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“Told you so.” The Patent Trial and Appeal Board found that claims 31-35 of Personal Audio’s ‘504 patent are unpatentable.

The big news this week is that the Patent Trial and Appeal Board(“PTAB”)  recently issued a decision on Electronic Frontier Foundation’s challenge to Personal Audio LLC’s U.S. Patent 8,112,504. In short, the Board concluded that EFF has shown that Claims 31-35 of Personal Audio’s ‘504 patent are unpatentable.

Readers may recall that Personal Audio was in the news quite a lot in 2014 because it seemed to be suing anyone who was someone in podcasting (mostly over U.S. Patent 8,112,504), including CBS, CNN and the companies behind The Adam Corolla Show. While we may be oversimplifying just a tad, it did seem that Personal Audio was acting as if had invented podcasting single handedly. What followed was a slew of Personal Audio lawsuits against successful podcasters.

As we’ve noted in many posts (e.g. see here), patent litigation is a rocky road, even for big successful companies like Apple. It’s wildly expensive, it takes your people away from their work and the discovery process potentially opens your confidential matters to your opponent. So, the companies that settled with Personal Audio (e.g. Ace Broadcasting and Adam Corolla) can’t be faulted for wanting to just move ahead and get on with their business.

But taking on entities like Personal Audio is what Electronic Frontier Foundation (“EFF”) is all about. EFF’s website explains that it “champions user privacy, free expression, and innovation through impact litigation, policy analysis, grassroots activism, and technology development.”

True to its mission, last year, EFF filed the request for Inter Partes Review of Personal Audio’s ‘504 patent.  Inter Partes Review is a fairly new type of trial proceeding conducted at the U.S. Patent Office that began on September 16, 2012. Its purpose is to allow review of the patentability of one or more claims in patents issued on or after September 16, 2012. One catch, though, is that the Patent Office will consider only issues that could be raised under sections 102 or 103 of the Patent Act (i.e., whether the claims are obvious or anticipated), and only on the basis of prior art consisting of patents or printed publications. In other words, the Patent Office will not consider allegations of prior public use or knowledge or an on-sale bar in these proceedings.

So, EFF had a tough job ahead and it also had a few set-backs at the start of the proceedings. For example, the Board excluded much of the evidence that EFF wanted to present. Ultimately, EFF was left resting its entire case on only two prior art references. But EFF prevailed even with those setbacks.

Personal Audio’s ‘504 patent broadly relates to a player for audio programing which includes functions allowing the listener to control many aspects of the playback. Most relevant is how audio program segments are distributed to client subscriber locations. During the PTAB proceedings, Personal Audio did a lot of arguing as to the definitions of “episode” and “segment”.  One reason Personal Audio did this is because EFF had presented references showing that CNN was compiling its archived shows for online access way back in the 1990’s. Personal Audio tried to argue that the news shows were not “episodes” as covered by the ‘504 patent because the topic of one show might not be related to the topic in a later show. The Board ultimately rejected Personal Audio’s distinction between a “segment” and an “episode.”

After considering the prior art references and the parties’ respective arguments, the Board found all of the disputed claims (claims 31-35 of the ‘504 patent) unpatentable. Personal Audio will likely file an appeal of the Board’s decision with the Court of Appeals for the Federal Circuit. In the meantime, though, it will be interesting to see if the Board’s decision has any effect on related pending litigation and whether it will alter Personal Audio’s current business practices in any way.

If you’d like to review the Board’s decision, you can locate it by pulling the case up at the PTAB/IPR link, here, and putting in “8112504” in the patent search field or “IPR2014-00070” in the proceeding search field. Click on the case number link (IPR2014-00070) and then go to page 2’s entry/document #36 entitled “Final Written Decision”, dated 4/10/15.