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Top 5 Legal Issues for Podcasters – Number 5: Patents

Avoiding Lawsuits

Although podcasting is at an all-time high, most podcasters still do not understand the legal issues that can land them in court. Given the high cost of defending a lawsuit, if you get sued, it may not even matter whether you are right or wrong. The cost of the lawsuit itself may be more than enough to shut down your podcast and put you on the hook for a default judgment that includes an injunction, large compensatory damages, punitive damages, and attorneys’ fees. Making matters even more complicated, many podcasting activities that technically violate the legal rights of others are unlikely to land you in court, while activities that are otherwise legal might can end up making someone angry enough to sue you, even if they are unlikely to win at trial.

Compounding the problem is that even if you successfully defend a lawsuit, the damage to your reputation and your pocketbook may be enough to erase any traction and goodwill you had hoped to achieve with your podcast. For these and many more reasons, winning a lawsuit is far less preferable than not getting sued over your podcast in the first place. While you may get sued for many things, some of the most costly and complex lawsuits over podcasts involve intellectual property disputes. Intellectual property disputes over podcasts typically fall into one of the following five categories: patent infringement, copyright infringement, defamation, trademark infringement, and right of publicity/right of privacy. In this five-part series, we will examine each of these potential pitfalls and the steps you can take to reduce the likelihood of having one of these issues be the centerpiece of a lawsuit with your podcast’s name on it.

5. Patent Infringement

Patent infringement is one of the least likely intellectual property problems your podcast will face. However, if you do receive a patent infringement cease and desist letter, how and when you handle that letter can mean the difference between whether your podcast lives or dies. Given the growing maturity of the podcasting market, it is unlikely a patent has or will issue covering a portion of your podcast activities. It is far more likely that a patent does or will exist that someone may simply claim you infringe. Patent holders know that the cost of successfully defending a patent infringement lawsuit through a jury trial runs about two and a half million dollars in attorney fees alone. Unscrupulous patent owners may leverage this knowledge to extort monetary settlements out of small podcasters. They know that there is a high probability that if they sue you for patent infringement, you will run out of money and give them their default judgment long before you ever get the chance to present your defense to a jury.

Patent owners who do not make, use, or sell the invention, but merely sue infringers are called patent trolls. These patent trolls know that few podcasters have the resources to fight a patent infringement lawsuit. But they also know that taking the case all the way to trial could mean a court might rule their patent is invalid and unenforceable, putting an end to their shakedown activities. So what patent trolls often do is demand money in exchange for agreeing not to file a patent infringement lawsuit. The amount of money they demand is calculated to be just enough to convince the accused infringer to pay them, rather than fight them. That is what happened to podcasters in the face of United States Patent Number 8,112,504 (the “‘504 Patent”). What the owner of the ‘504 Patent did not count on however, was that podcasters would rally together, pooling funds and crowdsourcing resources to actually fight the patent.

The fees expended in the podcaster’s defense of the ‘504 Patent infringement lawsuit far exceeded the amount of patent infringement damages any one podcaster would have had to pay. The hope was that once the patent owner realized the funds were available to fight, the patent owner would back down. And that is exactly what happened. The patent owner filed a patent infringement lawsuit against a podcaster, the podcaster used the funds to fight the case, and the parties eventually settled the lawsuit, with the patent owner agreeing to not only drop the lawsuit, but to not pursue patent infringement lawsuits against other small podcasters as well. That was not even the end of it. After the lawsuit was settled, the Electronic Freedom Foundation attacked the ‘504 Patent before the United States Patent and Trademark Office, using its own resources and crowdsourced documents to show the invention claimed in the ‘504 patent had been invented years before the patent was filed. As a result, the Patent Office’s Patent Trial and Appeal Board invalidated all of the claims of the ‘504 patent, based on two documents showing the invention had already been invented by someone else.

Thankfully, the story of the ‘504 patent had a happy ending, but that is unusual. Had the podcasters not pooled their resources behind a large podcaster willing to spend more money to fight than to simply pay the amount demanded by the patent owner, or had the public not scoured the internet to find the two documents showing the invention had already been invented, things might have turned out very badly for all podcasters. The chance of such a lucky confluence of circumstances and such successful document crowdsourcing ever happening again is small at best. Do not count on ever being this lucky. If you receive a patent infringement cease and desist letter, the key is to act quickly. Contact an intellectual property attorney immediately to determine the strength of the patent infringement claims against you and discuss your possible options. There may be creative solutions available to get you out of the patent infringement crosshairs and back to podcasting with a minimal expenditure of time and money. Even if there are no simple of inexpensive options in your particular case, ignoring a cease and desist letter is the surest way to turn a manageable problem into a problem that brings down your entire podcast.

Be sure to check out the other posts in this Top 5 Legal Issues for Podcasters series:

Number 1: Copyright Infringement
Number 2: Trademark Infringement
Number 3: Defamation
Number 4: Rights of Privacy and Publicity

Posted in General, Patent Law.