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

[kdarling]

Why isn't apple stepping up to defend these app developers? I am sure they would all fight if apple's deep pockets protected them directly.

Apple did step up; that's in one of the referenced articles:

Last April, "...Apple's motion was granted in part: Apple is permitted to intervene in this suit, but such intervention is limited to the issues of patent exhaustion and licensing."

(I haven't seen any news since then. The case changed judges, so perhaps it got delayed.)

Apple's argument is that their license should extend to all their customers, business partners and app developers.

Lodsys' argument is that they only licensed Apple to use it in their OWN products.

It seems like it's all going to depend on the wording of the contract.

 

[1239689]

Lodsys = extorting scum

 

[linuxcooldude]

I'm not sure how some of you come up with this idea that patent "trolls" as you call them are bad for the patent system. In reality they actually do more GOOD than harm.

The purpose of their business is to acquire patents and license them to as many companies who want to use it.

Example, Apple has slide to unlock patent, and they refuse to license it to any other competitor (Samsung, LG, HTC etc..), thus if a consumer wanted this feature they are stuck only buying Apple's products.

IF Lodsys had a patent of this type, they would proliferate it to any company willing to pay a licensing fee, thus helping spread technology vs. hoarding it, (like what Apple does). Giving the consumer better choices.

I can ASSURE you if Apple had patented in-ap purchasing, no other company would be able to use it. Apple has established it's record on HOARDING patents to themselves.

"Slide to unlock" is widely recognizable as an Apple feature that is the first thing you see when you turn on the iphone. Probably one reason they don't want to licence it out.

This unlock feature is not some essential technology needed by any other phone to operate properly and they can come up with their own versions.

 

[linuxcooldude]

I'm not a fan of software patents.

That said, the Lodsys fee (0.575% of the developer's profit) is peanuts compared to what Apple and the government take.

If a developer sells $1,000 worth of in-app purchases, then about...

• $300 goes to Apple.
• $150 goes to taxes.
• $4 goes to Lodsys.

No wonder many devs just give in and pay.

.

But its still a good deal for the small developer. It gives them exposure they would not normally get anywhere else. Website costs, bandwidth, payment charges, distribution, all thats handled by Apple. All the developer has to do is upload the app.

While 30% may seem like a lot, take in consideration what it took to get Apple to where they are now. Over a decade of development for the infrastructure. They took all the risks, almost going bankrupt, so yeah, they get to reap the rewards of all their hard work.

 

[mdelvecchio]

I guess you can patent a phone with rounded corners and a bouncing scrolling mechanism than you can patent in-app purchasing..

what a ridicules world we living in!

yeah -- and a soda company can patent curved glass! crazy, huh? bet youre all riled up about coke bottles, right? right??

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I'm not a fan of software patents.

That said, the Lodsys fee (0.575% of the developer's profit) is peanuts compared to what Apple and the government take.

If a developer sells $1,000 worth of in-app purchases, then about...

• $300 goes to Apple.
• $150 goes to taxes.
• $4 goes to Lodsys.

.

errr, but you get things in return for those payments to Apple or the govt -- in the case of apple, it's their shopping mall, so by paying rent you get access to their customers, as well as infrastructure and other admin services. this works really well. and in the case of the govt, you get power lines, GPS, safety from invading armies, etc..

what services do you get in return from Lodsys?

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So is rounded corners.

and nobody got sued solely for "round corners". youre making a straw man argument. Samsung got sued because they lifted several different aspects of Apple's trade dress -- from a slab rectangle w/ round corners to the TouchWiz UI design to the packaging design....all of which was enough to infringe on the signature look & feel of an iphone.

do you complain about Coke's patent on its curved-glass bottles? why not? why shouldnt other competitors be allowed to make bottles that look exactly like a Coke bottle and put their soda in it?

 

[JAT]

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

Once my patent gets approved, everyone will know who to kill.

Fixed that for you.

 

[KdParker]

“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!

Now this if what gives patents a bad name.

