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Adam Carolla Is Bummed About Patent Trolls Taking All His Money

The comedian and podcaster is being shaken down for $3 million by a company that claims he violated a patent from 1996 that covers podcasting. His court battle in September of this year will be a make-or-break moment for the podcast world.
May 5, 2014, 9:57pm

Adam Carolla is being sued for $3 million by a company called Personal Audio, which claims that the funny man has violated a patent from 1996 that covers podcasting. On a balmy Thursday night at the end of March, Carolla held a live event called "The Show to Benefit The Legal Defense of Podcasting” to raise funds.

Inside the venue was the usual Carolla swag, including his trademark Mangria drink along with his books and merchandise that fans can purchase to support the cause. I spoke to Carolla before he took the stage. “I don’t see myself as some sort of champion to save podcasting,” he explained. “I don’t know what my alternatives are. They’re suing me and I have to fight back. All I can do is try to raise a bunch of money and fight these guys.”

Calling upon longtime pals like Kevin & Bean, Jimmy Kimmel and Dr. Drew, Carolla was relatively subdued at the event. With two large “They Hold the Patents/We Hold the Power” logos adorning the stage, the night felt like any other live podcast that Carolla has hosted. However, the vibe was a bit more tense, with fans in the three-quarter filled venue knowing what’s at stake.

Carolla is well aware that many will roll their eyes and question him for trying to crowdfund his defense, but so far he’s plunked down well over $50,000 of his own money towards the initial filing as well as attempts to get the venue moved. So far, Carolla has raised nearly $400,000, which is significant, but he acknowledges that it’s still only a fraction of the approximately $1.6 million that the litigation will cost.

While the Adam Carolla Show has been recorded by the Guinness Book of World Records as the most downloaded podcast in the world. It isn’t the cash-generating machine that the company that’s suing him evidently thinks it is, let alone one that can survive a $3 million shakedown.

“I’m flattered they think we make that much money from the podcast,” Carolla said. “I have no idea how they came up with that number, but if they think I’m coming back saying ‘Not a penny over $2.75 million!’ they’re mistaken.”

In 1996, Jim Logan created Personal Audio with the intent of offering up magazine articles customers liked on the Internet, converting them into the equivalent of a book-on-tape and sending them to the customer on cassettes. It’s safe to say that the idea didn’t go very far. However, that didn’t stop the company from claiming that this was the precursor to modern day podcasting.

Spoken word audio delivery does bear a superficial resemblance to podcasting. Podcasts, however, are almost never transcripts of written material. Most often they consist of content originally conceived for online streaming. As for delivery, the podcaster and distributor don't send the audio anywhere. Podcatchers—apps that organize and play podcasts—actively retrieve the audio, rather than having it delivered by something like email, let alone snail-mail. In 1996, all of this was science fiction.

According to Daniel Nazer, a staff attorney for the Electronic Frontiers Foundation, putting together the discovery documents to present a case before a judge is financially burdensome and can cost around $1 million, but he said that Personal Audio’s control is questionable since they rewrote the patent in 2009. He also notes that they didn’t contribute to any of the development of the technology and code associated with podcasting.

“The basic technology that they claim was invented before they filed their patent,” Nazer explains. “This one is a bit complicated because the patent system allows you to write claims many, many years after you file the patent. If the claims bear enough relationship with that old application you can claim priority all the way back. They’re writing claims for what the technology looks like today and are pretending they invented it back in 1996. That explains why these guys never did any podcasting: because it wasn’t really on their minds. It’s a pretty strange thing and they didn’t invent what they say they invented.”

Other podcasts, like WTF with Marc Maron, the Joe Rogen Experience, the Dennis Prager Show, and Chris Hardwick’s Nerdist broadcast were hit with cease-and-desist letters in the middle of last year. After several months of not hearing anything, Carolla and his podcasting friends thought they were out of the woods.

Things changed in late January, when Carolla was served with the lawsuit. While the lawsuit caught him off-guard, he had a feeling something was bound to happen.

“I’m never surprised by any disappointing feature of humanity,” the comedian said. “When I hear that somebody slips and falls at Chili’s and bangs their head, gets up, rubs it, and doesn’t demand a free dessert, that’s when I’m surprised.”

Many of the podcasters who I sought out either declined or didn’t respond to interview requests due to the complex nature of the case and fear that they could be next on Personal Audio’s hit list. But Marc Maron is standing at the front line with Carolla. Though he hasn’t been sued, Maron has been outspoken railing against patent trolls. He’s invited Carolla onto his podcast to publicize the issue and has been imploring his listeners to get involved by donating to their FundAnything campaign.

Like Carolla and a number of other podcasters, Maron received four cease-and-desist letters from Personal Audio. However, having not received one or heard of someone getting one in a while, he thought he was out of the woods. When Carolla was served with the lawsuit, Maron sprang into action, knowing what his colleague’s downfall could mean to the community.

“They’re predators and shakedown artists going after people who can’t defend themselves,” Maron said over the phone a few weeks before Carolla’s show. “They use a loophole in the patent system to be a legally-based extortion racket. What they’re banking on is reality. In order to litigate anything like this, it costs a significant amount of money, so they work this angle and know exactly what they’re doing, which is looking for quick cash.”

The WTF host, along with Doug Benson, joined Carolla for the second half of the live show, riffing on the stuff comics usually give each other shit about. They barely spoke of the September trial date that Carolla faces. But the men have all been targeted by Personal Audio.

Maron believes that the intent of the letters is no more than a cash grab. “They’re coming after the little guy and Adam has to fight this,” Maron said. “The EFF has filed a re-exam and we have to hope for the best here, because this can go on for years and cost a ton of money. It’s straight up mob tactics.”

“Podcasting began earlier than the date of their 2009 filing,” Carolla’s Associate Producer Mike Altier said. Altier is helping spearhead the campaign. “Now he’s suing us years later after the technology was already successful, and his idea didn’t go through.

Even if Carolla emerges victorious, he won’t gain anything financially. If he’s lucky, he’ll be able to recoup the attorney fees for this undertaking. For now, his team is focused on moving the case forward, and settling isn’t an option. Still, if he does win big in court, it’s possible that Personal Audio won’t be able to go after any other podcasters.

Carolla maintained that it’s all about business. “I don’t really take it personally, and I assume they’re a nameless, faceless conglomerate of jackoff attorneys who go out and make money,” he said. “They just do what they do. People go to me, ‘Aren’t you pissed?’ and no, not in the least. I don’t take it personally. I’m flattered that I made their list of people they think have money.”

Even though President Obama mentioned the pitfalls of patent trolling in this year’s State of the Union, it doesn’t appear to be going away. If nothing else, Carolla hopes his case sheds some light on the trend.

“A lot of people had never heard of this,” he said just before he’s about to take the stage at his fundraiser. “But if this is the point in history where people went, 'What’s a patent troll?' or 'What’s a podcast?' and now they know, then it maybe it’s a turning point.”

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