Big news from Texas: Adam Carolla has settled with the podcasting patent troll Personal Audio. Although the settlement is confidential, we can guess the terms. This is because Personal Audio sent out a press release last month saying it was willing to walk away from its suit with Carolla. So we can assume that Carolla did not pay Personal Audio a penny. We can also assume that, in exchange, Carolla has given up the opportunity to challenge the patent and the chance to get his attorney’s fees.
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.
Carolla and Personal Audio have agreed to a “quiet period” where they won’t make any public statements about the settlement before September 30, 2014. Not coincidentally, Personal Audio is still scheduled to go to trial against a number of television companies (NBC, CBS, and Fox) in September. Since Carolla is muzzled, we’ll do our best to explain the significance of the settlement. In short, it’s a mixed result.
Carolla, his team, and everyone who donated in support deserves massive credit for putting up such a strong fight. The podcasting community showed that it would not be shaken down. Patent litigation is very expensive and most troll targets settle early just to avoid the cost of defense. By fighting back, Carolla forced Personal Audio to actually mount a case and establish that it deserved money. That turned out to be too hard for the troll.
As you probably know, podcasting is not an especially lucrative business. Personal Audio, however, appears to have been unaware of this. In its July press release, the company wrote:
When Personal Audio first began its litigation, it was under the impression that Carolla, the self-proclaimed largest podcaster in the world, as well as certain other podcasters, were making significant money from infringing Personal Audio’s patents. After the parties completed discovery, however, it became clear this was not the case. As a result, Personal Audio began to offer dismissals from the case to the podcasting companies involved, rather than to litigate over the smaller amounts of money at issue.
By forcing Personal Audio to prove that it suffered damages, Carolla made it confront the fact that podcasting generates little revenue (for people that claim to have ‘invented’ podcasting, Personal Audio appears not to have understood the industry at all). Carolla is the one of themost successful podcasters in the business. If suing him makes no economic sense, then it makes no sense to sue any podcaster.
We hope that Personal Audio’s public statements on this issue mean that it has truly abandoned threatening and suing podcasters. Though a press release might not be legally binding, the company will have a hard time justifying any further litigation (or threats of litigation) against podcasters. Any future targets can point to this statement. Carolla deserves recognition for getting this result.