Company sues tech giants claiming podcasting patent breach
By Ben Knight, ABC Updated June 5, 2013, 10:42 pm
A company claiming it invented podcasting is suing some of the United States' biggest broadcasters for intellectual property infringement.
Personal Audio has already extracted millions from some of the biggest tech names in the world, even though it does not actually make any products of its own.
Critics say the company is a patent troll, part of a massive legal problem costing US companies billions of dollars.
A Boston University study found that in 2011 alone patent trolls cost US businesses $29 billion and the number of cases is ballooning each year.
Personal Audio has so far been successful, winning $8 million from Apple last year for breaching its patent on playlists for personal media players.
It also has licensing agreements with massive companies like Samsung, Motorola, Sony and LG, which arose when Personal Audio sued them for breaching its patent.
Now, the company is going after the American networks CBS and NBC, as well as others, for infringing its patent on podcasting.
It has also written to dozens of smaller podcasters telling them that they, too, are in breach.
However, Jim Logan from Personal Audio says his company is definitely not a patent troll.
"We are the inventors. We came up with the idea," Mr Logan said.
"We put [inaudible] equity and hard earned dollars behind the effort to come up with personalised audio back in the 90s.
"It didn't pan out and we're just trying to basically recoup our investment on the other end by getting some value from patents."
Mr Logan would not say exactly how many podcasters Personal Audio has written to or how much they are asking them to pay in licensing fees, but did say amateurs will not be approached.
"We haven't really publicised our licensing model yet, but we probably will be in the next few weeks," he said.
"[Amateurs] will probably never hear from us because it's just impractical to reach that broad an audience."
Settlement a cheaper option for businesses
A few months ago US president Barack Obama also likened patent trolling to extortion.
"They don't actually produce anything themselves, they're just trying to essentially leverage and hijack somebody else's idea and see if they can extort some money out of them," Mr Obama said.
According to lawyer Daniel Nazer, who is currently defending a case brought by Personal Audio, the choice for businesses to pay patent trolls often becomes a business decision.
"[The choice is to] pay $2 million to defend [it]or [pay] $100,000 in settlement," Mr Nazer said.
However, patents can be vague and broadly worded in nature, and in some cases, even describe things that have already been invented.
Comedian Marc Marron, who has one of the most popular podcasts in the country, does not see the funny side to the patents.
"Especially [for] the people who are working out of their garage, or you, who are trying to start your podcast," Mr Marron said.
"All of a sudden this company, this troll company, is going to shake you down to extort money from you."
Personal Audio does not make anything but rather has a group of patents that describe what we now call podcasting, based on a description it filed with the US Patent Office in 1996.
For this reason the defence will be simple, Mr Nazer says.
"They didn't really invent podcasting," he said.
"The challenge is for podcasting in 1996 were hardware challenges and challenges about bandwidth, distributing large files through the primitive internet.
"Their patent addresses none of those issues, so when they say they failed to actually produce a commercial product, that's because they didn't do any of the hard work that led to the podcasting that we know today."
There are currently five bills before the US Congress to crack down on the number of patent lawsuits being brought in the US.
Mr Obama announced his own series of executive orders on Tuesday.
