Patent Trolls Are Ballsy Assholes

I'm not typically one for bold titles but, in this case, it has been well earned. We have all heard about the patent troll who sued Apple three years ago over ipod playlist patents and won. However, it may come as a surprise that the same victorious company is now claiming to own the patent on something you wouldn't expect: Podcasts.

Personal Audio, owner of the patent titled (#8,112,504) "System for disseminating media content representing episodes in a serialized sequence", is suing Adam Corolla because his podcast infringes on said patent. Sound absurd? Well, not surprisingly, the issue is more complicated than you might expect, via TechDirt:

This patent was applied for on March 4, 2009 and granted on February 7, 2012. Isn't it great that the "new" USPTO is now rushing through patent approvals, so examiners like Carl Colin could claim that this patent was both "new" and "non-obvious" to those skilled in the art, when podcasting itself has been around since at least 2004. Hell, why not look it up on, oh, HowStuffWorks -- one of the companies being sued for "violating" this patent that wasn't applied for until 2009? Incredibly, Adam Carolla's podcast started on February 23, 2009... or exactly two weeks before this patent was applied for. Update: As pointed out in the comments, this is actually a "child" patent of an earlier application, so they can argue a priority date from back in 1996. In other words, this is really a submarine patent (which were supposed to have been outlawed).

Reasonable people can disagree about how best to protect the intellectual property of individuals and corporations. But, suggesting that entire companies whose only product is patent lawsuits is an intended and useful appendage of such a system borders on the absurd. Additionally, a recent study by Catherine Tucker, a professor of marketing at MIT's Sloan School of Business, found that patent trolls have a large, negative effect on Venture Capital investment, via ArsTechnica:

The study defines "frequent litigators" as companies that file 20 or more patent lawsuits, which limits the definition to true-blue "patent trolls," or Patent Assertion Entities (PAEs), the term used by the paper. The study covers the period from 1995 to 2012.

Tucker's paper estimates a 95 percent confidence interval for the amount of lost investment to be between $8.1 billion and $41.8 billion. Those numbers are relative to a baseline of just under $131 billion of investment that actually occurred during that five-year period of time.

Additionally, the study does not suggest that all litigation is negative, only litigation via patent trolls:

When she looked at patent litigation generally, Tucker found that there is a positive correlation between some litigation and VC funding. More lawsuits go along with more investment—to a point.

"In the beginning, in general, patent litigation is good," said Tucker in an interview with Ars. "It suggests a well-functioning patent system and has a positive effect. However, when you get to a certain point, that's no longer the case. Then, the more patent litigation you have, the worse it is for venture capital investment."

When the study limited the question to patent assertion entities, the effect was entirely negative. There's no amount of activity by the frequent litigators that correlates with increased VC investment.

It's a rare thing to see an activity labeled "entirely negative". It appears that "patent trolling" has joined the ranks of type 2 diabetes, infanticide, and Kim Jong Un's haircut. Which, begs the question, "is anyone going to do anything about it?" Well, if you thought, "congress will," you'd be wrong. Luckily, thanks to a pissed off bank and the US Supreme Court, something has been done, via Wired:

On Thursday, the court upheld the notion that an idea alone can’t be patented, deciding unanimously that merely implementing an idea on a computer isn’t enough to transform it into a patentable invention...

The case in question was Alice Corporation vs. CLS Bank. Alice Corporation, a financial company based in Australia, holds a number of patents for facilitating financial exchanges between two parties by using a computer as a third party. CLS Bank, a foreign currency exchange company, filed a claim that the patents were “invalid, unenforceable, or not infringed,” and then Alice countered with a claim that CLS was infringing its patents. The court ruled in favor of CLS, reasoning that third party intermediation is a fundamental building block of the economy, and not a novel invention and that “merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.”

Certainly a step forward in making our patent system slightly less ridiculous, but there still seems to be an awfully long way to go. I would be interested in hearing from the VC monkeys out there, what's the general opinion of patent trolls in your neck of the woods? Are they as wildly despised as the above articles suggest? Or is there more nuance that isn't immediately clear? What do the rest of you monkeys think? Down with patent trolls? Or, is now the time to start patenting everything under the sun?

 
Best Response

Potentially a legitimate way to make money in a strictly legal sense, but these guys aren't innovating and are ultimately stifling innovation. I think they are scum. Not the worst sort of scum (eg they are not kidnapping schoolgirls and selling them into slavery), but certainly scum.

I have seen trademark trolls in action and they operate by scare factor ie write a nasty letter, ultimately get paid "go away" money. Patent trolls seem to work on the same methodology, but with higher pay off.

The trademark troll I saw in action was some guy who had trademarked the word "ninja" in the US and was trying to stop my friend using it for a not-for-profit business in another country. I was a lawyer at the time and wrote a response for my friend pointing out the troll's claim was inapplicable. This sort of approach wouldn't work for a patent troll given the nature of patent claims.

\/\/ To clarify, I'm commenting on patent trollery, not the merits of this particular case \/\/

Those who can, do. Those who can't, post threads about how to do it on WSO.
 

Okay, a few facts.

This lawsuit isn't new, they won against Apple because Personal Audio is not a patent troll. A patent troll by definition is a person or group that buys up patents to use to earn licensing income on.

The guy who patented the mp3 playlist is also the guy who owns Personal Audio, is also the same guy who is suing. He won against Apple because he owns the idea of a playlist. He is not suing podcasts, he is suing podcasters that use a playlist distributions and have not licensed the technology.

Funny how people are all up in arms over personal property when it is their personal property, but don't seem to give a flying fuck about the property of others. Be it real or intellectual.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

Intellectual property is all fine and dandy, but podcasts are basically rehashes of radio programs from the 1920s. Maybe the guy was waiting until every radio show creator from the early 20th century died, so he could say it was his idea.

 

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