I usually stop the conversation whenever I hear the phrase “I’ve got a client,” for it often means two things, neither good for me. First, it can suggest that somebody needs an attorney, which I am not. Second, it suggests that there is money changing hands, and that I need to be careful about giving work to somebody else for free. However, I feel that I have a continuing obligation to students, even after they have graduated. I know that this obligation can sometimes mean that I end up doing work for others. However, I am willing to tolerate a certain amount of volunteer work to fulfill my role as a teacher.
Most of my student’s questions dealt with issues that surrounded the case that we have come to call the podcasting patent. This patent was awarded in 2009, though it was originally filed in 1996. It describes a system that collects audio files, distributes them on demand and provides a means for searching the files. It produced two very different reactions when it was awarded. Most of my engineering colleagues, who regularly deal in patents, were generally pleased with the result and perhaps wondered how they might lay claim to such an invention
In contrast, my media friends were more than a little appalled. To them, podcasting was very close to a natural and obvious activity. In their minds, no one should be able to patent podcasting any more than they should be able to patent the blowing wind or the bubbling brook. Many of them point to the podcasting that I did and asked why I was not worried that my work would not be challenged by the patent holders. I explained to them that the patent did not cover distributing audio files over the internet, which is really all that I do. It covered the actions of a far more sophisticated system. Few were satisfied with that explanation and felt that something needed to be done to stop such things.
Of course, doing anything in the world of intellectual property is expansive. Everything is done through arguments, and arguments require money. It can easily cost $100,000 to create an application for a patent. It can cost that much and more to get any revenue from a patent, especially if people are already using the ideas in the patent and feel that they have a right to them.
The cost of creating and protecting intellectual property creates the great problems. Individual inventors usually don’t have the assets to apply for patents or prosecute their claims. This problem has encouraged a new form of business that invests in patents and attempts to get revenue from them, a group of businesses that have come to be called patent holding company. The podcast patent is held by such an organization. This company, Personal Audio, started asking for revenue from podcasters shortly after they got the patent. However, they changed their strategy when they began to realize that there was little money being made in podcasting. “When Personal Audio first began its litigation, it was under the impression that [a number of podcasters] were making significant money from infringing Personal Audio’s patents.” After initiating legal action, the company noted, “it became clear this was not the case.”
If Personal Audio nurtured any hope of getting revenue from the podcast patent, it lost that hope in April. The U.S. Patent And Trademark Office (USPTO), responding to a challenge filed by the Electronic Freedom Foundation, concluded that a key claim of the patent had been also invented by others. Hence, Personal Audio would not be able to license technology based on the claim or demand revenue from it.
Like anything in the world of intellectual property, the patent challenge was an expensive proposition. Normally, such challenges are undertaken by companies that otherwise would be forced to pay substantial royalties for the use of the technology. Since there were no companies in that circumstance, the job fell to a nonprofit organization, the Electronic Frontier Foundation. By itself, the Foundation’s principle brief was an expensive production. It presented four major examples of podcasting that were operating prior to 1996. Each had to be researched and validated. These examples were wrapped in pages of case law and precedents. In the end, the USPTO accepted two as valid and rejected the other two. With that ruling, the power of the podcasting patent to make any money has probably come to an end.
In her effort to understand intellectual property, my former student asked if we should ban patent holding companies. In her question, she used the more common term patent trolls. The answer to such a question is not easy, as it touches on issues that form the basis of our economic system: the free movement of capital, and the rights of inventors. It certainly seems unlikely that the podcasting patent case will bring an end to patent holding companies. The case surprised many people, but it did not cause enough of them to demand wholesale changes in our intellectual property system. It merely taught one company that there was little money to be made in podcasting. It also reminded a somewhat larger group, that certain ideas that seemed to be obvious were actually patentable intellectual property.
David Alan Grier is a former president of the IEEE Computer Society and is an associate professor at the Center for International Science and Technology Policy of the George Washington University.