Patent trolls have a simple business model: they collect broad patents that appear to cover some part of an industry, and then they sue everyone, hoping that most companies will choose to pay a settlement over the hassle and cost of a lawsuit.
That's what Personal Audio did with podcasters: the company has a patent that appears to cover distributing podcasts over the internet, and it began filing lawsuits against several popular podcasters, including Adam Carolla and How Stuff Works. There was only one problem: there's no money in podcasts, so Personal Audio decided it wasn't worth the cost to collect whatever percentage of revenue it was demanding from the companies it sued. Here's a press release the company issued in July (emphasis added):
"When Personal Audio first began its litigation, it was under the impression that Carolla, the self-proclaimed largest podcaster in the world, as well as certain other podcasters, were making significant money from infringing Personal Audio's patents. After the parties completed discovery, however, it became clear this was not the case. As a result, Personal Audio began to offer dismissals from the case to the podcasting companies involved, rather than to litigate over the smaller amounts of money at issue."
While other companies took the dismissals in July, Carolla apparently pushed back until now. We don't know the exact terms of the settlement, but a motion to dismiss was filed yesterday and both parties agreed to a quiet period that will last through September 30. As the EFF pointed out yesterday, if suing a podcaster with the reach of Adam Carolla isn't a profitable enterprise, it's probably not worth it to sue any podcasting group. Score one for the little guys with no money.
The big guys are still in the fight, though: Personal Audio still has a lawsuit pending against CBS, NBC, and Fox, which all presumably make more money distributing media than Adam Carolla. The EFF hopes that these companies will pay the legal fees necessary to fight all the way through to invalidating the patents in question, which would offer the most protection for podcasters and other online media outlets, but we'll see if anything gets that far, or if Personal Audio can slink away with some actual cash.