Lodsys defends legal threats: Apple is licensed, iOS developers are not

“Following a number of legal threats that were sent by Lodsys to third-party iOS developers over in-app purchases on the iPhone App Store, the company has taken to its official blog to explain and justify its actions,” Katie Marsal reports for AppleInsider.

“The answers were given on Sunday in a number of posts made to the company’s official blog, in which the company revealed that Apple has not been sued because the company is licensed to offer in-app purchases,” Marsal reports. “But Lodsys believes that developers do not have the right to offer in-app purchases through Apple’s system without licensing as well.”

Marsal reports, “The question-and-answer posts also reveal that Lodsys is seeking 0.575 percent of U.S. revenue over the period of the notice letter to the expiration of the patent, plus applicable usage. That would amount to $5,750 per year for an application that makes $1 million in annual sales. Last week, developers began receiving letters from Lodsys, and were accused of patent infringement. The letters gave developers 21 days to license technology related to in-app purchases, a feature that Apple offers iOS developers through its App Store.”

Read more in the full article here.

Related article:
Lodsys threatens Apple App Store devs with lawsuit over In-App Purchases – May 13, 2011


  1. This is chilling. It opens the door to all kinds of patents wanting the SAME sort of licensing deal.

    This stuff needs to be nipped in the butt NOW.

  2. Shouldn’t they wait til the technology is well established before they hobble it? Seems like Lodsys is shooting themselves in the foot here. What small time 3rd party developer is gonna use a technology that is inhibitively expensive to license? Many of these developers are already on a shoestring.

    1. The fact that Lodsys is going after the small developers first is a pretty clear indication that they’d prefer to scare devs into paying up. Whereas if they went after larger companies developing for iOS, they might have a court fight on their hands.

      Standard extortion scheme, really – intimidate those who are least able to meaningfully fight back.

  3. The license that Apple got does not extend to 3rd parties. But why didn’t Apple tell their developers that they dont have the right to use the feature without paying for a license, yet they encouraged it? That is like setting them up for liability. Guess, Apple did not read the fine print to tell them so or Lodsys is pulling a fast one.

    1. Or maybe the developers didn’t read the fine print. This is patent trolling, it makes no practical sense to anyone but the trolls. Hear this Lodsys?

    2. “But why didn’t Apple tell their developers that they dont have the right to use the feature without paying for a license, ”

      The developers are not using the feature, Apple is. Its an in app purchase which goes thru Apple on apps sold by apple. Desperate patent trolling. PERIOD.

      If you make a refridgerator and pay a fee to the guy who invented the compressor, does the user of the fridge have to pay for keeping his food cold?? How about the cow that is going to have its meat kept cold in the fridge, should it pay a fee?? ON and on.

      Just a terrible horrible very bad no good thought,

  4. Apple handles the in app purchases (i.e., they handle all the financial transactions) and the code is on Apple’s iOS. The developers have not infringed upon the patent in anyway. Had they developed their own system to implement it, then yes, they would be infringing. If I buy a house, I do not have to pay a royalty on any of the patented features because they have already been paid for. This is ridiculous and I hope this gets thrown out with Lodsys paying all lawyer fees soon because this precedence would be bad for the entire industry.

    1. I totally agree. This is patenting a common sense idea. I wrote these guys a somewhat long email as follows:

      I doubt you will take me too seriously. I am just a consumer. However, if the position is that your LLC is the owner of a patent to upgrade from a trial version to a full version of software or anything for that matter. I find that quite laughable. This is not a very unique idea. This idea is an event of common sense, not an individual’s intellectual property. I do not care what the patent office says. It is almost as if they would patent the air you breathe. I liken your attempt to collect on the unwise patent purchase to someone claiming a patent to rocken roll, rap, or language itself. Software would never sell well if a consumer had to go in blindly. Everyone knows this intuitively. It’s just a try before you buy senario. If there is a specific code or script that is proprietary or something, that would be a different senario. But it appears to me on your blog that you are trying to own this intuitive model of try before you buy. It is rather quite absurd. Do not chase bad money on the patents with bad money on this litigation. It’s just foolish. In other words, you need to go about your business as usual, there is nothing for you to see here.

      1. You obviously have no idea what the standard of patentability is. Have you even read the patent claims? If you think the claims are invalid, start by showing me where each and every element of the claim is taught in the prior art.
        I’ll tell you what is absurd…. it is absurd for someone to claim a patent is invalid when they don’t even know what the standard of patentability is or what the patent claim says. Your analysis is gobbledygook.

        1. Well, I am no lawyer. I have a very basic idea behind the spirit of patent law. I did read their claims and analysis from their websites. http://www.lodsys.com/blog.html And they do seam absurd IMHO. Many contend that the patent system is flawed and or broken. Also, I stated “This idea is an event of common sense, not an individual’s intellectual property. I do not care what the patent office says.” Which would mean that obviously the patent office did patent it. That does not make it right though. If you believe that they are in the right and that the developers are wrong then go ahead and champion the patent owner in this case. I gave the perspective from a consumer.

  5. Too bad the legal system of the US is the most pathetic one that exists and will be forever, since all of DC is run by lawyers, bloodsuckers and crooks.

    1. The U.S. has the best legal system in the World and the patent system is one of its crown jewels. The U.S. patent system is a significant reason all this technology is developed in the U.S. If you think a non-existent patent system is good for innovation, look no further than countries like Saudi Arabia, Angola, Ethiopia, Turkey, Mexico, etc. There is a clear trend throughout the world…..No patents = No innovation. This fact was so apparent to the founders of our country that the task of issuing patent protection was written in the U.S. Constitution. You all are idiots if you think we should disregard patents. If the Devs think these patents are invalid, then by all means put forth evidence that shows they are invalid. The patent office said it was valid and I certainly would trust them over any of you. I’m not saying the patents are valid or enforceable. I’m just saying that if the Patent Office says they are valid we should assume they are unless someone proves otherwise. Complaining about the patent system and making conclusory accusations about the validity of the patents and calling the patent owners “trolls” is childish and ignorant.

  6. Quevar is right. But this is a principle of any kind of patent lawsuit or medical malpractice lawsuit — sue everybody connected. Obviously, they didn’t sue Apple since they were licensed, but they could be interpreting the contract such that only apps made by Apple have the license – not those made by 3rd parties. Apple may not have interpreted the licensing agreement such. Also it illustrates the principle of suing the “little guy” so that it costs him more to litigate than to just settle.

  7. If Apple is licensed and the developers are not then definitely the users are also not licensed. Looks like anyone who purchased within an app without a Lodsys license is a target for the next idiot lawyer.

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