Is a podcast analogous to a cassette tape recording of a magazine article? Jim Logan of Personal Audio thinks that it is, and that it thereby infringes his patent.
In 1996, Jim Logan received a patent for a personal audio device that would allow users to select and download audio tracks for offline enjoyment. Personal Audio eventually launched a service where users could receive cassette tape audio recordings of magazine articles on demand. The company has not released a product in 15 years, yet, Personal Audio received a continuing patent in 2012 and was successful in a patent infringement suit against Apple for $8 million dollars. Apple appealed the ruling and later settled for an undisclosed amount.
Personal Audio is now going after individual podcasters with claims against NBC, CBS, ACE Broadcasting and HowStuffWorks.com. Logan says that his company will not go after smaller podcasters, but several individuals, including comedian Marc Marron have reported receiving letters from Personal Audio informing them that their activities infringe Personal Audio’s patent. The activities of Personal Audio have led several critics to label the company as a "patent troll."
Logan sees nothing wrong with allowing a patent holder to come forward and claim infringement on a product that they did not manage to bring to market. His claim is that he put $1.6 million into development and his only remaining asset from the venture is the patent itself. This is part of the allure of the patent - that even when a product is unsuccessful, an individual may still be able to get a return on their investment when another entity wants to licence the patent and "try again." The argument remains that patents provide incentive for innovation through the economic rights related to the intellectual property covered by a patent.
In 2012 Logan obtained a continuation patent and was able to succeed against Apple. This is one angle from which others might attempt to challenge the patent’s validity. Canada takes a restrictive approach to patentability and does not have continuing patents. In my opinion, it is doubtful whether Logan’s original patent would hold up under opposition under the Canadian patent system, as he would not have had the same ability to update it to reflect the ways in which the technology developed. Although purposive construction of claims can blur Canadian patent parameters, the lengthy review process makes it less likely for a patent to pass basic threshold tests when challenged in the Federal Court.
Canada also has procedural safeguards in place that would affect how defendants may choose to proceed against a patent troll. Canadian courts are reluctant to award interlocutory injunctions in patent infringement cases, which limits the ability for patent trolls to threaten an injunction to force a settlement at an early stage in the proceedings.
When threatened with patent infringement, alleged infringers have to make a choice - defend against the claim at a substantial financial cost (with no guarantee of "winning") or attempt settling to avoid court costs and an extended time in litigation proceedings. In Canada, a lack of interlocutory injunctions and the possibility of costs awarded to successful defendants provides an incentive to defend against a weak claim.
One suggestion to combat patent trolls has been discussed by Professor Cameron Hutchison of the University of Alberta, who proposed using the concept of "adverse possession" in property law to deal with companies like Personal Audio. This idea would require patent holders to commercially develop their invention. If a patent holder does not bring their invention to market within a specified time, others could use the defence of "adverse possession" when a patent holder comes forward to claim infringement. This may also curb the registration of over-broad patents that are able to encompass future technologies, as is the case with Personal Audio.
This latest string of suits could be the straw that breaks the camel’s back for patent trolls in the United States. The Electronic Frontier Foundation (EFF) has now launched a claim against Personal Audio for what it calls “a classic example of an over-broad software patent”. EFF, along with Harvard’s Cyberlaw Clinic, and few vocal podcasters have put out the call to challenge the validity of the patent and demand legislative reform.
Allison McLean is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.