By virtue of Marc Maron's podcast, I was made aware of the recently dropped lawsuit against Adam Carolla and other podcasters filed by Personal Audio LLC, which by most accounts is an East Texas shell company whose only product is litigation. If you're unfamiliar with the term "patent troll," an unnamed interviewee from this fantastic 2011 This American Life episode sums it up rather nicely: "It's basically a flimflam game that anybody who knows how to take advantage of it is doing."
In short, so-called patent trolls buy or file patents that are broad and ill-defined, and then sue companies or individuals who may or may not be perceived to be infringing on those patents. Of course, anyone being labeled a patent troll will likely argue that they're fighting for innovation, for the inventor, but in the end, critics contend, their effect on both is stifling. Patents are bought, then backed by venture capital and litigated upon, then sold to a shell company, then backed by venture capital and litigated upon again, ad nauseam.
In this case, Personal Audio was acting on a patent on "'episodic content,' which it said included anyone doing a podcast, as well as many types of online video." PA purportedly dropped the lawsuit against Carolla and other podcasters because there wasn't enough money at stake. From their statement:
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.
In turn, they've painted Carolla's refusal to accept the dismissal as frivolous and a waste of the $450,000 defense fund he's raised through crowdsourcing:
We are quite surprised that Carolla has turned down the offer that was accepted by his peers. Perhaps this is because he feels he can simply get his fans to fund his future, and now unnecessary, legal expenses. Or perhaps it relates to how he uses the case as material for his show,” said Brad Liddle, CEO of Personal Audio, LLC. “The fact of the matter is that Adam Carolla is asking people to donate money to him for a lawsuit that he no longer needs to defend. We would like his listeners to understand this situation when deciding whether or not to donate additional money to his cause.
Carolla should obviously be applauded for his efforts. And hopefully, taking this to court will set a new precedent for patent law. As Alex Blumberg points out in the TAL episode, the true bilking is to the benefit of the patent trolls and no one else. Here he concludes the piece with the story of Nortel, a bankrupt tech company that auctioned off its patents as part of its liquidation. There was a bidding war in which Google said it was willing to spend more than $3 billion, but Apple finally won out with a bid of $4.5 billion—the largest patent auction in history. This money isn't for the technologies owned via the patents, it's basically insurance against patent trolls.
Think of that. $4.5 billion on patents that these companies almost certainly don't want for their technical secrets. That $4.5 billion won't build anything new, won't bring new products to the shelves, won't open up new factories that can hire people who need jobs. That's $4.5 billion that adds to the price of every product these companies sell you, $4.5 billion essentially wasted buying arms for an ongoing patent war.
The big companies— Google, Apple, Microsoft— will probably survive this war. The likely casualties [are] the companies out there that no one's ever heard of that could one day take their place.