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'Podcasting Patent' Is Totally Dead, Appeals Court Rules (arstechnica.com)

Posted by BeauHD on from the dead-as-a-doornail dept.

A federal appeals court affirmed the April 2015 inter partes review (IPR) ruling -- a process that allows anyone to challenge a patent's validity at the U.S. Patent and Trademark Office -- that invalidated the so-called "podcasting patent." "That process was held by a company called Personal Audio, which had threatened numerous podcasts with lawsuits in recent years," reports Ars Technica. From the report: Back in 2013, Personal Audio began sending legal demand letters to numerous podcasters and companies, like Samsung, in an apparent attempt to cajole them into a licensing deal, lest they be slapped with a lawsuit. Some of those efforts were successful: in August 2014, Adam Carolla paid about $500,000. As Personal Audio began to gain more public attention, the Electronic Frontier Foundation, however, stepped in and said that it would challenge Personal Audio's US Patent No. 8,112,504, which describes a "system for disseminating media content representing episodes in a serialized sequence." In the end, EFF raised over $76,000, more than double its initial target.

[T]he history of Personal Audio dates to the late 1990s, when founder Jim Logan created a company seeking to create a kind of proto-iPod digital music player. But his company flopped. Years later, Logan turned to lawsuits to collect money from those investments. He sued companies over both the "episodic content" patent, as well as a separate patent, which Logan and his lawyers said covered playlists. He and his lawyers wrung verdicts or settlements from Samsung and Apple.

30 comments

  1. Patent Peer Review by CaptQuark · · Score: 4, Insightful

    This is one of the reasons patents should be peer reviewed before being granted. This was also discussed when it was revealed that Australia awarded a patent for a wheel in 2001. https://yro.slashdot.org/story...

    1. Re:Patent Peer Review by slashrio · · Score: 1, Flamebait

      A long time I didn't understand why it weren't those ex-convicts 'down under' that have invented the 'cell phone', but now I know: they even hadn't invented the wheel yet. Hilarious.

      --
      "Trump!!", the new Godwin.
    2. Re:Patent Peer Review by Anonymous Coward · · Score: 1

      Sigh, that patent is a 'non pantent'. It's a special kind of cheap and fast patent that is un-reviewed.

      Should the patent holders desire to allege infringement against someone, the holder then pays for a formal review and upgrade of the patent before it would stick in a court of law. Until then, it's a very formal form of prior art.

      Upshot, those true 'backyard' inventors can quickly patent their inventions, prior art can be accumulated more quickly and formally, crackpot inventions can be 'patented' without significantly annoying anyone, and true patent infringement is dealt with properly.

      If a system like this was flooded with all the computer-based patents we can think of, can you imagine the amount of prior art for stopping other claims?

    3. Re:Patent Peer Review by jellomizer · · Score: 1

      There is problem with peer review too. There is often the patented idea, that is so simple and elegant, that the reviewer would go, why didn't I think of that, and flag it as obvious. Where it actually is a new and unique idea, where the inventor deserves credit and compensation for the idea. While they are other ideas that will tech-talk its way around the peer reviewers who may not be able to see past the BS and will never admit they didn't get it. And approve it for the fact it egged the system, for a complicated worded version of a common thing, or a natural progression.

      Nearly every system can be hacked. What we need is a justice system that deals with justice and not just the letter of the law, but determine if the people are abusing the law, then they really shouldn't be allowed to be doing so.

      Just like if I was driving at the posted speed limit during a dangerous driving conditions, I could get pulled over and ticketed for speeding, even for following the letter of the law.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    4. Re:Patent Peer Review by Lobachevsky · · Score: 1

      I've seen Hans Rosling talk about how his common-sense ideas were dismissed as obvious in many of his initial presentations, so he switched to first asking the audience what they thought, and then presented his findings, and suddenly everyone thought he had remarkable and ground-breaking insights.

