WEBVTT - The Podcast Patent Problem 0:00:04.120 --> 0:00:07.160 Get in touch with technology with tech Stuff from how 0:00:07.200 --> 0:00:13.920 stuff works dot com. Hey there, and welcome to tech Stuff. 0:00:14.040 --> 0:00:17.079 I'm your host, Jonathan Strickland. I'm an executive producer at 0:00:17.120 --> 0:00:21.520 how stuff Works in love all things tech, and we're 0:00:21.960 --> 0:00:25.239 going to tackle a very special topic to me today. 0:00:25.320 --> 0:00:29.400 So for several years, there was a dark cloud looming 0:00:29.600 --> 0:00:33.280 over the podcast landscape, and the shadow of this cloud 0:00:33.360 --> 0:00:38.320 was affecting many podcasters in different ways, including the podcasts 0:00:38.320 --> 0:00:41.960 from How Stuff Works. So today we're going to explore 0:00:42.040 --> 0:00:45.800 the story of Personal Audio l l C, the patents 0:00:45.840 --> 0:00:48.559 that were at the heart of the issue, and what 0:00:48.800 --> 0:00:52.280 happened as a result. And I've been asked about this 0:00:52.400 --> 0:00:56.200 story many times, and until the matter was actually put 0:00:56.240 --> 0:01:01.080 to rest earlier in two thousand eighteen, I couldn't really 0:01:01.240 --> 0:01:04.480 talk about it. I'll mention more about being put to 0:01:04.560 --> 0:01:06.959 rest in a little bit, but I didn't feel comfortable 0:01:07.400 --> 0:01:10.959 covering the story on my show because How Stuff Works 0:01:11.040 --> 0:01:14.400 is one of the parties specifically named by Personal Audio 0:01:14.600 --> 0:01:17.360 LLC and its complaints, and as an employee of How 0:01:17.400 --> 0:01:20.880 Stuff Works, it would at the very least be unwise 0:01:21.000 --> 0:01:23.559 to comment officially on the matter. I might be seen 0:01:24.080 --> 0:01:27.280 as a real voice of the company, like I was 0:01:27.560 --> 0:01:31.200 representing the company as a whole, and I wouldn't necessarily 0:01:31.240 --> 0:01:33.440 mean that I would just be trying to cover the story. 0:01:33.840 --> 0:01:37.560 I am not the official voice of the company. I 0:01:37.600 --> 0:01:40.400 am given an awful lot of control over my podcast, 0:01:40.440 --> 0:01:43.759 and I do appreciate that. But as we understand, with 0:01:43.959 --> 0:01:48.960 great power comes great something something. As my fictional uncle 0:01:49.000 --> 0:01:51.240 Ben used to tell me before, I would hustle off 0:01:51.280 --> 0:01:55.160 to shoot pictures for the local paper. But now the 0:01:55.200 --> 0:01:57.480 whole matter is closed and I feel I can at 0:01:57.520 --> 0:02:00.840 least give an account of what happened and why it 0:02:00.880 --> 0:02:03.400 took so long to resolve, and I'll try to be 0:02:03.480 --> 0:02:06.440 as objective as possible. So please remember, this was a 0:02:06.440 --> 0:02:09.240 case that had the potential to really affect my career, 0:02:09.720 --> 0:02:11.320 so I am a bit close to it, but I'm 0:02:11.320 --> 0:02:15.040 gonna try and be unbiased. That's also challenging because a 0:02:15.120 --> 0:02:19.000 lot of the outlets that reported on this had a 0:02:19.160 --> 0:02:23.520 very specific perspective on the matter. So let's begin this 0:02:23.560 --> 0:02:27.280 discussion by talking about what patents are, because that's at 0:02:27.280 --> 0:02:32.840 the very heart of the matter. A patent is at 0:02:32.919 --> 0:02:34.920 least a patent like the kind of talking about in 0:02:34.919 --> 0:02:39.840 this episode is essentially a license or similar authorized document 0:02:40.000 --> 0:02:43.120 issued by a government to an applicant for the right 0:02:43.160 --> 0:02:48.320 to make, use, sell, or license out and invention. You 0:02:48.440 --> 0:02:53.600 cannot patent an idea, but you can patent the implementation 0:02:53.960 --> 0:02:57.399 of an idea as long as it meets certain criteria. 