‘Music player’ is not how most would describe Amazon’s much-hyped new tablet. Unless, that it is, you happen to own a powerful patent for audio technology that has already formed the basis of a successful lawsuit against Apple’s iPod devices.
In a suit filed in East Texas federal court, a shell company called Personal Audio LLC is claiming that Amazon’s Kindle Fire infringes two of its patents for receiving and downloading a “navigable playlist.” In explaining its infringement allegations, the company describes Amazon’s reading and shopping device as:
an audio program player capable of playing a group of audio files, such as songs, selected by the listener. A selected group of audio files arranged in a sequence is commonly known as a playlist.
Technology companies face down patent lawsuits nearly every week, but this particular suit could spell trouble not just for Amazon (NSDQ: AMZN) but for a whole range of devices and services that play music. Personal Audio has already used one of the patents in question to obtain a jury verdict worth $12 million ($8 million plus $4 million in interest) against Apple this summer, and has also filed similar suits against Samsung, Research In Motion, Sirius XM (NSDQ: SIRI), Motorola (NYSE: MMI) and others.
So what are these patents and who owns them? As is the case with many of these lawsuits, the “inventions” in question are more than a decade old. A tech executive named James Logan and his lawyers filed for the first one (used to sue Apple) in 1996 and received approval from the patent office in 2001. Logan was for years the head of Microtouch which, the claim against Amazon notes, was a world leader in touch technology and brought about a shift to glass screens from plastic ones. (The claim does not note that Logan paid half a million dollars to settle insider trading charges when he sold the company to 3M).
The second patent was granted in 2009 to a trust fund controlled by Logan. It is related to the first one which the claim says is “a foundational patent in the portable personal audio player industry.” Personal Audio appears to be using both patents to target large companies who make devices that allow users to make an audio playlist. The abstract for the newer patent says it is:
An audio program and message distribution system in which a host system organizes and transmits program segments to client subscriber locations.
Personal Audio has also used the new patent to take a second crack at Apple (NSDQ: AAPL), filing a new lawsuit shortly after the launch of the latest iPhone. It prevailed in its original case, although Apple is appealing, after persuading a Texas jury that that the patent claims were not obvious.
It is hard to tell at first glance if the Personal Audio lawsuits are an attempt to vindicate an American inventor of if they are simply another species of “patent troll” suits, in which law firms use questionable patents to shake down companies with deep pockets.
The suits were all filed in the District of East Texas, a forum that has gained notoriety in legal circles for having judges and juries who critics say have made a cottage industry out of patent lawsuits. This is the second time Amazon has been sued over the Kindle Fire. Another shell company sued it in Texas in October over technology related to tapping an icon.