Apple Granted Limited Permission to Intervene in Lodsys Case

[Josheh]

~snip~

I think that, if you asked the vast, vast majority of the developers they would tell you that they get far more value from their relationship with Apple than they ever would with Lodsys.

Agreed. You have to pay to play, but the cost is pretty reasonable. I always liked the idea of the App store as Apple has implemented it. For developers it seems easier to reach a wider audience than going at it alone. They handle a lot of stuff that would be a headache for a small time developer to handle.

I'm not a fan of Lodsys. I think in-app purchases is a logical approach to having add-ons for applications in an environment like the App Store. I don't see anything strikingly innovative about it, not enough to justify a patent on such a concept. It's like trying to patent the concept of a device that tells you what the current time of the day is.

 

[Mr Fusion]

Good. You can't hit up everyone in the chain for a patent, you only get one.

Says who?

Spiderman.

http://www.youtube.com/watch?v=FYZfNZbn0SU

 

[Eriamjh1138@DAN]

Crazy defense

Developers could simply say they are not using the patents: the users of the apps are. Sue the users. The apps just sit there until someone taps.

Then Lodsys can try to sue me. And everyone else.

Not gonna happen.

 

[iSRS]

Apple doesn't invent the apps in its store, but it gets $300 of each $1,000 mostly for being the only store allowed.

Many developers have already made a deal, since Lodsys only gets $4 royalty per $1,000. Not worth fighting over.

Nice revisionist view. Other than the "mostly for being the only store allowed" how about:

• Creating the ecosystem upon which the apps run.
• Creating the tools with which the developers develop.
• Providing excellent support for the developers.
• Advertising for the developers.
• Handling and paying for all of the transactional costs.
• Continuing to develop better, faster hardware to run the developed apps.

I think that, if you asked the vast, vast majority of the developers they would tell you that they get far more value from their relationship with Apple than they ever would with Lodsys.

Don't forget hosting the apps, costs for bandwidth for unlimited downloads, etc.

 

[whooleytoo]

Says who?

The US Supreme Court seems to think so

For over 150 years this Court has applied the doctrine of patent exhaustion to limit the patent rights that survive the initial authorized sale of a patented item. In this case, we decide whether patent exhaustion applies to the sale of components of a patented system that must be combined with additional components in order to practice the pat- ented methods. The Court of Appeals for the Federal Circuit held that the doctrine does not apply to method patents at all and, in the alternative, that it does not apply here because the sales were not authorized by the license agreement. We disagree on both scores. Because the exhaustion doctrine applies to method patents, and because the license authorizes the sale of components that substantially embody the patents in suit, the sale ex- hausted the patents.

 

[Frobozz]

Abolish software patents. They stifle innovation and are in direct opposition to the spirit of the patent system.

Here's the problem. It takes years to get a patent on software, and you almost certainly aren't the first person to think of it. Since patents are intentionally vague and obfuscated, companies sue on ridiculous grounds. This results in the economy of software patents:

• Large companies purchase lots of patents to protect themselves from each other and patent trolls
• Patent trolls– companies that don't do anything other than sue other companies with patents they have purchased, go after small companies as a form of extortion. If you can't pay, you're put out of business. If you can, you're crippled.
• Large companies sue each other in never ending rounds, feeding money to lawyers. Usually, they either settle or win a case, only to be the victim in the next round.
• Large companies seek injunctions to prevent competing technology from reaching market.

And then you have the internet company "incubator" methodology. I think all companies should use this method. You let people splinter off and create their own company. They write software or make something and prove it's valuable to consumers. In the process, they prove that they are sufficiently motivated, resourceful, and intelligent. They then have two options– try to go on their own and compete with larger companies, or get bought out. There's an entire startup economy built around 5 dudes working hard for a couple years, then being bought.

The net difference is that the mountains of cash spent in the latter process goes to INNOVATORS, instead of lawyers.

 

[Frobozz]

Nice revisionist view. Other than the "mostly for being the only store allowed" how about:

• Creating the ecosystem upon which the apps run.
• Creating the tools with which the developers develop.
• Providing excellent support for the developers.
• Advertising for the developers.
• Handling and paying for all of the transactional costs.
• Continuing to develop better, faster hardware to run the developed apps.

I think that, if you asked the vast, vast majority of the developers they would tell you that they get far more value from their relationship with Apple than they ever would with Lodsys.

So true!

The software developers would count that $4/$1000 as overhead, or an expense, because they do not receive anything back in return. It's just a cost of doing business like keeping the lights on. Wheras with Apple, they wouldn't even have a way to make money without them. Get ready for a car analogy– Apple makes the roads, traffic signs, and puts cops on the streets. The developers make cars and buses. Lodsys is the neighborhood punk that punctures your tires.

 

[JAT]

Apple doesn't invent the apps in its store, but it gets $300 of each $1,000 mostly for being the only store allowed.

Was this a joke? Your posts are invariably well-thought-out and informational. But comparing retail markup to patent licensing is...not.

 

[Moonjumper]

Although it's a lot easier just to work directly with Apple, there is substantial revenue to be had by Lodsys. Based on permission departments I'm familiar with, it takes about 3 people to handle about 200 requests a month. They would need at least 30 people to conceivably handle all the requests coming in.

If they are taking $4 from every $1,000 and lets go with the amount reported a few months ago that was paid out to developers, $2.5 billion (not really how much is made with in-app purchases, but we can use it as an upper limit to gauge the market), that's about $10 million dollars. We have an optimistic figure of $5 million a year.

Salary for each employee, it would cost about $40,000/year to hire them (they likely have the managers already). That's about $1.2 million in expense to run the extended business. That leaves Lodsys with about $3.8 million a year on top of what they get from Apple, minus other fees we are unaware of.

Even if the numbers are off, the basis for the added business is the same and the above example shows a healthy profit margin -- enough for them to merit going after settlements and risking court.

Thank you for putting the numbers together, very interesting, but there are a few things that change the figures.

Probably less than half the amount paid out to developers is in-app purchases.

I believe it only applies to USA sales as most of the rest of the world doesn't allow software patents.

Initially they were only going after smaller developers, I don't know if this has changed, and only a subset of them.

 

[SPUY767]

If patent law is that clear cut then why do we have this and other cases actively claiming otherwise? Seems like they would have already thrown out abusive nuisance lawsuits that had a high likelihood of failing.

Because companies who exist to exploit vague patents, a.k.a. Patent Trolls, know that if they sue a small fry for a small amount, they're likely to get a settlement rather than end up in court. Apple, however, will stand up and defend its developers because it realizes how important they have been in Apple's success. Since apple can represent its developers in this case, Lodsys is screwed.

----------

If patent law is that clear cut then why do we have this and other cases actively claiming otherwise? Seems like they would have already thrown out abusive nuisance lawsuits that had a high likelihood of failing.

Oh, and because we don't have a loser pays legal system for lawsuits like this.