    5. Re:Patent Peer Review by HiThere · · Score: 1

      No. The problem is the size of the inventor pool. If there were 30 or 300 people inventing in an area, it would be a reasonable argument. If there are 300,000 it's quite weak. You're going to get more than one independent invention, and there's no reason to grant any particular one of them an exclusive monopoly.

      If it were allowed as a defense against a patent that you had independently invented it, then you might have a valid point. Unfortunately, all to often something is granted for an "obvious patent" that really *is* obvious if you are trying to deal with the problem it addresses, but which you don't think of if you aren't, and which you wouldn't bother patenting anyway.

      --

      I think we've pushed this "anyone can grow up to be president" thing too far.
    6. Re:Patent Peer Review by Anonymous Coward · · Score: 0

      This actually sounds like a great addition to the patent system.

    7. Re: Patent Peer Review by KGIII · · Score: 1

      Your local laws actually probably state the speed limit is the fastest you can prudently go. So, in that case, you probably weren't actually following the letter of the law. In other words, check your laws. Prudent means, in this case, under optimal conditions. That is most jurisdictions, across the globe - with varied enforcement levels.

      --
      "So long and thanks for all the fish."
  2. Need a way to reverse settlements by Solandri · · Score: 5, Insightful

    attempt to cajole them into a licensing deal, lest they be slapped with a lawsuit. Some of those efforts were successful: in August 2014, Adam Carolla paid about $500,000.

    We really need a procedure to get these sorts of payments reversed if the patent is later found to be invalid. A large part of the reason the Blackberry died was because they settled for over $600 million with patent troll NTP right around the time when they badly needed the money to develop a new device (industry was transitioning to touchscreens). All but one of NTP's patents were later invalidated, but because RIM had entered a settlement they couldn't get the money back (even though it was effectively done under threat of a lawsuit under false pretenses).

    1. Re:Need a way to reverse settlements by ledow · · Score: 4, Insightful

      Lesson: Don't enter into settlements to shut up people who have absolutely no claim as to what they are holding over you.

      Take them to court, drag it out, invalidate their patents and take their business from underneath them, instead of just capitulating and paying them money to avoid the hassle.

      If you have $600m dollars to give away, you can fight in court for an AWFULLY long time, appeal multiple times and then reclaim all your costs from the company when they are proven wrong.

      These people operate on the basis of extortion - I won't take you to court and risk winning my case against you, if you just give me lots of money now.

      If their claims are baseless, ignore them. If their claims have standing, pay them a FRAND patent licence for failing to do your homework.

      Don't "believe they have no case" but then settle to avoid the hassle. It allows them to continue doing that to yourself and others, and they'll come back for more.

      What was stupid was entering into a $600m settlement, part of which - your lawyers would have instructed you - means that if it were invalidated, you'd get nothing.

      Hell, for a couple of million you could do a full patent review and argue the case. If you lose, you probably still have to pay the $600m (to be honest, I can't imagine a reasonably licensed patent costing that much for such a company). But then if the patent is invalidated you automatically "win" on appeal and get your money and court-costs back.

      Settling is really a stupid thing to do if you're innocent. To be honest, it's also a stupid thing to do if you're guilty (just pay the patent licence in the first place if you thought it had merit!).

      It's the corporate equivalent of accepting a police caution when you're innocent. Easy to do, all the hassle goes away, you don't spend a night in the cell or have to hire a lawyer. But it will forever stain your record as, basically, an admission of guilt of that instance.

    2. Re:Need a way to reverse settlements by Anonymous Coward · · Score: 0

      That's not what false pretenses means. Fix the system that awards patents incorrectly to solve this problem, because I doubt courts are going to want to start reviewing agreements that parties entered into willingly.

    3. Re:Need a way to reverse settlements by Anonymous Coward · · Score: 0

      "...then reclaim all your costs from the company when they are proven wrong."

      Ahaha! Yeah. Right. Of course you'll be able to.

