Aldav, LLC claims big radio companies infringed patented content-substitution methods

Radio stations that stream their content onto the Internet will want to keep an eye on a patent lawsuit filed in the United States District Court for the Eastern District of Texas. Several major radio companies have been accused of patent infringement by engaging in “content replacement” – that is, they substituted Internet-friendly content in place of more locally-oriented content that went out over the air. While the complaint provides no details, it suggests that the local content which was removed consisted, at least in part, of commercials. 

The suit, filed April 16, pits Plaintiff Aldav, LLC against a list of defendants comprising a virtual who’s who of Big Name National Radio Operators: Clear Channel, CBS Radio, Citadel, Cox Radio, Cumulus, Entercom, Gap Broadcasting, Radio One, Regent, Saga, Univision and the Aloha Station Trust (which is operating some Clear Channel stations).

At issue is a patent (No. 6,577,716, if you’re into that kind of thing) which covers methods for (a) “replacing a portion of the content of a radio broadcast that is to be distributed over the Internet” and (b) distributing a portion of the content of a radio station broadcast over the Internet.” To folks not steeped in the technical intricacies of patent descriptions (i.e., us), the overall description of the “methods” is not a model of specificity and detail. It refers, without much elaboration, to the use of content-related “markers” to trigger the identification of “local” programming (e.g., ads, news, weather, sports, traffic) and the replacement of such programming with programming “applicable to individuals located outside the geographical range of the radio broadcast”. 

Exactly what (if any) specific hardware and/or software might be necessary to implement these “methods” does not appear to be identified in the patent itself.

If successful, Aldav could potentially receive millions in both “actual” and “enhanced” damages, and could obtain a permanent injunction preventing these stations from using the patented process without Aldav’s permission.

Of course, broadcasters might want to yank local programming from their Internet stream and replace it with wider- interest material for a number of reasons. Replacement of local spots often makes sense, since the advertiser presumably is not expecting business from a global audience, and, conversely, a global audience presumably isn’t interested in hearing about some local business. Also, a station’s right to transmit some content, including locally-produced spots and even some music, may not include Internet transmission – in which case the station could subject itself to claims by the content’s producer, talent and/or copyright holder for additional compensation if that content were to be included in the stream. (While the station may be indemnified by the commercial producer or broker in the event that the talent sues to recoup the extra compensation he or she believes is owed for this extra performance of the commercial, the station and the station alone will be on the hook for the sound recordings performed but not reported to SoundExchange.)

So it’s no surprise that content substitution may be standard operating procedure among many, if not most, streamers.

The big question raised by the Aldav suit is whether Aldav’s patent really does give it a monopolistic (or near-monopolistic) lock on any such program-replacement activity. Presumably Aldav thinks so, and is looking to establish that principle by dipping into some of the deepest pockets in the business. In view of the potentially astronomical stakes on the table, though, it is not likely that anybody’s going to be conceding liability in the early rounds.

Meanwhile, streaming stations not targeted by Aldav’s suit should take a close look at their own program-substitution practices, with an eye to trying to dodge any litigation bullets that might get shot in their direction as this situation develops.