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.

Filed Under: adam carolla, patent troll, patents, settled
Companies: personal audio


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  1. icon
    Dave Cortright (profile), 19 Aug 2014 @ 2:57pm

    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 (info@techdirt.com 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.

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