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Lotzi Digital, Personal Audio drop patent lawsuit over podcasts

updated 03:00 pm EDT, Tue August 19, 2014

Terms under 'quiet period' until September 30, Adam Carolla crowdfunded defense fund

Big name podcasts may be in the clear for the time being, as Personal Audio and Adam Carolla's Lotzi Digital recently agreed to jointly dismiss a patent lawsuit without prejudice last Friday. The filing, obtained by the Electronic Frontier Foundation (EFF), comes after a settlement was reached between the two parties, the details of which have yet to be announced. Both companies are under a "quiet period" until September 30.

Personal Audio filed a lawsuit for patent infringement against Lotzi Digital and several other parties, including Togi Entertainment and How Stuff Works, in 2013. Carolla decided to fight the lawsuit, turning to crowdfunding to fund the battle against the well-known patent troll. Personal Audio has used a patent numerous times in the past to take high-profile providers of episodic content to court, including networks like Fox, CBS and NBC.

Personal Audio offered to dismiss the suit on July 29 in a press release, but Carolla continued the fight after crowdfunding nearly $500,000 for his defense. The patent holding company was willing to depart without payment, but it's possible there were other stipulations. By coming to an agreement and dismissing the case, Carolla loses the ability to recoup attorney's fees and continue to fight against the patent.

As Daniel Nazer of the EFF points out, there are several good and bad points about the patent lawsuit being dismissed. By putting up a fight, Carolla and Lotzi Digital forced Personal Audio into mounting a defense to show whether it deserved money. In turn, the company discovered that one of the largest podcasters on the Internet makes very little revenue, educating the company that there may not be money in pursuing any other podcasters in the future.

Perhaps the biggest missed opportunity isn't so much the loss of recouping fees, but forcing Personal Audio to fight for its patent. Since a court case would have the ability to provide more prior art, Personal Audio could have been removed as a threat from all podcasters if the patent ended up being invalidated. The company is going to court with television broadcasters in September, so this sort of victory could still be in the cards.

Personal Audio could pursue the infringement lawsuit again in the future, since the suit was dismissed with prejudice. However, that doesn't mean that it will be able to, as the EFF currently has a petition before the Patent Trial and Appeal Board (PTAB) at the United States Patent and Trademark Office. The EFF originally filed a petition in 2013 to review the serialized media content patent US8112504, with a hearing scheduled December 2014. A ruling isn't expected until April 2015, but the PTAB previously found that the EFF has a "reasonable likelihood" of prevailing.

By Electronista Staff


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