0:02:57.560 --> 0:03:00.000 So let's say you've come up with a really cool 0:03:00.080 --> 0:03:04.320 invention that's going to automatically coordinate all your outfits so 0:03:04.360 --> 0:03:07.639 that not only are you fashionable, but you also never 0:03:07.680 --> 0:03:10.120 have to worry about wearing the exact same outfit twice 0:03:10.440 --> 0:03:13.440 because it will keep a track record of everything you've done, 0:03:13.480 --> 0:03:17.359 so it will pair different pieces together to consistently keep 0:03:17.400 --> 0:03:20.440 your look fresh from day to day and fashionable. It's 0:03:20.440 --> 0:03:25.360 not gonna pair two mismatched pieces of clothing together. And 0:03:25.400 --> 0:03:27.840 you feel this invention has real value and you want 0:03:27.880 --> 0:03:30.320 to protect your idea from people who might steal it, 0:03:30.760 --> 0:03:33.280 so you have a couple of different options ahead of you. 0:03:33.880 --> 0:03:36.720 One of those options is you keep your mouth shut 0:03:37.040 --> 0:03:40.280 about how you invented it. You don't explain how it works, 0:03:40.720 --> 0:03:44.040 You create a product, and you go to market. The 0:03:44.160 --> 0:03:46.560 danger of this method is that you don't really have 0:03:46.600 --> 0:03:49.840 any protection for your idea if someone goes out and 0:03:49.880 --> 0:03:52.800 buys your product and then says, I'm going to break 0:03:52.840 --> 0:03:56.080 this down and figure out how this this person did this. 0:03:56.360 --> 0:03:59.640 They reverse engineer your process and they figure out how 0:03:59.680 --> 0:04:03.240 you did it. They could conceivably create a competing product 0:04:03.320 --> 0:04:06.040 of their own and undercut you, and you don't have 0:04:06.080 --> 0:04:09.840 any protection in that case. Or you could apply for 0:04:09.920 --> 0:04:13.640 a patent for your invention. Now, this involves drafting a 0:04:13.680 --> 0:04:17.160 patent application to the respective authority in the United States, 0:04:17.200 --> 0:04:20.880 that's the Patent and Trademark Office. The Patent Office reviews 0:04:20.920 --> 0:04:24.440 your application and assuming your patent appears to be valid 0:04:24.720 --> 0:04:28.200 and presents at least a partly new invention that is 0:04:28.240 --> 0:04:33.039 not obvious, they will most likely approve it. Now, that 0:04:33.120 --> 0:04:36.560 creates a very interesting trade off because, on the one hand, 0:04:36.920 --> 0:04:40.560 your patent is public information. Anyone can pull up your 0:04:40.560 --> 0:04:43.560 patent and read it and see how your invention works 0:04:44.000 --> 0:04:47.360 from a very high level. Most patents use fairly vague 0:04:47.400 --> 0:04:50.920 language so that the intricate details are not on display. 0:04:50.960 --> 0:04:54.040 They give the general process of how an invention works. 0:04:54.200 --> 0:04:56.360 And by the way, you can go to and do 0:04:56.520 --> 0:04:59.200 patent searches online and pull up patents for all sorts 0:04:59.200 --> 0:05:01.080 of stuff and see how it works. It's actually really 0:05:01.120 --> 0:05:03.719 really useful if you're trying to, I don't know, do 0:05:03.839 --> 0:05:06.960 a podcast where you're explaining how tech works. But the 0:05:07.000 --> 0:05:10.880 patent also grants protection. If you find someone using your 0:05:10.920 --> 0:05:13.840 invention and they don't have your permission to do so, 0:05:14.279 --> 0:05:17.359 you can sue them for infringing on your patent. And 0:05:17.400 --> 0:05:20.760 if you can prove that they are using your approach, 0:05:21.040 --> 0:05:23.920 the one that's detailed in your patent, and they don't 0:05:23.960 --> 0:05:25.840 have your permission, you can put a stop to it. 0:05:26.320 --> 0:05:28.880 Even if it turns out that other people have come 0:05:28.960 --> 0:05:32.400 up with the same approach independently after you came up 0:05:32.440 --> 0:05:37.360 with it. If they say, look, we never ever encountered 0:05:37.600 --> 0:05:41.640 your design, you could argue, well, that doesn't matter, because 0:05:41.720 --> 0:05:46.000 I have the patent, and that patent pre dates your 0:05:46.400 --> 0:05:51.640 version of my invention. I own that approach to the invention. Effectively, 0:05:52.560 --> 0:05:55.279 you can choose to license your approach to other people 0:05:55.480 --> 0:05:57.640 if they want to do the same thing, but they 0:05:57.680 --> 0:06:00.719 can't do it without your permission. Now. Current lee in 0:06:00.760 --> 0:06:03.840 the United States patents have a term of twenty years 0:06:03.960 --> 0:06:07.960 from the earliest filing date of the patent application. You 0:06:08.000 --> 0:06:11.560 also have to pay occasional fees to maintain the patent. 