Personal Audio LLC is an East Texas shell company that gleaned national attention when it claimed it had the right to demand cash from every podcaster. The company was wielding a patent on “episodic content,” which it said included anyone doing a podcast, as well as many types of online video.
Now the company is trying to walk away from its highest-profile lawsuit against comedian Adam Carolla, without getting paid a penny—but Carolla won’t let the case drop.
Carolla sent Ars a statement saying he’ll continue to pursue counterclaims against Personal Audio, seeking to invalidate the patent “so that Personal Audio cannot sue other podcasters for infringement of US Patent 8,112,504.” Lotzi (Carolla’s company) has already “incurred hundreds of thousands of dollars in fees and expenses to defend itself” against the Personal Audio patents.
So, if I understand this correctly, Carolla solicited donations to fight this case. Personal Audio LLC want to drop the case now that they’re up against someone who aren’t scared. The way I see it, Carolla has got three options. One; agree to drop the case, and pay back his donors (impractical). Two; agree to drop the case, and keep the money (unethical). Three; refuse to drop the case, and spend the money the way the donors intended.
Update (2014-08-24): Daniel Nazer:
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.
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.
On his podcast he said he spent it all and over 100k on top of it on the pre-trial legal and expert fees.
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