The Magazine

Trolling for Dollars

At times, our intellectual property laws produce results that are patently absurd

Jul 14, 2014, Vol. 19, No. 41 • By JONATHAN V. LAST
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One February day in 2012, the U.S. government granted its 8,112,504th patent to a corporation called Personal Audio. The company’s invention was described as a “system for disseminating media content representing episodes in a serialized sequence,” which sounds complicated and impressive. The invention looked even more complicated, and more impressive, if you read through the 31,000-word text describing it. The supporting images looked more complicated still, but less impressive. Accompanying the patent were eight pages of confused flow charts with dozens of boxes and circles and arrows pointing hither, thither, and yon.

...where plaintiffs prosper

...where plaintiffs prosper

Billy Hathorn

The flow charts combine technical-sounding terms, such as “raw program database,” with high levels of abstraction. For instance, one squiggly line connecting two boxes is simply labeled “Internet.” The overall effect is that of a bright middle-school student trying to fake his way through an assignment. Which is more or less what patent number 8,112,504 is: It is an attempt to define and take ownership of the idea of the podcast.

The patent is what allowed Personal Audio to sue podcaster/comedian/celebrity Adam Carolla for a reported $3 million. Carolla started podcasting in 2009 and today runs America’s largest podcasting network, yet neither he nor any other podcaster has ever paid Personal Audio for the right to use the medium. Carolla is fighting the suit. If he loses the case or decides to settle, then Personal Audio will have leverage to sue other podcasters, a list including everyone from amateur hobbyists to entertainment conglomerates such as Comcast/NBC, Time Warner, Viacom, and NPR. 

The Personal Audio podcast patent isn’t a special case. Rather, it’s emblematic of how America’s legal and financial systems, which were designed to foster innovation and encourage the efficient allocation of capital, have evolved into a system which often does the opposite.

But before we move on to the larger questions about intellectual property, let’s dispense with the specific question of Personal Audio and its podcast patent, with which there are a few problems.

The first problem is that neither Personal Audio nor its founder, James Logan, seems to have ever created a podcast. This isn’t fatal to their patent claim, of course. But it does mark them as nonpracticing entities, or NPEs, in legal parlance. By Logan’s own account, Personal Audio is a holding company: “We own property, and our main activities relate to earning a return on that property. Now, it just so happens that our property consists of patents.” Which is to say that the company does not make, or use, anything. It simply seeks rents from actual producers. Nothing wrong with that, of course.

The more substantive problem is the nature of the podcasting patent itself. It is difficult to say when, exactly, the first podcasts were made, but they seem to have dribbled out in 2003, possibly a bit earlier. By 2005 podcasts had become popular enough that Apple added explicit support for managing these audio files to its popular iTunes software. Personal Audio applied for its patent in 2009. In the byzantine world of patent law, the term for this problem is “prior art.” The plain-English version: If something already exists out in the world, you cannot swoop in and patent it yourself, because your invention is not original. The prior art of the podcast existed long before Personal Audio asked to be given credit for its invention.

But the company was not unsophisticated, so when Logan and his colleagues made their bid in 2009, they tied it to a 1996 application for another patent. The 1996 filing sought to patent an interesting idea: a handheld audio device that would allow listeners to skip around within the source material. Mind you, Logan was never able to build this device—the technical challenges proved so formidable that when he tried to implement the idea, he wound up going decidedly low-tech: He took existing articles from magazines, read them aloud, and recorded these readings onto audiotapes. People would, in theory, come to him over the Internet and place orders for the tapes. At which point Logan would physically mail them to the customer, via the Postal Service. The business didn’t work out for him, and he abandoned it in short order.

But in 2009, Logan took advantage of a rule that allows patent seekers to amend the claims of their previous inventions. He filed an amended claim, which contended that his invention of the personal, handheld audio device also encompassed the serving of serialized content from the Internet, which he asserted was the essential element of his tapes-by-mail system. The implication being that the real origin of the podcast lay in his 1996 “invention” that never actually existed.

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