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Adam Carolla Gets It On with Personal Audio Settlement

Posted in E-Commerce (Internet Agreements and Issues), Intellectual Property Litigation, Technology News & Events

As part of their settlement, Adam Carolla and Personal Audio LLC agreed to not make any public statements concerning their patent infringement lawsuit until September 30th.[1]  On Wednesday’s podcast, Adam Carolla and Mike August, a former attorney, discussed the lawsuit and the settlement that was reached between Carolla and Personal Audio.[2]

Personal Audio had filed their lawsuit against Carolla in January of 2013, and the trial was scheduled for this past September in the Eastern District of Texas.  Carolla and August revealed that when the discovery phase of the lawsuit started around March 2014, about $100,000 a month was spent on legal fees during the four months of discovery.

The approximately $475,000 that was crowdfunded through the internet for Carolla’s litigation expenses has since been exhausted.  Carolla estimates that about $650,000 to $675,000 has been spent on defending the lawsuit, and Carolla needs to raise an additional $200,000 to pay for the incurred litigation expenses.  If Carolla had allowed the lawsuit to go all the way to trial, August estimates that it would have cost an additional $750,000 to $1 million.

For both Carolla and Personal Audio, it was not in their economics interests to incur additional litigation expenses in light of the low amount of damages that was at stake.  According to August, Personal Audio was willing to dismiss the case if Carolla would “shut up” about their lawsuit because Carolla was “killing the jury pool” for Personal Audio’s other lawsuits filed in Texas against CBS and NBC.

Since the settlement was first announced, Carolla has been criticized for going against his words by settling with Personal Audio.  Carolla, however, explains that the “settlement” does not involve any payment to Personal Audio, and he considers the settlement to be a victory for him and other podcasters that are not economically desirable for Personal Audio to sue.  But even if the settlement is a victory for such podcasters, media companies with deeper pockets could still be targeted by Personal Audio under their currently valid patent, as recently seen in the September 15 jury decision determining that CBS is liable to Personal Audio for $1.3 million dollars.[3]

With the Carolla lawsuit dismissed, trollhunters will be keeping their eyes on a petition filed by the Electronic Frontier Foundation (EFF) to invalidate Personal Audio’s podcasting patent.[4]  The EFF petition is expected to be heard later this year by the Patent Trial and Appeal Board.  In the meantime, Carolla’s supporters can continue to get it on by donating to Carolla’s FundAnything campaign to help cover that $200,000 deficit from his litigation expenses.[5]


[1] Agreed Motion to Dismiss Claims without Prejudice, No. 2:13-CV-00013 (E.D. Tex. Aug. 15, 2014), available at https://www.eff.org/files/2014/08/18/ecf_272_-_mot_to_dismiss_pa-carolla.pdf.

[2] Rich Eisen, Eric Stonestreet and Mike August, The Adam Carolla Show (Oct. 1, 2014), http://adamcarolla.com/ rich-eisen-eric-stonestreet-and-mike-august/.

[3] Joe Mullin, Jury Finds CBS Infringes Podcasting Patent, Awards $1.3 Million, Ars Technica (Sept. 15, 2014, 7:23 PM CDT) http://arstechnica.com/tech-policy/2014/09/jury-finds-cbs-infringes-podcasting-patent-awards-1-3-million/.

[4] EFF v. Personal Audio LLC, Patent No. 8,112,504 (USPTO Mar. 4, 2009), available at https://www.eff.org/document/podcasting-petition-inter-partes-review.

[5] Save Our Podcasts Legal Defense Fund, FundAnything: Money for Your Dreams, http://fundanything.com/patenttroll (last visited Oct. 1, 2014).