Trevor Hultner: Patent “Trolls” are Bad. Patents are Worse

by Stephan Kinsella on March 12, 2013

From C4SS, based on my interview (KOL 031 | Smash Walls Radio Podcast: Episode 9: Patent Shenanigans). N.b.: I did not say trolls cost $500B a year; but it’s possible the patent system itself does (it’s impossible to know for sure). (Patent Trolls Cost Productive Companies $29 Billion in 2011, Stall Innovation, and Hurt Small BusinessesPatent Trolls Cost The Economy Half A Trillion Dollars since 1990Costs of the Patent System Revisited.)

Patent “Trolls” are Bad. Patents are Worse.

Posted by  on Mar 11, 2013 in Commentary • Comments (5)

While global biotechnology firm Monsanto battled a farmer over soybean patents in the US Supreme Court, a District Court in eastern Texas heard a similar case: Personal Audio, an alleged “patent troll,” filed suit against Adam Carolla’s Ace Broadcasting network for patent infringement.

The patent allegedly infringed? “System For Disseminating Media Content Representing Episodes In A Serialized Sequence.” In other words, podcasting.

Personal Audio has been around since the mid-1990s, and credits itself with inventing the “Personal Audio Player,” a device similar to the iPod and the source of many of the company’s patents, including this one.

“[Personal Audio CEO James Logan] is a small businessman, an entrepreneur, who invested a ton of his money into a startup, who still owns the patent, and is just trying to get compensation for his hard work as an inventor,”the company’s vice president of licensing, Richard Baker, said. “This is what the patent system is for.” According to Baker, Personal Audio is also trying to sell its podcast license to several major and influential podcasts and providers.

“I will say that we’re certainly looking to license this patent beyond those three (companies they’re suing),” he said. “We’ve sent letters to a number of companies that we hope will come to a license with us amicably, without having to resort to litigation.”

The prospect of this licensing scheme spreading across the entire medium has spooked many podcasters, including WTF Show host Marc Maron and Majority Report host Sam Seder. Both have received letters fromPersonal Audio “inviting” them to purchase licenses, and both have used their voices to back a recently introduced piece of legislation called the SHIELD Act.

Supported by the Electronic Frontier Foundation, SHIELD aims to make it prohibitively risky for alleged patent trolls to sue; according to the act, if a patent troll loses, they have to pay the other side’s legal fees and costs.

While this bill might be a minute step in a better direction, it isn’t even a bandage on the problem of corporation-favoring patent law. The SHIELD Act, if passed, might prevent companies like Personal Audio from shaking people down, but it won’t prevent companies like Monsanto, with “legitimate” patents on genetically modified and enhanced seeds, from suing farmers and forcing them to burn their crops when they find their seeds on the latter’s land or Apple from making the smartphone and tablet markets expensively litigious.

Libertarian intellectual property lawyer and self-described IP abolitionist Stephan Kinsella brought up an interesting point in a recent interview that seems to get lost in the general discussion surrounding patent trolls, patent law and intellectual property more broadly: as bad as patent trolls are — according to Kinsella they cost the US economy somewhere around $500 billion — legitimate patent holders, companies like Monsanto andApple, can be — and often are — worse.

Speaking of Apple, imagine a scenario where the company going after Adam Carolla and the rest of the podcasting world wasn’t some tiny dot-com-era relic in Texas, but the multi-billion dollar corporation from Cupertino, Calif.

In this hypothetical situation, who would have the money or power to fight against Apple? How could a DIY podcast held together with string and some spit defend against Apple if it held the “podcasting patent” and wanted money for its license?

Millions of people subscribe and listen to podcasts through Apple‘s distribution and cataloging software, iTunes. Currently, it costs nothing to add your own podcast to the iTunes directory; all that is necessary to do so is being able to link to a podcast RSS feed. If Apple owned the patent on podcasting and forced all new podcasts to purchase this license, it might, as EFF activist Adi Kamdar suggested in reference to Personal Audio, create a “chilling effect” on the medium.

It’s possible, if the cost was high enough, that podcasting would meet the same fate as other forms of media and find itself subject to a “walled garden” model of organization. Only people with the means to do so would podcast. Vital voices and perspectives would be cut off.

Patent legitimacy as it is currently presented seems to be based more on perception than any objective standards of law. With Personal Audio, we question the legitimacy of their podcasting patent in a way we may not have done if another company with more buying power had reached it first. Therefore, the solution to the problem of patent trolling is not to “regulate” it with faulty measures and half-steps in the “right direction.”

The patent system itself must be abolished.

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Trevor Hultner is an independent journalist and Internet content creator. He is the host and producer of Smash Walls Radio, a weekly news and politics podcast, as well as the host of a YouTube series aimed at spreading Absurdist philosophy. Follow him on Twitter: @SmashWalls.

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