Lodsys Patent Invalidation Efforts: Apple Barred? $15,000 Bounty for Crowdsourced Research

Lodsys, the patent holding company currently taking on App Store developers over their use of in app purchasing and upgrade buttons, is under increasing attack as it continues to push forward with its own actions while its targets have begun to fight back. Last week, we noted that the first legal challenge had been brought seeking to invalidate Lodsys' patents, and three other companies, including the parent company of The New York Times, have since filed similar suits against Lodsys.

But while Apple has stepped forward and asked to intervene in Lodsys' case against the App Store developers, arguing that Apple's own license extends to developers using its tools, the company has not joined the effort to have the patents themselves invalidated. FOSS Patents now reports that Apple (and Google, whose developer ecosystem is also being targeted by Lodsys) may actually be barred from challenging the patents by virtue of their licensing agreements already in place with Lodsys.

None of the attorneys I talked to knows the language of the license agreement Apple and Google signed with Intellectual Ventures while the four patents later acquired by Lodsys belonged to that entity. But they and I concur that it's highly likely that Apple and Google are contractually precluded from challenging Lodsys's patents because such license agreements often come with clauses under which a licensee will lose a license once he participates in an effort to invalidate any of the related patents (in addition to possibly having to pay contractual penalties).

So even if Apple and Google had wanted to attack Lodsys's patents proactively, they would have lost their license -- at least to any patent they attack; more likely to all four Lodsys patents; and possibly even to any or all of the more than 30,000 patents they licensed from Intellectual Ventures, a patent aggregator in which those companies (alongside many other industry players) invested.

Consequently, Apple may be limited to simply defending App Store developers with respect to the terms of Apple's licensing, and not able to directly attack the patents themselves.

lodsys invalidation bounties
But that does not mean that Lodsys' patents are safe by any means. In addition to the four invalidation lawsuits already filed against Lodsys, CNET reports that crowdsourcing intellectual property research firm Article One Partners has launched a series of bounties for information on prior art or other issues that could help in the effort to invalidate Lodsys' patents.

Article One Partners, a business that crowdsources intellectual property (IP) research, has launched three new studies into patents held by Lodsys. Each offers a reward to the party that finds prior art, or examples of pre-existing technologies or other IP that could be used as evidence to invalidate one or more of Lodsys' patents.

Each of the three studies carries a $5,000 bounty guaranteed to be paid out to the researchers who submit what is judged to be the "highest quality prior art" to be used in attacking Lodsys' patents.

It is unknown who is funding the bounties on Lodsys' patents, as that information is not disclosed by Article One Partners. Article One is, however, an established company with a community of around one million people participating in crowdsourced intellectual property research on a variety of topics.

Top Rated Comments

0815 Avatar
143 months ago
That raises another question though. Are developers consumers?
In this case yes: technically they are 'consuming' the licensed API.

Basically they are 'buying' a component (where Apple uses licensed parts) from Apple to build into their product. If the component at the root in a production chain is licensed, you can't charge everyone down the road in the production chain for the same thing over and over again (those are just using/consuming that component).
Score: 3 Votes (Like | Disagree)
paradox00 Avatar
143 months ago
The thing is, Apple isn't challenging the validity of the patents, they are arguing that developers are licensed for the patents. I don't see the issue right now.
Score: 3 Votes (Like | Disagree)
0815 Avatar
143 months ago
Apple not being allowed to challenge the patent ... that stinks. Didn't know that license agreements can have a stupid clause like that - that should be illegal and every company should always have the right to challenge a patent, no matter if they pay a license fee or not.

Could Apple 'pay' some other company to challenge? Are they allowed to support "Article One Partners"?

At least they are allowed to help their indie developers with the stupid law suit.

Good luck to every company challenging this patent troll - I hope this will be the end of Lodsys.

Lodsys shouldn't have tried to charge a license fee for a license that is already payed for (that is the outrage in my opinion) - as a result of this they turned now every major company against them trying to invalidate their patents leaving them hopefully with nothing (instead of a small something).

Even so mostly small indie developers were targeted (presumable 'easy' targets that can't defend themselves) it is fantastic to see how even big companies are now targeting Lodsys as enemy.
Score: 3 Votes (Like | Disagree)
BornAgainMac Avatar
143 months ago
Lodsys is getting sued by antivirus software maker now. Probably not enough to close them down.

http://news.cnet.com/8301-1023_3-20070941-93/lodsys-sued-by-antivirus-software-maker/
Score: 2 Votes (Like | Disagree)
gnasher729 Avatar
143 months ago
Guys, FOSS patents = Florian Müller = paid Microsoft mouthpiece.

See for example http://iptarget.blogspot.com/2011/06/leverage-if-you-are-threatened-with.html . Title "Leverage If You Are Threatened with Patent Infringement (and why you should ignore FOSSpatents)" At the end of the article: "On a personal note, Florian accused me of being an "anonymous smearer". While I am doing this anonymously, my response still stands: "FYI rebutting factually inaccurate statements does not make me a "smearer", it makes you uninformed"."

There is something that irritates me, to see how giant companies (in this case, Apple) will always have advantage over subjects like these which are, in essence, proving the other side wrong. Apple has a lot of fanboys, and as evidenced by one of the first posts in this thread, people see Lodsys as the 'bad guy' when they are simply fighting for what they think is theirs.
You should probably inform yourself about Lodsys and its patents. See for example http://www.applepatent.com/2011/06/lodsys-hints-from-file-history.html which shows prior art to Lodsys' patent.
Score: 2 Votes (Like | Disagree)
NebulaClash Avatar
143 months ago
This is a distortion of the purpose of patents. We're not talking about poor Lodsys inventing something and then striving to compete with the big, bad corporations who are stealing their intellectual property. They are merely a tiny holding company that owns four patents they bought from Intellectual Ventures (http://en.wikipedia.org/wiki/Intellectual_Ventures), that company founded by Microsoft employees whose business model is to collect as many patents and intellectual property they can get and make money from it all.

Now Lodsys got ahold of these patents and is trying the old Slashdot humor on the world:

1. Buy patents
2. ?????
3. PROFIT!

Of course in this case their "?????" step is to sue the little developer, get them to pay up instead of taking it to court, use that precedent to go after bigger prey, etc. It's simply a business that has nothing to do with protecting ideas and everything to do with getting rich off someone else's ideas.
Score: 2 Votes (Like | Disagree)

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