Apple files motion to intervene in Lodsys suit against iOS developers
In an effort to protect its iOS developers, Apple has filed a motion to intervene in legal action taken by patent-holder Lodsys over App Store in-app purchases.
Apple's presence in the Lodsys complaints is pending court approval, but intellectual property activist Florian Mueller of FOSS Patents said he believes it's "fairly likely" that Apple will be admitted as an intervenor. In its filing, Apple asserted that its iOS developers are covered by an existing license agreement with Lodsys.
"The app developers whom Lodsys sued appear to be bound by a non-disclosure agreement (which makes sense), so they can't speak out on their current relationship with Apple," Mueller wrote in his blog on Friday. "While I don't have any confirmation from anyone that Apple has agreed to cover those defendants' costs and potential risks, it's hard to imagine how else this could work.
"In its motion, Apple states explicitly that the sued app developers 'are individuals or small entities with far fewer resources than Apple and [...] lack the technical information, ability, and incentive to adequately protect Apple's rights under its license agreement."
While developers aren't allowed to speak out on matters involving the Lodsys lawsuit, this week Apple began asking its iPhone and iPad developers about legal complications. Developers who access the iTunesConnect application management service have been asked, through a form titled "iCloud Legal Information," if they have any apps that "may have a legal issue." It has been assumed that the question pertains to the Lodsys complaints.
In May, iOS developers first began receiving legal threats from Lodsys, accusing them of patent infringement. The company has asserted that developers who utilize the in-app purchasing system Apple created for iOS software are in violation of U.S. Patent No. 7,222,078, entitled "Methods and Systems for Gathering Information from Units of a Commodity Across a Network."
Lodsys later revealed that while Apple is licensed for the patent in question, the company does not believe that the agreement in place extends to iOS developers. Last month, Apple initially responded by sending a formal letter to Lodsys, asking the company to cease legal threats against developers who utilize in-app purchases.
While Lodsys initially only threatened legal action against developers, giving them 21 days to comply with their requests, the company followed through on those threats last week, and filed lawsuits against iOS developers. 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, a rate that would amount to $5,750 per year for an application that makes $1 million in annual sales, the company has said.
This week, Michigan company ForeSee Results Inc filed suit against Lodsys seeking a declaratory judgment that would invalidate four of the company's patents. It said that Lodsys has "threatened assertion" against its customers, including Adidas, Best Buy and WE Energies.
Apple's presence in the Lodsys complaints is pending court approval, but intellectual property activist Florian Mueller of FOSS Patents said he believes it's "fairly likely" that Apple will be admitted as an intervenor. In its filing, Apple asserted that its iOS developers are covered by an existing license agreement with Lodsys.
"The app developers whom Lodsys sued appear to be bound by a non-disclosure agreement (which makes sense), so they can't speak out on their current relationship with Apple," Mueller wrote in his blog on Friday. "While I don't have any confirmation from anyone that Apple has agreed to cover those defendants' costs and potential risks, it's hard to imagine how else this could work.
"In its motion, Apple states explicitly that the sued app developers 'are individuals or small entities with far fewer resources than Apple and [...] lack the technical information, ability, and incentive to adequately protect Apple's rights under its license agreement."
While developers aren't allowed to speak out on matters involving the Lodsys lawsuit, this week Apple began asking its iPhone and iPad developers about legal complications. Developers who access the iTunesConnect application management service have been asked, through a form titled "iCloud Legal Information," if they have any apps that "may have a legal issue." It has been assumed that the question pertains to the Lodsys complaints.
In May, iOS developers first began receiving legal threats from Lodsys, accusing them of patent infringement. The company has asserted that developers who utilize the in-app purchasing system Apple created for iOS software are in violation of U.S. Patent No. 7,222,078, entitled "Methods and Systems for Gathering Information from Units of a Commodity Across a Network."
Lodsys later revealed that while Apple is licensed for the patent in question, the company does not believe that the agreement in place extends to iOS developers. Last month, Apple initially responded by sending a formal letter to Lodsys, asking the company to cease legal threats against developers who utilize in-app purchases.
While Lodsys initially only threatened legal action against developers, giving them 21 days to comply with their requests, the company followed through on those threats last week, and filed lawsuits against iOS developers. 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, a rate that would amount to $5,750 per year for an application that makes $1 million in annual sales, the company has said.
