ZOE CHACE, HOST:
ROBERT SMITH, HOST:
CHACE: I want to start the show today with a very special treat because I have here in my hand what one man claims is the very first podcast - the first podcast, he says, that was ever recorded. And so we're going to play a bit of this.
SMITH: You have pulled out a cassette tape. Most people would not consider this a podcast.
CHACE: Well, the guy who made the cassette says it's an early, crude form of a podcast. And the idea this cassette represents is at the center of a legal battle that could affect the future of podcasting. Ready?
(SOUNDBITE OF MUSIC)
SMITH: Oh, I love the music.
CHACE: It was late '90s.
(SOUNDBITE OF ARCHIVED RECORDING)
DEBORAH BECKER, BYLINE: Welcome to "Women's Health," brought to you by Personal Audio, the publisher of magazines on tape, your new audio information source. Hello. I'm Deb Becker.
SMITH: Deb Becker is now a reporter at WBUR in Boston.
CHACE: She narrated this.
(SOUNDBITE OF ARCHIVED RECORDING)
BECKER: This tape, like all the others in our unique and growing series, will bring you 90 minutes of information-packed audio full of tips, analysis, insights and stories. You'll hear over 20 articles.
SMITH: Twenty (laughter).
BECKER: ...Some from well-known magazines and some from leading newspapers, like The New York Times.
SMITH: Wow. We can't stop there - New York Times.
CHACE: OK. The guy who made this cassette back in the late '90s, his name is Jim Logan. He had a company called Personal Audio. And he had this big idea, which is, you, the listening public, would pick out magazine articles that you like, and they would send you audio of those articles being read out loud, like a - just a personalized audio magazine.
SMITH: Now, the cassette that we just played, that - this is a low-tech version of what Jim really wanted to do. Jim Logan dreamed that one day, you would not need a cassette player, that you would be able to hear smart people talking about whatever subject you could dream of, and that audio would be magically downloaded to an electronic device.
JIM LOGAN: To me, back then, it was just this audio player that could interact with the Internet and your preferences to pull down to your personal player all the personal stuff that you wanted to listen to. It has come to pass that - you know, we didn't use these words back then - but the idea of, you know, downloading playlists to your audio player and podcasts are how the world has kind of gotten around to actually implementing those ideas.
CHACE: What the smartphone does today.
LOGAN: Like the smartphone does today, right.
CHACE: Jim tried to build what we now think of as an MP3 player in the 1990s. And he failed. And his idea of the customized cassette audio magazine - not surprisingly, that also did not succeed, and he shut that business down. But before he did, he made sure to get a patent on the idea.
SMITH: He wrote a bunch of technical terms down, drew a bunch of diagrams and submitted this document to the U.S. Patent Office. And now, 15 years later, he says, all you people out there today podcasting - podcasters, you are basically doing an electronic version of my cassette tape. He says they are violating his patent and they owe money.
CHACE: This is despite the fact that Jim Logan did not create the smartphone, the iPod...
SMITH: The Zune.
CHACE: ...The Zune.
SMITH: He did not do it.
CHACE: He did not create the technology to edit the audio or to podcast. Since the late '90s, he's let this patent sit in a drawer. He himself is not a podcaster. He doesn't actually really listen to podcasts. But because of this patent, he says...
LOGAN: I am one of the co-inventors of podcasting. Yes.
(SOUNDBITE OF OK GO SONG, "A GOOD IDEA AT THE TIME")
SMITH: Hello, and welcome to PLANET MONEY. I'm Robert Smith.
CHACE: I'm Zoe Chace. Today on the show - when patents hit podcasters.
(SOUNDBITE OF SONG, "A GOOD IDEA AT THE TIME")
OK GO: (Singing) Seemed like a good idea at the time.
CHACE: We've covered a bunch of patent issues before. In fact, just this weekend, our own Alex Blumberg with our NPR colleague Laura Sydell - they have another big patent story on This American Life. You should listen to it. And when you hear about patents in the news, it's usually big companies suing other big companies over these arcane technical issues that don't involve regular people. Apple sues Samsung. Samsung sues Apple.
