How Marshall, Texas Became Ground Zero for ‘Patent Trolls’

Joe Mullin talks to David Brown about the company behind the lawsuits.

By David Brown, Wells Dunbar and Sarah TalaatSeptember 17, 2014 10:50 pm|

A courtroom in Marshall, Texas – population 25,000 – is deciding patent cases with implications for some of entertainment’s biggest names.

Marshall was the setting for a court case against CBS this week. A small company, Personal Audio, has sued media giants including Apple, Sirius XM, and CBS for damages related to alleged infringement of their podcast patent. (Podcasts are digital files on the Internet that can be downloaded to a computer or media player.)

A jury found CBS did infringe the patent – awarding Personal Audio $1.3 million.

Joe Mullin covered Personal Audio’s suit against CBS for Ars Technica. He talks to Texas Standard’s David Brown about the company behind the lawsuits.

“Personal Audio is a patent-holding company,” Mullin says. “It doesn’t own anything but patents, and it has no business other than licensing those patents and suing over those patents. It’s the kind of company that gets called, in a more derogatory way in tech circles, a patent troll.”

Interview Highlights:

On the Marshall, Texas courtroom:

“The Eastern District of Texas began to be a center, a very popular place for patent-holders to file because they were looking for certain things. They were looking a strong chance that the case would go to jury, and they were looking for a relatively fast time to trial, which in the early days, East Texas had. Now, East Texas has slowed down a bit but it’s still has a lot of advantages for patent-holders.”

Why that $1.3 million award isn’t an outright win:

“The $1.3 million [that Personal Audio recovered in damages] might not have even covered their expenses. They didn’t get what they were asking for, which I’m told was close to $8 million. But they have other defendants in line. They [also] didn’t lose. CBS was trying to invalidate their patents…. They’re going to be able to wield that patent against other companies, including FOX and NBC, who have trials coming up.”

Patent trolls vs. patent protection :

“There’s an argument on both sides – and certainly there is a side that says the companies being called patent trolls are really nothing more than the classic, American, individual inventor that has a right to collect a royalty for their inventions and to have it not stolen and used without authorization by big companies. But the fact is, by leveraging the system the way it is, there are cases moving to trial where people looking at this would say, ‘Is this really an invention at all?’… Some of these inventions are not things that the average person would look at as such.”