0:06:12.320 --> 0:06:14.400 In the United States, like in some countries, it's an 0:06:14.440 --> 0:06:16.880 annual fee, but in the US it's not. In the US, 0:06:17.279 --> 0:06:18.800 you have to pay a fee at three and a 0:06:18.839 --> 0:06:21.520 half years, seven and a half years, and eleven and 0:06:21.600 --> 0:06:24.000 a half years after the patent has been issued, and 0:06:24.040 --> 0:06:28.320 the patent fee increases each time. If the patent holder 0:06:28.400 --> 0:06:32.000 fails to pay the fee, the patent is abandoned and 0:06:32.080 --> 0:06:36.479 the invention is no longer under patent protection. Patent holders 0:06:36.520 --> 0:06:40.160 will often abandon a patent on purpose if the maintenance 0:06:40.200 --> 0:06:44.000 fees exceed the value of the patent itself. If you're saying, well, 0:06:44.600 --> 0:06:47.599 I'm going to be paying x amount, but this is 0:06:47.839 --> 0:06:50.599 worth less than X, it doesn't make sense to keep 0:06:50.720 --> 0:06:53.799 maintaining the patent, you might abandon it. The Patent office 0:06:53.839 --> 0:06:56.159 can take a couple of years to grant patents from 0:06:56.200 --> 0:07:00.320 the moment that they've been applied for. After the HERMA 0:07:00.360 --> 0:07:03.440 protection is up, anyone is free to create inventions based 0:07:03.480 --> 0:07:07.320 off the information in those patents. So twenty years passes 0:07:07.360 --> 0:07:10.200 after the filing of a patent or the rather the 0:07:10.240 --> 0:07:15.520 application for a patent, then anyone can make something and 0:07:15.560 --> 0:07:18.800 you you have no legal recourse to suthe them for 0:07:19.000 --> 0:07:22.400 using your approach because the patent has expired. The general 0:07:22.440 --> 0:07:27.520 logic about this is that you don't stifle innovation. This way. 0:07:27.560 --> 0:07:30.720 Other people can take your idea and they can work 0:07:30.720 --> 0:07:32.440 with it. They can change it up, they can make 0:07:32.480 --> 0:07:36.640 tweaks to it. But the protection gives you two decades 0:07:36.880 --> 0:07:39.400 of a head start, so you have a nice solid 0:07:39.440 --> 0:07:44.320 ground to to start from. Now. Patent holders can make 0:07:44.360 --> 0:07:48.160 money or exploit their inventions in several ways. And when 0:07:48.160 --> 0:07:52.400 we say exploit, and it's not like it's being it's 0:07:52.400 --> 0:07:55.840 not a negative thing. Exploiting in this sense means you're 0:07:55.920 --> 0:07:58.880 just making use of the invention in a way in 0:07:59.000 --> 0:08:03.360 order to profit from it. So patent holders can make 0:08:03.400 --> 0:08:06.800 their inventions and sell them to customers. They could go 0:08:06.840 --> 0:08:11.520 into manufacturing and production. They might license their inventions to 0:08:11.640 --> 0:08:14.440 other parties, which then can go on to exploit those 0:08:14.480 --> 0:08:17.240 inventions and sell them or otherwise profit from them. So 0:08:17.840 --> 0:08:20.640 that makes sense. Let's say you're a small time inventor 0:08:21.000 --> 0:08:23.200 and you've come up with a brilliant invention, but you 0:08:23.200 --> 0:08:26.720 don't really have the capital to start up a whole 0:08:26.760 --> 0:08:31.040 manufacturing system. You might take your idea and license it 0:08:31.120 --> 0:08:34.600 to a different company that does do manufacturing. And that's 0:08:34.600 --> 0:08:36.840 why you can. You can profit from your idea, but 0:08:36.960 --> 0:08:40.000 you don't have to sink in the massive investment to 0:08:40.120 --> 0:08:43.400 go into the actual production. You could even sell your 0:08:43.400 --> 0:08:47.720 patent rights to another party entirely. You just sell them 0:08:48.000 --> 0:08:50.679 the patent and they become the patent holder. It's it's 0:08:50.679 --> 0:08:54.920 like a transference of property, which means the company might 0:08:55.080 --> 0:08:58.040 then go into production, or maybe they just sit on 0:08:58.120 --> 0:09:02.080 the patents and wait and watch, and if anyone else 0:09:02.120 --> 0:09:05.439 tries to make anything that infringes upon that patented invention, 0:09:05.920 --> 