This week, Michigan company ForeSee Results Inc filed suit against Lodsys seeking a declaratory judgment that would invalidate four of the company's patents. It said that Lodsys has "threatened assertion" against its customers, including Adidas, Best Buy and WE Energies.
Comments
Hmmmmm could you get anymore specific?
"Methods and Systems for Gathering INformation from Units of a Commodity Across a Network."
Hmmmmm could you get anymore specific?
It's specific enough that Apple licensed it rather than litigating its validity--something that we know that Apple isn't averse to doing.
It's specific enough that Apple licensed it rather than litigating its validity--something that we know that Apple isn't averse to doing.
Except that the best information we have indicates that Apple licensed it under a blanket license that covers a large number of patents, meaning that they probably got the license for each individual patent pretty cheaply, making it not worth delving deeply into the validity of each.
In other words, you can't necessarily conclude anything about the patent's specificity or validity from the fact that it's licensed to Apple. I'm sure you know all this, so no reason to toss BS around on the forum.
Except that the best information we have indicates that Apple licensed it under a blanket license that covers a large number of patents, meaning that they probably got the license for each individual patent pretty cheaply, making it not worth delving deeply into the validity of each.
In other words, you can't necessarily conclude anything about the patent's specificity or validity from the fact that it's licensed to Apple. I'm sure you know all this, so no reason to toss BS around on the forum.
I just hope that this isn't a situation similar to the one where they licensed the use of overlapping windows and other System features to Microsoft many years ago for the purpose of Microsoft writing programs for Apple, but where the wording was not specific enough so that MS stole those features for Windows, and when Apple took them to court, they lost.
If that's the case with Lodsys's portion, then Apple could be in the right, but if Apple is wrong here, because of sloppy legal work, Lodsys could hold the cards.
We won't know this for a while.
Google would do the same thing for their devs, right? Right?!? (crickets chirping...)
Or they could wait until all the lawsuits are settled, and let their devs hang until then.
I just hope that this isn't a situation similar to the one where they licensed the use of overlapping windows and other System features to Microsoft many years ago for the purpose of Microsoft writing programs for Apple, but where the wording was not specific enough so that MS stole those features for Windows, and when Apple took them to court, they lost.
If that's the case with Lodsys's portion, then Apple could be in the right, but if Apple is wrong here, because of sloppy legal work, Lodsys could hold the cards.
We won't know this for a while.
This would be assuming that as painful a lesson that situation was, Apple learned nothing at all from the experience and are now poised to repeat the same clueless strategy that cost them so much. Given everything known about Apple from that time forward, are there any indications that they are capable of learning from their mistakes? That is the critical question to answer in order to understand whether or not they will be successful in challenging Lodsys on this.
Every indication mel, from the staffing they have hired over the last several years, to the lawsuits in which they have been involved indicate a track record of not only having learned but having advanced the capacity to deal with this successfully. Most of this has been followed assiduously here at AI...
Except that the best information we have indicates that Apple licensed it under a blanket license that covers a large number of patents, meaning that they probably got the license for each individual patent pretty cheaply, making it not worth delving deeply into the validity of each.
In other words, you can't necessarily conclude anything about the patent's specificity or validity from the fact that it's licensed to Apple. I'm sure you know all this, so no reason to toss BS around on the forum.
What are you talking about? The original comment pointed out that the title of the patent comes across as exceedingly broad. I was merely pointing out that Apple licensed it rather than litigating it, which leads one to believe that the actual patent itself is at least reasonably well done. I haven't read the patent, have you?
As to your point about a blanket license, that wasn't included in this story, was it? You're also suggesting that Apple's attorney's didn't do a very good job of vetting the patents that they were licensing, which I also doubt given the important to Apple and the iOS ecosystem of in-app purchasing. It certainly could be that the licensing cost was low enough that they decided it wasn't worth litigating, but I think's it reasonable to assume that the patent isn't ridiculous.
We could also see an attempt to invalidate the patent as a result of this, though it seems like the original decision to license it would work against Apple.
I think it's probably the case that patent holder knew going into the licensing agreement that they were going to try and do this, and did their best to write an agreement where it was possible. It may never have crossed Apple's mind that this would be an issue, and so we are where we are.
