Lodsys Offers Update on In App Purchase Patent Dispute, Claims Licensing Momentum

[MacRumors]

Nearly a year and a half ago, patent holding firm Lodsys threatened to file suit against App Store developers making use of Apple's In App Purchase mechanism, claiming that they were infringing upon patents held by Lodsys.

Apple stepped in to protect developers, ultimately filing a motion to intervene in the lawsuits being pursued by Lodsys against developers who were unwilling to license the patents in question. Earlier this year, Apple was granted limited permission to intervene in the case to the extent that it could seek to demonstrate that its existing license with Lodsys covers developers' usage of In App Purchase.

There has been relatively little news on the Lodsys situation over the past six months, but Lodsys today published a blog post providing a status update. According to Lodsys, the U.S. Patent and Trademark has upheld the validity of a key claim of one of the major patents in question, stymying efforts by Google to have the patent invalidated entirely.

As a part of the Inter-Parties Reexamination requested by Google, the USPTO recently issued an Office Action confirming Claim 24 of US Patent 7,222,078. This claim is particularly relevant regarding in-app purchases and free-to-paid application upgrades. In addition, we have every confidence that all claims will ultimately be confirmed through this lengthy process. In-app purchase features and free-to-paid upgrades will be a part of the litigation process that is now swiftly moving forward.

Lodsys goes on to note that Apple is continuing to press forward with its assertions that patent rights have been exhausted via Apple's license to the patents, thereby protecting developers from Lodsys' actions. Lodsys obviously contests that assertion, and a trial on the issue is scheduled for early 2013.

In a separate blog post, Lodsys notes that it has gained licensing momentum, now having reached agreements with 150 developers to license the In App Purchase patents, with over 80% of those licenses being obtained without involving litigation.

As of October 8, 2012, there are greater than 150 companies which obtained the rights to use the Lodsys Group patent portfolio, and more than 4 out of 5 of these companies have entered into licenses outside of the litigation process. These companies have realized significant savings by taking advantage of lower licensing rates.

Lodsys has taken on companies big and small with its effort, initially focusing primarily on smaller developers but later taking on heavyweights such as Rovio, EA, and Atari. Lodsys' plan has been to provide developers with notices of infringement, giving developers 21 days to obtain a license before filing suit.

It seems that most developers have elected to simply license the patents rather than incurring the expense and time commitment necessary to fight a lawsuit, but others have not backed down and with the assistance of Apple, Google, and other larger companies have been seeking to hold out against Lodsys.

Article Link: Lodsys Offers Update on In App Purchase Patent Dispute, Claims Licensing Momentum

[Pakaku]

How, exactly, can the idea of in-app purchases even be patented...?

[nagromme]

“Licensing momentum” = “extorting small developers, who cannot afford to defend themselves even when they’re right, to share their livelihood with people who contributed nothing.”

A new frontier in euphemism!

[jav6454]

The whole Lodsys lawsuit should be thrown out. Apple paid the royalty, developers are using something Apple already paid.

[faroZ06]

I would complain about this being a bogus patent, but I also hate in-app purchases, so it's OK. I don't want to buy a game for $1 then have to buy every @#$%ing level in the game for $2 each.

Still, the idea of this poop pile (Lodsys) making money in general doesn't sit well with me. Just looking at the Wikipedia article (http://en.wikipedia.org/wiki/Lodsys) makes me wish the entire company would die of lawsuits and extreme debt. They haven't made a single product! All they do is patent troll for money! What poor excuses for human beings! They sue everyone from Apple to HP to Adidas for invalid patents.

[Kilamite]

Cannot wait for the patent reform.

[iGrip]

Originally Posted by jav6454

The whole Lodsys lawsuit should be thrown out. Apple paid the royalty, developers are using something Apple already paid.

When it comes to ripping off Apple, these scum know no shame. But Apple will not sit back and be abused. They will be sorry they ever tried to sleaze their way into Apple's pockets.