 

[cmwade77]

I hope the court sides with Apple and then makes Lodsys pay back all of the developers who purchased a license through them with interest.

 

[KnightWRX]

"Slide to unlock" is widely recognizable as an Apple feature that is the first thing you see when you turn on the iphone. Probably one reason they don't want to licence it out.

Except Slide to Unlock was patented also by Neonode, their patent was used to defeat Apple's in 2 succesful cases for HTC, and it Neonode isn't even a patent troll, they used the Slide to Unlock feature in a phone prior to the iPhone shipping.

Apple failed to cite Neonode's patent as a prior art in their application (they failed to mention they were building on top of Neonode's patent) which is what raised the question of the validity of their patent. It's also one of the patents Apple had to resubmit multiple times until they simply got it granted through sheer harassement of the patent examiner.

 

[Eriden]

Lodsys has to try and convince developers to license while it can. The money supply may dry up when the licensing and exhaustion issues come up at trial. If Apple's arguments win, the only money Lodsys will have to cover its legal fees is what they've been able to get from other developers thus far.

 

[KnightWRX]

But its still a good deal for the small developer. It gives them exposure they would not normally get anywhere else. Website costs, bandwidth, payment charges, distribution, all thats handled by Apple. All the developer has to do is upload the app.

Uh ? Not for In-App purchases. For In-App purchases, Apple provides payment processing. You're in charge of distributing the content through your own infrastructure to customers, so bandwidth, website costs and distribution are all added costs on top of Apple's 30% fee for payment processing.

Apple really gouges the little guy for In-App purchases.

----------

errr, but you get things in return for those payments to Apple or the govt -- in the case of apple, it's their shopping mall, so by paying rent you get access to their customers, as well as infrastructure and other admin services

Not for In-App purchases guys. Join the developer program and write an app, put some in-App purchases in there and see how much Apple does if you don't believe the official documentation.

 

[JAT]

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

My thoughts exactly as I was reading the article. As a developer, I fail to understand how this is 'patentable'. Come on... buying stuff from within an app exists since waaay before App Store (micro payment in MMO's, for example).

IIRC, it was the networking back-and-forth that was patented, which jumps between app and purchasing system. Also, it was patented and licensed to Apple by the company that actually wrote the software. Lodsys then bought the rights and is now going after anyone it can.

The patent is much older than the AppStore. From the first linked article at MR:

The patent in question was filed in December 2003 as part of series of continuations on earlier patent applications dating back to 1992.

How can a rectangle be patented, yet most applaud that lawsuit.

So, you're on Lodsys' side? Good choice. Go to WWDC and announce your decision. We'll just film what happens.

 

[KnightWRX]

So, you're on Lodsys' side? Good choice. Go to WWDC and announce your decision. We'll just film what happens.

I don't think he's on Lodsys' side at all. He just thinks Apple's lawsuits and patent threats are on the same side of the morality compass as Lodsys'.

 

[JAT]

I don't think he's on Lodsys' side at all. He just thinks Apple's lawsuits and patent threats are on the same side of the morality compass as Lodsys'.

It was properly phrased as a question.

 

[KnightWRX]

No, what Lodsys is doing doesn't make what Apple is doing right. Criticizing Apple's patents and the lawsuits based on them doesn't mean you agree with Lodsys. Heck, both situations are far from analogous, so if you have to form an opinion on either, feel free to review each seperately.

This is no "You're either with Apple or against Apple" here. Don't make it out to be such a case.

 

[linuxcooldude]

It's also one of the patents Apple had to resubmit multiple times until they simply got it granted through sheer harassement of the patent examiner.

A government agency allowing Apple to harass them to give a patent? Something I simply don't believe. Don't you know how ludacris that sounds?

Uh ? Not for In-App purchases. For In-App purchases, Apple provides payment processing. You're in charge of distributing the content through your own infrastructure to customers, so bandwidth, website costs and distribution are all added costs on top of Apple's 30% fee for payment processing.

