Two patent holders in Tyler, TX are alleging that 13 radio groups have infringed upon their patent that provides the technology to insert different commercials in radio's otherwise similar terrestrial streams when aired on the Internet.
This technology was reportedly being marketed by Ando Media out of Quincy, MA.
Interestingly enough, Ando is not mentioned in this massive lawsuit.
Instead, there are two Texas lawyers (Danny L. Williams and J. Mike Amerson) who have decided to go after Ando's clients instead.
The suit filed on behalf of Aldav, LLC does not seek a specified amount of damages but as usual the plaintiffs want everything but the kitchen sink if they prevail in Federal Court, Eastern Division of Texas. You know -- fees, anything the judge wants to throw in, interest.
The radio companies being targeted are: Clear Channel (of course, why not go after the big one), Cumulus, Citadel, CBS Radio, Entercom, Saga, Cox, Univision, Regent, Gap Broadcasting I & II, Radio One and Aloha Station Trust.
This is trouble -- big trouble.
Some of the radio groups are being jumped by inventors David D. Minter and Albert S. Baldocchi for an Internet Radio System with Selective Replacement Capability Patent Number 6,577,716 granted June 10, 2003.
What's worse is that the defendants have no legal protection in their contractual agreements since the ad insertion software was sold to them by the party that is not being sued right now -- Ando Media.
That means all will incur substantial legal bills even if they eventually seek to combine their cases into one defense.
And although most cases never make it to trial because of out of court agreements, these radio operators will have the disadvantage of having to pay the expenses of defending themselves even if the case ends up in an out of court settlement to make Minter and Baldocchi happy. (Danny L. Williams did not return a call of inquiry on this matter).
No one can say for sure how it will all end. But even an out of court settlement will be costly. And Ando will not have the funds to help all 13 radio groups defend themselves.
What a mess.
Of course, I'll have to leave the legal battle to the attorneys, but on the issue of running terrestrial streams on the Internet in the first place, I object (I'm starting to sound like a lawyer now).
Radio on the Internet is a cottage business at best -- that would be a small cottage, by the way.
On the issue of replacing terrestrial commercials with custom Internet ads, union rules and other legal considerations make this mandatory for broadcasters streaming on the Internet. They need this type of software to continue the quest for their version of the digital future.
But Internet ads inserted into the "same old-same old" terrestrial format is like adding hamburger helper to the main course.
I'll bet you if the patent holders have a case (again, I'm not the jury -- did I mention, the plaintiffs are requesting a jury trial?), the radio companies will have to pay them to go away. The two inventors, if proven to be the original patent holders that were infringed upon, might eventually wind up as Ando partners as a result of a settlement, who knows?
You can't fault these 13 radio groups for using the insertion software -- how would they know if (and I emphasize if) there are disputes over who owns the patent?
Where you can fault these radio groups is for trying to reuse their terrestrial content online even as they are compromising and cutting back their on-air radio programming.
It's a typical tactic of radio groups -- we have one product and damn it you're going to get it everywhere. We will incur no additional expenses.
And as costly as this lawsuit could wind up being, what will end up being even more costly is not having a strategy to use their already employed radio talent to innovate and provide exclusive (not repurposed) content for Internet and mobile devices.
You don't need a lawyer to take this down to its common denominator.
Fool me once (on the streaming patent), shame on you.
Fool me twice (on both the patent and the stupidity of inserting Internet commercials into existing terrestrial streams), shame on me.
I rest my case.
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