0:09:09.240 the patent holder can threaten legal action. They can attempt 0:09:09.280 --> 0:09:12.200 to take the other party to court, often as a 0:09:12.240 --> 0:09:16.080 means to leverage a large settlement from the infringing party. Now, 0:09:16.120 --> 0:09:19.400 many people call this last group of patent holders a 0:09:19.520 --> 0:09:23.280 patent troll, and the argument for doing that, to call 0:09:23.360 --> 0:09:26.080 them a patentrol goes kind of like this. The holder 0:09:26.080 --> 0:09:29.600 of the patent is not actually doing anything useful with 0:09:29.679 --> 0:09:34.800 the invention that the patent covers. Instead, what they're doing 0:09:35.320 --> 0:09:39.400 is effectively acting as a gatekeeper. The patent holder is 0:09:39.440 --> 0:09:42.120 not protecting their inventions so much as they are lying 0:09:42.120 --> 0:09:45.960 in wait to spring a trap. They want other parties 0:09:46.000 --> 0:09:49.760 to use that invention implementation so that they can jump 0:09:49.800 --> 0:09:53.240 in with threats of litigation, so you could argue their 0:09:53.280 --> 0:09:56.800 stifling innovation rather than encouraging it. For many people, it 0:09:56.800 --> 0:10:00.240 seems unfair that a company or inventor could patent a 0:10:00.280 --> 0:10:03.680 really cool invention and then refuse to actually do anything 0:10:03.720 --> 0:10:06.520 productive with it, while preventing anyone else from doing the 0:10:06.559 --> 0:10:10.840 same unless they pay an exorbitant fee. Some folks would 0:10:10.880 --> 0:10:13.360 go so far as to throw the patent holders who 0:10:13.440 --> 0:10:16.400 license their patents to others in that category. I think 0:10:16.400 --> 0:10:19.000 that's going too far. I think there are plenty of 0:10:19.040 --> 0:10:23.560 cases where it's totally legitimate to license out a patent 0:10:23.640 --> 0:10:27.320 to other companies if you are incapable of producing it yourself. 0:10:27.360 --> 0:10:30.880 I think that's totally legit. I think the patent holders 0:10:30.880 --> 0:10:35.040 should get compensation for his or her idea. But I 0:10:35.080 --> 0:10:38.600 do get a little uneasy about companies that hold lots 0:10:38.600 --> 0:10:41.760 of patents but they never do anything with them apart 0:10:41.840 --> 0:10:45.680 from threatened litigation. That does rub me the wrong way. 0:10:45.840 --> 0:10:49.480 I find it rather trollish. Next, I'm going to talk 0:10:49.520 --> 0:10:53.720 about Personal Audio LLC and why many people refer to 0:10:53.840 --> 0:10:56.920 that company as a patent troll. But first, let's take 0:10:56.920 --> 0:11:07.240 a quick break to thank our sponsor. Now, before I 0:11:07.320 --> 0:11:10.679 get too far into this section, let me be clear. 0:11:10.960 --> 0:11:15.719 I am not definitively saying that Personal Audio ll C 0:11:15.960 --> 0:11:20.960 is a patentrol. Lots of other people have done that. 0:11:21.160 --> 0:11:24.040 If you do any research at all on the various 0:11:24.040 --> 0:11:27.880 news outlets that have covered this story, patentrol tends to 0:11:27.920 --> 0:11:32.440 be the phrase most used to describe Personal Audio LLC. 0:11:32.679 --> 0:11:35.839 But I am going to try and step back from that. 0:11:36.440 --> 0:11:39.199 I just want to explain the story as it unfolded 0:11:39.480 --> 0:11:42.160 and let you guys draw your own conclusions, because I 0:11:42.240 --> 0:11:45.480 actually really do think the story is more complicated than 0:11:45.559 --> 0:11:49.480 how it's frequently portrayed. There are critics who said that 0:11:49.600 --> 0:11:53.160 what Personal Audio LLC did was an extortion racket, and 0:11:53.200 --> 0:11:55.480 I think it's actually a little more nuanced than that. 0:11:55.600 --> 0:11:58.600 I think that's not being entirely fair. So let's dial 0:11:58.640 --> 0:12:02.720 this back all the way to nineteen nine six, which, 0:12:02.760 --> 0:12:05.599 by the way, was years before the word podcast was 0:12:05.640 --> 0:12:09.600 a thing. And I can say that authoritatively because podcast 0:12:09.760 --> 0:12:13.679 comes from the word iPod, and the Apple iPod didn't 0:12:13.760 --> 0:12:18.479 hit the market until two thousand one. So this company's 0:12:19.000 --> 0:12:25.000 beginnings pre date the word podcast, if not the general concept. 