Blog Post

Hated podcast troll wins $1.3M patent verdict from CBS, but may soon be dead all the same

A patent troll known as Personal Audio LLC has been on a rampage to collect royalties from podcasters across the land, claiming that it invented “episodic content.” In its latest victory, a jury in East Texas this week ordered media giant CBS to pay the troll $1.3 million.

The news comes after comedian Adam Carolla fought the troll to an apparent stalemate last month, but failed to kill its patent. As a result, [company]Personal Audio[/company] remains free to continue its shakedown racket, which involves demanding a license fee from anyone who produces a podcast — and threatening them with expensive litigation if they refuse.

The premise of the lawsuits appears to be absurd given that the troll’s “invention” is, in the words of one critic, “nothing more than an online table of contents.” Still, Personal Audio has flourished since, under the twisted business model of patent trolling, the trolls’ targets face a terrible choice: either settle or face hellish legal costs and a potential jury verdict (the troll is largely shielded from such costs since it is just a shell company with no real assets).

While patent trolling has afflicted large sections of the tech and retail industries, the podcast patent troll is particularly notorious. In an exposé on trolling last year by NPR’s “This American Life,” Personal Audio’s alter-ego, a man named Jim Logan, stated that he deserved the patent monopoly even though he had never made a podcast.

There is hope, however, that Logan’s shakedown campaign could hit a brick wall. Despite the latest Texas jury verdict, court filings show that [company]CBS[/company] is still waiting on the outcome of several motions that could lead a judge to declare the patent is invalid as a matter of law. One of these, filed last week, is based on a recent Supreme Court decision called Alice that ruled that an old or abstract idea — like a table of contents — is not eligible for a patent simply because it is carried out on a computer. In recent weeks, judges have used Alice to shred a dozen or so software-related patents.

As a result, the jury verdict could be knocked out, and the podcast patent could be killed — either by the trial judge or on appeal. Meanwhile, the Electronic Frontier Foundation is pursuing a challenge of its own at the Patent Office, asking that an administrative judge to declare that the patent is invalid. Surely, some judge, somewhere will have the sense to put a stop to this.

The upshot is that, one way or the other, the podcasting patent troll is likely to be crushed eventually. But in the meantime, Personal Audio stands as another monument to America’s broken patent system, which fails to encourage innovation and forces companies to throw money down a legal rat hole instead.

13 Responses to “Hated podcast troll wins $1.3M patent verdict from CBS, but may soon be dead all the same”

  1. Jack Decker

    I think a real simple way of getting rid of all patent trolls is the permanent disbarring of all of a law firm’s lawyers whose one of their lawyers get convicted of being a patent troll. I mean it isn’t as if there’s a shortage of lawyers.

    Likewise, if you get a law degree and are admitted to the bar, you should be prohibited from running for political office. Those who love laws love making laws. It is a trade. No one is forcing anyone to become a lawyer so it is a choice they have to make. Be a lawyer and never be able to be a politician or not be a lawyer and possibly be a politician. Much like in the military, soldiers there have to give up many of their constitutional rights when taking the military oath and serving as a soldier.

  2. The vitriol in this article against the patent holder should not be on any page that claims to be journalistic. The problem is in a system that has not been adequately maintained in the face of the incredibly rapid change in technological forms.

    That the patent holder tries to extract maximum value from a piece of paper that specifically grants him the right to do that is in no way heinous. He was himself unable to bring his ideas to market profitably, a rather common failing, and wishes to profit on the work of those that did which is well within the intent of patent law.

    • stoptheinsanity

      Its not broken, its been hijacked by rogue operators who take a good system and twist it to their own selfish ends because the cost of litigating forces small businesses to settle or quit rather than to fight… Its not the system, its the holes in the system that the Executive, Congressional and Judicial branches refuse to patch to the detriment of us all…

    • stoptheinsanity

      It is heinous when that extraction is done in a the manner that Personal Audio has undertaken demanding either outrageous license fees or face outrageous litigation expenses. Their only original idea was to reapply for a 1996 patent in 2009 as a submarine patent and upon being granted in 2012 immediately begin suing every company in sight. The amount of prior art for podcasts is staggering, but dopey East Texas juries never fail to hand it to defendants big and small. This horrible result is not the intent of the patent law and your assumption that Personal Audio is a good faith actor just trying to recoup on their sunk costs does not square with how they have conducted themselves in this action.