      They'll definitely not just declare bankruptcy or anything.

    4. Re:Need a way to reverse settlements by ledow · · Score: 2

      So? You've lost money either way. At least this way you can sue them to oblivion, or even buy up their other patents in the fire sale. And court judgements are high on the list of administration priorities, so they aren't going to get away with porting all the money and assets somewhere else to hide them from you.

      Did IBM settle? No.
      Did Autozone settle? No.
      What became of SCO? Nothing.
      They may not have got all their money back, but they certainly cannot be sued over those things ever again.

    5. Re:Need a way to reverse settlements by drinkypoo · · Score: 1

      So does anything preclude them suing to get that money back? Or is it only astronomically unlikely that they would win such a case?

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    6. Re:Need a way to reverse settlements by Anonymous Coward · · Score: 0

      Sure, reduce the risk of giving in to extortion. Nothing bad could come of that. - If you give these people money, you deserve to lose it, for the single reason that you fuel the fire that threatens us all.

    7. Re:Need a way to reverse settlements by Aaden42 · · Score: 1

      I'd bet the sum of that settlement there's language in the agreement to the effect that the settlement and payment stand even if the patent is later found invalid. There's nothing you could do to reverse that.

    8. Re:Need a way to reverse settlements by Anonymous Coward · · Score: 0

      The problem is the way that a lot of these patent trolls are structured and how the legal system lets them get away with it. They know that what they're doing is borderline criminal so they sue via shell companies with next to no assets. If they lose they declare bankruptcy and let the shell die, if they win they siphon off the assets of the shell to themselves or their actual company. Either way the patent troll can keep going with little financial consequence, while the company being threatened/sued risks significant damage to their company. The legal system needs to put safeguards in place to prevent this kind of abuse, for example allowing winning defendants to go after the assets of the parent company of the shell or the owners/"employees" of the shell directly.

    9. Re:Need a way to reverse settlements by stabiesoft · · Score: 1

      Except the way the trolls work is they begin by picking off little guys for a couple mil, which is way less than the cost of the court fight. After the troll has some bucks from extorting some small frys, they move to medium frys, who still roll because the cost of fighting is still more than settling. Good biz dictates settle. Finally the troll may attempt to take on a big fry where the payout to the troll makes it worth the risk. I was obliquely involved in a case where the company decided to fight and they did win. Their lawyers advised settling and guess what, it cost them more to win than to lose. I don't see a solution actually. If you make it hard to allow trolls to do this, then true inventors will be harmed. On the other hand, the current system invites trolling.

    10. Re:Need a way to reverse settlements by ledow · · Score: 2

      If you don't own the patent, you have no standing to sue. So the shell company must at least own the patent in question.

      If you own the patent and a court orders you to pay, the assets of that company are sold for the benefit of paying that court fine.

      If someone tries to MOVE assets from a shell company to avoid paying a court order, holy cow are they in trouble.

      I don't believe it's happening the way you state. And even if it is - same problem. Pay $600m to a shell company as profit/encouragement to sue again, or pay $600m to burn shell company to the ground and go after its parents if they try anything funny. Same cost, but one of them sends a clear message while also saying "Oh, by the way, you need a new patent now, because that one won't wash".

      In terms of reputational damage, the same - settling is basically "admission of guilt", if you like. Even if legally it's not the same, that's basically what it's perceived as, by shareholders and customers. Not settling, burning them to the ground, for the same cost, is saying "Go on, try it". Has anyone tried the same to even IBM since? $600m is an AWFUL lot of legal work and chasing. You could bring almost anyone down for that if they're doing anything even slightly dodgy.

      Also, if shell company has no assets, hence no value, except the IP value of its patent... bang... you have an exact upper limit on how much that patent is actually worth, to its own parent company. You've got them coming and going.

      Any law firm, given $600m, would screw such organisations to the wall in one way or another. That's their job. But settling for $600m is just saying "Whoops, yeah, we agree your patent is probably valid, here have the cash we probably should have paid you." - i.e. all your own fault. So, no, you don't get your money back. Ever.

