Patent trolls Lodsys have gone forward on their earlier threats to bring litigation against companies it felt were using their patented technologies without a license, filing suit on May 31 against various developers of iOS and Android applications. In a post on their site, they state that they moved up their timeline to keep their legal options open in the face of legal opposition by Apple. They went on to dispute the claims that Apple had made in a separate blog post, where they stated that Apple’s cease and desist letter had “no discernable (sic) basis in law or fact”. Their argument is that developers who use the patents in question – which, in simple terms, facilitate Apple’s in-app purchase system – aren’t covered by Apple’s agreement with developers, and that they must be negotiated with Lodsys personally.
According to Florian Muller, some of the companies affected are Combay Inc. (responsible for Mega Poker Online Texas Holdem), Illusion Labs AB (Labrynth for iOS and Android), and Richard Shinderman (Hearts and Daggers), among others.
The lawsuit will be fought in Texas, which Ars Technica notes is friendly towards patent holders in litigation cases.
Neither Apple nor the developers who are being sued have offered comment on the litigation since it was filed. Google has not offered any comment on the litigation affecting Android developers.
Analysis: This is a gutsy move by Lodsys. Apple – a company notorious for lawyering up – sent them a pretty stern warning, and Lodsys basically called their bluff. However, it might not be as gutsy as we think. The suit isn’t against Apple, it’s against the developers themselves. Apple isn’t likely to pay developers’ costs in this; they’re going to do the bare minimum, and they’ll only do something if it keeps their noses – or more specifically, the viability of the App Store’s economy – clean. They’ll move with the full weight of their legal team only if they feel that the integrity of the App Store is in jeopardy.
What’s most telling is that Lodsys is specifically going after smaller developers who likely won’t be able to fight a protracted legal battle in an area of jurisdiction that has shown that it usually sees things in favour of patent holders. In short, they made sure – by basing their entire business (the business of patent litigation, enforcing patents that were purchased from one inventor) in Texas to begin with – that all of the advantages were weighted towards them in the first place. In short, this is nothing different than what Righthaven is doing: using litigation as the whole basis of their business model. The hope is that the companies being sued – again, tiny companies who cannot fight back without significant help – will capitulate and settle, which gets them not only money, but further sales any time an app is sold with that patent. In short, it’s the bully who’s threatening a swirlie in order to get lunch money, which in this case, they’re hoping establishes a precedent they can use against larger companies.
Personally, I don’t think it’s going to work. If Righthaven is the example, then it’s not a very good one. Once the courts see the circumstances, and the fact that this company established roots in Texas specifically to exploit them, I think the tenor is going to change. If it doesn’t, however, or worse, if Apple only makes token efforts to defend its developers, then it’s going to drive a lot of smaller developers out of mobile development. Who would want to pay the 30% fee to Apple or Google, knowing they’re likely going to get sniped by a patent troll based on something that is in the API provided to them by Apple or Google, knowing that those fees won’t get them any protection? Apple *must* defend their devleopers vigorously in this case. If they do, or at least assist in resources to get a good legal counsel for the affected defendants, then I think this case will fall apart like other patent/copyright troll cases before it.