Tag: Legal issues »
The Lodsys in-app purchase drama has just gotten ugly. Apple roared back last week at Lodsys' threats to individual developers, claiming that Apple's license of Lodsys' technology applied to App Store developers' products. However, Lodsys remained unflinching in the face of the strong words from Apple, as they have sued 7 developers over the use of in-app purchases in their apps. Notable developers include Quickoffice and their Quickoffice Connect suite Iconfactory, known for Twitteriffic, Ramp Champ, and Astronut, all of which use in-app purchases to unlock features in their apps. The list interestingly includes Illusion Labs, developers of the Labyrinth games for iOS; the Android version of the game is mentioned as well in Lodsys' suit. This is the second known case of Lodsys pursuing Android developers over in-app purchases, as an anonymous developer was also contacted by Lodsys recently.
Lodsys have posted new blog posts on their site trying to explain their position publicly, reiterating that they believe that Apple's license does not cover the developers who use in-app purchases in their apps. According to Lodsys' interpretation of Apple's agreement with developers, "Apple has specifically absolved itself of any legal responsibility it has with respect to 3rd party patent infringement by Application Developers." Lodsys has at least been very forthcoming with their position on the matter, even if they have developed a reputation as a patent troll by existing solely as a patent holding firm, and establishing jurisdiction in Marshall, TX — a city that with a court that is very favorable to patent holders.
Lodsys has offered a gesture of goodwill toward the developers they have sued, offering $1000 if it is ruled that developers' use of in-app purchases does not violate Lodsys' patents. However, this is largely a token gesture, as according to Florian Mueller of FOSS Patents: "Obviously, $1,000 is not much to gain considering that even an initial analysis of a patent assertion letter by a qualified attorney will typically cost much more than $1,000. And a lawsuit can cost millions." Lodsys are putting on a public face of being a company that has been wronged by Apple and these developers, although they are just a patent holding firm that are suing developers after Apple already licensed their technology. Like all other cases involving the courts and lawyers, this one may not be resolved any time soon, and the impact of any decisions or settlements may not be known for some time.
Apple has finally responded to patent holding firm Lodsys' claims against developers using in-app purchases in their apps. The gist of the story so far is that Lodsys has a patent that it claims covers the mechanism the App Store apps use to offer in-app purchases. Apple pays a fee to Lodsys to cover the use of in-app purchases, but Lodsys has gone after a series of individual developers, including the developer of PCalc, asking for a fee to use in-app purchases in their own apps. Apple has been silent on the matter for the last week, prompting one analyst covering the matter to say that developers who get notified by Lodsys should just appease the seeming patent troll. That was just before Apple finally responded to Lodsys' claim recently, and they responded with sound and fury.
Apple claimed that their licensing of Lodsys' patents extends to developers using in-app purchases in their apps as well, saying that "Because Apple is licensed under Lodsys' patents to offer such technology to its App Makers, the App Makers are entitled to use this technology free from any infringement claims by Lodsys," as according to Apple senior vice president and general counsel Bruce Sewell, in a letter sent to Lodsys and the developers who have been contacted by Lodsys. Sewell also claims in the letter that "Apple is undisputedly licensed to these and the Apple App Markers are protected by that license. There is no basis for Lodsys' infringement allegations against Apple's App Makers." Apple has requested that Lodsys cease and desist their claims against developers they have contacted in regards to these patents.
It will be interesting to see where this issue goes from here on out - will Apple provide legal defense for these developers affected? Lodsys is located near a court that is notorious for being friendly to patent holders, so any legal battle could be tricky for Apple and affected developers. Or will Lodsys just back off of their claims, having awoken the big dogs at Apple after trying to nickel and dime individual developers? Dane Baker of Villain, developers of Archetype, who received a patent infringement notice from Lodsys, claims that "We were sent a notice of patent infringement which implies a lawsuit. None of us can operate on the assumption that Apple is going to provide any help here at all, that's just not smart. In other words it's not Apple's problem when Villain are hit with a lawsuit." Dane also claims that they have spoken to patent attorneys, and that Lodsys will likely sue thousands of developers and "hope for a handful of scared or stupid developers to pay them to go away." This will likely be an issue settled through a lengthy legal matter, so the impact on individual developers could be unknown for a long time.