Advice For Lodsys-Targeted App Developers

[MacRumors]

In Mid-May, several app developers, for both iOS and Android, received legal notification from a patent holding company named Lodsys, claiming that certain functions of their apps (such as the In-App Purchasing mechanism that Apple offers to developers) were in infringement of Lodsys patents.

After Lodsys filed lawsuits against seven iOS developers, Apple attempted to intervene on behalf of the defendants, but Lodsys has continued to send out legal threats to developers. Because of the way patent litigation is designed in the United States, it is frequently considerably cheaper to settle with patent-holders rather than fight it out in court -- even if the defendant believes they are right, because of the extraordinary costs involved with patent litigation.

This past weekend, Florian Mueller at FOSS Patents penned a lengthly article outlining what he believes is the most cost-effective strategy for developers who must deal with Lodsys. He makes it clear that his post isn't meant to be "legal advice" but it is a good starting point for smaller developers who might now know where to begin:

It's time to be pragmatic.

Lodsys won't go away quickly unless Apple and Google pay them many millions of dollars (which could happen anytime but might also never happen). Meanwhile, each app developer who faces this problem should make a rational and responsible decision -- even if it means to pay. So far there's no indication that Android developers can get away without paying, and iOS developers don't have a dependable basis for ignoring Lodsys's insistent demands.

Mueller's conclusion? License the patents to make Lodsys go away and get back to building great apps.

Lodsys is only a risk for you, not an opportunity to get rid of trolls or of software patents. Eliminate the risk now. Follow the two-step approach. Try to get coverage. If not (which is the most likely outcome), do a license deal. Do all of this with legal help, but don't let any lawyer persuade you of futile efforts. Pick the most direct path to a solution. Share the costs with other app developers. And when you've solved this problem, focus on more important, more interesting, more productive and more edifying things in life.

(Photo by Flickr/Stefanedberg)

Article Link: Advice For Lodsys-Targeted App Developers

 

[dethmaShine]

No.

 

[Cheerwino]

They should shrug.

 

[tgildred]

Just lie back and think of England.

 

[Alaerian]

Lodsys isn't even a "real" company - they are a patent holding company. In other words, they're a complete shill.

It pisses me off that developers are basically losing to something that doesn't exist.

 

[nagromme]

The fact is, we live in a world where people are often bad, and bad people often win. Pretending to live in some other fairy land may NOT be the best choice! It’s hard to say.

I’ll still be rooting against Lodsys, and especially hoping for some future outcome that nullifies any future license payments developers have agreed to pay Lodsys. Maybe even some nice expensive suit aginst Lodsys from some big players (like and Apple and Google, whose businesses are indeed being interfered with).

My own FIRST choice, if/when I finish my iOS game, will be simply to cancel the parts of the game that might have used IAP. They can always be added later, but I don’t want the hassle/paperwork of paying a share of my income to Lodsys, any more than I want to give up some of the income from my labors. Not to Lodsys, and not to lawyers! Some awesome games are probably “night jobs" making little money, and if you’re one of those developers, you can’t even pay a lawyer without going deep into the red—and who pays your rent then? I’m lucky: my app isn’t done yet, and that means I can dodge Lodsys entirely. Maybe I’ll lose a lot of IAP income I could have had, but I can’t stomach Lodsys right now, and am willing to start with conventional sales alone.

(The comments in this thread are pleasingly cryptic!)

 

[NebulaClash]

He makes it clear that his post isn't meant to be "legal advice"

That's good, because Mueller is not a lawyer and most specifically not a patent lawyer. Note how often he gets details wrong when he discusses what patent cases mean or how they will proceed. He's being shot down by patent attorneys on the Web. So:

a) MacRumors should stop giving him credence on the subject of software patents.

b) Nobody should follow his advice without talking to a patent attorney. Talk to the experts, not the ones playing an expert on the Net.

 

[mmcc]

Pay this troll and you can be sure many more will spring to life, each sucking a little bit more of your productive life. It is the new high-tech business model of this century.

I'd rather remove features, or even withdraw a product, than pay a patent troll.

 

[arn]

a) MacRumors should stop giving him credence on the subject of software patents.

b) Nobody should follow his advice without talking to a patent attorney. Talk to the experts, not the ones playing an expert on the Net.

Feel free to point to any better sources.

Pay this troll and you can be sure many more will spring to life, each sucking a little bit more of your productive life. It is the new high-tech business model of this century.

I'd rather remove features, or even withdraw a product, than pay a patent troll.

But I don't believe that pulling the product and removing the features means you are off the hook for past violations.

arn

 

[Don Kosak]

Look, a small developer doesn't have much choice here. This sounds like practical advice.

It costs a small fortune to go to court, and the only ones who win are the law firms on both sides...

Often, a license (as a percentage of all future revenues) is all the patent holder is requesting. Especially in the case of tiny development shops.

It is possible in some cases that they will ask for a portion of previous revenues starting with the date the application began infringing upon the patent as well. If the total revenues aren't in the hundreds of thousands/million dollar range, they will probably ignore it, but they might ask anyway...

Unless you're making over a million dollars a year in sales, the licensing fee most likely a tiny fraction of the cost of having an attorney even look at your case.

