Hulu Faces Another Potential Patent Fight
As the initial round of bidding for Hulu wraps up, the digital media venture owned by News Corp., NBC-Universal and Walt Disney Co. may be facing another patent dispute. Mobile technology company Single Touch Systems said Thursday it had issued a "letter of notification" to Hulu in relation to patents it holds for streaming and routing media.
Single Touch's business has focused on using abbreviated dialing codes to run mobile marketing programs for retailers and brands that might provide reminder messages, coupons, advertising, or voice calls. The bulk of its sales have come from notifications sent on behalf of Walmart and Sam's Club through a services reselling agreement with AT&T.
The company, which trades on the over-the-counter market, also operates a content delivery platform called Mobile Machine, which allows companies to offer ringtones, videos, and applications to mobile users through a drag-and-drop interface. In the second quarter, Single Touch reported a net loss of $14.9 million on revenue of $1.3 million.
Single Touch says it has filed and been awarded more than 14 patents to date, tied to mobile search, commerce, advertising and streaming media. "After years of establishing ourselves as a pioneer in mobility, and cementing our IP position, it has become increasingly important for us to take the steps necessary to protect what we have already established," said Anthony Macaluso, the company's chairman and chief innovation officer.
A Single Touch spokesperson said the company would not make public a copy of its notification letter sent to Hulu until Friday. Hulu did not respond to media inquiries Thursday about the letter.
Earlier this month, the company was hit with a patent lawsuit by Rovi Corp., which provides backend streaming technology for Blockbuster and Best Buy. It licenses technology to Apple Corp, Microsoft Corp and Comcast Corp, among others. The patent issues arise as Hulu's owners close in on receiving first-round bids to sell the streaming service, which is projected to reach $500 million in revenue this year. Apple and Microsoft are considered the mostly likely buyers.
Despite a reported Wednesday deadline for bids, offers could come in for Hulu throughout this week, according to Variety.