[Solomani]

Originally Posted by jav6454

The whole Lodsys lawsuit should be thrown out. Apple paid the royalty, developers are using something Apple already paid.

Quite true. Apple already paid the royalty to cover its app ecosystem. Otherwise, how on earth could SMALL indie developers ever survive (financially) to publish profitable apps in ANY app store (be it Apple's, Google's, Microsoft's, etc) if Lodsys patent insists on extorting hundreds (or thousands?) of dollars from them?

To be balanced, maybe the Apple-Lodsys agreement *should* have been modified or clarified that the Apple payment covers all developers within the confines of its App Store, in which case Lodsys should then have asked for a higher royalty payment.

The conversation could have gone like this: (this is just an example)

Lodsys: "OK Apple, if you insist coverage of the ENTIRE App Store including all your developers that publish apps for it, then it's gonna cost you another so-and-so thousand dollars. Pay up!"

Apple Exec #1: "Hmmm. They're asking for a quarter million dollars more. Whatcha think Tim?"

Tim Cook: "A drop in the bucket for us. Go ahead and write them a check. It's worth it in the long run, since all our App Store devs will thank us for covering their butts on this one."

[Aspasia]

Lodsys is a patent troll. Unsure if they've ever created anything but lawsuits.

[shartypants]

They are the modern mafia.

[theBB]

If Apple really believes that its licenses cover third party developers, it should indemnify all developers who use its in-app purchase APIs and it should take over their defense. Its ecosystem is under attack, it's got the necessary experience in patent litigation and it's got deep enough pockets.

[ThunderSkunk]

Lodsys is the main reason our company won't rewrite our proprietary Cad software for iOS. Our attorneys aren't the only ones coming to that conclusion. The iPad's been doing great in sales, but to truly become the computer of the future, Lodsys will have to be destroyed.

[Medic311]

Originally Posted by Pakaku

How, exactly, can the idea of in-app purchases even be patented...?

b/c our US Patent Office is under staffed and will approve anything if you ask them enough times.

[JuBe]

I just looked at the patents: http://patft.uspto.gov/netacgi/nph-P...&RS=PN/7222078 and http://patft.uspto.gov/netacgi/nph-P...S=PN/7,620,565. From these I've concluded the patent officer must have looked at the application, thought "Daf*q? I don't understand any of this--therefore it must be something new. Approved!"

[Nova Sensei]

Originally Posted by Pakaku

How, exactly, can the idea of in-app purchases even be patented...?

I'd love to know the answer to this question.

What a ridiculous world we live in.

[Solomani]

Originally Posted by Kilamite

Cannot wait for the patent reform.

Which will not happen overnight. You know it will takes years, right? And if it ever happens, it will take even many more years of "amended" legislation to refine it, fix loopholes, etc.

And FINALLY.... define "patent reform". Are we talking about reforming the United States patent laws? Reforming European Union laws on patents? Chinese laws on patents (hahahahahahaha LOLZ)?

Or might you be implying that the United Nations should be like some Mega-Fascist Entity that is laying down a uniform patent legal code for the entire Planet Earth that all nations should follow internationally? Do people have any idea how many Americans already have extreme distrust/animosity towards the U.N.?

[ScottishCaptain]

Quite true. Apple already paid the royalty to cover its app ecosystem. Otherwise, how on earth could SMALL indie developers ever survive (financially) to publish profitable apps in ANY app store (be it Apple's, Google's, Microsoft's, etc) if Lodsys patent insists on extorting hundreds (or thousands?) of dollars from them?

They shouldn't have paid it.

Lodsys shouldn't have gotten a single dime from anyone, anywhere, at any time. The fact that there are ****ing retards running around out there stupid enough to pay this "troll toll" is beyond pathetic. The idiots who have given Lodsys money are only validating Lodsys's behaviour as an acceptable business strategy.

This company needs to be driven into the ground. Along with every other ****ing company propagating this kind of ********. As far as I'm concerned, nothing good will ever come from giving Lodsys MORE money to "go away for a while".

