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

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Original poster
Apr 12, 2001
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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.

lodsys_logo_2012.jpg
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.
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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.
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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
 
Article Link
https://www.macrumors.com/2012/10/08/lodsys-offers-update-on-in-app-purchase-patent-dispute/
Pakaku

Pakaku

macrumors 68040
Aug 29, 2009
3,134
4,440
How, exactly, can the idea of in-app purchases even be patented...?
 
nagromme

nagromme

macrumors G5
May 2, 2002
12,546
1,196
“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!
 
faroZ06

faroZ06

macrumors 68040
Apr 3, 2009
3,387
1
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.
 
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iGrip

iGrip

macrumors 68000
Jul 1, 2010
1,626
0
jav6454 said:
The whole Lodsys lawsuit should be thrown out. Apple paid the royalty, developers are using something Apple already paid.
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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

Solomani

macrumors 601
Sep 25, 2012
4,785
10,477
Slapfish, North Carolina
jav6454 said:
The whole Lodsys lawsuit should be thrown out. Apple paid the royalty, developers are using something Apple already paid.
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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."
 
theBB

theBB

macrumors 68020
Jan 3, 2006
2,453
3
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

ThunderSkunk

macrumors 68040
Dec 31, 2007
3,814
4,036
Milwaukee Area
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.
 
Solomani

Solomani

macrumors 601
Sep 25, 2012
4,785
10,477
Slapfish, North Carolina
Kilamite said:
Cannot wait for the patent reform.
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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.?
 
S

ScottishCaptain

macrumors 6502a
Oct 4, 2008
871
474
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?
Click to expand...

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
 
K

kolax

macrumors G3
Mar 20, 2007
9,181
115
Solomani said:
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.?
Click to expand...

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

Solomani

macrumors 601
Sep 25, 2012
4,785
10,477
Slapfish, North Carolina
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.
 
F

FrizzleFryBen

macrumors 6502
Dec 14, 2009
453
179
Charlotte, NC
iGrip said:
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.
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Apple isn't being abused, developers are. Apple is protecting the little, medium and big guys from bullies.

Kilamite said:
Cannot wait for the patent reform.
Click to expand...

Half of a century overdue!

Pakaku said:
How, exactly, can the idea of in-app purchases even be patented...?
Click to expand...

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!
 
B

btbrossard

macrumors 6502a
Oct 25, 2008
973
11
Chicagoland
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

Solomani

macrumors 601
Sep 25, 2012
4,785
10,477
Slapfish, North Carolina
btbrossard said:
Just wait until my patent on breathing gets approved. All of you are going to be screwed!
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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. ;)
 
W

Windlasher

macrumors 6502
Jan 11, 2011
483
111
minneapolis
iGrip said:
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.
Click to expand...

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

Serelus

macrumors 6502a
Aug 11, 2009
673
132
Vm9pZA
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.
 
W

Windlasher

macrumors 6502
Jan 11, 2011
483
111
minneapolis
Solomani said:
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.
Click to expand...

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.
 
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