How, exactly, is this "misuse of IP?" The entire point of a patent is that it provides the holder of the patent with the ability to prevent others from practicing the claims of the patent for a limited term of years.
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Lodsys Responds to Controversy Over Lawsuit Threats
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How, exactly, is this "misuse of IP?" The entire point of a patent is that it provides the holder of the patent with the ability to prevent others from practicing the claims of the patent for a limited term of years.
HobeSoundDarryl
macrumors G5
The first little guy that files the paper and pays the relatively big cost. It's not just filing a patent that gets it. You have to pay out the big dollars too. Go ahead and imagine everything that is coming and then go patent everything not yet patented so you can put yourself in this same evil position of potentially putting the squeeze on Apple or Apple affiliates some day. We can all imagine many things to come. If we believe they'll come soon enough, we can patent the concepts now and do the same as this group later on.
But, it's not cheap to do that, which is why even the big guys with very deep pockets can't afford to patent every possibility. And why every day on MacRumors is another Lodsys laying claim to shares of revenues made on Apple's business model in some form.
From a legal standpoint you are correct. In my opinion and in that of many others the system improperly allows technological ideas to be held for ransom, stymieing competition and preventing adequate and timely access to technology that could improve peoples lives. I know this example isn't really one of the life altering concepts, but in reality it is within the same precedent.
Sorry for the noob question here, but i have not really had the time to read all of this.
Can someone easily explain what this means for developers?
Is this patent to say that if I have an app with an upgrade button, I would need to pay Lodsys?
What about free apps going to a paid version?
Can someone easily explain what this means for developers?
Is this patent to say that if I have an app with an upgrade button, I would need to pay Lodsys?
What about free apps going to a paid version?
HobeSoundDarryl
macrumors G5
But that's just a cost of doing business if this pans out for Lodsys. If some developers are making less than 3%, one could argue it's because Apple is taking up to more than 10X of what the developer could get by arbitrarily choosing to take 30% off the top. Should they shoot death threats at Apple for taking 30% if some will shoot death threats at this other company for seeking .575%.
We'll also argue record companies are crooks because the artists they represent end up with only a few percentage points of the revenue made on their recordings. But we can't find fault with Apple for taking 30% of this kind of "recording," leaving some developers with "less than 3%". Every penny counts but only after Apple gets it's cut? Every penny counts... but only after Apple gets it's full cut?
Or are we fine with Apple taking 30% in all cases, but abhor another company seeking .575% in only applicable cases as justified by the latter's (but somehow not the former's) effect on these poor developers who make less than 3%?
I do have to agree with you. I am well of aware of the patent process. I have over 15 in my name and I will never see a dime from them.
Again I agree with you, Apple is more guilty, and if anything they are justifying Lodsys' position.
It really quite silly, and developers can actually work around this quite easily, but I think most of us are arguing with the principal at hand. The primary claim Lodsys is making is that they own the patent for an in app upgrade button from a demo/trial/lite version of a product to a full version.
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HobeSoundDarryl
macrumors G5
apparently (and someone correct my math if I am wrong about this), they're asking for .575% of applicable revenues as a fee for using their patented concept through the end of the patent term, as well as a .575% of applicable fees already realized from revenues made on the use of the patented concept to date.
If this was universally adopted today by all developers and they passed the entire cost on to us users, when there was an applicable fee, we would pay .575% more than we pay now when the transaction was driven as covered by the patent. In very simple terms, if the in-app transaction would normally cost us- say- $4, it would now cost us $4.02 to also cover the fee they are seeking.
If over the course of a year, we use their patented method for say- $2,000 in transactions (I have to think that much would be unlikely for many iDevice users), the added cost that could be thrust upon us to pay their requested fee for all $2,000 would be $11.50.