0:12:25.280 --> 0:12:28.560 More on that in a minute. In nine a guy 0:12:28.640 --> 0:12:32.559 named James Logan got involved in this and made this 0:12:32.800 --> 0:12:36.320 enormous investment to start up a company. Now, Logan had 0:12:36.360 --> 0:12:41.200 previously founded a company called Microtouch Incorporated. He was the 0:12:41.240 --> 0:12:45.880 CEO of that company. He had amassed a you know, 0:12:46.080 --> 0:12:50.079 good fortune. He would remain the CEO of Microtouch until 0:12:50.160 --> 0:12:54.720 two thousand. At that point, another company, three M, would 0:12:54.720 --> 0:12:57.800 acquire micro Touch. Fun side note, by the way, the 0:12:57.920 --> 0:13:02.120 U S Securities and Exchange Commissi or SEC would actually 0:13:02.320 --> 0:13:07.199 file a suit against James Logan alleging charges of insider 0:13:07.280 --> 0:13:10.959 trading back in two thousand three. UH. The charges stated 0:13:11.000 --> 0:13:14.360 that Logan had directed a trust for the benefit of 0:13:14.400 --> 0:13:19.520 his minor children to acquire Microtouch stock, knowing that Microtouch 0:13:19.800 --> 0:13:24.440 was engaged in negotiations with both Tycho International Limited and 0:13:24.640 --> 0:13:29.160 Minnesota Mining and Manufacturing also known as three M, and 0:13:29.720 --> 0:13:33.079 that he was benefiting directly from this where specifically his 0:13:33.200 --> 0:13:37.000 children were. Logan would end up settling this matter out 0:13:37.000 --> 0:13:40.600 of court for more than half a million dollars without 0:13:40.720 --> 0:13:44.360 having to admit or deny the charges anyway. In the 0:13:44.360 --> 0:13:47.480 mid nineties, James Logan says he invested more than a 0:13:47.520 --> 0:13:49.880 million and a half dollars in a new company with 0:13:49.920 --> 0:13:52.240 a couple of co founders, and the company's goal was 0:13:52.280 --> 0:13:55.000 to bring to market a product that would download and 0:13:55.040 --> 0:13:58.400 play customized audio tracks, and as part of the company's 0:13:58.440 --> 0:14:02.160 pursuit of this goal, it filed patent applications regarding the 0:14:02.200 --> 0:14:06.280 business strategy. But in this process, the company concluded there 0:14:06.280 --> 0:14:09.520 would be too difficult and expensive to move forward, and 0:14:09.640 --> 0:14:13.440 they abandoned the plan to make the product, but they 0:14:13.480 --> 0:14:17.240 still held the patents. This would lead Logan to form 0:14:17.360 --> 0:14:21.400 Personal Audio LLC in two thousand nine. It served as 0:14:21.400 --> 0:14:24.760 a holding company and its only purpose was to hold 0:14:24.800 --> 0:14:28.240 onto those patents that were created back in the ninety nineties. 0:14:28.680 --> 0:14:32.120 The company itself is based in Texas, which has led 0:14:32.200 --> 0:14:35.680 many critics to suggest this was a calculated decision because 0:14:35.720 --> 0:14:41.280 Texas courts have a reputation for favoring patent holders. A 0:14:41.440 --> 0:14:44.960 judge in Texas had established some really strict rules to 0:14:45.280 --> 0:14:49.240 keep these patent trials short and to the point, creating 0:14:49.280 --> 0:14:53.920 what was casually known as the rocket docket, and juries 0:14:54.200 --> 0:14:59.520 tended in Texas to side with patent holders more than others, 0:14:59.560 --> 0:15:02.640 so it became such a big issue that in two 0:15:02.680 --> 0:15:08.000 thousand seventeen, a court case caused great upheaval because the 0:15:08.040 --> 0:15:11.200 courts ruled that patent holders would no longer be allowed 0:15:11.240 --> 0:15:14.360 to seek out a friendly court to hear their litigation. 0:15:15.120 --> 0:15:17.600 That this was in the wake of discovering that Eastern 0:15:17.640 --> 0:15:21.640 Texas would hear Thousands of patent infringement cases per year 0:15:23.760 --> 0:15:28.280 were brought to courts by what was called nonpracticing entities. 