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Lodsys reports momentum in licensing of in-app purchasing patent

post #1 of 21
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A pair of blog postings to Lodsys Group's website on Monday offer a brief update regarding the company's ongoing patent licensing disputes against app makers over certain in-app purchasing inventions, and claim more developers are buckling to the firm's demands.

Lodsys, a non-practicing entity which has been asserting four patents it purchased from another so-called "patent troll" Intellectual Ventures against app makers, said that an increasing number of developers are licensing rights to its portfolio.

According to the blog post first discovered by MacRumors, over 150 companies "obtained the rights to use the Lodsys Group patent portfolio" as of Oct. 8, with "more than 4 out of 5 of these companies have entered into licenses outside of the litigation process."

"These companies have realized significant savings by taking advantage of lower licensing rates," the blog reads.

Lodsys first leveled its purchased patents against iOS developers in May 2011, sending legal complaints accusing the app makers of infringing upon technology related to in-app purchases. The firm followed up the original claims with number of subsequent filings, moving from small companies to large developers like Rovio and Electronic Arts. Many companies have given in to Lodsys' demands, as legal fees associated with patent litigation are usually more costly than settling out of court or licensing the technology outright.

Lodsys


A separate blog entry posted on Monday noted that the U.S. Patent and Trademark Office confirmed on of its patent's key claims, effectively shooting down Google's attempt to have the property invalidated.

Also mentioned was the status of Apple's intervention:

The Court has allowed Apple to participate to try to make the case that their license rights for Apple products extends to the products of unrelated third party developers. [?] The dispute about the scope of Apple's license rights extending to 3rd parties remains unresolved and clearly contested. This is irrespective of Apple?s unilateral declarations to the contrary and their insistence that the documents that underlie the issue remain shrouded in secrecy to prevent application developers and others from determining the scope of Apple?s license for themselves.


In June 2011, Apple filed a motion to intervene in the patent-holder's suit, claiming an agreement between itself and Lodsys protected iOS app developers by what is called patent exhaustion. The motion was granted in April, though the amount of time and resources Apple plans to dedicate to the litigation remains unclear.

Lodsys is confident that its patents will be validated through ongoing in-court proceedings which are "now swiftly moving forward," and a trial regarding the matter is scheduled for 2013.
post #2 of 21
I'd simply offer several different levels of apps rather than go the in-app purchase route. Example: Standard and Pro.

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post #3 of 21
Quote:
Originally Posted by SpamSandwich View Post

I'd simply offer several different levels of apps rather than go the in-app purchase route. Example: Standard and Pro.

There are many apps where that simply isn't feasible.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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post #4 of 21

this is what wrong with the patent system. Many crying about the samsung suit, imo that is what patents are for. But patent trolling should be illegal. Patents should be invalidated when not being used and litigation does not count as use.

post #5 of 21
Originally Posted by geoadm View Post
Patents should be invalidated when not being used and litigation does not count as use.

 

Hmm… I want to agree with part of your take on this, but "invalidated" is far too strong.

 

How's this for something better: Patents not in use cannot be sued over, but still must be licensed or sold if others wish to use them. The owner does not have to license or sell the patent.

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post #6 of 21
Microsoft just released an iOS game called Tentacles, it has another game as an in App purchase.

I wonder when Lodsys will sue them?
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post #7 of 21
Quote:
Originally Posted by Tallest Skil View Post

 

Hmm… I want to agree with part of your take on this, but "invalidated" is far too strong.

 

How's this for something better: Patents not in use cannot be sued over, but still must be licensed or sold if others wish to use them. The owner does not have to license or sell the patent.

 

yeah thats a better idea but the licensing still feeds trolls, although if they cant sue why would you bother paying a license

post #8 of 21
Quote:
Originally Posted by hill60 View Post

Microsoft just released an iOS game called Tentacles, it has another game as an in App purchase.
I wonder when Lodsys will sue them?

I'd like to see them try and get the smack kicked out of them.

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post #9 of 21
Originally Posted by geoadm View Post
yeah thats a better idea but the licensing still feeds trolls, although if they cant sue why would you bother paying a license

 

Because you need the tech. 

 

If my post becomes what is done, then really intelligent people will be able to patent spectacular stuff that they can't afford to build, which they can then sell to the people who CAN build it (instead of just suing them, which is ludicrous), bettering both parties.

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post #10 of 21

If memory serves- apple was granted a patent that clearly dictates in app purchasing technology, whiles the lodsys patent clearly outlines an ancient fax machine.

 

If you are going to be a patent troll, shouldn't your patent be explicit about the technology you are suing for (in the least)? This is plainly the assertion of a useless patent on the string of a hope that small developers will cave and pay their extortion like tax or pay legal bills into oblivion.

 

And more so, get as much money as possible until this sham is put to bed.

post #11 of 21
Quote:
Originally Posted by Tallest Skil View Post

Hmm… I want to agree with part of your take on this, but "invalidated" is far too strong.

How's this for something better: Patents not in use cannot be sued over, but still must be licensed or sold if others wish to use them. The owner does not have to license or sell the patent.

