Lodsys Agrees to Dismiss Patent Case Against Small Developer for a Charitable Donation

Back in May 2011, patent holding firm Lodsys began threatening lawsuits against a number of small iOS developers, alleging infringement of a Lodsys-held patent through the use of Apple's in-app purchase and upgrade functionalities. The case was an interesting one because small developers were being held liable for their use of Apple's supported tools for iOS apps, with Apple agreeing to back the developers and claiming that Apple's existing license with Lodsys automatically extended to cover third-party developers using those tools.

Lodsys continued to pressure developers, both large and small, to take out their own licenses for Lodsys' patents, with many developers choosing to purchase licenses rather than fight in court. Lodsys now claims over 200 licensees for its patents.

While news about Lodsys had been relatively quiet through late 2012 and early 2013, the firm once again made a splash in April of this year when it filed suit against Disney, Gameloft, and several other developers and companies. Aside from a brief June announcement from Lodsys noting that Angry Birds developer Rovio has taken a license for Lodsys' patents, things had once again turned quiet through the middle of this year.

But as noted in a blog post today from developer Todd Moore, whose firm TMSOFT is responsible for several dozen iOS and Mac apps, Lodsys has curiously agreed to dismiss its case against him in exchange for an end to the dispute and a mutual charitable donation from the two sides (via @DotComCTO).

The dismissal is with prejudice which means they can never sue my company again for infringing its patents. I did not have to pay any money to Lodsys or sign a license agreement. I also did not sign a confidentially agreement so I’m free to talk about this matter.

So what did I have to agree to?

1. Never to sue Lodsys over its patents (I otherwise would have the right to ask a court to rule their patents invalid if I wanted)

2. Dismiss all motions with prejudice (we had filed a motion to dismiss that also sought to recover my attorneys fees, costs and expenses)

3. Make a donation to a mutually agreeable charity

Moore notes that the only reason he was able to fight Lodsys in court was that he had pro bono assistance from the Public Patent Foundation, with attorneys there estimating that their time spent on the case could normally have been billed at roughly $190,000 even before it headed to trial. He also highlights the ease with which Lodsys is able to file patent lawsuits against small developers and his continuing efforts at supporting patent reform.

It remains unclear whether Lodsys' move to dismiss the case against Moore and TMSOFT is part of a strategy shift for the firm or if it simply realized that it was not worth pursuing a protracted fight against a small developer receiving free legal representation. We have yet to hear of any similar settlements, although many developers have understandably been reluctant to share details on their own experiences with Lodsys.