SMITH: What's happening with Jim and his podcast patent, though - this is a new phase in the patent wars because Jim Logan and his lawyers are not just going after the people who make the technology they've described in their patent. They're going after the end users, the people who use the podcast technology, people who plug in a microphone, record an audio file into a computer and send it out.
CHACE: They are sending threatening letters to podcasters, to people like Marc Maron.
MARC MARON: This letter is sitting on my desk. You know, it's sitting on my friend Sam's (ph) desk. It's sitting on other people's - other podcasters' desk. And all of a sudden, you know, we're terrified. We might have to stop podcasting. We might have to go broke trying to protect ourselves from this.
SMITH: We should say here that NPR and PLANET MONEY have not been sent a letter from Jim's lawyers, but plenty of podcasters have, and they're freaking out. And the way patents work in this country - it actually makes sense that they're scared. We'll explain.
(SOUNDBITE OF MUSIC)
CHACE: Jim Logan claims he invented podcasting on October 2, 1996. That's when he submitted the patent to the Patent Office. But he only got around to sending letters to people like Marc Maron this year, 2013.
SMITH: In between those two dates, the American patent system seems to have undergone this real change. Lots of people now say that it's doing the very opposite of the thing it was set up to do. And I'm sure you've heard about all of the lawsuits and the bickering back and forth of people buying patents and accusing other people of violating their patents. Some people say that instead of encouraging innovation, what's happening now in the legal system actually discourages innovation, actually makes the world a worse place for inventors.
CHACE: Jim Logan would tell the story a different way. In the 1990s, the world was about to change - as we know now - and he could foresee it. And he styles himself as this classic, old-fashioned inventor. In those days, he would come up with an idea. He'd get a patent on it usually, hire people, try to build the thing and sell it. For example, he had a bunch of patents on these little enhancements to touch screens.
LOGAN: Touch screens that you see in Las Vegas on all those gaming machines, the touch screens in cash registers in Home Depot, at many restaurants and many other public places - those are all touch screens that were made by my company.
SMITH: This company, MicroTouch, did very well. In fact, he sold it off for a bunch of money years ago to the company 3M.
CHACE: This is one business where Jim Logan was able to take a patent and really bring a product successfully to market. As he describes it, most of his other ventures didn't work out.
SMITH: Right. He had the TV thing.
LOGAN: In the early '90s, I got a patent on pausing live TV.
CHACE: That was your idea, to - that you would be able to pause live TV.
LOGAN: Right. If the doorbell rang, you could just - you know, it would automatically buffer the show. You could go see who was at the door. This is in the old days, when people used to...
CHACE: Have doorbells.
LOGAN: ...Go to doors and have doorbells. Right.
SMITH: He could've been TiVo, but he wasn't.
LOGAN: Well, it turned out, it - you know, we were still a bit too early to get into the TiVo business because the hardware costs weren't down low enough, et cetera. But I could see, you know, this intersection of the Internet, and media and PC computing power was all going to join together to form some interesting things.
CHACE: He got a couple patents on deep tagging in video. So, like, I send you a YouTube video, and I say go to 1:48, where Beyonce does this drop. His patent would enable me to tag the video; you could skip right to that part.
SMITH: That business also did not take off.
CHACE: Did not happen. He also invented the Bringer (ph). It's a little gizmo that tells you when you forgot your cellphone somewhere. And it actually goes...
LOGAN: Bring, bring, bring, bring. And then you know you have to go back and get your phone.
CHACE: He had the thing manufactured, went on that home-shopping channel, QVC. It didn't sell well.
SMITH: In the end, these failures may not really matter because the world of innovation was going through this big change in the last decade. Even when products went nowhere, the patents themselves - those things are immensely valuable. And patents stopped being about protecting your gizmo from someone else's gizmo and making money off of this protected space. Patents started to be used as weapons. And it became big business to get a patent, sit on it and then extract licensing fees from everyone else who wanted to do something similar. There was big money in old patents.