Of course, the whole American patent system needs to be burned to the ground. The fact that I, as an indie developer, can sit here and genuinely come up with my own clever approach to a logical problem and be breaking the law and subject to thousands- millions of dollars in lawsuit costs and fees- is so astronomically stupid it makes me **** bricks of fear to even think about it.

Good job on stifling innovation, though. I can think of no better way to do it then to allow patent trolls like this to roam free.

-SC

[Kilamite]

Originally Posted by Solomani

Which will not happen overnight. You know it will takes years, right? And if it ever happens, it will take even many more years of "amended" legislation to refine it, fix loopholes, etc.

And FINALLY.... define "patent reform". Are we talking about reforming the United States patent laws? Reforming European Union laws on patents? Chinese laws on patents (hahahahahahaha LOLZ)?

Or might you be implying that the United Nations should be like some Mega-Fascist Entity that is laying down a uniform patent legal code for the entire Planet Earth that all nations should follow internationally? Do people have any idea how many Americans already have extreme distrust/animosity towards the U.N.?

I'd love to see a huge movement worldwide if possible, on software patents and invalidating many that are ridiculous/essential for the modern digital era.

Being able to buy a patent is getting out of hand when you look at this, and Google's portfolio of stuff they bought.

The whole idea of "prevent others innovating so we can innovate first and make all the money" sickens me.

[Solomani]

I do find it amusing that in this particular issue with Lodsys, both Apple and Google seem to be on the same team.

Lodsys certainly must be up to something malicious when rivals like Apple and Google and Microsoft have to join forces to oppose Lodsys. It speaks volumes of Lodsys' intent.

[FrizzleFryBen]

Originally Posted by iGrip

When it comes to ripping off Apple, these scum know no shame. But Apple will not sit back and be abused. They will be sorry they ever tried to sleaze their way into Apple's pockets.

Apple isn't being abused, developers are. Apple is protecting the little, medium and big guys from bullies.

Originally Posted by Kilamite

Cannot wait for the patent reform.

Half of a century overdue!

Originally Posted by Pakaku

How, exactly, can the idea of in-app purchases even be patented...?

Yes, now it seems obvious, but there was a time when we all bought boxed software and visited bullentid boards with our 9.6k modems. In app purchase was once an innovative idea. The key is length of patent terms and renewals...It's all jacked up and NEEDS reformed!

[btbrossard]

Just wait until my patent on breathing gets approved. All of you are going to be screwed!

Everyone can pay now to license this new technology or I'll be forced to sue.

[Solomani]

Originally Posted by btbrossard

Just wait until my patent on breathing gets approved. All of you are going to be screwed!

I just sent in my application to the US Patent Office for Patent #726480 "Internet Forum Trolling".

Once my patent gets approved, I will be forced ask many MacRumors regulars to immediately cease and desist, or my attorney will be sending you all a very big bill.

[Windlasher]

Originally Posted by iGrip

When it comes to ripping off Apple, these scum know no shame. But Apple will not sit back and be abused. They will be sorry they ever tried to sleaze their way into Apple's pockets.

They are not really trying to sue apple. They are trying to get paid TWICE for the same license by bullying small developers.

[Serelus]

WHY IS PATENT TROLLING ALLOWED AT ALL?

Why can't a court simply notice a company isn't doing anything but leeching of other companies, and therefore close the case entirely.
It seems like your laws have no room for discretion whatsoever, which sounds very flawed.

[Windlasher]

Originally Posted by Solomani

I do find it amusing that in this particular issue with Lodsys, both Apple and Google seem to be on the same team.

Lodsys certainly must be up to something malicious when rivals like Apple and Google and Microsoft have to join forces to oppose Lodsys. It speaks volumes of Lodsys' intent.

Apple should throw a few developers at the problem and develop in an house solution, cancel the LODSYS agreement and then LODSYS will be sorry.