0:15:29.040 --> 0:15:32.640 That means companies that did not actually produce anything. They 0:15:32.640 --> 0:15:35.120 owned a lot of patents, but that's all they did, 0:15:36.080 --> 0:15:40.840 In other words, patent trolls. According to some critics, one 0:15:40.960 --> 0:15:44.480 of the patents that Personal Audio LLC. Was concerned with 0:15:44.960 --> 0:15:50.560 was titled Audio Program Player Including a Dynamic Program Selection Controller, 0:15:51.080 --> 0:15:54.360 and the abstract for that patent describes the invention like this, 0:15:54.400 --> 0:15:56.080 and this is a long quote, but stick with me. 0:15:56.560 --> 0:16:00.320 An audio program and message distribution system and which a 0:16:00.400 --> 0:16:05.320 host system organizes and transmits program segments to clients subscriber locations. 0:16:05.640 --> 0:16:09.040 The host organizes the program segments by subject matter and 0:16:09.080 --> 0:16:14.200 creates scheduled programming in accordance with preferences associated with each subscriber. 0:16:14.560 --> 0:16:18.880 Program segments are associated with descriptive subject matter segments, and 0:16:18.920 --> 0:16:21.720 the subject matter segments may be used to generate both 0:16:21.800 --> 0:16:25.800 text and audio cataloging presentations. To enable the user to 0:16:25.920 --> 0:16:30.640 more easily identify and select desirable programming, a playback unit 0:16:30.720 --> 0:16:35.240 at the subscriber location reproduces the program segments received from 0:16:35.280 --> 0:16:39.440 the host and includes mechanisms for interactively navigating among the 0:16:39.480 --> 0:16:43.480 program segments. A usage log is compiled to record the 0:16:43.520 --> 0:16:47.440 subscriber's use of the provided program materials, to return data 0:16:47.480 --> 0:16:51.080 to the host for billing, to adaptively modify the subscribers 0:16:51.120 --> 0:16:55.240 preferences based on actual usage, and to send subscriber generated 0:16:55.320 --> 0:16:59.720 comments and requests to the host for processing. Voice input 0:16:59.840 --> 0:17:03.320 and control mechanisms included in the player allow the user 0:17:03.360 --> 0:17:06.480 to perform hands free navigation of the program materials and 0:17:06.560 --> 0:17:09.600 to dictate comments and messages, which are returned to the 0:17:09.600 --> 0:17:14.120 host for retransmission to other subscribers. The program segments sent 0:17:14.200 --> 0:17:18.600 to each subscriber may include advertising materials which the user 0:17:18.720 --> 0:17:23.119 can selectively play to obtain credits against the subscriber fee. 0:17:23.480 --> 0:17:27.679 Parallel audio and text transcript files for at least selected 0:17:27.720 --> 0:17:31.679 programming enable subject matters searching and synchronization of the audio 0:17:31.720 --> 0:17:34.879 and text files. Speech synthesis may be used to convert 0:17:34.880 --> 0:17:38.879 transcript files into audio format. Image files may also be 0:17:38.920 --> 0:17:43.439 transmitted from the server for synchronized playback with the audio programming. 0:17:44.040 --> 0:17:48.920 Now that's a long summary, but that particular thing would 0:17:48.920 --> 0:17:52.760 come into play in two thousand nine when Personal Audio LLC. 0:17:53.280 --> 0:17:58.119 Would bring a lawsuit against Apple for patent infringement. Personal 0:17:58.119 --> 0:18:02.000 Audio would win eight million dollars that effort. Other lawsuits 0:18:02.040 --> 0:18:05.560 against other manufacturers would follow, and you could certainly argue 0:18:05.720 --> 0:18:08.960 that the iPod and playlists and structure that Apple had 0:18:08.960 --> 0:18:14.320 created resembled the proposal in the patent, and that other 0:18:14.359 --> 0:18:17.760 companies that had produced MP three players in their own 0:18:17.880 --> 0:18:21.440 filing systems and organization systems also kind of fell into 0:18:21.480 --> 0:18:24.600 that category. But the patent the company would use to 0:18:24.640 --> 0:18:29.080 go after podcasters was not exactly that same patent. It 0:18:29.119 --> 0:18:31.600 was slightly different. And one of the things about patents 0:18:32.200 --> 0:18:35.040 is that you can actually apply to modify them as 0:18:35.080 --> 0:18:39.359 technology advances. So you could create an invention that depends, 0:18:39.440 --> 0:18:42.600 let's say, on a specific type of media. For example, 0:18:42.720 --> 0:18:47.480 let's say that your invention UH concerns cassette tapes. But 0:18:47.560 --> 0:18:50.960 then later on, as technology advances and you get compact 0:18:51.040 --> 0:18:55.240 discs or you get digital media. You want to update 0:18:55.320 --> 0:18:58.880 your invention. It's following the same sort of invention process, 0:18:58.920 --> 0:19:01.439 but now it's dependent upon a new form of media. 