SAN DIEGO – A panel of industry experts gathered together at Cybernet Expo earlier this month to talk about the online adult industry’s current hot-button issues. The seminar, titled ‘The Hot Issues of 2004,’ boasted a panel of speakers that included Brandon Shalton from FightThePatent.com, Aaron M from AMPContent, Scott Rabinowitz from TrafficDude.com, George from GuerillaTraffic.com, and Connor Young from YNOT Masters. The panel was moderated by attorney Eric Bernstein.The first topic offered to the panel was the industry’s ongoing legal battle with Acacia Research Corporation, a company that claims to own a patent on streaming digital audio or video media over the Internet. Acacia and several adult entertainment companies are currently battling in court, and Acacia has threatened to drag the bulk of the online adult entertainment business into a class action lawsuit if Webmasters with audio or video content don’t agree to pay licensing fees, usually a percentage of the company’s profits, to Acacia.

“It’s really an important issue because if Acacia’s patent is upheld in court and we’re told, yes, this is a valid patent, these guys are probably going to come to each and every one of your doors and start demanding money,” said Young. “And with a legal victory behind them, what’s going to stop them from setting the licensing fees at some ridiculously high amount and taking a big percentage of our revenues? We need to keep up on this issue … as ridiculous as it seems, we have to take this threat seriously.”

Shalton summed up the ‘Markman’ hearing process, explaining that the judge will soon rule on the definitions of various terms that will be used in the case. These definitions are important, he explained, because they can determine the scope of Acacia’s patent and provide defendants with the means to show that they are not infringing on Acacia’s patent. Shalton said that Acacia hopes to drag as many adult Webmasters into their licensing program as possible.

“Acacia has filed a class action lawsuit against the entire adult industry, and I cannot recall an example where there was a class that was done this way,” said Shalton. “You’ve got one company suing a class. The way that they’re defining the class is based on 2257. They’re basically saying that if you have audio or video on your Web site and you’re required to use a 2257 statement for compliance, that defines the class. So their patent should apply to everyone, right? AOL, CompuServe, Microsoft, anybody that has content on their site and has digital audio or video. But for some reason the content, because it has no clothes on, makes a difference to define the class?”

Shalton said the Defense Group is arguing that Acacia’s approach is unfair because it targets a class based on the nature of said group’s content, singling out the adult industry while ignoring other possible infringers.

Rabinowitz was next to chime in, warning Webmasters that the Acacia fight affects virtually everyone in the online adult entertainment business.

“For those of you who have not had any correspondence from Acacia Research, someone from our office who has generated less than a thousand dollars revenue just sending traffic to sponsor programs over five years received one of these letters,” said Rabinowitz. “This goes down to the linking relationship level. So if you believe that by virtue of not being a content producer, distributor or pay site operator that you’re exempt, that’s not the case. If you have a linking relationship and the class action status is decided against us, you are in that class. So that does include even the most entry level Webmasters that are in the business that are just starting to support other programs, so this is a consequence to everybody.”

Moderator Bernstein added that Acacia is getting personal information about other adult Webmasters, including their names and addresses, through certain other adult companies that have already settled with Acacia. “You were basically given up by people further up the food chain,” said Bernstein.

The next topic thrown out for the panel to discuss was federal record keeping requirements.

“2257 is a really serious topic,” said Aaron M. “A lot of people don’t understand it, a lot of people have not actually read the law in regards to it. The law’s written pretty easy, black and white, simple to understand. A lot of people are trying to find ways around it. There’s a lot of amateurs out there … that don’t want to put their specific information out there, they’re afraid of cyber-stalking, various things like that. And although that is definitely a threat, it’s not a huge one and there are ways around that … it’s really important that you understand this law.”

At this point in the seminar, a contestant from the “Miss GFY” contest ran to the front of the room to pose for a few quick pictures, much to the delight of the audience. The room erupted with laughter and applause before the young lady finally removed herself from the front of the room.

Moving on to the topic of extreme content and obscenity, YNOT’s Connor Young was the first to speak.

“The extreme content issue … is really divisive for this industry, and that’s really unfortunate,” said Young. “Take the Extreme Associates case … there was this scene they filmed where supposedly this girl was being raped. It was sexually explicit and violent and all that, and it’s really hard for any Webmaster to go out there and say, ‘Yeah I support this kind of content.’ Most of us aren’t into that kind of content, most of us are turned off by it. There’s a reason why federal prosecutors have picked this particular target because it divides the industry, it keeps us from uniting. Who wants to stand up and say, ‘Yes I support Rob Black’s right to do this scene where this girl’s being slapped around and raped and what not.’ But the thing to remember is that this content is not real. It’s staged. It’s staged content. I think as an industry it’s really important that we make a stand that says, look, if the content contains consenting adults and only consenting adults, no kids are involved, the actors involved have agreed to this … and the people who are receiving it are all adults, then we kind of have to say this isn’t for the government to step in and censor … you may not want to, but you really need to stand up for Rob Black and people like Rob Black.”

Rabinowitz tackled the extreme content issue from more of a business perspective.

“Business model wise though, if you’re looking at your bottom line and how legal issues affect you – I’m wholly supportive of what Connor believes as far as the rights to consenting adults by and for – however, on the practical side, since perception is everything, if you are in the process of building up a sponsor program and you need to be able to appeal to the widest possible base of potential affiliates and advertising sources, it may be prudent, if not to remove any type of sites that are on the extreme side, you need to offer something for everyone though,” offered Rabinowitz. “If there’s a perception that your program or your collection of sites to be promoted is exclusively over the top, you may alienate people that could otherwise benefit your business.”

“We’re famous for female ejaculation, big clits and extreme bukkake,” added George. “I firmly believe in those types of Web sites. I don’t want to send 3000 visitors and get one join, I want to send eighty and get one join. It’s the quickest way to make money, that’s why people do it. Maybe I’m the bad guy, but I’m here to make money.”

Adding to comments Rabinowitz had made, Connor pointed out that nobody on the panel was saying that Webmasters who aren’t comfortable with extreme content should promote extreme content. Young disagreed, however, with comments Larry Flynt had made a few months ago about the effect of companies like Extreme Associates on the rest of the industry.

“There were some comments by Larry Flynt in AVN magazine where he was very critical of Black and was saying, ‘Hey we have a guy who’s bringing heat on the industry and I’m not going to support that and that’s bad.’ Another way to look at it – and obviously I have tremendous respect for Larry Flynt – but another way to look at it is that Black is really protecting us,” offered Young. “He’s not bringing heat on us, he’s keeping heat off of us. He’s a barrier. By comparison, if you look at what Black is doing, most of us have really tame content. So if he’s out there and if his content is protected and if a jury says, ‘No this content is not obscene,’ how are they ever going to get us for obscenity?”

While discussing the issue of mandatory condom use in adult films, Rabinowitz managed to paint an amusing picture of a possible future.

“Can you imagine a guy in a suit with a federal badge basically checking the guys before they make entry into the girls to make sure that they’re sheathed?” asked Rabinowitz.

Moderator Bernstein next asked the panel if anyone wanted to venture a definition of obscenity.

“I know it when I see it,” quipped Young to laughter and applause.

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