If you've got a mobile device, chances are you subscribe to a podcast or two. After all, there are hundreds of thousands of podcasts out there available to millions of listeners. And a company that holds a patent that it claims covers podcasting wants in on the action.
The patent dispute surrounding podcasting is unlikely to have an immediate affect your ability to enjoy on-demand audio programming from your favorite producers--certainly not after the patent holder failed to get what it wanted out of a high-profile court case. But the legal maneuvers involving podcasting offer a telling look at the impact patents are having on the technology world.
On patents and podcasts
You've likely never heard of Personal Audio, the East Texas company that claims it invented podcasting. At any rate, it holds several patents--including one it says for "the uploading and distribution of episodic content"--and its business revolves around collecting royalties for these patents. That makes Personal Audio a patent holding company or--in a less polite term used by tech companies and analysts--a patent troll.
In 2013, Personal Audio told podcasters they had to pay up, targeting high-profile podcasters like Adam Carolla. Carolla fought back, raising money on FundAnything for legal representation. The case was settled earlier this month, and, while the terms of the settlement are confidential, an analysis of the case by the Electronic Freedom Foundation (in the midst of its own dispute with Personal Audio) suggests that Carolla didn't pay Personal Audio a cent.
The reason: A month before the settlement was reached, Personal Audio tried to back out of the suit after discovering there was no money to be made from it--which seems like something a company claiming to have invented podcasting might have known about ahead of time. Other podcasters, including Togi Net and How Stuff Works, have been dismissed from the suit as well. Personal Audio did't reply to our request for an interview.
According to the EFF's analysis of the Personal Audio-Carolla settlement, the podcast host gave up his rights to demand that the company cover his legal fees plus his right to invalidate the patent. It's that latter concession that likely prompted Personal Audio to settle the suit.
But other people are hoping to challenge that patent, namely the EFF, which has filed a petition with the U.S. Patent Office to invalidate Personal Audio's patent. "As we cited in our petition, podcasts were being done long before Personal Audio claims to have invented podcasting, by CNN, the Canadian Broadcasting Corporation, and Carl Malamud's Geek of the Week online radio show," said EFF staff attorney Daniel Nazer, who also holds the EFF's Mark Cuban Chair to Eliminate Stupid Patents. (Yes, that is an actual title.) "Personal Audio's patent is extremely weak, and I expect that they'll lose the fight to retain it."
The fact that there's a EFF position funded by a $250,000 grant from Internet entrepreneur and Dallas Mavericks owner Mark Cuban speaks volumes about Cuban's contempt for patent trolls in general. "I've been arguing for years that trolls are crushing startups, [which is] bad for the economy and our country," Cuban told us via email. "I didn't want there to be any question about where I stood or what the issue was. The chair name made the point clear."
Asked about how patent trolls might hamper the growth of podcasting, Cuban replied, "It's not just podcasts. It's any startup. One troll that owns a ridiculous patent for running a wire up a sleeve to connect an iPod to ear buds has been harassing companies. I got sued by someone that took one of my ideas and patented it and then sued me for violating it."
The EFF's Nazer points the finger of blame at a underfunded U.S. Patent Office for the proliferation of patent lawsuits, which he says have doubled over the last decade. "On average, a patent examiner only has 18 to 19 hours to inspect a patent application, from start to finish," Nazer said. "That is just not enough time to do the degree of investigation that is required."
So are podcasters out of the woods now that Personal Audio took its shot at the popular Carolla podcast and missed? The company remains involved in legal cases involving CBS, Fox, and NBC, who presumably make enough money to be worth suing.
But for a podcaster like John Lee Dumas, the patent fight "has had zero impact on the podcasting sector thus far." Dumas would know: he's the founder and host of the EntrepreneurOnFire podcast, which has been downloaded over 8.6 million times and averages more than 800,000 unique listens a month in more than 145 countries.
"Anyone who has looked at the case has seen just how weak a case Personal Audio has and with the latest against Adam Corolla, it is obvious they are starting to recognize it too," Dumas said.
Dumas is also the founder of Podcasters' Paradise, which he described as a 1,250-member community of podcasters looking to create, grow, and monetize their podcasters. "None are concerned with Personal Audio, as monetizing directly from the podcast is not most podcasters' goals," he added. "Instead, it's all about building an online audience, and serving that audience in many different ways unrelated to podcasting."
Maybe so. However, just because Personal Audio appears to be at bay, doesn't mean that other patent trolls aren't waiting in the wings. As a result, podcasters and podcast fans should not become complacent. This particular battle may be won, but the patent war may not be over.
"That's the biggest problem with trolls," Cuban says. "Companies have no idea when the trolls will strike. They can't anticipate the attack. There is no preemptive action they can take. Trolls are pure unquantifiable risk ... [and] vampires that suck the life out of startups."