Lodsys Ignores Apple, Sues Developers Over Patent Infringement

Last week, I, and many others, assumed that Lodsys had been stymied from continuing with their demands for money from independent developers after Apple issued a strongly worded letter to Lodsys CEO Mark Small, discouraging Lodsys from harassing app makers and defending Apple’s licensing.

That assumption certainly proved true, and Lodsys was quiet for the rest of the week, aside from sending a few new letters to threaten Android developers. However, things have changed again this week, and Lodsys has decided to continue pursuing the alleged patent infringement of developers using in-app purchasing functionality on iOS and other platforms.

In a series of blog posts, Lodsys revealed that on May 31st, they filed lawsuits against seven iOS app developers: Combay, Inc., Iconfactory, Inc., Illusion Labs AB, Michael G. Karr d/b/a Shovelmate, Quickoffice, Inc., Richard Shinderman, and Wulven Game Studios.

If the aforementioned choices seem odd to you, you’re not alone. Why these developers, when there are certainly bigger and more lucrative apps violating Lodsys’ licenses? Is Lodsys targeting small developers first, developers who couldn’t possibly take Lodsys to court, in order to get them to cave to set a precedent for other developers?

Originally, Lodsys set a 21 day deadline for developers to pay before legal action would be taken. The deadline hasn’t passed, but Lodsys filed anyway, saying “Lodsys chose to move its litigation timing to an earlier date than originally planned, in response to Apple’s threat, in order to preserve its legal options.” Filing first will likely give Lodsys an advantage in a disagreement over the venue of a lawsuit, meaning court proceedings will likely happen in Texas, which is historically favorable to patent holders in disputes.

In a blog post that coincides with the filing of the lawsuits, Lodsys asserts that “Apple is not ‘undisputedly licensed’ with rights that extend to 3rd party Developers,” which is a claim that Apple made in their letter to Lodsys last week. Lodsys goes on to say, “We stand firm and restate our previous position that it is the 3rd party Developers that are responsible for the infringement of Lodsys’ patents and they are responsible for securing the rights for their applications.”

It seems that Lodsys has not been cowed by Apple, and insists on continuing what is sure to be a losing battle. Apple has already promised to vigorously defend its licensing rights and App Store developers, and for the future of the App Store and continuing advances in app development, Apple has to make this problem go away. There are two ways to make that happen: a settlement with Lodsys, or a prolonged, expensive legal fight.

It’s currently unclear how this issue will pan out, but Lodsys has resorted to cheap scare tactics, claiming that contractually, Apple has, “offered you [developers] nothing, no license, no indemnification, no obligation to defend you,” all the while urging developers to pay up and not to rely on Apple’s letter. In addition, Lodsys has offered to pay developers $1,000 each if they receive an infringement notice and it turns out that Lodsys is wrong about their patent claims.

On the surface, it may seem that this exudes confidence and that Lodsys is sure about their victory, but $1,000 is a paltry sum that would barely cover two hours with a patent lawyer. If they’re so sure that Apple’s licensing doesn’t apply to developers, why not offer $10,000 or $20,000, an amount that could actually help with legal fees and allow developers to challenge Lodsys’ assertions? It’s a ridiculous offer. Hopefully such tactics will garner a quick response from Apple, to set developers at ease. You’re up, Apple, and we’re all eagerly awaiting your next move.

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About Juli: Contact me via Twitter: @julipuli