

I thought it was part of Acacia's statement that they aren't trying to do several tiers of enforement.. as in affiliates are already indemnified? Or were they bullshitting?

Need text, hurry up. They have no fucking clue how affiliates work in this industry as per their stupid statements on the radio shows. So they very well could have fucked up.

Post text now.

Once smaller webmasters start going down for their shit, you'll see how many people start exclusively start promoting hustler/vivid. It's twisted but it's a good business decision on their part :2 cents:

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freeadultcontent,

You are only safe for the portion of business you send to Hustler or Vivid. For example, if you send half of your traffic to Hustler and Vivid and the other half to a company who has not settled, the portion of business you send to the company who has not settled is still at risk, but the portion you send to Vivid and Hustler is safe.

Sorry my bad, I just realized it's the definition of "affiliates" that they do differently..

The whole bullshit about affiliates being safe is probably just spin anyway.

There are rules about "double dipping" that would almost certainly protect affiliates who fight in court.

They can sue the person using the patent, not the person buying from or selling to the person using the patent.

This press release is bullshit way to try to seem like these companies did it to protect you, when they really did it because they are to too wimpy to fight.

It looks like even Larry Flynt doesn't care enough to fight anymore.

That says a lot about where this industry is going.

And they know this how? Will they have access to our stats, will your companies be sharing affiliate info with them?

I don't see why not. If I understand correctly, they DO have to open their books.

A very professional decision and response, would you expect anything less from hustler & vivid?

They're not going to be charging YOU anything, they take 2% of the paysites gross earnings. That means when they make a sale, they send acacia their 2% at the same time they send you your 50%. So they're paying instead of you, get it?

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rooster,

It's amazing how you can make statements based on little or no factual information.

First of all, they have both been in litigation with Acacia for quite some time and have spent considerable time and money on this issue.

Secondly, both Hustler and Vivid have a repuation for fighting. That has not changed. They will take each "fight" on a case by case basis and detirmine the best course of action at that particular time.

Have you litigated with Acacia yet? Have you spent hundreds of thousands of dollars dealing with this issue? When you have, you might be a little less likely to jump to conclusions.

open books about their profits with video, sure. open books about affiliates personal information? fuck that! acacia isn't the irs!

I believe Berman in the latest YNOT interview said that if you are an affiliate who just sends traffic (and does not stream audio and video) then you are immune to license fees for contributory infringement. I may be wrong.

It seems if you are an affiliate of Hustler and Vivid but you have a gang of audio and video streams too, then you are not safe from Acacia.

You can't knock Hustler, what Larry Flynt did back in the day for 1st amendment rights still helps us all out today.

cluck, there have been free sites and even a tgp that have received papers from acacia and they have none of their own content.

it has seemed to me for some time that acacia does not understand what an affiliate is, and secodarily that they are changeable about this. what someone says on ynot doesn't really matter as much as what the contract they sign says.

I agree. Larry can never be anything less than a legend for what he has done for this industry and this country.

But what does it say about the state of the online adult industry when even Larry flynt doesn't want to fight anymore?

Giving in to something like this is never "just business". Decisions are made by humans, not computer, and these people decided they didn't want to take a chance and fight something they know is wrong.

Thank god for Homegrown.

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Prior to settling, Hustler and Vivid had in depth discussions with the groups who are fighting. The issue really came down to many different companies with different agendas, different reasons to fight or settle, etc. So, no Hustler and Vivid did not financially support the groups fighting, nor are they permited to under the Acacia agreement. Trust me, they would if they could. No doubt about it.

However, they did spend a very large sum of their own money dealing with this issue and fighting for their affiliates to achieve the most positive outcome possible.

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You bring up a good point, one that I forgot to address. Hustler and Vivid have refused to share any affiliate information with Acacia and have no obligation to do so. In fact, we refused to give out information about anyone we do business with. We settled for good reasons, but we are certainly not going to help them in their fight against others.

I have no idea as to their tactics, but I would assume if they went after an affiliate, they would do so based on public information of where his traffic is going, etc.

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Agreed, and Hustler and Vivid have no intention of ever providing this kind of information to Acacia or anyone else for that matter.

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Sly_RJ,

They only have the right to audit gross sales, not affiliate or vendor information.

If you are a webmaster that is part of many affiliate programs, being an affiliate with Hustler or Vivid could make you open for contributory infringement to the other other sponsors.

