ON THE HORIZON

Some recent developments in Washington, D.C., could put a crimp in Acacia’s licensing business. The U.S. Supreme Court’s 2006 ruling in eBay v. MercExchange makes it nearly impossible for licensing firms to get an injunction against an infringer, says patent litigator Ruffin Cordell, a partner at Fish & Richardson. I think that will play a major factor in how much [in] licensing fees [Acacia] can negotiate without the threat of injunction, Cordell says.

Congress is also considering several bills that would, among other things, lower the threshold for invalidating a patent and reduce possible patent damages that licensing companies can recover against an infringer. None of the bills have garnered enough support from lawmakers, but some patent experts predict that major changes will be introduced in 2007. The operations of patent licensers such as Acacia are a destructive and economically wasteful activity, and companies like Acacia are popping up all over the place, says Dan Ravicher, executive director of the Public Patent Foundation in New York. But you really can’t blame them, because under the law what they’re doing is legal. This kind of activity should be outlawed.