Apple really gouges the little guy for In-App purchases.

Probably to stop anyone from offering a free app then applying an in app purchase to circumvent having to pay Apple anything. People will & have done anything to get around the system.

 

[HoosPhotog]

Interesting Op-ed about companies like Lodsys...

A Reuters opinion piece about the need to eliminate anonymous shell corporations- in the piece the motivation is to limit access to the banking system by terrorists, drug cartels, etc. but this would also apply to "corporations" like Lodsys, Intellectual Ventures, etc:

http://blogs.reuters.com/great-debate/2012/10/09/its-time-to-eliminate-anonymous-shell-companies/

Here's a great NPR feature about just how the "Patent troll" model works and the difficulties in identifying people connected to some of the companies bringing litigation:

http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

Would be great if forcing shell corps. to be attached to real people would discourage the kinds of tactics they engage in (or at least we can hope).

 

[dejo]

For In-App purchases, Apple provides payment processing. You're in charge of distributing the content through your own infrastructure to customers, so bandwidth, website costs and distribution are all added costs on top of Apple's 30% fee for payment processing.

Actually, as of iOS 6, Apple now "provides support for having downloadable content hosted on Apple servers."

 

[tbrinkma]

This is true...Apple has not stepped up so I suspect there is some doubt.

...

Why isn't apple stepping up to defend these app developers? I am sure they would all fight if apple's deep pockets protected them directly.

Wait... What?

Apple *has* stepped up. They've publicly stated that developers using the standard iOS In-App Purchase APIs (which are the only ones allowed for apps in the App Store) are covered by Apple's license of the patent in question. They've even gone so far as to get the required permission to intervene in the lawsuits.

Google also tried to intervene, but they don't require that Android developers use their solution, and (IIRC) they hadn't taken their own license to the patent anyway, so their ability to protect their developers is shakier.

Given the status of things, I suspect most of the 'licensing momentum' is on the part of Android developers who don't currently seem to have someone going to bat for them, or who didn't use the official In-App Purchase APIs for Android (if there are any).

----------

Uh ? Not for In-App purchases. For In-App purchases, Apple provides payment processing. You're in charge of distributing the content through your own infrastructure to customers, so bandwidth, website costs and distribution are all added costs on top of Apple's 30% fee for payment processing.

Apple really gouges the little guy for In-App purchases.

At the typical IAPs, the 30% Apple takes is *quite* competitive with what you'd get from a credit card company. Most small businesses get terms along the lines of 25-30 cents + 5%. On a $1 charge, that's more than the flat 30% Apple takes. Apple can do this because they deal with *huge* quantities of charges, and can therefore get a better rate from the credit card companies.

Sure, for more expensive IAPs, it's less of a deal up front, but it also means the developer doesn't have to deal with the expense of developing and maintaining their own solution.

 

[KnightWRX]

A government agency allowing Apple to harass them to give a patent? Something I simply don't believe. Don't you know how ludacris that sounds?

The patent office is overflooded with demands and they moved to a quota based system quite a while back. Companies can get sketchy patents through just by resubmitting until an examiner grants it based on the law of "least effort". When it becomes more complicated to reject a patent over and over than simply granting it, filling the quota and letting the courts invalidate it, the over-worked examiners really don't blink twice before they stamp "GRANTED" on said patent.

This is a well documented side of the USPTO and something in dire need of reform, amongst other issues with patents in the US.

You're free not to believe it, but that simply means you're ignoring the reality of it all.

Probably to stop anyone from offering a free app then applying an in app purchase to circumvent having to pay Apple anything. People will & have done anything to get around the system.

A free app still gives Apple 99$/year fee. That's what it costs to host free applications on the app store. If that wasn't OK with Apple, they wouldn't permit free applications.

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Actually, as of iOS 6, Apple now "provides support for having downloadable content hosted on Apple servers."