      But see how much the shell company can afford to match in lawyers without having any assets or leaving a paper trail to funding by its parent. If they can't lawyer up as they have no assets or funds, you win. If they can lawyer up, you win the assets/funds used. If said assets/funds mysteriously disappear after you win, or only appear from the parent company when it looks like they are winning, well, $600m would get an awful lot of evidence of such foul play rather quickly.

      At worst, you lose as bad as settling but with the chance for appeal when the patent is invalid.

      At best, you take them out of the market entirely, send a strong warning not to mess with you, and maybe take down the real source / parent company too if they're playing shenanigans.

    11. Re:Need a way to reverse settlements by Anonymous Coward · · Score: 0

      Often times settlements include a "no further legal action" clause with bars them from being allowed to sue later if it's reversed.

    12. Re:Need a way to reverse settlements by brewthatistrue · · Score: 1

      Big companies that settle have a competitive advantage over smaller companies who actually feel pain from the settlement.

  3. it's me tapping on the screen waving again by Anonymous Coward · · Score: 0

    while it looks like i'm here.. with my tor os i could be in woodstock plotting to post about peace & love ceasefire standdowns across the ocean or rolling the the dice once more sing along.. https://www.youtube.com/watch?v=VKMVxrryzps ..unprecedented evile never sleeps..

  4. Americna patent system is unfit for purpose by Anonymous Coward · · Score: 1

    The American patent system is a total joke.

    If I was an American citizen I'd patent using your bowels to eliminate waste into a suitable receptacle. Everyone who ever took a dump would then owe me a million dollars.

    I'd be a trillionaire within minutes !!!

  5. Adam Carolla Suit by Anonymous Coward · · Score: 2, Informative

    The summary of the articles is misleading about the lawsuit with Adam Carolla. The articles linked to in the summary say that Adam Carolla raised $500,000 for a legal defense against Personal Audio. They do not say that he paid Personal Audio any money. The reports and what he has said on his podcast indicate he used the money for defending against the lawsuit.

    1. Re:Adam Carolla Suit by Anonymous Coward · · Score: 0

      Perhaps Personal Audio should reimburse him for the cost of his legal defense.

    2. Re:Adam Carolla Suit by FatRatBastard · · Score: 3, Informative

      He didn't pay Personal Audio any money. There ended up being an out of court settlement where PA promised not to sue Carolla or a group of other podcasters for something like 5 years. Carolla did a great job of highlighting what PA were doing and they basically wanted to get out of the spotlight.

    3. Re:Adam Carolla Suit by Anonymous Coward · · Score: 0

      Adam Carolla spoke about this on his podcast; he didn't pay PA anything.
      The $500k he spent fighting the case, was mostly trying to get the venue changed from East Texas.
      Ultimately, PA settled with Adam Carolla, withdrawing their case, agreeing to not sue him again in the next 5 years and added an NDA, all so they could get out of the spotlight and claim they settled with him.
      Which he promptly ignored calling them out as "pussy losers".

  6. If you want to bust bogus patents by Anonymous Coward · · Score: 0

    If you want to bust bogus patents then there are projects here:
    https://www.eff.org/patent-busting
    https://www.cloudflare.com/priorartsearch/

  7. Held by production. by Anonymous Coward · · Score: 0

    I work in the oil and gas industry and we have a thing called held by production. What this means and does is that when a operator lease the minerals in a given area they have a period in which they have to get a well-drilled and if they don't they lose the drilling rights and the mineral owners can make another deal with another operator to get the well-drilled. Also if well runs dry and its production runs out same thing mineral owners can move on. There should be some kind of held by production for patents if the patent owner can produce a good then they can protect the patent but if they don't produce a good within a given amount of time they lose the rights to defend the patent. Thus making way for someone else to make the product.