Adam Carolla Settles With Podcasting Patent Troll: Even With A Strong Case And $500k In The Bank, It's Too Expensive To Fight

from the too-bad dept

A few weeks ago, we noted that Personal Audio, the patent troll that ridiculously pretended to own a patent on “podcasting” had put out a press release saying that it had tried to settle with Adam Carolla, the podcasting giant that the Personal Audio had sued a while ago. But Carolla had refused to settle. If you haven’t been following the case, Personal Audio claims that patent 8,112,504 covers podcasting and went after a few of the “big names” with lawsuits, while sending demand/threat letters to many others. Carolla fought back hard, getting a bunch of other top podcasters to speak up as well, and point people to a crowdfunding campaign for a podcasting legal defense fund.

We were at least somewhat happy that Carolla was still fighting, noting that by continuing the case and pushing the counterclaims, hopefully he could invalidate the patent in court. However, a few weeks have gone by and Carolla has settled the case. Given that Personal Audio had already said it offered to dismiss the case for no money, it’s unlikely that Carolla paid anything here, and you can never really fault someone for settling a lawsuit, which is going to be costly and time consuming when there’s an easy out. Still, as the folks at EFF note, this is a lost opportunity to both kill off that patent and to get attorneys’ fees out of Personal Audio:

By settling now, Carolla gives up the chance to make Personal Audio pay his fees. If a defendant wins on the merits it can get fees in extraordinary cases. Winning fees would be a huge deterrent to future litigation from Personal Audio. Although the Supreme Court recently made it somewhat easier for victorious defendants to get fees, it is still a challenge. Moreover, the judge has a lot of discretion and this case was in the Eastern District of Texas, a forum generally considered quite friendly to trolls. Carolla?s team likely made the calculation that fees would be a long shot.

Even more important, Carolla also loses the opportunity to invalidate the patent. If the case had gone to trial, he would have argued that the patent was invalid because the so-called invention was described or made obvious by other people?s work before Personal Audio filed its patent. Carolla would have been able to use more prior art at trial than EFF (challenges at the Patent Office are limited to printed publications). As Charles Duan at Public Knowledge recently explained, if Carolla had won on the invalidity issue, he would have defeated Personal Audio for all podcasters. A troll can?t sue with patent claims that have been invalidated by a court.

Also, somewhat unfortunately, Carolla has agreed to a gag order, promising not to talk about any of this until the end of September. While that’s not too far off, the EFF notes that between now and then, Personal Audio is using that patent against a number of TV companies in a case set to go to trial in September.

Furthermore, the EFF notes that this situation shows just how ridiculous the patent troll situation is. When you have a very strong case, and $500,000 given to you via crowdfunding specifically to kill this patent troll… and most experts agreed it still wasn’t nearly enough, which is why settling is the right move:

The most disappointing aspect of today?s settlement is how unsurprising it is. Almost every defendant, no matter how strong their case, ends up settling with the patent troll. Litigating patent cases is extraordinarily expensive. Carolla raised almost half a million dollars and that still would not have been enough to fund a defense through trial.

Trolls know this and use the cost of defense to extort settlements. In the rare case where someone shows a willingness to fights to the end, the troll will often save its patent at the last moment with a walk-away deal. This is likely what happened in Carolla?s case.

Once again, it’s time to fix the patent system to stop bogus trolling like this.

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Companies: personal audio

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Comments on “Adam Carolla Settles With Podcasting Patent Troll: Even With A Strong Case And $500k In The Bank, It's Too Expensive To Fight”

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Michael (profile) says:

Re: Re:

Having been on the receiving end of a bulls*** lawsuit, I cannot blame him at all for settling if he could without any additional cost.

It is not only financially crippling to defend yourself in court – regardless of how good your case is, but it is extraordinarily stressful.

I give him a lot of credit for holding in as long as he did.