Maybe they should update the documentation to reflect that point then :

http://developer.apple.com/library/...n.html#//apple_ref/doc/uid/TP40008267-CH1-SW1

Important: In-App Purchase only collects payment. You must provide any additional functionality, including unlocking built-in features or downloading content from your own servers. This documentation details the technical requirements of adding a store to your application. For more information on the business requirements of using In-App Purchase, see the App Store Resource Center. You must also read your licensing agreement for the definitive treatment of what you may sell and how you are required to provide those products in your application.

 

[kdarling]

But its still a good deal for the small developer. It gives them exposure they would not normally get anywhere else. Website costs, bandwidth, payment charges, distribution, all thats handled by Apple. All the developer has to do is upload the app.

Yep, it's a good deal for the small developer. (When I started selling software back in the early 1980s, it was good to get 15-30% as a developer. Of course, the prices were much higher, too, so that helped. 15% of $20 ($3) is better than 70% of $1 (70 cents). Also, the retailers back then did a LOT more to push your app than Apple does now: they advertised your app in magazines, at shows, and in interviews.)

It's not so good a deal for the larger developers. I think it's one reason it took so long for Slingplayer to show up on iOS. They had their own site that they'd been selling apps from for years. They had zero reason to want to give up 30% to Apple.

As for in-app purchases, it's one thing for Apple to get money from selling the app itself, it's quite another to take any money made aftewards "just because". It's like someone selling you a lawnmower and then wanting to take a percentage of the money you make cutting lawns as well.

A government agency allowing Apple to harass them to give a patent? Something I simply don't believe. Don't you know how ludacris that sounds?

They sure seemed to use the wearing-down method to tack on more claims to their original slide-to-unlock patent, once they realized that others could get around it quite easily. (pdf article link)

Apple... double patenting, an illegal abuse of the patent system. You know, what USPTO patent examiner, Mr. Andres Gutierrez said of Apple's latest slide‐to‐unlock patent, before he rejected EVERY claim Apple was applying for, THREE separate times, in this issued continuation (read: we want to get credit for an earlier patent's priority date) of ANOTHER slide‐to‐unlock patent.

 

[linuxcooldude]

The patent office is overflooded with demands and they moved to a quota based system quite a while back. Companies can get sketchy patents through just by resubmitting until an examiner grants it based on the law of "least effort". When it becomes more complicated to reject a patent over and over than simply granting it, filling the quota and letting the courts invalidate it, the over-worked examiners really don't blink twice before they stamp "GRANTED" on said patent.

Does not say what is needed for this "Quota" system. It could simply be how many patents they process regardless if accepted or rejected.

I think a much better reason besides "Got tired of Apple resubmitting patent so it got accepted" routine. No proof to indicate it in the slightest.

 

[-Hackintosh-]

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.

Actually laughed out loud at this..... and then felt sad thinking that this is something the patent office might actually grant.

 

[KnightWRX]

Does not say what is needed for this "Quota" system. It could simply be how many patents they process regardless if accepted or rejected.

I think a much better reason besides "Got tired of Apple resubmitting patent so it got accepted" routine. No proof to indicate it in the slightest.

See both of kdarling's post on this very subject where he provides the evidence. Just because you don't want it to be true doesn't mean it isn't.

 

[linuxcooldude]

See both of kdarling's post on this very subject where he provides the evidence. Just because you don't want it to be true doesn't mean it isn't.

Evidence being an article where the author gives his opinion:

Here at M•CAM, we’re wondering if in a post‐Jobs world, Apple will actually turn to inventing the process of claim one: inventing
patents using an infinitely continuous sliding interface where one wears down a patent examiner in the patent office with sufficient
mindless drivel such as to; claim two: make said examiner in claim one seek a deranged Easter Bunny and do late night talk shows
on an iTunes broadcast streaming video; claim 3 on a mobile device… but, oops, that might infringe on an Oracle patent.**Ah shucks!**
Trick‐or‐Treat![/quote]

"We're wondering" is an opinion, not based on any fact besides the authors own belief. Thats not evidence by any stretch of the word.