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Lodsys defends targeting app developers instead of Apple

updated 10:20 am EDT, Mon May 16, 2011

Says Apple 'pixie dust' no protection for devs

Lodsys, the company threatening to sue some iOS developers over in-app purchases, has made a series of blog posts attempting to defend its actions. Regarding why it is targeting developers instead of Apple -- the company responsible for creating iOS' in-app purchase technology -- Lodsys downplays Apple's role. "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," it writes. "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)."

The firm claims that it is not trying to indirectly force Apple into a licensing deal, but that while Apple is "licensed for its nameplate products and services," its "pixie dust" does not protect third-party apps. "The value of the customer relationship is between the Application vendor of record and the paying customer, the OS (is acting as an enabler) and the retailers (are acting as a conduit to connect that value), and taking their % for that middleman role," according to Lodsys. It adds that Apple has not entered into discussions about an umbrella license, and that the "best return" for Lodsys would be to get license deals with each app seller.

Regarding criticisms that it's unfair or not even lucrative to go after small developers, the company insists that it is coming from a "fairness perspective," attempting to license all patent users on proportional terms instead of letting a lot of "free riders" avoid paying. The argument comes despite an admission that the largest businesses often dodge licensing agreements because it may be cheaper for them to force legal confrontations that license holders may not be able to afford.

Other details mentioned by Lodsys include a demand for 0.575 percent of US revenue for apps with in-app upgrades, including retroactive payments for past use, and the fact that it sent out "notices" asking for licensing rather than cease-and-desist letters. "Lodsys wants people to use the rights in their products and services, not to stop using it," the outfit states. "Our goal is to popularize the technology, have it used by many people and to make relatively small amounts per licensee, but to have the large volume of licensees aggregate to be a worthwhile business."

Media and industry have raised several concerns. Central is whether or not developers can be blamed for using technology created by Apple. On top of this, though, some developers could be economically ruined if they attempt to fight back.






by MacNN Staff

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Comments

  1. solefald

    Joined: Dec 1969

    +4

    Your turn, Apple!

    Apple [questionably] created in-app purchase technology and made it available for devs. Dev's should NOT be worried about whether technology is licensed or not. This is something for Apple to take care of.


    Apple needs to come out and squish these parasites. Unfortunately this would probably involve a few million dollars paid to them, instead of destroying them in court.

  1. charlituna

    Joined: Dec 1969

    0

    this is about money

    plain and simple. Lodsys is claiming that Apple has a license for their use but it doesn't cover 3rd party apps.

    why would they do that. Easy. they want their .5% to come from the 70% cut the developers get not the 30% that Apple does (or even better get it from both).

    But I say, show me the paperwork. Show me that Apple has a license at all and that it doesn't also cover the developers use.

    And show me that your patent is on tech and not just the broad idea of this kind of system with Apple having a patent on the actual tech that they use to implement the idea (which is totally legal under US law and would cut Lodsys out of the game if true)

  1. hayesk

    Joined: Dec 1969

    +1

    Double-license?

    Has Apple licensed the technology for their in-app system, or just Apple branded apps? If the former, then a license has already been paid for each app. Why should Lodsys be paid a second time for a single in-app purchase.

  1. tomacsh

    Joined: Dec 1969

    0

    who pays

    it is said that Apple may not come to the rescue of its developer partners as it has the possibility of opening them up to other patent infringement suits. Personally, I think Apple needs to absorb the license fee into their 30% cut or risk losing the entire in-app purchase system as well as a great deal of apps.

  1. abburks

    Joined: Dec 1969

    +3

    Lodsys Patent to Expire Next Year

    I hope everybody calls Lodsys' bluff on this.

    Apple licensed a patented technology for their iOS system with the explicit intention of making this technology available for all developers, not just Apple applications, and Lodsys knew/knows this. The technology, as an API, is part of the iOS product, that Apple provides to others through another one of their products, the iOS SDK. This technology is not cooked up separately by each developer on their own.

