Lodsys Responds to Controversy Over iOS Developer Lawsuit Threats

lodsys wordmark
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.

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Top Rated Comments

Bluefusion Avatar
171 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?
Score: 10 Votes (Like | Disagree)
saxofunk Avatar
171 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.
Score: 6 Votes (Like | Disagree)
Frobozz Avatar
171 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.
Score: 6 Votes (Like | Disagree)
NutsNGum Avatar
171 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...
Score: 5 Votes (Like | Disagree)
kiljoy616 Avatar
171 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.:(
Score: 5 Votes (Like | Disagree)
CylonGlitch Avatar
171 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.
Score: 5 Votes (Like | Disagree)