The Patent Troll Has A Name And It Speaks

The company behind the legal threats being thrown at small iOS developers finally has a name. It is Marshall, Texas-based Lodsys, LLC, according to MacRumors. And they’ve now began to respond publicly to their letter writing campaign. It was on Friday we alerted our readers that unsuspecting iOS developers began receiving letters via FedEx. Their purported crime: Lodsys believes each is illegally using Apple’s in-app purchasing system, which they claim, they own a patent. According to Lodsys, they are going after iOS developers and not Apple itself, because the Cupertino, California-based company already purchased a license for its own products and services. However, third parties (i.e. app developers) have yet to make that purchase. Answering questions on its blog, Lodsys states the following.

Q: Lodsys is trying to force Apple to take a license by pressuring iOS developers. A: No, that’s not what’s happening.   Apple is licensed for its nameplate products and services. Q: What about other Operating Systems such as Android? A: So far no one has asked this, or speculated on it, but it’s a logical question for a business that has created applications on multiple platforms.  Google is licensed for its nameplate products and services.  Also, Microsoft is licensed for their nameplate products and services.

The patents in question were apparently issued in 1992 and recognized as “invention” from a patent application filed in August of 1992. Lodys’s solution is for each iOS developer who uses the in-app purchase system to give them 0.575 percent of U.S. revenue. Developers are also responsible for past usage. They state:

In the case of an Application doing an in-application upgrade (and only this scenario), Lodsys is seeking 0.575% of US revenue over for the period of the notice letter to the expiration of the patent, plus applicable past usage. So on an application that sells US$1m worth of sales in a year, the licensee would have an economic exposure of $5,750 per year.

Finally, Lodys states to its critics:

There are lots of bills in life that it would be preferable to not pay if one didn’t have to.  Lodsys is just trying to get value for assets that it owns, just like each and every company selling products or services is, trying to do business and make a profit.  Its odd that some of the companies that received notices had such a visceral reaction.   Some of these companies have our favorite apps, for which we paid the asking price.   We realize you have to get paid for your work and so do we.

In any event, name calling, threats and irrationality don’t help.  In particular, the death threats are seriously uncool.

Golden rule: do unto others as they would do to you.  You would like people to pay for your product and services, so would we.   Finally, you would like to be treated in a human manner, so would we.

Naturally, this entire event is head scratching. While Lodsys very well might own a 19 year old patent that looks like the in-app purchase system Apple is using, we don't know this yet. In addition, we have yet to hear from Apple about this issue, which is essential to getting to the bottom of this situation. Until we do, however, iOS developers are scared, nervous, and aren't sure what to do next. We encourage our readers to visit the Lodsys website and tell us what you think. Leave your comments below. [Photo: Troll Cave]

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