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

Tue, Aug 19th 2014 1:21pm — Mike Masnick

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.

Ecf 272 Mot to Dismiss Pa Carolla (PDF)Ecf 272 Mot to Dismiss Pa Carolla (Text)

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

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

59 Comments

If you liked this post, you may also be interested in...

Reader Comments

The First Word

“

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.

—Josh in CharlotteNC

”

Subscribe: RSS

View by: Time | Thread

BentFranklin (profile), 19 Aug 2014 @ 1:20pm

What a fucking pussy. Whoever Adam Carolla is, I'll never listen to anything he casts, pod or otherwise.

Also, what happens to the money I donated to Save Podcasting? EFF is still happily taking donations:

https://supporters.eff.org/donate/save-podcasting

Email him here: Ihaveissues@AdamCarolla.com
[ link to this | view in thread ]
Michael, 19 Aug 2014 @ 1:37pm

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.
[ link to this | view in thread ]
Darryl, 19 Aug 2014 @ 1:40pm

The 500k was already gone
It wasn't 500k in the bank, it was over 600k spent. He talks about this on his podcast. I believe at one point he had spent 50-100k on just trying to move the venue from east Texas.
[ link to this | view in thread ]
BSD32x (profile), 19 Aug 2014 @ 1:41pm

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 - https://www.eff.org/deeplinks/2014/08/good-bad-and-ugly-adam-carollas-settlement-podcasting-troll 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."
[ link to this | view in thread ]
michael, 19 Aug 2014 @ 1:43pm

disaster ...
It's amazing watching all the commenters over a Breitbart calling Carolla a hero for giving up.

This is like giving your money to the neighborhood jock to beat up the neighborhood bully, but instead of beating him up, he gives him a BJ and says "thanks for the memories, stud."
[ link to this | view in thread ]
Josh in CharlotteNC (profile), 19 Aug 2014 @ 1:45pm

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.
[ link to this | view in thread ]
Rich, 19 Aug 2014 @ 1:51pm

Re:
Says the guy who doesn't even know who Adam Carolla is.
[ link to this | view in thread ]
BSD32x (profile), 19 Aug 2014 @ 1:51pm

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.
[ link to this | view in thread ]
John Fenderson (profile), 19 Aug 2014 @ 1:54pm

Re:
I'm VERY disappointed, but it really is misguided to call him a pussy. He's just not rich enough to afford to press forward. This is, indeed, a huge part of the problem with the court system. If you aren't wealthy, you don't have a chance.
[ link to this | view in thread ]
jackn, 19 Aug 2014 @ 1:57pm

Re:
I agree and I want my donation back.

I listen to a lot of podcasts, but not his. he's a little too low brow.
[ link to this | view in thread ]
jackn, 19 Aug 2014 @ 1:58pm

Re: Re:
I can blame him when he is on the record saying he wouldn't back down, which is why I donated.

I think he just stepped into a bigger financial problem.
[ link to this | view in thread ]
Anonymous Coward, 19 Aug 2014 @ 1:58pm

More people should cite "Cost of justice too high to afford." as the reason they stop fighting. Maybe someone will get a clue.
[ link to this | view in thread ]
BSD32x (profile), 19 Aug 2014 @ 2:00pm

Re: Re: Re:
Did you donate directly to him, or the EFF, though? Your EFF donation isn't being wasted, it's going towards fighting the patent directly with the patent office, it's important to make that distinction.
[ link to this | view in thread ]
Anonymous Coward, 19 Aug 2014 @ 2:01pm

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.
[ link to this | view in thread ]
BentFranklin (profile), 19 Aug 2014 @ 2:02pm

Re: Re:
That's good to know. Maybe I shouldn't have flown off the handle like that.
[ link to this | view in thread ]
jackn, 19 Aug 2014 @ 2:13pm

Re: Re: Re: Re:
I did fundanything (which should have been a red flag?)

Do you know, does the fundanything campaign include the EFF?
[ link to this | view in thread ]
jackn, 19 Aug 2014 @ 2:16pm

Re: Re: Re:
No, you were right on in my book
[ link to this | view in thread ]
AnonCow, 19 Aug 2014 @ 2:16pm

"The only thing necessary for the triumph of evil is for Adam Carolla to act like a chump."