As such the real "pain" in this is the tally on total relevant transactions to date, which is probably a big enough number that getting an ultimate settlement instead of .575% from all developers everywhere is interesting enough to some law firm that they've chosen to take this on. That's probably what has some developers wound up enough to apparently sling death threats at this company, though I have to wonder just how much money it would take to make myself threaten someone's life. Even if I've made $50 million in relevant revenues on some app called "Aggravated Pigs: The Revenge," would some patent claim that made me shell out .575% on that ($287K in unexpected cost) be enough to make me threaten someones life? For me, I think not. Now, how many app developers with relevant transactions total $50 Million? $10 Million. Let's say a few have made $5 million in relevant transactions. $5 million times .575% puts $28,750 at risk if they just pay the fee rather than settle the suit (for something less). Is $28,750 enough to make someone sling a death threat on $5 million in revenues?
Again, note that Apples 30% cut on $50 million is $15 million, and the cut on $5 million is $1.5 million. Shouldn't these developers be many multiples angrier at Apple?
The point is that as a user, this should amount to less than chump change unless you are buying in-app purchases in huge volume. Has anybody in this thread bought more than $2,000 in in-app purchases in the last year? 2 years? If so, if this is added onto your personal costs, you'll need in-app purchases of more than $17,391 in the future to have to pay an extra $100 to cover the .575% for this company... or in-app purchases of more than $173,913 in the future to have to pay an extra $1,000 to cover the .575% for this company.
I've had Macs for over 10 years now and I've bought a good deal of software- include Adobe's high-priced suites. I'd have to look it up but I doubt that in 10 years, I've bought more than $17,391 in software for my Mac. Who out there is planning to spend $17,391 in iDevice software via this patented method over the next 5 or 10 years? If so, you might want to work on coming up with that extra $100 should this patent claim be fully upheld instead of settled.
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Patents fights here, licensing restrictions there. I would not be surprised if one day there is so many licensing fee claims going around that making a profit becomes impossible. Patents disgust me because I see them as detrimental to free competition. Let companies withhold the knowledge of inventions, but this should not restrict others from coming up with it by themselves and using it to compete.
Don't blame the patent trolls for a broken patent system. Could have been fixed long ago but no one has had the political scrotum to do so. So lets enjoy the histrionics its after all so much fun watching as well as paying for it.
Political Scrotum is my IP. It's the name of my band.
You probably should rethink your numbers. $2000 is a bit low.
Apple, for better or worse, at least provides several tangible services to the developers -- providing a marketplace, the SDK, the name-brand of the App Store, millions of potential users, etc. I'd be surprised if any developer thinks that Lodsys provides them any tangible benefit. That's why people perceive Lodsys as a patent 'troll', because that's what trolls in the traditional sense did... block people from crossing otherwise passable bridges.
HobeSoundDarryl
macrumors G5
That's the thing though. Kill patents altogether as you describe and every patent that protects Apple's stuff is also killed. We could immediately and legally have clones of OS X, iDevices, Macs, etc. Withholding the knowledge is not good enough unless the innovation is so advanced that only the inventor can build another copy. If anyone can reverse engineer anything, every invention would be lost as a potential way of making a living for the inventor.
Our patent system is broken. But the primary problem is that we tolerate defensive patents and the concepts of buying up patents to prevent damage to the "status quo" business models. Thus, big oil buys up anything that risks revenue from big oil. Big pharma is much more motivated to develop 1-a-day treatments than any permanent cures. Big communications companies buy out the small guys as well as anything that can jeopardize their existing cash flows. Etc. In other words, the few with most of the wealth have a fundamental incentive to keep things the same (and thus protect their established cash flows) rather than allow innovations to marginalize the cost of something like energy sources, treatments for diseases, communications, etc.
Defensive patents are the tool that can be used to suppress the bigger innovations that can lift us out of our messes. Make defensive patents a "take it to market or it becomes public domain" proposition and many patent problems get fixed quickly. Make software something that is copyrighted instead of patented and our technological innovations will accelerate faster than they do now. Etc. There's a handful of solutions that would "fix" what's broken, without doing away with what is good about a patent system. Hopefully, the nation decides to make those fixes sooner than never.