CHACE: Jim Logan - he remembers the moment when he realized his audio patent might be worth something. The cassettes themselves were moldering away somewhere, but it was around 2007. Jim had been off inventing the Bringer. And in the meantime, this whole world of audio devices and technology had come along - iPods, iTunes, playlists, podcasts. Jim and his patent lawyer hadn't really made the connection with the audio cassettes they developed.
LOGAN: I wasn't a big music listener, and Charlie Call wasn't either. We didn't own iPod's. We didn't even use iTunes. So it's all kind of foreign to us. So he went off on another project, explored iTunes, and then he realized that the Personal Audio patents that we had filed years before were actually being infringed by iTunes. And that's when we started to look at those patents and think about asserting them in some form or fashion.
SMITH: For 10 years, a bunch of brilliant people developed all this amazing technology and audio - music players, software, all of the stuff that we carry around and listen to music on. Jim Logan did not create any of it. He didn't use it. And then after all the hard work was done, then he came along and said, hey, everyone, this is my idea.
CHACE: Yes. Exactly. Jim has a guy who enforces his patents, Richard Baker. And Richard says this is precisely the way that it works. But it did seem weird to me.
If you have the idea of the thing, don't you have to invent the way to get it?
RICHARD BAKER: This is the road map. This is Jim's patent. It's the road map that would tell someone how to do podcasting, how to do MP3 players. A lot of the - you know, the road map is right here in the columns of this patent.
CHACE: But do you think that the guy that invented iTunes, like, read your road map?
BAKER: We don't know one way or another.
CHACE: Would that make a difference? What if they just came up with it on their own, but they actually had the capacity to build the thing?
LOGAN: That does not make a difference in the world of patents.
CHACE: In the world of patents, the first person to write something down has a legal case, and a jury gets to decide if there's a connection between an audio cassette and an iPod. So once Jim realized that, hey, I might be able to use this old patent, he went to work. And the first target was, in fact, Apple, not for podcasting, but for the ability to make a playlist.
SMITH: You know, the way you put songs in a certain order on iTunes or on your iPhone - that was something that Jim claimed that he invented.
CHACE: Like, I have a playlist on my phone that's, like, summer favorites.
CHACE: You know, and then it's a bunch of summer songs. And that - you have a patent on that.
LOGAN: Yes, and you owe us 15 cents.
CHACE: OK, sounds kind of scary, but he was actually joking - joking about me paying for my playlists. But they definitely went after Apple to pay them. And they were pretty crafty about it. They didn't sue Apple in Cupertino, Calif. Jim has his company registered in Beaumont, Texas. And he sued Apple on its corporate home turf, the Eastern District of Texas.
SMITH: So it was Jim, the scrappy American inventor, versus the largest corporation in the United States. The jury went with Jim. They said that Apple had infringed on Jim Logan's patent.
CHACE: And the jury awarded Jim Logan's company something like $8.5 million. And then Apple appealed, and they appealed back, and there was a settlement. It's totally not public. And so we don't know how much money Jim Logan's company actually got from Apple, if any. But Jim Logan did tell me that they'd been able to get licensing agreements after this whole thing with a bunch of companies over the playlist part of the patents. He would not, of course, tell me how much those licensing fees were.
SMITH: But still, in this world, the fact that he won a jury verdict in the first place - that is kind of amazing, since the idea of putting songs in a particular order that you choose was probably invented by, you know, some teenage boy in the mid-'70s making a mixtape for his girlfriend.
CHACE: But he did not write it down. And Jim Logan wrote it down. And that is what matters. And once Jim had won this verdict against Apple, he started to look around and say, who else uses a technology that I own a patent for? And that's when he decided to focus on podcasters. They release episodes over the Internet. He felt another patent covered that, so he pulled up the patent and added to it to make sure the part he thought covered podcasting was emphasized.