BSD32x (profile) says:

Re: Re: Re:3 Re:

I don’t know, to be honest. I checked the page, and can’t find anything definitive one way or the other: Considering you get access to the exclusive podcast or other rewards if you donated more, I’m guessing this money may have gone straight to Carolla. It’s also worth noting the EFF isn’t mentioned anywhere on that page.

Dave Cortright says:

Re: Re: Re:4 say what you mean; mean what you say

And no one has yet disproved the existence of Russell’s teapot. Therefore it must exist. q.e.d.

Доверяй, но проверяй

Regarding not backing down for patent trolls, my verification of the data available shows NewEgg has 100% trustworthy, while Adam Carolla is at 0%.

John Fenderson (profile) says:

Re: Re: Re:5 say what you mean; mean what you say

This isn’t a Russell’s teapot kind of thing. The reason saying that you’ll never back down is stupid is because it’s not something you can actually guarantee. Not even NewEgg. NewEgg has done better than Corrola, certainly, but that doesn’t mean it’s any less of a stupid promise.

A non-stupid version would be “we’ll fight against patent trolls as long and as hard as we can.”

Dave Cortright says:

Re: Re: Re:6 say what you mean; mean what you say

If you want to be Asperger’s literal about things, that’s fine. Don’t accept “never” or “always”. I prefer to operate more pragmatically.

Yes I understand that there are mitigating circumstances for everything. There are always an infinite number of improbable black swans out there ready to take the stage at any moment. But there is power to the word never, and that sends a powerful message to trolls. If you need to put a mental asterisk next to that word when you read it, by all means.

BSD32x (profile) says:

Re: Re:

Actually, Carolla is the one who has folded, not the EFF. They are still fighting to have the patent invalidated. They published a response to this yesterday, it’s worth a read – They state “EFF’s own challenge to Personal Audio’s patent is on a separate track and will continue. Our case is before the Patent Trial and Appeal Board at the Patent Office. We are on schedule for a hearing in December with a ruling likely by April 2015. Carolla’s settlement does not impact our case.”

Josh in CharlotteNC (profile) says:

Half a mil ain’t what it used to be… seriously, WTF!

That’s the price of a large piece of land with a very nice house where 98% of us live. It’s enough to get a few kids through some of the most expensive universities in the country. I’m young, have a good job, and I make considerably more than either of my parents, and that would be my base salary for about 8 years.

Legal costs are completely out of control. When only the rich can afford the justice system, it is tragic to call it justice.

BSD32x (profile) says:

Re: Re:

I would love to say I’m surprised by this, but after seeing what’s been going on with Prenda and Malibu Media, I’m not. Carolla saved his own skin, rather than keep fighting for the greater good and take a risk in regard to attorney fees, not unlike a lot of those defendants. It’s unfortunate, but not unexpected. At least the EFF are fighting on.

Anonymous Coward says:

Re: Re:

And yet we see so many people talk about how you shouldn’t worry about your rights being violated because you can always enforce them in court.

This is also why I find it so troubling that the Supreme Court has trended to making their recent rulings so overly narrow and insisting that it is in no way a precedent. If there are any lingering questions, you have to sue to get them answered.

Anonymous Coward says:

Re: Re:

Additionally, someone needs to do a History Channel sort of documentary on the fall of the great United States civilization from the perspective of the future where the US has crumbled, citing reasons like cost of justice, hypocrisy, militarization, partisanship, disconnect between the people and the state, corporate power and the like.

jackn says:

Still on the donation page (at fundanything),

This fund will be raised on the behalf of ALL PODCASTERS AND THEIR FANS, and send a crystal clear message to all patent trolls that we WON’T BACK DOWN!

I don’t know how to classify this? False Advertising?

Must be a sad day for corrola, not only did he loose, he probably lost 3/4 of his audience, and he might have trouble getting the $500,000 back to the people he misled.

Well, nobody ever said he was smart.

