Acacia claims that, over the past several years, it has acquired 5 US and 17 international patents for its DMT technology, which "covers the transmission and receipt of digital audio and digital video content, commonly known as audio-on-demand, video-on-demand, and audio and video streaming."
Acacia's parent company, Acacia Technology Group, holds intellectual property rights in several areas. One of its subsidiaries owns patents covering the technology used in the television content-blocking V-Chip, which is included in almost all television sets.
In 2002 alone, the company reportedly earned approximately $25 million from licensing these patents.
The company started a process for licensing its streaming patents in summer 2002, by approaching adult entertainment companies which transmit, or provide access to, digital content on-line.
Acacia has also approached a number of mainstream webcasters, demanding royalties of up to 2% of the companies' annual revenue.
Acacia has said that its lawsuit, filed in the District Court for the Central District of California, names 39 adult entertainment companies which "were previously notified of their infringing activity" but which refused to enter into licensing arrangements.
Concern has been expressed that, if valid, the patents in question would cover virtually all transmissions of compressed digital content, not only over the internet, but also over satellite and wireless services and pay-per-view cable TV.
This would affect any business involved in providing on-demand digital content, from content companies to software companies and network service providers.
It is believed that Acacia has filed the lawsuit to test its patents in court, before approaching major players in the internet industry.