Chinese ‘Patent Trolls’ attack US entities

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WASHINGTON, September 1, 2014

Comedian Adam Carolla was elated when his Adam Carolla Show won the Guinness World Record as the most downloaded podcast on earth. That was in 2011.

On January 7, 2013, Personal Audio LLC slapped Carolla’s podcasting empire, Carolla Digital, with a lawsuit for alleged patent violations.

According to the complaint, Carolla used an “apparatus for disseminating a series of episodes represented by media files via the Internet as said episodes became available… employing one of said one or more communication interfaces to… download said updated version of said compilation files to said requesting client device.

In other words, creating a podcast, compiling sequential episodes online, and allowing the public to download them, violates Personal Audio’s patent. In essence, they claim to own podcasting.

Personal Audio recently announced it has dropped its suit against Carolla, but said it will continue to seek damages against CBS, NBC, and Fox, which have deeper pockets.

Personal Audio is known as a “non-practicing entity” (NPE), which produces no products for sale, but uses patent claims to extract money from so-called violators in the form of licensing fees. NPEs are popularly known as “patent trolls.”

A Boston University School of Law study estimates that patent trolls cost U.S. companies $29 billion in 2011.

What if patent trolling becomes a weapon of state-sponsored economic warfare?

“Chinese high-tech companies are on the counterattack regarding intellectual property rights, which used to be very much a soft spot,” said the China Daily. China’s Silicon Valley, Zhongguancun, recently received a $15 million infusion from the state to create a patent acquiring entity called Ruichuan IPR Funds.

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