How are they going to decide what percentage you are infringing? Looking at your logs? Who knows, it's all new territory.

If you ONLY promote Hustler or Vivid or other sponsors that have signed, then you would be in the clear (based on words by Berman in various articles).



Fight The Patent!

Ken,

You must be their Publicist! If you aren't, you should be. A very well written article.

I agree with the points you made in your article (i had made similar comments earlier in another thread about how sponsors are protecting their affiliates and their business by paying the license).

As you wrote, the acceptance by Hustler and Vivid does not validate Acacia's claims... some here have interpreted that it must be true about Acacia if the "high price" lawyers told them to sign the deal.

I have to cast some doubt as to how much research was done in the "fighting" of the infringement claims.

I haven't received any emails from either company, asking what prior art that I could provide to them to help them make a more informed decision... especially since i don't charge for my efforts.

I don't claim to be an expert, but I have been doing my research, I have been involved with technology and computing for over 17 years, I have seen what Acacia has described as their patent, well before their patent date...... this is why i have taken up this fight to fight against patent abuse cases.

I am not saying patents are a bad thing. They have their place in protecting IP. But if that patent had prior art and the USPTO didn't know about it, then it's a bad patent and deserves to be invalidated. Especially if it is a broadly INTERPRETED patent.



Fight the Patent!

That's RIDICULOUS! They're trying to dicatate that companies who sign on with them can't try to fight the patent and have it overturned later? That is SO WRONG!

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FightThisPatent,

That is also how we understand it, however as you said, this is all new territory. I can tell you one thing for sure, they won't be looking at our logs.

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FightThisPatent,

Thanks for the good words. I think I'll stick to my day job. This is too much work! ;)

I think the important issue that we both agree on is that nobody should interpret Hustler and Vivid settling as a validation of the Acacia patent.

I applaud you on your efforts and hope you are successful. It is very generous of you to donate your time and engery to this issue.

Each individual or company that is faced with this issue needs to do their own research, come to their own conclusions and make the best business decision they can given all factors involved.

They won't need to be looking at your logs, they'll be looking at your quarterly and yearly financial statements.

I have to dive into semantics here... you wrote that Hustler and Vivid were in LITIGATION. So they were in court with Acacia? That's what LITIGATION means (i checked with an attorney as well as with the dictionary before i made this statement).

Maybe you meant to write, they were in DISCUSSIONS with Acacia on the licensing issues.

Any maybe the "fighting" was more like "heated discussions".

You also wrote they spent hundres of thousands of dollars on expenses.... maybe it was more like tens of thousands?

Also, that Hustler and Vivid couldn't partake in any activities to "fight" against them?????

THe answers don't matter.... the big players have settled, leaving the rest of the players to fend for themselves...afterall, why would anyone expect a competitor to want to stand up for other competitors.. oh wait, Larry did that before....i guess that's where people get that impression.


Fight The Patent!

isnt there sort of a contradiction though. We shouldnt view the settling as validation, but imo the only reason these companies would settle is because they are getting a special deal. Now why would acacia give a special deal, because they want some big companies to sign to give credibility to their claims and scare more webmasters into signing.

So its essentially validating the claims imo.

Unless you don't have video content! And what if you just link to a page that they are hosting?

jDoG

you are still contributing to the infringement of the patent if that website hasn't licensed the patent.. and so they could go after you... that's what Acacia claims.

sux huh?


Fight the Patent!

that's the way i see it and I think any webmaster would get the same interpretation.


Fight the Patent!

Reading what Ken wrote, they are also probably trying to de-fund the fight against the patent.

If you take all the guys with 10 million dollars and exempt them from licensing, on the condition that they can't give any money to help fight against your patent, you have a better chance of winning in court.

Thank god for Homegrown. :)

I remember back in 1985 when a friend showed me a black and white (not greyscale... literally black and white) porn flick he downloaded from a BBS (it had appx 20 frames and looped, but was still an obvious video file) to his Mac. It was in a compressed format, and he downloaded it over a remote wire transmission (modem) and saved it for later viewing. If this is not evidence of Prior Art, then I do not know what is.

I completely understand why companies are settling for business ($$) reasons, but I often wonder if anyone settling ever got porn vids from BBS's in the '83-'88 time frame. Prior Art will sink this set of patents, but it will take very deep pockets to do so. :disgust

Interesting