Lodsys Patent Invalidation Efforts: Apple Barred? $15,000 Bounty for Crowdsourced Research

[MacRumors]

Lodsys, the patent holding company currently taking on App Store developers over their use of in app purchasing and upgrade buttons, is under increasing attack as it continues to push forward with its own actions while its targets have begun to fight back. Last week, we noted that the first legal challenge had been brought seeking to invalidate Lodsys' patents, and three other companies, including the parent company of The New York Times, have since filed similar suits against Lodsys.

But while Apple has stepped forward and asked to intervene in Lodsys' case against the App Store developers, arguing that Apple's own license extends to developers using its tools, the company has not joined the effort to have the patents themselves invalidated. FOSS Patents now reports that Apple (and Google, whose developer ecosystem is also being targeted by Lodsys) may actually be barred from challenging the patents by virtue of their licensing agreements already in place with Lodsys.

None of the attorneys I talked to knows the language of the license agreement Apple and Google signed with Intellectual Ventures while the four patents later acquired by Lodsys belonged to that entity. But they and I concur that it's highly likely that Apple and Google are contractually precluded from challenging Lodsys's patents because such license agreements often come with clauses under which a licensee will lose a license once he participates in an effort to invalidate any of the related patents (in addition to possibly having to pay contractual penalties).

So even if Apple and Google had wanted to attack Lodsys's patents proactively, they would have lost their license -- at least to any patent they attack; more likely to all four Lodsys patents; and possibly even to any or all of the more than 30,000 patents they licensed from Intellectual Ventures, a patent aggregator in which those companies (alongside many other industry players) invested.

Consequently, Apple may be limited to simply defending App Store developers with respect to the terms of Apple's licensing, and not able to directly attack the patents themselves.

But that does not mean that Lodsys' patents are safe by any means. In addition to the four invalidation lawsuits already filed against Lodsys, CNET reports that crowdsourcing intellectual property research firm Article One Partners has launched a series of bounties for information on prior art or other issues that could help in the effort to invalidate Lodsys' patents.

Article One Partners, a business that crowdsources intellectual property (IP) research, has launched three new studies into patents held by Lodsys. Each offers a reward to the party that finds prior art, or examples of pre-existing technologies or other IP that could be used as evidence to invalidate one or more of Lodsys' patents.

Each of the three studies carries a $5,000 bounty guaranteed to be paid out to the researchers who submit what is judged to be the "highest quality prior art" to be used in attacking Lodsys' patents.

It is unknown who is funding the bounties on Lodsys' patents, as that information is not disclosed by Article One Partners. Article One is, however, an established company with a community of around one million people participating in crowdsourced intellectual property research on a variety of topics.

Article Link: Lodsys Patent Invalidation Efforts: Apple Barred? $15,000 Bounty for Crowdsourced Research

 

[BLACKFRIDAY]

That's a bad turnout for App Store Developers and Apple.

I am just wishing myself to be safe and Lodsys to get bankrupt.

 

[jav6454]

Actions against Lodsys went to Apocalyptic means. However, these actions should give patent trolls second thoughts before trying to extort money from companies.

 

[BenRoethig]

Live by the patent lawsuit, die by the patent lawsuit. Lodsys, don't start a war unless you're ready to for your opponent(s) to fire back.

 

[Consultant]

This would be an interesting case to see how well crowd sourcing to deal with prior art works. Hopefully patent trolls would take notice.

 

[alent1234]

who owns or invests in lodsys? intellectual ventures has a long investor list that includes apple, google, cisco, microsoft and dozens of other tech companies. it's almost like a clearing house of patents so that no one sues each other.

 

[Popeye206]

Love it!!!!!!!!

Patent trolls must die!

 

[THEENDUSER]

Hope things turn out well

Hope things will in the end turn in favor of the developers. I really hope this will serve as an example to all patent trolls. It's been ridiculous and out of hand. A developer can't just create anymore without also worrying about dummies like Lodsys. Just Dumb.

 

[JTToft]

This is getting serious...

 

[0815]

Apple not being allowed to challenge the patent ... that stinks. Didn't know that license agreements can have a stupid clause like that - that should be illegal and every company should always have the right to challenge a patent, no matter if they pay a license fee or not.

Could Apple 'pay' some other company to challenge? Are they allowed to support "Article One Partners"?

At least they are allowed to help their indie developers with the stupid law suit.

Good luck to every company challenging this patent troll - I hope this will be the end of Lodsys.

Lodsys shouldn't have tried to charge a license fee for a license that is already payed for (that is the outrage in my opinion) - as a result of this they turned now every major company against them trying to invalidate their patents leaving them hopefully with nothing (instead of a small something).

Even so mostly small indie developers were targeted (presumable 'easy' targets that can't defend themselves) it is fantastic to see how even big companies are now targeting Lodsys as enemy.

 

[Mattie Num Nums]

This is such a sensitive topic.

On one hand I can see Lodsys protecting their IP but, on the other hand its stupid! Its the system and they are using it to the fullest. The only thing that will stop this is reinventing the broken patent/trademark system.

I hope for the sake of the future Apple and Google kick the crap out of them.

 

[paradox00]

The thing is, Apple isn't challenging the validity of the patents, they are arguing that developers are licensed for the patents. I don't see the issue right now.

 

[0815]

This is such a sensitive topic.

On one hand I can see Lodsys protecting their IP but, on the other hand its stupid! Its the system and they are using it to the fullest. The only thing that will stop this is reinventing the broken patent/trademark system.

I hope for the sake of the future Apple and Google kick the crap out of them.

The problem is they tried to double dip.