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HobeSoundDarryl
macrumors G5
Really? So you- for example- spend >$2K in applicable transactions in iOS software purchase each year? OK. How about $20K then? If it was $20K, .575% added to that much in-app purchasing would cost us a whopping $115 in extra cost. Is anyone in this thread so wound up about this outrageous greed spending more than $20K in relevant purchases each year?
I can appreciate this argument. But when Apple is in the role of Lodsys- when there seems to be a play for nothing but money because Apple holds the patent, and there appears to be no added value in the Apple option vs. the alternative- is Apple equally in the wrong then per this kind of thinking? Death threat worthy wrong?
In the example, we're comparing 30% on all app transactions to .575% on some app revenues. Yes, Apple is delivering tremendous value relative to this Lodsys thing, but Apple is also taking a massive amount more for it.
Obviously I as one person don't spend that much. But I do think an average app will pull in more than that from any number of users, depending on how popular the app is. It's not about a single person spending that much money on his/her own, so I'm not sure how to make sense of what you're saying.
In any case, it's not about 'how much money' they are trying to extort (for lack of a better word). It's about the fact that they step in with a claim to a somewhat questionable (read: unenforceable) patent and target small-fry developers intentionally.
Death threats uncool? LOL
Um yeah, about those death threats and hate mail, these people are doosh bags. Washington really needs to revise patent laws.
In the meantime, before they do, I'm going to patent the idea of patent law-law suits and sue everyone suing for using my idea to sue for vague patents that don't patent anything but ideas. Then Lodsys can't send me death threats while I laugh my way to the bank.
Where does it end? Let's patent the idea of an idea.
Unless you have something physical and technical, something created, really? Like a button in the app? Damn, I wish I could resurrect the dead because I'd bring back the guy who made the first real button so he could sue for using the name button.
Um yeah, about those death threats and hate mail, these people are doosh bags. Washington really needs to revise patent laws.
In the meantime, before they do, I'm going to patent the idea of patent law-law suits and sue everyone suing for using my idea to sue for vague patents that don't patent anything but ideas. Then Lodsys can't send me death threats while I laugh my way to the bank.
Where does it end? Let's patent the idea of an idea.
Unless you have something physical and technical, something created, really? Like a button in the app? Damn, I wish I could resurrect the dead because I'd bring back the guy who made the first real button so he could sue for using the name button.
Maybe I missed it in the responses, but does a developer actually know if the purchase came as a result of anyone clicking a button in their trial app? Stop promoting it as an upgrade. Promote it as a totally new application. It is technically a different application with different capabilities. They even have different names. You downloaded "Cool Game Free". You click a button to see "Cool Game" in the app store. There is no guarantee of purchase. It is not an instant purchase kind of thing.
I don't even have any apps in the store, but this makes me cringe!
I don't even have any apps in the store, but this makes me cringe!
HobeSoundDarryl
macrumors G5
That's right & wrong. You're right that it's not about the average spend of each user. You're wrong though in thinking that somehow the fee gets larger based on total purchases of the relevant app. Instead, the latter number is exactly the same whether totaled- as you imply- or spread over each user of that (relevant) app purchase.
In other words, my point of illustrating it per user was to show how much of a mountain this per-user molehill was being made. As one big number (.575% of $X, where $X is the total applicable revenues from the very first relevant transaction to the very last realized at some point in the future... or when the patent expires) it is a whopper. But no lone app developer pays that whopper, it is instead something spread over all app developers who made revenues by this method.
Like any costs, if the patent is upheld, the developer will either eat the cost out of their profits or pass it along to us consumers in higher fees... probably the latter. That's where my calculations per user come into play. So, if you or I would spend $2K per year on relevant purchases and the entire .575% was passed on to us to cover the entire .575% fee, instead of spending $2,000 we would spend $2011.50. The $11.50 would pay the patent fee requested by this company.