Lodsys will use the fact that X number of (tiny) developers DID license the patent in their legal battle with the big guys, like EA or Zynga or whoever. They'll say, "Dozens (hundreds?) of iOS and Android developers saw the value and validity of the patent and elected to licensed it." And that is undoubtedly the MAIN thing Lodsys wants out of the small-time developers at this stage.

I've gone through this dance before. It's ugly, but it's how the system works.

(Not intended as Legal Advice! Just my educated opinion.)

 

[0815]

I would rather like to hear the advice from the Apple lawyers ....

For anyone getting targeted, the first action should probably be to contact Apples legal team and decide than based on their input.

 

[tomovo]

And next time... get insurance.

Here's what I would do: pay Lodsys whatever they want. Don't go to court to fight for a principle... this time. Pay them, make them go away. Then go and get lawsuit insurance. Next time a company like Lodsys comes with a similar demand (and I'm sure they will if it works out fine for Lodsys), you CAN go to court and fight for the principle without losing (that much) money.

 

[RalfTheDog]

...
But I don't believe that pulling the product and removing the features means you are off the hook for past violations.

arn

Alleged violations.

 

[arn]

Alleged violations.

Right. Well, point being, pulling your app isn't necessarily going to get you off the hook for legal fees.

arn

 

[RalfTheDog]

If they came at me, the first thing I would do would be to talk to my legal staff about putting the money into an escrow account while the legal action was taking place. The next thing would be to ask about starting a class action lawsuit with the intent of destroying Lodsys. My third action would be to start looking for prior art on every patent Loadsys owns.

Sometimes the best course of action is to destroy your opponent at all costs. This reduces the odds of some other jerk coming at you in the future (If you survive.)

 

[NightFox]

If they came at me, the first thing I would do would be to talk to my legal staff about putting the money into an escrow account while the legal action was taking place. The next thing would be to ask about starting a class action lawsuit with the intent of destroying Lodsys. My third action would be to start looking for prior art on every patent Loadsys owns.

Sometimes the best course of action is to destroy your opponent at all costs. This reduces the odds of some other jerk coming at you in the future (If you survive.)

When you're just one guy writing iOS apps in your study in the evenings, the couple of £100 you make from the App Store aren't going to go far towards funding that...

 

[mmcc]

Right. Well, point being, pulling your app isn't necessarily going to get you off the hook for legal fees.

If you pull the app or show a record of trying to modify your app to avoid the patent claims, then you can argue you acted in good faith with due diligence in a suit. In that case you likely would only be penalized the same terms for past sales as Lodsys is asking for future sales, and that probably would not include court costs for Lodsys. That is hardly worth it for Lodsys.

The one sticking point is that you generally need to show a "competent legal opinion" as part of your due diligence efforts. That is where several developers can cooperate and share the costs of such an opinion. The opinion could be as simple as the patent claims do apply and removal of the in-app purchase option avoids the claims. There is some movement in the courts of late to remove the burden of expensive legal opinions as the sole source of proof of due diligence -- but that is a risk.

Frankly I find the conversion rates for feature-limited free apps with in-app purchase is so low that many small developers might be better compensated with in-app advertising instead (without the option of in-app conversion to no ads of course). Customers looking for freebies generally won't pay for your app anyway.

 

[gnasher729]

Florian Müller is at it again, and MacRumors is giving him an audience again. Pathetic.

Here some slightly different take on the situation for Lodsys under the headline "This is going to get expensive... for Lodsys".

http://www.groklaw.net/article.php?story=20110705124738103

 

[Porco]

Someone needs to make a 'FIGHT LODSYS' app.

And yeah, you can have that, patent-free, it's my gift to the world.

(Don't include In-App Purchasing though).

 

[cms2]

That's good, because Mueller is not a lawyer and most specifically not a patent lawyer. Note how often he gets details wrong when he discusses what patent cases mean or how they will proceed. He's being shot down by patent attorneys on the Web. So:

a) MacRumors should stop giving him credence on the subject of software patents.

b) Nobody should follow his advice without talking to a patent attorney. Talk to the experts, not the ones playing an expert on the Net.

I could not agree with your (b) point more. Anyone facing this action should seek competent legal help immediately. Contact your state bar to access their lawyer referral service (should be free). You might even be able to find free or reduced cost legal service. Make sure you speak to an intellectual property attorney though; it's a very complicated, specialized area of the law.

 

[designedbyapple]

Can someone please fill me in on how the picture used in the story is at all relevant?

 

[PBG4 Dude]

Feel free to point to any better sources.

http://iptarget.blogspot.com/
http://www.ipwatchdog.com/

These sites are run by practicing patent attorneys, which should provide much better information than the IANAL Mueller.

 

[NebulaClash]

Make sure you speak to an intellectual property attorney though; it's a very complicated, specialized area of the law.

Exactly. And this is why you see such wrongheaded advice given on the Web by people who are not specialists in this field. When it comes to law, you cannot use common sense for the definitions as used by the law are sometimes different from the way words are employed in common usage. And no, talking to your cousin Henry who is a divorce lawyer doesn't count. Intellectual property law is detailed and complicated.

Can someone please fill me in on how the picture used in the story is at all relevant?

I assume it's a reference to Mueller's advice to just pay up as being the easier and cheaper route to take -- terrible advice, by the way. I hope no developers are doing just that.

 

[Dranix]

The solution is so simple - just remove the us from the list of targeted countries. Or do inapp in the rest of the world and in the us only a fullfeatured expensive premium-edition that contains all features.