SMITH: This is actually allowed. If you have a patent, you can go back to it. You can add to it. You can tweak it a little bit. If you see people doing something that reminds you of your patent, you can tweak it a little bit - totally legal. So if Apple is the most powerful company in technology, then the next target may be the most powerful podcaster - Marc Maron - or at least, he's the funniest. He does this comedy podcast called "WTF." It's incredibly funny. It's heartfelt. It's a great podcast. But there is a big difference, Marc Maron points out, between himself and Apple.
MARON: I'm not a rich guy. I don't run a tech company. I am a guy who turns on his computer and does his thing.
CHACE: So Marc goes to his P.O. box one day. He actually broadcasts the podcast from his garage in his home. Marc goes out. He finds this letter from Jim and his lawyers.
MARON: The 504 patent covers important technology related to automatically identifying and retrieving media files representing episodes in a series of those episodes becoming available. What? Do you mean, like, almost anything on the Internet? These patented techniques are commonly used in podcasting. We are currently engaged in litigation on the 504 in the Eastern District of Texas.
CHACE: Now, if this sounds scary, that's the point of a letter like this. It's expensive to sue people. And Marc Maron wasn't being sued yet and hasn't been. But one of the things that you do, if you claim someone's infringing on your patent, is you try to get the person to negotiate and cough up some money before you get to that point.
MARON: And they sent a copy of the patent with this letter, which is very helpful to a layman, the - a patent, which looks like a large bunch of legal gibberish interspersed with, you know, ridiculous diagrams. So, like, from - you know, in my mind, this guy - he seems to have patented a diagram or a series of math problems that he's now retrofitting into an extortion racket.
SMITH: Marc Maron was not the only guy getting this letter. The public radio host Jesse Thorn got one. He does a podcast called Bullseye. And so people got more than letters. Jim Logan filed a lawsuit against NBC and CBS, against the podcast "HowStuffWorks" by Discovery, against "The Adam Carolla Show." As far as we can tell, those are still in process.
CHACE: So what does Jim Logan and his company want out of all this legal action? A license fee - money for these podcasters to continue doing what they are already doing. He won't tell me how much. That's not how the game is played. The way you get money is not by naming a number. You let the other guy make up big numbers in his head. Here's the licensing guy Richard Baker.
BAKER: For those that are complaining, they should talk to us and find out - I think they'd find that our - that we're very reasonable.
CHACE: Well, they're scared. They're scared they're going to get sued.
BAKER: I'm a nice guy.
CHACE: In some ways, this legal battle is a pretty typical one for a patent lawsuit. From Jim's perspective, enforcing his patent helps innovation because it lowers the cost of going into business. At the end of the day, if it doesn't work out, you still might be able to make some money back from that initial investment through licensing fees on your patent.
SMITH: And the podcasters, the people getting sued - they have the typical argument that someone on the other side always has, right? It stifles innovation if you have to pay money to some guy who thought of some idea years and years ago and never used it. If you think you're going to have to pay some unnamed scary amount of money, why would you even start a podcast? Why would you continue a podcast when you're barely making any money in the first place?
CHACE: The thing that is new here, though, the thing that distinguishes this lawsuit from other patent lawsuits between, like, Apple and Samsung, is this targets people way lower down in the chain. Jim Logan is going after people who just bought something off the shelf. Podcasters, they buy a computer. Maybe they pay extra for audio software. That's about all they do. They don't make the software themselves, but they're getting into trouble.
SMITH: It's like if you had a patent on the automobile. If you were the guy who invented the car, imagine if instead of going after General Motors and Ford, you went after the drivers - everyone behind the wheel.
CHACE: That's the law, though. The law says, make, sell, distribute, use.
SMITH: And, you know, there are a couple of legal actions, like this one against the podcasters, going on right now. It's a little bit of a trend - targeting people low down in the chain. For instance, someone has patented the idea of distributing Internet over Wi-Fi. And you know who's getting threatening letters? Coffee shop owners - people have Wi-Fi in their coffee shops. They didn't create the router. They didn't write the software, but they're the ones having to deal with lawyers.