So, if any of us individuals have got ourselves wound up enough to send a death threat to these "greedy" "trolls", etc, I wonder if that $11.50 is enough to drive death threats. Maybe some of us plan to spend $10K in relevant purchases over the next few years and can't bear the pain of the extra $57.50 (if the patent would even still apply over 5 more years). Is that worth the death threats?
Of course not. So at what level does someone anticipate enough of a financial pain to justify death threats? If one could say $1000 is enough, they'll have to make relevant in-app purchases of almost $174K for it to cost them the extra $1000 to pay the patent holder. Is an extra $1K enough for death threats?
Of course not. Thus, mountain out of molehills (on the individual level).
Now, for big developers who have made a lot of money (measured in millions) via the patent-covered option, the claim against all past transactions could add up to a pretty big number. For example, if a developer has tallied $10M in relevant purchases to date and they have to pay out the full .575% (instead of some smaller settlement), they'll have an unexpected cost of $57,500. Maybe that's enough to make some hot-head developer angry enough to sling a death threat?
So yes, if this Lodsys could win .575% from all relevant transactions conducted to date, their take will be sizable. How big? In March, Apple claimed the iOS store had generated a total of $2 billion. Certainly not all of that would be applicable revenues. But let's go big and make half of it applicable. $1 Billion times .575% is $5,750,000. So, if we assume that 50% of ALL (cumulative) iOS app purchases over the last few years have been done via the patented approach claimed by Lodsys, and if we further assume they could fully win against all of those developers, the max upside for past revenues would probably be in the $5 to $6 million range.
The reality is that many developers are long gone, and I'm probably being generous at 50%. If this gets any real traction, I would expect developers to pool their resources against Lodsys fighting to either have the patent nullified or to reach some settlement shy of that kind of total. If the settlement is around 50% to maybe 70% and we apply that vs. $6 million, this entire play is for a total of $3-$4.2 million for past revenues max.
So even there, that's not hitting 1 little developer who makes "3% per app sale" up for $3 million or more dollars. That would be hitting the entire group of app developers up for their share of up to $4.2 million based on relevant sales of their apps.
In short, this entire thing is chump change. Apple could reduce it's cut to 29% for a very short time to cover up to all $6 million in a total win for Lodsys, then set it at 29.425% to "cover" all such expenses going forward on relevant transactions.
Or they could probably just take the extra they're making by flexing their patent muscles on cutting out the much cheaper magsafe connector cables and probably more than cover all of this for all of their developers for the past and the future.
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Lol @ death threats.
Seems these guys are getting exactly what they deserve.
Lol @ death threats.
Seems these guys are getting exactly what they deserve.
HobeSoundDarryl
macrumors G5
Try the above. Do it. You'll find that rather than just slinging out the concept, you have to pay a lot of money to try to get it patented. A person doesn't patent something expecting to do nothing with it. They patent something because they think they have something original enough to make more than it costs to patent it. If they win a patent, someone in the government had to agree that it was original enough to grant the patent.
This is not like buying a lotto ticket. It doesn't cost $1 or even $100 to buy a (lotto) patent approval. It is relatively expensive to even try to patent a concept or invention. If you do so just hoping that things fall into place that later on you can try to sue Apple app developers for .575% of their gross revenues, you might find it more lucrative to spend those patent dollars on (scratch off) lotto tickets.
There are time limits on patents. And this lodsys one appears to be near it's end. So even if you could do that, or time travel back to the original button maker, it would be irrelevant to this as any patent you might lock up at that time would have long since expired.
Again, I understand you're just aggravated at the concept, but I would suggest you should be just as aggravated when Apple is on the suing side, flexing their patent portfolio muscle fighting someone else for revenues on ideas that Apple may never bring to market.