0:19:01.800 --> 0:19:05.000 You can do that. It's subject to the Patent Offices approval, 0:19:05.000 --> 0:19:08.720 but you can win a new patent that covers the 0:19:08.840 --> 0:19:12.000 same approach, but now with a new element, like a 0:19:12.080 --> 0:19:15.800 new in this case new medium. But on the media 0:19:15.840 --> 0:19:19.720 distribution side, this patent was was not focused on a 0:19:19.760 --> 0:19:22.800 model that would resemble subscribing to downloading and listening to 0:19:22.840 --> 0:19:27.120 a podcast with that Apple one and for that the 0:19:27.160 --> 0:19:31.040 patent Personal Audio LLC would use against podcasters and which 0:19:31.040 --> 0:19:34.879 would later get challenged was u S Patent eight million, 0:19:36.160 --> 0:19:40.359 five hundred four, also known as System for Disseminating Media 0:19:40.480 --> 0:19:45.479 Content Representing Episodes in a serialized sequence. Now that patent 0:19:45.520 --> 0:19:49.000 included claims that would more closely tie to podcasting in general. 0:19:49.480 --> 0:19:52.400 These sections focused on the host side of the invention, 0:19:52.840 --> 0:19:55.040 as in the servers on the Internet that would host 0:19:55.040 --> 0:19:58.000 the audio files that listeners would connect to and download 0:19:58.119 --> 0:20:01.320 in order to listen to their shows. This patent was 0:20:01.359 --> 0:20:05.320 granted in two thousand twelve, and as the site i 0:20:05.440 --> 0:20:08.959 P Watchdog would put it, The patent quote claimed a 0:20:09.040 --> 0:20:13.160 media player for acquiring and reproducing media programming files which 0:20:13.200 --> 0:20:16.920 represent episodes in a series of episodes as those episodes 0:20:16.960 --> 0:20:20.760 become available. The media player includes a digital memory at 0:20:20.800 --> 0:20:24.040 communication sport coupled to the Internet for transmitting data requests, 0:20:24.560 --> 0:20:27.679 and an output unit for reproducing the media files that 0:20:27.680 --> 0:20:31.879 would essentially be speakers or headphones. The resulting invention addressed 0:20:31.920 --> 0:20:35.120 a need among Internet radio sources for a more practical 0:20:35.160 --> 0:20:39.360 system of delivering content too interested users on request, rather 0:20:39.400 --> 0:20:42.159 than searching for the radio source via web browser, a 0:20:42.280 --> 0:20:46.320 difficulty which is exacerbated further when while an interested user 0:20:46.480 --> 0:20:50.280 is driving end quote. That would be the patent that 0:20:50.359 --> 0:20:54.600 would be the focus of all the fuss. What fuss? 0:20:55.160 --> 0:20:57.240 I'll explain more in just a moment, but first let's 0:20:57.280 --> 0:21:07.679 take another quick break to thank our sponsor. In two 0:21:07.720 --> 0:21:11.639 thousand thirteen, Personal Audio began to issue warnings to several 0:21:11.680 --> 0:21:16.719 different podcasting organizations, including the Corolla Digital Network, home of 0:21:16.760 --> 0:21:20.280 the Adam Corolla Show. The warnings were all about this 0:21:20.440 --> 0:21:23.840 so called podcasting patent that Personal Audio had received. In 0:21:23.840 --> 0:21:27.760 February twelve, Corolla's company was hit with a lawsuit for 0:21:27.760 --> 0:21:31.360 patent infringement, and he decided to fight the lawsuit rather 0:21:31.359 --> 0:21:34.359 than just settle out of court directly, and he argued 0:21:34.359 --> 0:21:36.760 that the claims in the patent were overly broad and 0:21:36.960 --> 0:21:40.720 the suit was without merit. Around this time, podcasters were 0:21:40.720 --> 0:21:43.800 saying that the notifications sent by a Personal Audio were 0:21:43.840 --> 0:21:48.119 in the realm of extortion because they didn't include the 0:21:48.160 --> 0:21:51.040 demand for a licensing agreement or even a firm amount 0:21:51.440 --> 0:21:54.280 that the company wanted. Those who received the messages said 