  3. stoptheinsanity

    Its not broken, its been hijacked by rogue operators who take a good system and twist it to their own selfish ends because the cost of litigating forces small businesses to settle or quit rather than to fight… Its not the system, its the holes in the system that the Executive, Congressional and Judicial branches refuse to patch to the detriment of us all…

  4. I am very suspicious about the federal court in E. Texas that appears to be the venue-of-choice for handling patent disputes in favor of the patent holders.

    You would think a court that handles so many cases would be fully aware of the Supreme Courts’ decision involving Alice. I mean, if you know what your boss will say or do, then you will most likely make your decisions accordingly.

    So, for me, I am suspicious as to what is really at the heart of E. Texas handling these cases in such a fashion. Taking a look at the money trail, how much money is being funneled into E. Texas, both in court costs and other so-called legitimate fees?

    As for Personal Audio, I agree to its right to sue for patent infringement in any and all cases it feels are legitimate. You only have the US Patent Office to blame for that.

    What should happen are the federal courts providing checks and balances to correct such oversights or willful errors in judgment by the Patent Office. This is definitely not being done in E. Texas.

    The simple fact that entities are granted patents for abstract or vague ideas with no demonstrated effort to produce a marketable product or no assets to fund such a development is at the root of the US Patent Office’s suspect behavior.

  5. “… America’s broken patent system, which fails to encourage innovation and forces companies to throw money down a legal rat hole instead.”

    … Says the blogger with no patents and who works for a company backed by silicon valley funds.

    I’m 100% certain that if you were to be on jury selection for this trial, you would be booted at first opportunity with your biased opinion. How about writing an article based on the merits of the patent and the infringing works, rather than just say “Surely, some judge, somewhere will have the sense to put a stop to this.” A stop to WHAT, exactly? Write something with real substance for a change, Roberts.

    • Hi Mike, welcome back! Many of our readers like podcasts or even perform podcasts themselves, so I would argue that informing them about an ongoing extortion racket counts as writing something “with real substance.”

      I also think that looking at the podcast patent through the lens of the Alice decision is an issue of real substance. What do you think? Do you think the playlist patent is s.101 eligible under its latest iteration by SCOTUS in Alice/Bilski?

      • stoptheinsanity

        So Mike, just being granted a patent entitles you to be paid by all you say claim to infringe? No real innovation or product necessary, just some vague overbroad language that you claim covers dissemination of all content on the internet? That is what Personal Audio is getting away with because they have the backing of a mis-guided Patent Office, an Executive administration that fails to reign them in, a Congress that refuses to pass reform because they are in the pocket of the American Trial Lawyers Assn and a Federal Judiciary in East Texas aligned with the Patent Trolls serving as a high tech speed trap muscling businesses large and small into their podunk jurisdiction… East Texas Federal Courts have over 4,000 patent actions from all over the country! Why? The entire system is tilted in the Patent Troll’s favor as witnessed by this ridiculous 1.3 Million judgment against CBS that will be vacated on appeal when a non-corrupted Appeals Court will do the right thing. Mike, There are bad actors using a good patent system for their own money grubbing ends and Personal Audio is the poster child for those bad actors… Put your energy into complaining about somebody who actually deserves your respect, not the white collar thugs of Personal Audio…

        • >> just being granted a patent entitles you to be paid by all you say claim to infringe?

          No. Only those who are found to infringe are subject to a resolution as determined accordingly.

          >> No real innovation or product necessary, just some vague overbroad language that you claim covers dissemination of all content on the internet?

          No. The claims do not cover dissemination of all content on the Internet. The claim language should only be interpreted by the teachings of the specification of the patent application.

          >> That is what Personal Audio is getting away with because …

          Nevertheless, this is a matter between Personal Audio, those who are found to infringe, and the courts.