Lodsys has to have anticipated that Apple will get involved in this manner. I think that they probably have a pretty tight case, and I bet that Apple knows it too. Apple has no choice to get involved.
My hypothesis is that the best that they can do is to say to Lodsys, "this is going to cost a lot of time and energy to work out in court, sit back down at the table with us and we'll see what we can do about an extended licensing agreement." This is probably what Lodsys wants anyway. $5k on $1M in-app sales doesn't sound like enough money to me to be worth the added legal and bookkeeping fees to manage so many licensees. Getting a good agreement with Apple, which already manages all of the in-app purchases for their own reasons, would be much better for Lodsys in the long run.
As a side note, my opinion is that Apple is likely to get partially screwed in this one.
Lodsys has to have anticipated that Apple will get involved in this manner. I think that they probably have a pretty tight case, and I bet that Apple knows it too. Apple has no choice to get involved.
My hypothesis is that the best that they can do is to say to Lodsys, "this is going to cost a lot of time and energy to work out in court, sit back down at the table with us and we'll see what we can do about an extended licensing agreement." This is probably what Lodsys wants anyway. $5k on $1M in-app sales doesn't sound like enough money to me to be worth the added legal and bookkeeping fees to manage so many licensees. Getting a good agreement with Apple, which already manages all of the in-app purchases for their own reasons, would be much better for Lodsys in the long run.
Or Lodsys may just be betting on the ineptitude of our legal system. They are doing this out of Marshall, TX after all.
AFAIK, the only Android app included in the suit was written by an Apple developer who just happened to also have an Android version. And since Google hasn't mandated in-app purchasing as Apple has, Google's position may be different. Dunno. Suppose we'll all wait a while and find out.
...so if you write FIRST for Apple's platform, and THEN you write an app for Android, you aren't REALLY an Android developer, just an Android wannabe developer? Just curious if you were dismissing this developer ( and the hundreds of other developers who jumped on the Apple ecosystem first before turning around and bringing their apps to Android) because they weren't a "pure" Android/Android only dev.
Or Lodsys may just be betting on the ineptitude of our legal system. They are doing this out of Marshall, TX after all.
Maybe. Though they may just be aware of the potential for an invalidation attempt so have proactively filed there, knowing that it will be relevant to Apple's reaction. Does Apple really want to litigate a patent in East Texas, given the precedence they set when they licensed the patent originally? I don't think that East Texas is known as a hotbed for contract/licensing disputes.
It seems more plausible to me that they just want leverage with Apple to force a favorable renegotiation of the license agreement. It may also be the case that the existing agreement is so bad for Lodsys that they feel like it's worth the risk of having to pay Apple's lawyer fees for the suit if they lose (they'll still have the original licensing income).
That's why I love rumor sights. Anything could be true.
Maybe. Though they may just be aware of the potential for an invalidation attempt so have proactively filed there, knowing that it will be relevant to Apple's reaction. Does Apple really want to litigate a patent in East Texas, given the precedence they set when they licensed the patent originally? I don't think that East Texas is known as a hotbed for contract/licensing disputes.
It seems more plausible to me that they just want leverage with Apple to force a favorable renegotiation of the license agreement. It may also be the case that the existing agreement is so bad for Lodsys that they feel like it's worth the risk of having to pay Apple's lawyer fees for the suit if they lose (they'll still have the original licensing income).
That's why I love rumor sights. Anything could be true.
You think Lodsys is confident? You should see whom they sued.
As a side note, my opinion is that Apple is likely to get partially screwed in this one.
Lodsys has to have anticipated that Apple will get involved in this manner. I think that they probably have a pretty tight case, and I bet that Apple knows it too. Apple has no choice to get involved.
My hypothesis is that the best that they can do is to say to Lodsys, "this is going to cost a lot of time and energy to work out in court, sit back down at the table with us and we'll see what we can do about an extended licensing agreement." This is probably what Lodsys wants anyway. $5k on $1M in-app sales doesn't sound like enough money to me to be worth the added legal and bookkeeping fees to manage so many licensees. Getting a good agreement with Apple, which already manages all of the in-app purchases for their own reasons, would be much better for Lodsys in the long run.