0:21:54.320 --> 0:21:57.560 it felt more like an implied threat that Personal Audio 0:21:57.600 --> 0:21:59.399 held these patents and was ready to bring them to 0:21:59.480 --> 0:22:02.560 bear in courts, and the podcasters said it felt like 0:22:02.640 --> 0:22:05.959 they were the recipient of a shakedown. On the Personal 0:22:06.000 --> 0:22:08.920 Audio side, the company said that wasn't the case at all. 0:22:09.280 --> 0:22:12.240 They were just trying to protect the rights that they held, 0:22:12.600 --> 0:22:16.479 and people like Logan had invested real money into this 0:22:16.560 --> 0:22:19.400 company and they were eager to get that investment back. 0:22:19.600 --> 0:22:22.280 They didn't produce the product that they wanted to produce, 0:22:22.520 --> 0:22:25.440 but they still had the invention patented and they wanted 0:22:25.480 --> 0:22:28.199 to make profit off their idea. But no one was 0:22:28.240 --> 0:22:30.640 really sure at the time how much money was actually 0:22:30.880 --> 0:22:34.199 in podcasting. It could be hundreds of millions of dollars. 0:22:34.200 --> 0:22:37.480 It could be very little at all. This was the 0:22:37.520 --> 0:22:40.400 time of the wild West in podcasting, and you could 0:22:40.480 --> 0:22:44.320 argue we're still there right now, but podcasting was hardly 0:22:44.359 --> 0:22:48.040 an established medium at this point. Even years later, it's 0:22:48.040 --> 0:22:50.120 still a big question as to how profitable the form 0:22:50.160 --> 0:22:53.400 can be, as different podcasters test out different revenue models. 0:22:53.960 --> 0:22:58.840 But the backlash against Personal Audio LLC was quick, and 0:22:59.080 --> 0:23:02.560 since the targets happened to be podcasters, it was really public. 0:23:02.960 --> 0:23:05.880 The podcasters happen to have audiences that they could talk 0:23:05.920 --> 0:23:08.480 to and did talk to on a regular basis, so 0:23:08.520 --> 0:23:11.840 in the court of public opinion, personal audio had already lost. 0:23:12.320 --> 0:23:16.840 Dave Weiner, a software developer, was instrumental in modifying the 0:23:17.000 --> 0:23:21.639 RSS standard to include a new feature called enclosure, and 0:23:21.760 --> 0:23:25.600 closure would allow an RSS aggregator to grab the address 0:23:25.640 --> 0:23:28.760 of a media file and this is the heart of 0:23:28.800 --> 0:23:33.359 the subscription process. He did this back in two thousand one, 0:23:33.960 --> 0:23:37.520 and he questioned, how could this patent, which was granted 0:23:37.560 --> 0:23:41.720 in two thousand twelve possibly apply to a methodology that 0:23:41.840 --> 0:23:45.959 was more than a decade older. Adam Carolla launched a 0:23:46.000 --> 0:23:49.000 crowdfunding campaign to fight the lawsuit and raised more than 0:23:49.040 --> 0:23:53.679 half a million dollars in the process. However, ultimately he 0:23:53.840 --> 0:23:57.240 decided to settle with Personal Audio out of court for 0:23:57.400 --> 0:24:00.199 undisclosed terms. In fact, the terms were word it in 0:24:00.240 --> 0:24:03.080 such a way that Corolla had a non disclosure agreement. 0:24:03.080 --> 0:24:05.720 He could not share what those terms were or else 0:24:05.800 --> 0:24:09.760 it would invalidate the negotiations on his part. The settlement 0:24:09.800 --> 0:24:12.040 at the time probably made the most sense for Corolla, 0:24:12.240 --> 0:24:16.560 as these lawsuits can be incredibly expensive. Defending against a 0:24:16.560 --> 0:24:20.240 patent infringement suit could cost a couple of million dollars easy. 0:24:20.560 --> 0:24:22.840 Even with the half million he had already raised for 0:24:22.920 --> 0:24:27.280 legal fees, he was still way behind. And in Texas, 0:24:27.400 --> 0:24:30.440 where the lawsuits were filed, patent holders, as I said, 0:24:30.480 --> 0:24:34.040 had a long record of winds juries tended to favor 0:24:34.160 --> 0:24:38.760 them over others. However, by settling, this meant that Personal 0:24:38.800 --> 0:24:41.119 Audio would have the ability to sue others for that 0:24:41.280 --> 0:24:44.400 same sort of infringement, and that included companies like how 0:24:44.440 --> 0:24:46.600 Stuff Works, the one I work for, and at the 0:24:46.600 --> 0:24:50.480