Lodsys "responds and clarifies" their patent threats against iPhone, iPad developers

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Lodsys, the company threatening to sue iPhone and iPad developers for infringing on in-app purchasing patents, has put up a series of blog posts in order to "respond and clarify" their position. For example, why are they going after small, independent iOS developers?

The economic gains provided by the Lodsys inventions (increase in revenue through additional sales, or decrease in costs to service the customer) are being enjoyed by the business that provides the product or service that interacts with the user. Since Lodsys patent rights are of value to that overall solution, it is only fair to get paid by the party that is accountable for the entire solution and which captures the value (rather than a technology supplier or a retailer).

Why aren't they going after Apple?

Apple is licensed for its nameplate products and services.

As are Microsoft and Google, apparently, though none of them are licensed to pass on those services to 3rd parties.

So for those who don't speak patent blog, here's the bottom line:

Lodsys is going iPhone and iPad apps because they can (they bought the rights to these patents), and they don't want to leave any money on the table. Even tiny iOS developer tables.

[Lodsys blog, thanks @jhoove09!]

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Senior Editor at iMore and a practicing therapist specializing in stress and anxiety. She speaks everywhere from conferences to corporations, co-host of Vector, Review, and Isometric podcasts, and should be followed on Twitter @Georgia_Dow.

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Reader comments

Lodsys "responds and clarifies" their patent threats against iPhone, iPad developers


I feel like it's worth mentioning that Lodsys is asking for 0.575% of the revenue from in-app sales. I mean, that's more than it should be (0%), but Apple takes 30%! Surely developers can roll this 0.575% into their "costs" of selling the app. It isn't that big of a deal.

TO me this IS a big deal. THis is just ONE company that is going after the little guys. If they win and the developers buckle, imagine who else will go after developers!
These companies are using magnifying glasses to try and burn the ants that make awesome apps that you and me use daily. If they win, it affects you, me, apple, and the developers.

It does sound like the devs need to band together and form a union of sorts. First Apple takes it to them, and now others are looking to nickel and dime them.

Since Apple now mandates that purchases ave to be essentially in-app when users add on features or buy subscriptions, this licensing fee should come out of Apple's share. Alternatively Apple would have to allow developers to generate their revenues through promo codes the user can simply purchase on the developer's website without having to use in-app purchase as a feature. The way the Apple guide lines are written this licensing fee is essentially a mandatory tax which no one who plans on in-app purchases can get around. Shame on Apple for manhandling its developers and shame on this patent troll...

True. This appears to be a cost of doing business with Apple by selling via the app store. Apple goes to great lengths to tell people about the expense of running the app store and how 30% is not all that much to be asking. Well, this is yet another app store cost - either collect it and pass or on or eat it because you're getting paid. Apple can pay this fee night and day for a long time before they exhaust that $60 Billion hoard they've got. Why not put it to good use along with some good will. It was, after all, the small app developers who make Apple the titan in apps that they've become.

Apple should be stepping in since the developers will be affected by this. That will cut into Apple 30%. Someone just trying to make an easy buck. Why not just take away in app purchase?

Not if devs start pulling back from in-app purchase offerings they won't.
Imo, even more reason for devs to push more toward web app designs for those apps that don't NEED to be native.

Here is the wording of the patent in question...
Methods and systems for gathering information from units of a commodity across a network
In an exemplary system, information is received at a central location from different units of a commodity. The information is generated from two-way local interactions between users of the different units of the commodity and a user interface in the different units of the commodity. The interactions elicit from respective users their perceptions of the commodity.
God i hate patents, especially when they are written in such a way that it is hard to tell if it even has ANYTHING to do with in-app purchases.

Nostradamus himself couldn't have made a more nebulous statement, and that's saying something!

More like a Rambus. Despite Apple's dirty tactics of using litigation and filing for generic patents to try to stifle competition they actually do make products, so they don't qualify as patent trolls.

I'm surprised no one has said that consumers should step up to the plate and support the developers. Maybe we should boycott the whole inapp purchase system. Let Lodsys (and Apple) see how much their "intellectual property" is worth if no one uses it for a week.
Has anyone else read the Lodsys response and noticed how often they refer to this not as a legal strategy, but a marketing strategy, and a faulty one at that. They licensed the patent to Apple who in turn requires their developers to use the system, as part of Apple's system. If the individual apps truly aren't licensed then the problem is with either the license Lodsys sold to Apple or Apple's use of that license, not the developers.

You couldn't even convince Alex here, how exactly do you propose to galvanize over a million worldwide users to implement your boycott, Jay?

I very eagerly await Apples response to this to see whether or not they'll support their devs or leave them out to dry.

The thing that bugs me most about this is that Lodsys has known that 3rd parties have been or would be using the tech for about 2 years now, since Apple first introduced in-app purchase. Given that fact, why have they now decided that it must be licensed by each app? In truth I think it goes like this: Lodsys license tech to Apple. Apple pays relatively small licensing fees due to unknowns about popularity etc. Then later on Lodsys see how massive IAP has become and wants a bigger piece of the pie and thus we get to where we are today.
Also, I can't believe that Apple would license the tech with the intention of having an API for devs to use and didn't consider licensing the tech to cover those devs to be able to use it without paying another fee. If they didn't, and the terms are like Lodsys claim, then Apple should simplify the process for it's devs and absorb the extra costs in it's 30% cut.

If I was a developer, I would do away with in app purchases, and strat charging a fee for every update. Woud that solve this problem, or just create another? It seems if developers have to pay, they will just opt to stop in app purchases, and apple will loose it's 30%. Apple does not need to set back on this. They need to protect the developers. Without them, there is no app store.

Question: If Lodsys owns the technology, where do developers claim their rights to use that technology without a license derive from?

Because apple mandates it so. It is reasonable for a dev to assume they are acting properly by following the apple dev agreement. I wonder if this voids the dev agreement? Since it's apple's store a dev has no power to prove it. Devs are big loser in this. I bet it's a tactic to scare the devs so apple will be forced to intervene. If they did it will probably still cost the devs in the end. Sad.

Isn't this what shareware software on the PC has been doing since its inception? You download the shareware version, you play to the end of the level, then you are promoted with instructions to purchase the full version. I think prior art supersedes this patent.

This patent was allegedly filed in 1992 (expires next year). Where exactly were you downloading shareware twenty years ago? I won't say it didn't exist, but I don't recall anything available along those lines back then.

If the 30% cut Apple takes on every App Store purchase doesn't buy legal support from Apple in this matter, something is seriously amiss.
And, if Apple has decided the patent IS valid and HAS already licensed it from Lodsys, then they should pay whatever Lodsys claims is the developer's due portion due to said licensing fees from their 30%.

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