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Adam Carolla Refusing to Feed the Trolls

Posted in Intellectual Property Litigation, Technology News & Events, Uncategorized, Venture Capital, Private Equity and Other Financings

The WinTech blog previously covered a patent infringement lawsuit filed against the “Adam Carolla Show” from ACE Broadcasting Network, LLC.[1]  The plaintiff, Personal Audio, LLC, alleges that the “Adam Carolla Show” is infringing on their patent for a “[s]ystem for disseminating media content representing episodes in a serialized sequence.”[2]  The patent could also be interpreted in broader terms as a system for downloading and organizing digital media information.

On a recent podcast by Carolla,[3] he provides an update on his lawsuit and interviews Neel Chatterjee, an attorney that has represented Mark Zuckerberg on other matters.[4]  Carolla reveals that his legal fees for the month of October were approximately $22,000—most of it spent on requesting a transfer out from the Eastern District of Texas.

Chatterjee explains that a patent troll’s strategy is to sue a high volume of defendants and hope for a quick settlement rather than assume the risk and cost of litigation.  The patent system can be reformed however, as Chatterjee suggests, by creating additional downside risk for the patent trolls.  Many attorneys are already assuming the risk of litigation by taking patent infringement cases on a contingency basis, but Chatterjee believes that additional costs could be created to deter lawsuits from patent trolls, such as a system where “loser pays.”[5]

According to Carolla, another way to level the playing field against patent trolls is to crowdfund the legal fees incurred from defending a patent lawsuit.  Carolla believes that a lot of other people’s interests are at stake, such as all of the podcasters that could be extorted for license fees if Personal Audio prevails on Carolla’s lawsuit.  Carolla believes that creating a slush fund is appropriate because the outcome of his lawsuit would affect podcasters and listeners across the United States.

Carolla might be on to something.  Crowdfunding the cost of patent litigation could decrease the defendant’s potential loss from a trial decision, and accordingly create a greater incentive for defendants to take a stand against patent trolls rather than settle out of court.  But will Carolla’s crowdfunding be sufficient for his case?  Or will this end up as another settlement that continues to feed the trolls?

Stay tuned for updates and developments on this Personal Audio litigation.


[1] See Todd Chen, Patent Actions Targeting Podcast Shows, WinTech (Feb. 10, 2013), https://www.wintechblog.com/2013/02/patent-actions-targeting-podcast-shows/.

[2] U.S. Patent No. 8112504 B2 (filed Mar. 4, 2009), available at http://www.google.com/patents/US8112504?dq=8,112,504&ei=FrkRUc63N8zWigKlt4DABg.

[3] Alex Borstein and Neel Chatterjee, Adam Carolla Show (Nov. 21, 2013), http://adamcarolla.com/alex-borstein-and-neel-chatterjee.

[4] Chatterjee is not involved with Carolla’s currently pending case.

[5] See generally Tony Dutra, House Considers Patent Litigation Reform Bill With Some Agreement But Controversy Likely, Bloomberg BNA (Oct. 30, 2013), http://www.bna.com/house-considers-patent-n17179879682/; Joe Mullin, Peeved politicians want “loser pays” rule for patent trolls”, Ars Technica (Feb. 27, 2013) http://arstechnica.com/tech-policy/2013/02/pissed-off-politicians-want-loser-pays-rule-for-patent-trolls.