I don't blame him for the settlement, but allowing a gag order of any duration is straight up weak.
[ link to this | view in thread ]
jackn, 19 Aug 2014 @ 2:18pm

Re: Re:
for not knowing him, he described him perfectly.
[ link to this | view in thread ]
BSD32x (profile), 19 Aug 2014 @ 2:19pm

Re: Re: Re: Re: Re:
I don't know, to be honest. I checked the page, and can't find anything definitive one way or the other: https://fundanything.com/en/campaigns/patenttroll 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.
[ link to this | view in thread ]
John Fenderson (profile), 19 Aug 2014 @ 2:19pm

Re: Re: Re:
Yeah, that wasn't good at all, but I took it as his usual bombast. To say as a blanket statement that you won't back down no matter what is just stupid, because it can't ever be actually true.
[ link to this | view in thread ]
John Fenderson (profile), 19 Aug 2014 @ 2:21pm

Re:
Yes, it's hard to explain or forgive agreeing to a gag order.
[ link to this | view in thread ]
jackn, 19 Aug 2014 @ 2:26pm

Re: Re: Re: Re:
Yeah, and as mad as I want to be, I can see how difficult it would be to make progress in Texas. It would be cool to think we had a higher office that could take the east texas corruption of the table. but, the corrupt don't usually fight corruption.
[ link to this | view in thread ]
jackn, 19 Aug 2014 @ 2:31pm

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.
[ link to this | view in thread ]
Anonymous Coward, 19 Aug 2014 @ 2:35pm

Re:
Justice is only for the rich, It gets worse every year.
[ link to this | view in thread ]
Alien Rebel (profile), 19 Aug 2014 @ 2:46pm

Re: Re:
The History Channel's not-so historical programming actually stands as evidence pointing to the U.S.'s demise. But a show on how aliens crashed Wall St. might be fun. (I had nothing to do with that; I swear.)
[ link to this | view in thread ]
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.
[ link to this | view in thread ]
Dave Cortright (profile), 19 Aug 2014 @ 3:02pm

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).
[ link to this | view in thread ]
Josh in CharlotteNC (profile), 19 Aug 2014 @ 3:34pm

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.
[ link to this | view in thread ]
Adrian Lopez, 19 Aug 2014 @ 4:42pm

Isn't patent law just lovely? You literally can't post audio content at regular intervals without paying large sums to a company whose "invention" contributes nothing to your ability to speak in this fashion.

"Troll" is the wrong word. "Leech" is more like it.
[ link to this | view in thread ]
Anonymous Coward, 19 Aug 2014 @ 4:54pm

Re:
Just use iTunes. Apple already paid.
[ link to this | view in thread ]
Whatever (profile), 19 Aug 2014 @ 7:09pm

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.
[ link to this | view in thread ]
Anonymous Coward, 19 Aug 2014 @ 10:40pm

Re: Delay the trial until Oct
Wouldn't a subpoena be able to force the gag order open, especially if it was issued against Carolla and he wasn't very vigorous in fighting it?
[ link to this | view in thread ]
Dave Cortright (profile), 19 Aug 2014 @ 10:51pm

Re: Re: How to get around a gag order
My ethics happily enable me to use any and all legal loopholes to take advantage away from social parasites like this. Sounds like yours are different.
[ link to this | view in thread ]
Dave Cortright (profile), 19 Aug 2014 @ 10:56pm

Re: say what you mean; mean what you say
However NewEgg is on record saying they will never back down. And guess what? They never have.
[ link to this | view in thread ]
gaeliclad (profile), 19 Aug 2014 @ 11:19pm

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.
[ link to this | view in thread ]
Ninja (profile), 20 Aug 2014 @ 3:07am

Re:
That too. The problem is both the legal system and the laws.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2014 @ 5:48am

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.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2014 @ 5:50am

Re: Re:
Depends on how insistent Personal Audio was on the gag order. If it looked like it would take another excessively expensive week or so just to talk them down from that when you're already financially hurting, then it's quite easy to agree to.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2014 @ 7:09am

Re: Re: Re: Re:
If only he'd been a little more creative and said "I won't back down unless they threaten to murder my wife and children," he might've at least avoided the gag order.
[ link to this | view in thread ]
John Fenderson (profile), 20 Aug 2014 @ 7:51am

Re: Re: say what you mean; mean what you say
Never hasn't arrived yet.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2014 @ 7:59am

Re:
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.

