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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.

7 of 30 comments (clear)

  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...

  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 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.

    3. 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.

  3. 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 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.