Don't think anybody here on the forum can verify the validity of their patents - I'm willing to accept they are valid (or better, leave the check to people with better knowledge about that stuff), but I am not willing to accept the both producer and consumer are getting charged, that is what is not legal.

But the patents seems to be week and many companies seem to see it as a good preventive measure to target the validity, now that Lodsys has out itself as patent troll.

The thing is, Apple isn't challenging the validity of the patents, they are arguing that developers are licensed for the patents. I don't see the issue right now.

from the article it looks like that apple is not allowed to challenge the validity due to the stupid license contract they have ...

 

[Ivan0310]

This seems to me that when a patent troll goes after one of the heavy hitters, e.g. Apple, Google, Microsoft, etc.; no one cares--business as usual. It is when the troll goes after the little guys, i.e. the developers that people come out of the woodwork in attack formation.

 

[Mattie Num Nums]

The problem is they tried to double dip.

Don't think anybody here on the forum can verify the validity of their patents - I'm willing to accept they are valid (or better, leave the check to people with better knowledge about that stuff), but I am not willing to accept the both producer and consumer are getting charged, that is what is not legal.




from the article it looks like that apple is not allowed to challenge the validity due to the stupid license contract they have ...

That raises another question though. Are developers consumers?

 

[NebulaClash]

This is a distortion of the purpose of patents. We're not talking about poor Lodsys inventing something and then striving to compete with the big, bad corporations who are stealing their intellectual property. They are merely a tiny holding company that owns four patents they bought from Intellectual Ventures, that company founded by Microsoft employees whose business model is to collect as many patents and intellectual property they can get and make money from it all.

Now Lodsys got ahold of these patents and is trying the old Slashdot humor on the world:

1. Buy patents
2. ?????
3. PROFIT!

Of course in this case their "?????" step is to sue the little developer, get them to pay up instead of taking it to court, use that precedent to go after bigger prey, etc. It's simply a business that has nothing to do with protecting ideas and everything to do with getting rich off someone else's ideas.

 

[0815]

That raises another question though. Are developers consumers?

In this case yes: technically they are 'consuming' the licensed API.

Basically they are 'buying' a component (where Apple uses licensed parts) from Apple to build into their product. If the component at the root in a production chain is licensed, you can't charge everyone down the road in the production chain for the same thing over and over again (those are just using/consuming that component).

 

[paradox00]

from the article it looks like that apple is not allowed to challenge the validity due to the stupid license contract they have ...

Yes, perhaps that's why they are arguing licencing and aren't trying to invalidate them. The headline almost makes it seem like Apple's barred from intervening on the developer lawsuits though. That's what I was concerned with.

On the flip side, if they can invalidate the patent, who cares if they lose the license to the patent in the process Although, it would be a risky move if the assumptions in the article and that clause does exist.

 

[0815]

This is a distortion of the purpose of patents. We're not talking about poor Lodsys inventing something and then striving to compete with the big, bad corporations who are stealing their intellectual property. They are merely a tiny holding company that owns four patents they bought from Intellectual Ventures, that company founded by Microsoft employees whose business model is to collect as many patents and intellectual property they can get and make money from it all.

Now Lodsys got ahold of these patents and is trying the old Slashdot humor on the world:

1. Buy patents
2. ?????
3. PROFIT!

Of course in this case their "?????" step is to sue the little developer, get them to pay up instead of taking it to court, use that precedent to go after bigger prey, etc. It's simply a business that has nothing to do with protecting ideas and everything to do with getting rich off someone else's ideas.

Yes - that is the definition of a "Patent Troll"

Everybody hates Patent Trolls - even more when they try to re-charge for an existing license.

 

[Zweben]

I'd really like to see Apple put a chunk of their $30 billion cash on hand into pushing for patent and copyright reform in this country. If they could get actual changes made, any amount of money they spent would probably save them money in the long run. This country's IP laws are absurd.

It seems strange to me that big companies don't seem to want to push for new laws. I can't imagine Apple, Microsoft, Sony, Nokia, etc actually like funding big legal teams and constantly being entangled in lawsuits with other companies over issues that only exist due to a broken patent and copyright system. Maybe it's just because the ones with the money to get the status-quo changed are also the ones with the expensive legal teams that tend to win the most lawsuits.

 

[cmaier]

First, not every license agreement has such a clause. Second, even if Apple would be in breach if they challenged validity, so what? They lose the license. If they can successfully invalidate the patent they don't need the license.

It seems to me that assuming their deal was with IPV, IPV wouldn't be likely to assert that they lose the license to the entire portfolio, given that they no longer own the patent anyway.

 

[vartanarsen]

As "Iron-Clad" as we have all thought Apple Legal to be, how could they have signed their license agreement without redlining that clause and having it redrafted?

 

[Mattie Num Nums]

In this case yes: technically they are 'consuming' the licensed API.

Basically they are 'buying' a component (where Apple uses licensed parts) from Apple to build into their product. If the component at the root in a production chain is licensed, you can't charge everyone down the road in the production chain for the same thing over and over again (those are just using/consuming that component).

I think thats the issue though. Some may see developers not as clients but as developers. I think the difference is yes, they buy the API, but they are using the technology for profit vs. you and me who are buying it to consume it.

As "Iron-Clad" as we have all thought Apple Legal to be, how could they have signed their license agreement without redlining that clause and having it redrafted?

People give Apple's legal team way to much credit. I think its Apples ability to use the media and pressure people in the eyes of the public which help its legal causes.

 

[emulator]

Why should anyone care if someone sue them in Texas anyway? If I was a developer, I wouldn't.

 

[cmaier]

Why should anyone care if someone sue them in Texas anyway? If I was a developer, I wouldn't.

Why not?