There are plenty of situations where Apple plays the role of Lodsys against someone else. Yet, those threads are usually filled with cheerleading, hoping that Apple socks it to those evil patent infringers, and so on. If Lodsys has a valid patent and this is deemed to infringe upon it, they should get their few million (cumulative to date) at best and the little extra they seek going forward until their patent claim expires. It doesn't make sense to love the patent system when it's in favor of Apple and hate it when it's not... unless you are Apple.
In the worst possible case scenario (where Lodsys could somehow win this claim to the max), .575% is extraordinarily nominal if the entire cost was passed on to us users (see other posts for specific math).
To be fair to posters saying this, Lodsys are asking for percentage profits as their license fee. So, nothing unless someone actually buys something. Any non-earning clicks or interface designs (such as feedback/marketing, as outlined in the patent) are not really being addressed by said patent troll.
The original statements from devs suggest they are also being hit just for having a button in their Lite version, that is a simple link to the full version on the App Store. As clicking that button does nothing but go to the app's description page, there is no proof that the click resulted in a sale. LodSys is merely outlining the IAP fee rate, as it can be calculated. It remains to be seen what the rate for having an Upgrade button is. My guess is that it is a large flat fee, as sales cannot be proven.
Nope. Apple published their fee schedule up front and before most developers invested any time and money in creating stuff. If any dev didn't like Apple's fees, they could always try to make more money developing for some other platform... Windows Mobile or PalmOS or some rooted OSes maybe, and host their own app store. Most developers let Apple take 30% because that Developer has decided that they can make more money after the 30% take in Apple's store than elsewhere.
Patent trolls are bad because they usually sneak in well after a developer has made their business decisions, and throw a big wrench into whether some company can turn any profit or not. Thus ruining any attempts at good business planning.
HobeSoundDarryl
macrumors G5
Again, I understand that there is always a defense for Apple here in all things Apple does, thinks and/or thrusts upon us. I still would point out that 30% vs. .575% is too much to accept the former as fine, while the latter gets death threats... whether one is laid out ahead of time or not.
Similarly, if .575% after the fact can "throw a big wrench into whether some company can turn a profit or not," then 30% should represent almost every other tool in that toolbox. For example, if Apple took- say 29%- then apparently these poor company's profits would nearly triple. Maybe everyone should thoroughly get angry at Apple's greed at taking so much that such small, barely-making it app developers can barely squeak by?
A number of small, "poor" companies relative to Apple developed lower-cost options for Apple hardware buyers. For example, I keep referencing the magsafe cable, which is $79.99 from Apple. Some of these little companies were able to make well-regarded alternatives which could retail for as little as about $30 (saving people like you or me as much as about $50). Apple then flexed it's patent on that design to crush those options. This was a patent flex done after the fact completely wiping out those company's revenues from that kind of product. These smaller companies lost on all the cost they put into making the product. You and/or I lose by having to pay $80 instead of $30 if we so choose. Only Apple- the patent holder- won because they leveraged their patent to prevent anyone else from cutting into their revenues.
Did you read the post the other day about new iMac hard drives having a special connector so that when the hard drive dies, your only choice of replacement appears to be Apple and Apple service centers? Here's that link: https://forums.macrumors.com/threads/1152046/ When some third party tries to make that special connector to get around Apple's inevitably higher price for any do-it-yourselfers, what do you think Apple is going to do?
This "patents are good when they serve Apple's interests and bad when they work against Apple" happens over and over here. I understand this is Macrumors and the crowd should be biased toward Apple vs. everyone else. But there should be a limit to that bias. And flip flopping based on which side of the argument Apple happens to be on seems to be beyond that limit.
I'm not defending patent "trolls" at all- I don't believe any software should be able to be patented. However, that would include software like OS X and iOS, and all Apple-branded software applications along with rudimentary software like the simplest of apps or even an upgrade button. I think software should fall under copyright law myself.
But let me guess: patents should exist to fully protect any software that Apple creates be it big or small (like the 4 icon dock in iOS, which seemed to be one of the triggers of the Apple vs. Samsung patent battle) but when it comes to anyone else winning a patent that might work against Apple or Apple affiliates in some way (even a relatively nominal way like this one), such patents are worthless, right?
