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Lodsys Responds to Controversy Over iOS Developer Lawsuit Threats


Last late week, we reported that patent holding firm Lodsys had apparently begun targeting small iOS developers with notices of patent infringement for providing in-app purchase and/or App Store purchase links within their apps. Lodsys was requesting that the developers obtain a license within 21 days or face the prospect of a lawsuit.

Lodsys has finally written publicly about the notices, putting together a blog offering responses to a number of questions about the company's actions. Among the interesting revelations:

- In addressing claims that the patents being used by Lodsys are overly broad and obvious and should never have been granted in the first place, Lodsys argues that with the patents dating back nearly 20 years, that much hindsight naturally makes such inventions seem obvious.

- The company also seeks to defend its business model as the most efficient way to handle intellectual property licensing for small inventors such as Dan Abelow, who filed the patents in question. While some have criticized Lodsys for pursuing licensing rights for technology it neither invented nor directly uses, the company argues that its existence creates efficiencies that improve the level of innovation, noting that Abelow was able to sell off his rights to the patents in order to focus on new inventions rather than having to focus on the task of licensing. In passing that responsibility off to another entity, each party is able to focus on what they do best and extract value from inventions.

Apple Already a Licensee?

- Lodsys is targeting developers not because it is seeking to put pressure on Apple, as Apple has already licensed the intellectual property for use in its own products and services, as have Google and Microsoft. Lodsys states that each developer should be responsible for licensing the technology in individual apps, rather than Apple being responsible for an overarching agreement, making an analogy that a hotel owner rather than the owner of the land beneath the hotel is responsible for all services provided to guests.

Licensing Terms

- Lodsys' proposed licensing terms equal 0.575% of U.S. revenue for in-app upgrades, with developers also being responsible for past usage.
In the case of an Application doing an in-application upgrade (and only this scenario), Lodsys is seeking 0.575% of US revenue over for the period of the notice letter to the expiration of the patent, plus applicable past usage. So on an application that sells US$1m worth of sales in a year, the licensee would have an economic exposure of $5,750 per year.
Death Threats "Seriously Uncool"

- Finally, Lodsys notes that it has received a significant amount of hate mail and even death threats from a number of parties, apparently even including those developers who have received notice of licensing requirements. Calling the death threats in particular "seriously uncool", Lodsys argues that such behavior doesn't help the situation and that the company, like the developers, is simply trying to sell its products and make a profit.


Top Rated Comments

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96 months ago
This is utter nonsense.

Apple provides THE SERVICE OF IN-APP PURCHASES. How is that even remotely similar to "the land beneath a hotel"? More like the crew that built the place.

Really hoping Apple does the right thing here and tells them off. There's no reason developers should have to go through this kind of legal idiocy over a technology ALREADY owned by their sales system (in this case, Apple).

Should we conclude from this that Amazon make every individual seller license their "1-Click" technology? Even though they already sell on Amazon?
Rating: 10 Votes
96 months ago
Sounds like a lot of rationalization for acting like a pathetic patent troll. The part about "extracting value from a patent" is priceless.
Rating: 6 Votes
96 months ago
just gave me an idea...

20 years ago? I need to get on writing some really vague patents about robots and computerized cars and other future stuff. If I write enough, some of them have to come true. Then I can sell the rights off to some POS company and let them make all the money off of my ideas. As if small businesses needed any more 'taxes'. They have enough to worry about competing with the big guys.
Rating: 6 Votes
96 months ago

- In addressing claims that the patents being used by Lodsys are overly broad and obvious and should never have been granted in the first place, Lodsys argues that with the patents dating back nearly 20 years, that much hindsight naturally makes such inventions seem obvious.


Maybe they should stop using loopholes to extend their patent and just let it expire if it is as obvious as it is now. That's why patents are time limited, so that after a certain period of benefit by the inventor, society can start benefiting from the invention in question.

Lodsys needs to let this one go. They have had their time with it.

This is utter nonsense.

Apple provides THE SERVICE OF IN-APP PURCHASES. How is that even remotely similar to "the land beneath a hotel"? More like the crew that built the place.

Really hoping Apple does the right thing here and tells them off. There's no reason developers should have to go through this kind of legal idiocy over a technology ALREADY owned by their sales system (in this case, Apple).


This really isn't about In App Purchase. It's about Apps (especially LITE or DEMOs) offering the user a button to "upgrade" to the full app. When that button is pressed, the user is sent back to the App Store, to the proper page. No IAP required.
Rating: 5 Votes
96 months ago
Now, these guys do seem like a bunch of losers looking for a payday, this line just made me crack up.

Calling the death threats in particular "seriously uncool", Lodsys argues that such behavior doesn't help the situation and that the company, like the developers, is simply trying to sell its products and make a profit.


Yeah, death threats are "seriously uncool" but then again so is being a troll. Not saying that the death threats were justified, just the way it's worded just made me laugh.
Rating: 5 Votes
96 months ago
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.:(
Rating: 5 Votes
96 months ago
"...a hotel owner rather than the owner of the land beneath the hotel is responsible for all services provided to guests."

And the non-sequitur of the month award goes to...
Rating: 5 Votes
96 months ago
Yeah, just another overly broad patent ....

Patents like these should be struck down, as soon as it becomes clear that they're vague and overly broad in the context of what people are doing that the patent-holder claims "violates" them.

I've resigned myself to an understanding, though, that our current patent system is really just designed as a legal battleground for the wealthy. The more successful your company is, the more patents you stuff away into your portfolio so you can wage patent war on the other guy whenever the opportunity arises.

The fact that you can patent processes that are just virtual analogies of processes people do in real-life every day proves my point. A "1 click purchase" patent a la Amazon.com? Ridiculous on its face. Even if you "came up with the idea first" (which really means you spent the money to patent the idea first, because it's VERY doubtful nobody ever conceived of such as basic idea before you)? It's no different than the age-old concept of buying a product by selecting it with one gesture (like pointing it out with your finger). It's just translated (as all things must be) to a digital equivalent, when you want to do it on the web.
Rating: 4 Votes
96 months ago
From their About page:

"I never did anything by accident, nor did any of my inventions come by accident; they came by work." -Thomas Edison

That's funny. They bought the patents from one company that had bought the patents from another company that bought the patents from the guy that actually did the work. I guess that is a lot like Thomas Edison though, isn't it?
Rating: 4 Votes
96 months ago

I do like them slightly better for using the phrase "seriously uncool" in response to death threats.

You've got to put your opinion of their business aside and respect that.


No...no I don't.
In fact, it makes them seem much less professional, and just trying to cozy up to the reader to get them on the Lodsys side of things.


No, I don't like them slightly better at all for that cute little remark.
Rating: 3 Votes

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