    Since the API is provided by Apple in the form of both the iOS and SDK, as an Apple product, all developers should be asking Lodsys for a copy of the contract Apple signed with Lodsys regarding the agreement and use of the patented technology.

    An analogy of why Lodsys is in the wrong:

    Imagine if IBM had licensed a patented technology from a company and then included it in their point-of-sale systems before selling these POS systems to businesses. Now imagine the company that sold the technology to IBM goes after these businesses and asks them to pay a fee for using IBM's point-of-sales systems because the company says only IBM has the right to use the technology and not the businesses using IBM's POS systems.

    To me, Apple is technically liable for this fiasco, and I think Apple will do the right thing and force Lodsys' hand. If Apple doesn't back up their developers on this, it will be Apple that will suffer the most. And if for some strange reason, Apple actually doesn't protect developers from this legal nightmare, all developers should get together and hire a big-name legal firm and fight this bullshit by not only suing Lodsys, but Apple as well.

  1. AlenShapiro

    Joined: Dec 1969

    +3

    Consequences...

    The developers write the calls to the operating system into their code but they do not use the technology. The technology is only used when the application-user presses the button to perform an in-app purchase. The button press invokes procedures written into the operating system that then perform the action of the purchase. All the developer is doing is making an interface available to the *user* to invoke technology already built into the operating system.

    It would appear that the app developers have little, if anything, to do with the use of the technology. About as much to do with the use of the technology as an HTTP external link-creator in a web page is responsible for the content that the external link displays.

    Oddly, the application user (who presses a button and invokes the technology) is more liable (if at all) than the developer. Both the user and the developer are less liable (if at all) than Apple who actually wrote the code that executes the in-app purchase and causes that code to be run when the in-app purchase button is pressed.

    So, IMHO, the consequence of the above is that Apple is more responsible for a license than the application user who, in turn, is more responsible for a license than the developer of the app.

    I wonder if Apple is now liable to the developers (and end users) for having exposed them to the possibility of lawsuits from technology owners - merely by delivering a mechanism that could be used to present a button that a user may press?

    Apple paid for a technology license but do not appear to be receiving value for what they paid. If Apple's license does not hold users of Apple's software harmless for what they might legally do with that software, then Apple's lawyers are in big trouble (for not writing that clause in). If, on the other hand, Apple's license does hold users of Apple's software harmless, then Apple needs to put Lodsys down... quickly.

  1. testudo

    Joined: Dec 1969

    -4

    Re: Lodsys Patent to Expire Next Year

    Apple licensed a patented technology for their iOS system with the explicit intention of making this technology available for all developers, not just Apple applications, and Lodsys knew/knows this.

    Licensing it with that 'intention' and actually putting that into the contract are two completely different things.

    Since the API is provided by Apple in the form of both the iOS and SDK, as an Apple product, all developers should be asking Lodsys for a copy of the contract Apple signed with Lodsys regarding the agreement and use of the patented technology.

    No, they should be asking Apple for said contract, for Apple is the one who's led them down the garden path, so to speak.

    An analogy of why Lodsys is in the wrong:

    Imagine if IBM had licensed a patented technology from a company and then included it in their point-of-sale systems before selling these POS systems to businesses. ....

    Bad analogy. The license may have been for IBM POS systems, but imagine those businesses used the IBM technology to make Bob's POS system. That's what is happening here. They aren't using Apple's system, they're hooking into it within their own system.

    But it all depends on the contract.

    To me, Apple is technically liable for this fiasco, and I think Apple will do the right thing and force Lodsys' hand.

    Force them how? The only hammer they've got is the contract. All they need to do is show it and say "Developers, don't you mind one bit, because it says right here you're covered!". But they haven't done that yet. It may be that Apple will have to go back to Lodsys and say "We want to license third-party apps, too".

  1. testudo

    Joined: Dec 1969

    -3

    Re: Lodsys Patent to Expire Next Year

    Oh, and not sure why you pointed out that their patents expire next year.

  1. Athens

    Joined: Dec 1969

    +1

    this is stupid

    Every one needs to get together and counter sue this company. Customers, developers and big companies like Apple in one large counter legal offensive.

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