There's no taking you seriously when your definition of fair play is a deck stacked in your favor.
[ link to this | view in thread ]
John Fenderson (profile), 20 Aug 2014 @ 8:27am

Re:
"The problem isn't the laws, the problem is a legal system"

That's not an either-or thing. The problem is both, and both problems work hand-in-hand to promote injustice.
[ link to this | view in thread ]
Josh in CharlotteNC (profile), 20 Aug 2014 @ 1:08pm

Re: Re: Re: How to get around a gag order
I try to stay away from ends-justify-the-means thinking.
[ link to this | view in thread ]
John Fenderson (profile), 20 Aug 2014 @ 2:33pm

Re: Re: Re: How to get around a gag order
"Sounds like yours are different"

Mine certainly are. After all, behaving like a bad guy makes you a bad guy, no matter how altruistic your intentions are.
[ link to this | view in thread ]
John Fenderson (profile), 20 Aug 2014 @ 2:35pm

Re: Re:
"Apple already paid."

Which is an excellent reason to avoid using iTunes.
[ link to this | view in thread ]
Dave Cortright (profile), 20 Aug 2014 @ 2:58pm

Re: Re: Re: Re: How to get around a gag order
I don't see it that way. I dislike SuperPACs and the current state of campaign finance. Yet I gave to MayDay specifically to help change this. Similar concept. Use the tools and rules of the current system to change it for the better.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2014 @ 8:26pm

Re:
Obamalaw.
[ link to this | view in thread ]
Whatever (profile), 20 Aug 2014 @ 11:49pm

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.
[ link to this | view in thread ]
No Agenda Listener, 21 Aug 2014 @ 3:11am

When is a troll not a troll?
It would be ok to call them a troll if that's what they were, but the truth is the exact opposite, YOU people who donated to Corolla have been played by a self-serving fraudster called Corolla, he's played you all & stolen your money.
[ link to this | view in thread ]
Anonymous Coward, 21 Aug 2014 @ 4:36am

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.
[ link to this | view in thread ]
Dave Cortright (profile), 21 Aug 2014 @ 7:05am

Re: Re: Re: 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%.
[ link to this | view in thread ]
John Fenderson (profile), 21 Aug 2014 @ 8:31am

Re: Re: Re: Re: 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."
[ link to this | view in thread ]
John Fenderson (profile), 21 Aug 2014 @ 8:34am

Re: Re: Re: Re: Re: 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.
[ link to this | view in thread ]
Dave Cortright (profile), 21 Aug 2014 @ 9:06am

Re: Re: Re: Re: Re: 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.
[ link to this | view in thread ]
John Fenderson (profile), 21 Aug 2014 @ 9:25am

Re: Re: Re: Re: Re: Re: say what you mean; mean what you say
If that's the place you're coming from, then I don't understand the point you were trying to make in your original NewEgg comment.
[ link to this | view in thread ]
John Fenderson (profile), 21 Aug 2014 @ 9:26am

Re: When is a troll not a troll?
"the truth is the exact opposite"

Perhaps you should explain why you believe this to be "truth".
[ link to this | view in thread ]
Michael Smith, 21 Aug 2014 @ 4:53pm

re Patent Troll
How do you get rid of Patent Trolls ..... have them declared members/supporters of ISIS & let the real nasty boys do their thing. Good riddance to bad rubbish
[ link to this | view in thread ]
Sheogorath (profile), 23 Aug 2014 @ 1:54pm

Re: Re:
Reaganlaw and Clintonlaw, actually.
[ link to this | view in thread ]