Dave Cortright says:

How to get around a gag order

So maybe I’m just ignorant here (if so, I’m sure you all can crowdsource me into my place), but what’s to stop me from getting the agreement, scanning it, posting it online, and only THEN signing?

You cannot be bound by things that happen BEFORE you actually sign the agreement. After all, you hadn’t yet agreed to it and in fact you could walk away and never sign. So the other party would be powerless to punish you for that. And of course from that point forward you can’t say anything else about it, or even re-post the document.

But you don’t have to. Now it’s out in the public. If you were smart, you not only posted it, but you also emailed it to one or more friendlies who are not party to the agreement ( natch). Now they can do whatever they want with it.

Maybe this only works once until gag order writers start anticipating this. But still, the first time it happens would be a beautiful thing.

Josh in CharlotteNC (profile) says:

Re: How to get around a gag order

You get around a gag order by not agreeing to it at all if want to be principled.

Either negotiating in bad faith (your solution), or intentionally violating the contract you agreed to (and had adequate legal council to understand as Adam did here) is unethical.

Unfortunately this case is one amongst many that is showing that standing up for your principles is something almost no one can afford to do.

John Fenderson (profile) says:

Re: Re: Re:3 How to get around a gag order

“Use the tools and rules of the current system to change it for the better.”

I agree with this. I just don’t consider taking advantage of the cracks and foilables of the system as acceptable use of it. This is the crux of most of my objections to the behavior of politicians and corporations. What they do may be legal, but it’s still wrong.

If you engage in behavior that is wrong, then you are doing wrong.

Dave Cortright says:

Delay the trial until Oct

If I were a lawyer with any one of those “a number of TV companies”, I would be doing everything in my power to delay the trial until after the gag order lifts. It clearly will be very probative to their defense. In fact that reason alone may be justification enough to warrant a delay (though the cynic in me doubts it).

Whatever (profile) says:

Once again, it’s time to fix the patent system to stop bogus trolling like this.

Actually, it’s time to fix the legal system so that lawyers don’t cost so much, and so that cases can be tried in a reasonable amount of time. The problem isn’t the laws, the problem is a legal system that ties everyone in knots and keeps the (very expensive) meter running to the benefit of the lawyers and nobody else.

Whatever (profile) says:

Re: Re: Re:

Hi troll, how are you today?

What a surprise to find you defending the laws to the death, even while insisting everyone else fight to change the laws they dislike on your terms.

I know it’s hard to understand, but you can (a) respect the law, and (b) fight against it at the same time. I can drive my car at 20 mph in a zone set to that speed, but I can also fight that in city hall to get it changed. I never say just put up with it and shut up, I say do something about if you don’t like it. Just ignoring the law because you don’t like won’t change it.

The problem of patent trolling is based on the costs of taking them to court. Shrink the costs of going to court, and you shrink the potential profits of the trolls (and fix plenty of other legal issues at the same time). The costs of justice are too high, and that gap creates the problem.

Fix that, and most of the patent trolls will disappear, because the chance of ending up in court instead of getting a license would make it a bad investment.

Anonymous Coward says:

Re: Re: Re: Re:

And when changing the law is outlawed, what solution would you offer?

Most people can’t afford a lawsuit that gets dragged out, never mind a campaign to get laws changed. How do you think the RIAA’s methods went unchallenged and then got picked up by Prenda and Malibu Media? But no, you’d rather defend those to the death and ignore all the obvious problems, because everyone has to follow the law, and if any attempt to change it is to be construed as illegal, everyone can all go eat shit.

gaeliclad (profile) says:

podcast patent

They have a patent on play lists ,where people can download ,episode ,s at regular intervals,
hence they invented podcasting ???
Theres plenty of prior art to stop them,
but someone would need to go to court and spend more than 500k,to invalidate the patent.
Another example to show software patents are ridiculous.
Take a a basic idea say do this on a computer
eg heres a lists of episodes to download,
thats obvious to any one who makes programs on the net.

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