A federal appeals court in Washington on Friday upheld a lower court ruling that said CBS didn’t need to pay $1.3 million for allegedly violating a patent tied to podcasts. The decision came just weeks after the judges heard oral arguments.
The case is hinged on U.S. Patent No. 8,112,504 describes a system for organizing audio files, by subject matter, into “program segments.” The issue first came to the forefront in 2013 when Personal Audio began demanding royalties from podcasters based on that its contention that the patent first designed for cassette tapes should be applied to podcasts too. That patent was later cancelled by the U.S. Patent and Trademark Office.
In its decision, the appeals court said the district court in Texas should not have heard a challenge to the patent ruling and so it therefore didn’t have the jurisdiction to review the decision handed down by the judge. The three-judge panel says only a full panel of the circuit’s judges could make such a precedent-setting decision. That means Personal Audio will need to seek what’s known as an “en banc review” if it aims to press forward with its appeal.
Even though Personal Audio no longer holds the patent that it once aimed to use to squeeze royalties from podcasters, the appeal is tied to a 2014 Texas trial when a jury ruled CBS should pay $1.3 million in damages for infringement. Rather than appeal immediately, CBS and Personal Audio agreed to put the case on the backburner until the larger question of whether the patent was valid played out elsewhere in federal court.
As Podcast News Daily reported last week, CBS has argued that Personal Audio’s claims have become moot since its patent has been invalidated. And it says the patent company should be forced to help cover the money CBS has spent defending itself. But Personal Audio has argued that the jury’s award shouldn’t be impacted by the patent revocation that came months later.
Some legal observers have said Personal Audio is continuing to fight, even though its podcast patent has expired because it likely has spent far more than the $1.3 million a jury awarded it from CBS on legal fees and it hopes to collect something closer to the $7.8 million it first sought from the courts.