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.