          >> East Texas Federal Courts have over 4,000 patent actions from all over the country! Why?

          I suppose this is because the East Texas Federal Courts uphold the value of patents by supporting the rights of patent holders and individual inventors, as should all federal courts. Otherwise, what’s the purpose of having a patent system if we don’t support the inventor community.

          >> Put your energy into complaining about somebody who actually deserves your respect …

          Actually, I put my energy into innovation. I am an inventor and entrepreneur, and I support the rights of inventors. Without the patent system, big enterprise would just take and steal, and the concept of the power and innovation of the individual (and the rights that go with that) would cease to exist. Might as well just call Microsoft and give them your ideas for nothing.

      • >> … I would argue that informing [many of our readers who like podcasts] about an ongoing extortion racket counts as writing something ‘with real substance.’

        I would argue that in order for an article that opines against a jury verdict whereby a patent holder protected his rights (Your article summary: “…a podcast troll that never made a podcast — has proved depressingly tenacious”) to have real substance, it should actually address and/or challenge the findings of the jury and state exactly why this is “depressing”.

        Per the verdict, the jury found four claims of the patent to be infringed by CBS, and did not find clear and convincing evidence that these four claims were invalid.

        So rather than babble, how about actually addressing the claims and the verdict, if that is where your contention lies?

        >> I also think that looking at the podcast patent through the lens of the Alice decision is an issue of real substance. What do you think? Do you think the playlist patent is s.101 eligible under its latest iteration by SCOTUS in Alice/Bilski?

        What you’re saying (and what Alice and Bilski seem to be saying) is that if these claims are just old ideas performed on a generic computer, then the claims will not be eligible according to Alice/Bilski. However, what must also be considered is what comprises or what would have comprised such a generic “computer” in accordance with the date of the original filing, which was 1996. What did generic computers do at this time? Was a new type of computing system or apparatus invented?

        Claim 31 of the patent pertains to an apparatus that comprises multiple components, performing specific tasks. So the answer to your question lies in how a generic computer would have been defined at the filing date of the original patent application, and if the apparatus would be subject to a old idea performed on a generic computer. If the claims invent non-obvious, patent-eligible subject matter, then the claims still hold. If not, then they don’t hold. Again, was a new type of computing system or apparatus invented? The USPTO believed so.

        Perhaps you should ask this question to an expert witness, which I’m sure CBS did during their discovery and trial preparation period. And I’m sure they presented their findings to the jury. And whatever was presented to the jury, the jury, per the verdict, did not find clear and convincing evidence that these claims were invalid.

        Just because a majority of the people are familiar with podcasts now does not make the original idea of podcasts not unique. Nor should we remove the rights of the inventor of podcasts just because everyone enjoys podcasts now.

        Just because Coca-Cola is commonplace, should we take the recipe away from The Coca-Cola Company? I’m sure they would fight for their intellectual property, and rightly so.

      • “I also think that looking at the podcast patent through the lens of the Alice decision is an issue of real substance. What do you think? Do you think the playlist patent is s.101 eligible under its latest iteration by SCOTUS in Alice/Bilski?”

        Hey Jeff, I recently asked this question to my patent counsel, and the response was that if a computer or a processing system is an “actor” or performs an integral role in the method or apparatus, that is, it is being used as an element or embodiment in the claimed method or apparatus, then the claimed method or apparatus would NOT be deemed ineligible by Alice/Bilski.

        On the other hand, if a claimed method employs a computer or processing system to simply crunch numbers (as seen in Alice/Bilski examples), and said computer/processing system doesn’t perform any active role in the method other than saving time (i.e., the method could be performed manually — it would just take a long time by hand), then this particular claimed method’s mere addition of a computer or processing system to the method WOULD be deemed ineligible by Alice/Bilski.

        But, for example, if one desires to invent a new database structure or employ computers together in a method that produces a particular result where information has or could transform or change state, then hey, that’s inventive and eligible, and would not be deemed ineligible by Alice/Bilski. Maybe ineligible by something else, but not by the Alice/Bilski rulings.

        Based on this information, the podcast patent claims should hold.