Can Adam Carolla Defeat a Patent Troll and Save Podcasting?

29th Annual Nightclub & Bar Convention And Trade Show - Day 2
David Becker/Nightclub & Bar Media Group/Getty ImagesAdam Carolla is defending his popular podcast.

I'm going to tell you a secret. When I was a child, I was terrified of trolls -- those terrible creatures inappropriately placed throughout children's books who lived under bridges and apparently would eat you if you crossed their path. Of course, once I got older, I realized that trolls only existed in the pages of storybooks.

Then I got even older, and discovered there really are trolls out there after all. They just don't live under bridges.

Case in point: The patent troll -– or, to call him by a less pejorative name, the "patent assertion entity" –- is a person or group who tries to enforce patent rights against infringers in an attempt to collect fees, but who doesn't actually produce any product or technology related to that patent.

Traditionally, a company or individual with a proprietary product or technology seeks to protect its use with a patent. A patent troll might buy a patent from a bankrupt company, then sue another company, claiming that one of its products infringes on the patent.

The Future of Podcasting Is at Risk

Patent trolls sometimes sue over technology that was created before the patent they hold was granted, but that the troll asserts contain elements of that which was originally patented. That is what is happening in podcasting.

A mysterious group that calls itself Personal Audio claims the patent it owns for a "system for disseminating media content representing episodes in a serialized sequence" applies to podcasts. And that means anyone who does a podcast is infringing on that patent and is liable for licensing fees. In essence, the group is saying the very act of podcasting itself is controlled by their patent.

Personal Audio is no stranger to the world of trolling, having sued Apple (AAPL) on the claim that the iPod infringes on its patent for "downloadable playlists." It originally sought $84 million in damages, and a court awarded it $8 million.

Patent infringement suits are nothing new between large companies, but this latest attack by Personal Audio is significant because it targets a technology that has been a boon for individuals.

The podcast revolution is so remarkable because the costs to produce and distribute content are minimal –- anyone who has a microphone and a personal computer can create and upload a show. Most podcasts are free, and most podcasters produce them as a labor of love or as an additional platform to broaden their brand. But if Personal Audio gets its way, these podcasters will have to pay a fee if they want to continue producing them.

'Adam Carolla Show' Targeted

Personal Audio has set up shell offices in East Texas, a jurisdiction known to be favorable to patent trolls, and sued three of the best known podcasts, including "The Adam Carolla Show." It claims that a patent that was applied for in 2009 and granted in 2012 is being violated by Carolla –- even though podcasting has been around since at least 2004 -– and has offered to settle with him for $3 million.

%VIRTUAL-article-sponsoredlinks%The intent is to win a judgment against Carolla, whose podcast is the most-downloaded in history, with the idea that once he pays up, everyone else will fall in line. What will probably happen is that if Carolla loses, most individual podcasts will fold or be forced to charge listeners in order to pay the licensing fees. If Personal Audio wins, the public loses.

Carolla has united with some high-profile podcasters -- including Chris Hardwick, Marc Maron, Greg Fitzsimmons and Joe Rogan -- to raise a legal fund to fight Personal Audio. Using the crowd-sourcing website FundAnything, they hope to raise the $1.5 million in legal fees that it is estimated will be needed to fight Personal Audio.

"Normally people settle up with these guys because it's so expensive to fight them in court," says Carolla. "Well guess what? We're going to circle the wagons, band together, and come out throwing punches, because remember, if I go down, well then your favorite podcast is going down next, and we all fall like dominoes."

No man is an island, or even a peninsula, so I encourage your feedback in the comments below. And don't forget to pick up my book, "Trading: The Best of the Best -- Top Trading Tips for Our Time."