After a 45-day gag order required him to not speak about the settlement of the infamous podcast-patent troll lawsuit, Adam Carolla was finally able to discuss the matter on his show. Carolla, along with his usual cohosts and special guest legal counsel Mike August went over some details of the case. Here are some highlights:
- The so-called patent troll company, Personal Audio, sued Adam Carolla in a court district in East Texas known to be friendly to these types of lawsuits. Personal Audio also sued Apple under this patent in the same district and won to the tune of eight million dollars.
- Carolla’s team was spending about $100,000 per month in legal expenses during the lawsuit.
- Personal Audio stated its patent covers episodic content delivered via the Internet. The company sued NBC, CBS and Adam Carolla looking for royalty payments.
- The lawsuit was originally filed against Carolla in January 2013. It was scheduled to go to trial in September 2014. In July 2014, Personal Audio approached Carolla about dropping the suit because he had been successful in raising legal defense funds thru crowdsourcing as well as creating a lot of negative PR for Personal Audio by tying the name of the company to the term “patent troll.”
- Personal Audio initially filed their lawsuit against “Ace Broadcasting,” which isn’t a name officially used by Carolla. When they first tried to serve legal papers at Carolla’s studio they were turned away by Carolla’s staff for that very reason.
- At first, Carolla wasn’t concerned about the lawsuit as he believed he hadn’t done anything wrong. But Mike August was quick to explain that in patent suits, the burden of proof is shifted from the plaintiff to the defendant, causing the defendant to have to prove they didn’t violate the patent.
- In the papers served to Carolla, Personal Audio sent a 50-page, single-space document that was a copy of the patent with no further explanation of how the patent had been violated.
- The patent was originally granted in 1996 based on an idea to syndicate magazine articles online. In 2009, the holder of the patent applied for a sub-patent that would cover newer technologies such as podcasting. The sub-patent was approved in 2012, opening the door to these types of lawsuits.
- In the original lawsuit, Personal Audio demanded a payment of 3.5 million dollars. Mike August estimated that it’d cost 1.5 million to defend the case, and that’s why Carolla decided to fight the suit and turn to crowdsourcing for legal funds.
- According to Mike August, Carolla didn’t simply “settle” the lawsuit. Personal Audio dismissed the case because the company felt Carolla’s PR campaign was tainting the jury pool in East Texas which would make it harder for Personal Audio to win other lawsuits.
- Carolla’s team wanted Personal Audio to dismiss the lawsuit with prejudice but they wouldn’t agree to that so the case was dismissed without prejudice, meaning that they can technically sue Carolla again for the same thing.
- Carolla had raised about $475,000 for his legal defense fund. Had he not accepted the dismissal, the lawsuit could’ve cost him more than a million dollars beyond what had already been raised.
- Carolla spent about $675,000 defending the case, so even with the crowdsourced funds, he’s still at a deficit over the case.
- CBS was sued on the same day as Carolla and the jury found CBS had infringed the patent and was ordered to pay 1.3 million dollars.
- As part of the terms of dismissing the case, Personal Audio had to publicly state that they wouldn’t file similar lawsuits against other podcasters that had publicly supported Carolla. Marc Maron, Chris Hardwick, Earwolf, Jay Mohr and Joe Rogan were specifically mentioned.
- Mike August believes that if Personal Audio had to do it all over again, they wouldn’t file another suit against Carolla as they’ve realized that there just isn’t enough money in podcasting to make these types of lawsuits worthwhile.
- Personal Audio had approximately ten different lawyers from three different firms working on the case. Carolla was using a single legal firm in Texas of three to five lawyers.
- Mike August states that the podcast patent only applied to Carolla’s website. Since the Carolla podcast is distributed thru multiple channels, this actually lowered the amount of damages Personal Audio could claim in the lawsuit.
Carolla wrapped up the discussion by saying, “I think we’ve struck a nice blow for podcasters. I think the water shall be safe, whether it’s this company, Personal Audio, or other companies that come after that. Which is really that… This is not the ATM that you guys think it is… Go sue somebody else.”
You can download or stream the entire episode thru the link at the top of this article (the lawsuit discussion starts at about 14:53). Keep in mind that The Adam Carolla Show does carry an explicit tag for colorful language.