Lastly, since Apple apparently purchased a license from this Lodsys for their own apps, it appears that their substantial legal resources apparently recognized enough validity in the patent to pay vs. trying to fight the validity of it. So is Apple stupid for paying for a baseless patent or does this patent have enough validity to justify compensation for whatever it covers? Either Apple was stupid for paying for something that has no merit or all of these app developers should have built this cost into their products pricing all along, didn't, and are now getting called out for not doing so. This last bit should be hard to resolve even for the most "whatever Apple says is THE right answer" fan.
Similarly, if .575% after the fact can "throw a big wrench into whether some company can turn a profit or not," then 30% should represent almost every other tool in that toolbox. For example, if Apple took- say 29%- then apparently these poor company's profits would nearly triple. Maybe everyone should thoroughly get angry at Apple's greed at taking so much that such small, barely-making it app developers can barely squeak by?
A number of small, "poor" companies relative to Apple developed lower-cost options for Apple hardware buyers. For example, I keep referencing the magsafe cable, which is $79.99 from Apple. Some of these little companies were able to make well-regarded alternatives which could retail for as little as about $30 (saving people like you or me as much as about $50). Apple then flexed it's patent on that design to crush those options. This was a patent flex done after the fact completely wiping out those company's revenues from that kind of product. These smaller companies lost on all the cost they put into making the product. You and/or I lose by having to pay $80 instead of $30 if we so choose. Only Apple- the patent holder- won because they leveraged their patent to prevent anyone else from cutting into their revenues.
Did you read the post the other day about new iMac hard drives having a special connector so that when the hard drive dies, your only choice of replacement appears to be Apple and Apple service centers? Here's that link: https://forums.macrumors.com/threads/1152046/ When some third party tries to make that special connector to get around Apple's inevitably higher price for any do-it-yourselfers, what do you think Apple is going to do?
This "patents are good when they serve Apple's interests and bad when they work against Apple" happens over and over here. I understand this is Macrumors and the crowd should be biased toward Apple vs. everyone else. But there should be a limit to that bias. And flip flopping based on which side of the argument Apple happens to be on seems to be beyond that limit.
I'm not defending patent "trolls" at all- I don't believe any software should be able to be patented. However, that would include software like OS X and iOS, and all Apple-branded software applications along with rudimentary software like the simplest of apps or even an upgrade button. I think software should fall under copyright law myself.
But let me guess: patents should exist to fully protect any software that Apple creates be it big or small (like the 4 icon dock in iOS, which seemed to be one of the triggers of the Apple vs. Samsung patent battle) but when it comes to anyone else winning a patent that might work against Apple or Apple affiliates in some way (even a relatively nominal way like this one), such patents are worthless, right?
Lastly, since Apple apparently purchased a license from this Lodsys for their own apps, it appears that their substantial legal resources apparently recognized enough validity in the patent to pay vs. trying to fight the validity of it. So is Apple stupid for paying for a baseless patent or does this patent have enough validity to justify compensation for whatever it covers? Either Apple was stupid for paying for something that has no merit or all of these app developers should have built this cost into their products pricing all along, didn't, and are now getting called out for not doing so. This last bit should be hard to resolve even for the most "whatever Apple says is THE right answer" fan.
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You need to read a little history of capitalism before patents.
The U.S. Constitution stated a choice on the issue of granting exclusive rights for a limited time. The implementation of that choice has gone screwy and overboard IMO, but that basic choice had led to some pretty decent results in U.S. inventiveness vs. some other parts of the world over the past couple centuries.
It's all about choosing which way to scr*w consumers. By creating a society where inventors don't bother to create or outright hide a whole bunch of cool new ideas because they don't want them stolen by competitors? (Can we make a Stradivarius quality violin any more? If so, how many decades did that take?) Or by consumers paying the cost of a making lawyers rich by getting companies to sue each other?