Another example - someone patented the idea of scanning a document and putting it in email. Now, who gets the threatening letters there? Not necessarily just the companies who wrote the software, but, you know, Joe (ph) office guy, who happens to scan something and put it into an email in a law firm or in a business. He's the one.
CHACE: I talked to this woman at the Electronic Frontier Foundation, Julie Samuels. And she holds - you're going to love this - the Mark Cuban chair to eliminate stupid patents.
SMITH: And this is on her business card?
CHACE: Yes, it's on her business card.
CHACE: And she thinks that Jim Logan's patent is stupid, so she's fighting it. She told me about the trend of going after users lower down in the chain. She says this is completely not what the patent system is supposed to do.
JULIE SAMUELS: What we've seen, as a practical matter, is that someone thought of a problem, said, I would like to rewind TV, so I'm going to write a patent about how, theoretically, you could rewind and pause TV. And then five, 10, 15 years later, when there are all these different ways to do it, when you can, you know, use countless different technologies to accomplish the same task, that same inventor claims he owns all the ways to do it.
CHACE: Julie's group, the Electronic Frontier Foundation, they have big news this week, actually. They're planning to challenge this patent at the Patent Office, saying it never should've been granted in the first place. Their argument is, first, it's way too obvious, the idea of downloading serialized episodes to an audio device. It's so obvious that none of us who do that had heard of this patent, and the guy who owns the patent - Jim Logan - he had kind of forgotten about it himself for 10 years.
SMITH: The second way the EFF is going to fight this thing - they want to prove that Jim Logan is not the first podcaster. They are searching for recorded examples of people basically doing what Jim Logan describes before October 2, 1996, the day Jim's patent was filed.
CHACE: Julie Samuels uses a term for Jim and people like him. She calls them patent trolls. It just means someone who doesn't build, doesn't make, doesn't create jobs. A patent troll extracts money from people who do those things. I brought up the term with Jim Logan, and he says, no, that's not what he is. Jim says he's simply using the legal right given to him by the government and that's been backed up by the courts and juries. This is our system. He's using it. And Jim says, yes, that might mean some podcasters may have to pay, and some perhaps might stop podcasting or never start, but big picture - having patents encourages inventors like himself to come up with ideas and try them out.
SMITH: Yeah, but this system, as you put, it - I mean, this system means that the rest of us, frankly, have to spend all of our time watching our backs. I mean, the way the patent system works is, you never really know who invented something or who came up with some idea 10 years ago until it's already too late, until you're talking into a microphone or surfing the Internet in a coffee shop or making a mixtape. It's only after you do it that someone shows up and sends you a letter.
CHACE: And no matter what you do for a living or even for fun, in this new patent world, you have to keep asking yourself this question, this question that obviously came up when I was interviewing Jim Logan for this show.
So are we doing something illegal right now, though?
BAKER: I wouldn't comment on that (laughter).
LOGAN: No, I can't comment on that. We don't - I don't comment on the legalities of - leave that to the lawyers.
(SOUNDBITE OF ARCHIVED RECORDING)
BECKER: And in case you didn't notice, inside your cassette case, you'll find a reference card with a summary of each article and important phone numbers and websites you may want to refer to later.
(SOUNDBITE OF MUSIC)
SMITH: As always, we like to hear what you thought of the program. The address for PLANET MONEY is, of course, on the inside of the cassette, but I will just remind you. It's firstname.lastname@example.org.
CHACE: Of course, listen to This American Life this weekend, and you will hear a lot more about the patent system. I'm Zoe Chace.
SMITH: And I'm Robert Smith. Thanks for listening.
(SOUNDBITE OF SONG, "I GET IDEAS")
LOUIS ARMSTRONG: (Singing) ...Dangerously near me, I get ideas. I get ideas. I want to hold you so much closer than I dare to. I want to scold you because I care more than I care to. And when you touch me and there's fire in every finger, I get ideas. Yes, I get ideas. And after we have kissed good night...
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