I don't know, given everything reported so far, there are a couple of different scenarios playing out here - they may (like Nokia for example - and what I think you are alluding to here) be trying to leverage more money from the licensing they originally did with Apple for this. I don't think that they will be able to successfully argue the dev level suits as legitimate , but they were a means to the end of leveraging more money directly from Apple - its not a "tight case" for hitting the devs - but it is a clever way of getting Apple's attention. HOWEVER, it remains to be seen if Apple will allow this sort of blackmail to be successful - potentially then any IP holding org could go after the devs first to try to get a profitable response out of Apple. I think it is in Apple's best interest to publically make this a very painful experience for Lodsys, to prevent others from trying this same approach with them.
You think Lodsys is confident? You should see whom they sued.
I assume they sued people completely unable to defend themselves.
My point is that this is guaranteed to get Apple involved, and the only reason that I can see that Lodsys would want this is as leverage towards renegotiating a more lucrative agreement with Apple. Sorry if that wasn't obvious.
What are you talking about? The original comment pointed out that the title of the patent comes across as exceedingly broad. I was merely pointing out that Apple licensed it rather than litigating it, which leads one to believe that the actual patent itself is at least reasonably well done. I haven't read the patent, have you?
As to your point about a blanket license, that wasn't included in this story, was it? You're also suggesting that Apple's attorney's didn't do a very good job of vetting the patents that they were licensing. ...
No, I'm not suggesting anything of the sort. But, you are simply repeating yourself here, and the conclusions you are pushing are unsupported, so your comments are just rank speculation without foundation. That's what I'm pointing out.
I don't know, given everything reported so far, there are a couple of different scenarios playing out here - they may (like Nokia for example - and what I think you are alluding to here) be trying to leverage more money from the licensing they originally did with Apple for this. I don't think that they will be able to successfully argue the dev level suits as legitimate , but they were a means to the end of leveraging more money directly from Apple - its not a "tight case" for hitting the devs - but it is a clever way of getting Apple's attention. HOWEVER, it remains to be seen if Apple will allow this sort of blackmail to be successful - potentially then any IP holding org could go after the devs first to try to get a profitable response out of Apple. I think it is in Apple's best interest to publically make this a very painful experience for Lodsys, to prevent others from trying this same approach with them.
This is exactly what my fear is with all of this. This is nothing more than a form of Blackmail. I think it would be in Apple's best interest to go after Lodsys with all guns blazing, and just blow them out of the water. Also, it may set a precedent to help stop some of these "obvious" patents from being used as a way to extort money. That last part is wishful thinking, but one can hope.... Right??
I don't know, given everything reported so far, there are a couple of different scenarios playing out here - they may (like Nokia for example - and what I think you are alluding to here) be trying to leverage more money from the licensing they originally did with Apple for this.
This is the only thing that makes sense to me.
I don't think that they will be able to successfully argue the dev level suits as legitimate , but they were a means to the end of leveraging more money directly from Apple - its not a "tight case" for hitting the devs - but it is a clever way of getting Apple's attention.
Well, knowing that Apple---and their expensive lawyers---will be involved, and their reputation of begin both aggressive and competent, my guess that they must be fairly confident.
HOWEVER, it remains to be seen if Apple will allow this sort of blackmail to be successful - potentially then any IP holding org could go after the devs first to try to get a profitable response out of Apple. I think it is in Apple's best interest to publically make this a very painful experience for Lodsys, to prevent others from trying this same approach with them.
I agree completely. And unless Lodsys is run by a bunch of idiots, they know this too. Which is where my hypothesis that Apple is likely to get screwed here came from. Though the "any IP holding org" is probably too strong, it's just the ones that hold patents on the fundamental techs that are part of the iOS ecosystem that are an issue for Apple, e.g., Apple wouldn't get involved if someone sued a voice-recognition app because it uses a patented algorithm, etc.
No, I'm not suggesting anything of the sort. But, you are simply repeating yourself here, and the conclusions you are pushing are unsupported, so your comments are just rank speculation without foundation. That's what I'm pointing out.
You're pointing out that I am just speculating on a sight that specializes in speculation about Apple? I'm sure everyone thanks you for your vigilance.
Also you seem to have overlooked the fact that my original post had nothing to do with Lodsys, but was merely pointing out that you can't tell much about a patent from its title, and that we have circumstantial evidence that it was a legitimate patent, given that Apple licensed it (even as part of a batch).
The part about Lodsys' motivation and Apple's predicament are obviously complete speculation on my part.