I thoroughly disagree. Companies should be allowed to choose whether to license nonSEP patents regardless of their current use. And if someone else is using said invention they should be allowed to sue. Otherwise you might as well side with Googles 'if its popular its a defacto standard and the owners can't keep it from the rest of us or charge for it' arguments. 90% of the patents from any major company aren't currently being used by said company but its still nonSEP and they don't necessarily want others copying it. Especially if its something still in development. But you would have them forced to put it out for use against their wishes

What these 'trolls' shouldn't be allowed to do is threaten users in this way once an umbrella group has made a claim of exhaustion. The courts should freeze all claims pending a decision on said argument. Perhaps requiring some kind of bond for the possible fees would be in order, but from Apple. Since they claim they covered that issue make them bond the missing fees and pay for all 'damages' from all iOS developers using said patent. Then if they are in error and the use wasn't covered Apple pays for their error in saying otherwise. But if Apple is correct then these developers will likely have to sue etc to get back the unlawful double dipping money from Lodsys. Freezing such payments would prevent that.
Edited by charlituna - 10/9/12 at 9:29am
post #12 of 21
Quote:
Originally Posted by MacRR View Post

If memory serves- apple was granted a patent that clearly dictates in app purchasing technology, whiles the lodsys patent clearly outlines an ancient fax machine.

 

 

Memory does NOT serve. Apple has no such patent. They licensed the patent from the company that Lodsys bought if from, with, Apple claims, exhaustion terms protecting those that use Apple's SDK for IAP. 

 

But Lodsys is not honoring the exhaustion and going after the developers, many of whom can't afford to be sued cause they are two guys in the basement type groups so they are giving in to demands when perhaps they shouldn't have to. 

post #13 of 21
Quote:
Originally Posted by Tallest Skil View Post

 

Because you need the tech. 

 

If my post becomes what is done, then really intelligent people will be able to patent spectacular stuff that they can't afford to build, which they can then sell to the people who CAN build it (instead of just suing them, which is ludicrous), bettering both parties.

 

No, if your post becomes what is done then I will come up with a great invention, patent it and while I'm raising the money to use it, you'll come along and copy it and make a fortune and I can't do crap cause I can't sue you since I'm not using it. You know this so when I come to you telling you that you need to license it cause it's my invention, you'll tell me to get bent. 

post #14 of 21
Originally Posted by charlituna View Post
No, if your post becomes what is done then I will come up with a great invention, patent it and while I'm raising the money to use it, you'll come along and copy it and make a fortune and I can't do crap cause I can't sue you since I'm not using it.

 

No, you'd have the patent. I couldn't possibly use it. 

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post #15 of 21
Quote:
Originally Posted by charlituna View Post

 

Memory does NOT serve. Apple has no such patent. They licensed the patent from the company that Lodsys bought if from, with, Apple claims, exhaustion terms protecting those that use Apple's SDK for IAP. 

 

But Lodsys is not honoring the exhaustion and going after the developers, many of whom can't afford to be sued cause they are two guys in the basement type groups so they are giving in to demands when perhaps they shouldn't have to. 

My mistake- I thought patent http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.html&r=1&f=G&l=50&s1=%2220110246290%22.PGNR.&OS=DN/20110246290&RS=DN/20110246290 had been granted? oops. 

 

But to compare that patent to the lodsys patent http://www.google.com/patents/US7222078

 

It's a joke.

post #16 of 21
Quote:
Originally Posted by charlituna View Post

 

Memory does NOT serve. Apple has no such patent. They licensed the patent from the company that Lodsys bought if from, with, Apple claims, exhaustion terms protecting those that use Apple's SDK for IAP. 

 

But Lodsys is not honoring the exhaustion and going after the developers, many of whom can't afford to be sued cause they are two guys in the basement type groups so they are giving in to demands when perhaps they shouldn't have to. 

 

Unless of course you have an Android app, in which case you're just screwed. Google does not have a license for Android, so there's no exhaustion, and all they've done is ask for a reexamination of the patents, which isn't a good bet for relief.

 

But, yes, generally, Lodsys' tactics amount to little more than armed robbery when they are going after iOS developers. Hopefully, when they eventually lose the suit Apple is involved in on behalf of iOS developers, they'll have to at least forfeit any ill-gotten gains.

post #17 of 21
Quote:
Originally Posted by Tallest Skil View Post

 

Hmm… I want to agree with part of your take on this, but "invalidated" is far too strong.

 

How's this for something better: Patents not in use cannot be sued over, but still must be licensed or sold if others wish to use them. The owner does not have to license or sell the patent.

 

So what happens when someone just copies the tech anyway, without paying?

 

Quote:
Originally Posted by charlituna View Post

 

No, if your post becomes what is done then I will come up with a great invention, patent it and while I'm raising the money to use it, you'll come along and copy it and make a fortune and I can't do crap cause I can't sue you since I'm not using it. You know this so when I come to you telling you that you need to license it cause it's my invention, you'll tell me to get bent. 

 

Right.

 

Quote:
Originally Posted by Tallest Skil View Post

 

No, you'd have the patent. I couldn't possibly use it. 

 

Huh?  Tallest Trol?

 

~~~

 

I don't think there is anything wrong with companies that buy patents and then license, trade, or otherwise enforce them.  This is a fantastic service for poor inventors to sell their patents.  As someone else in this thread pointed out, the problem is where Lodsys is ignoring claims of exhaustion to strong-arm small developers.  If Apple correctly licensed to exhaustion, then these developers need to be protected.

 

I had been personally studying to develop apps but threw in the towel as a result of these proceedings.  It's not worth the risk, not when the business model I had planned relied heavily on in-app purchases.

post #18 of 21
Originally Posted by brutus009 View Post
So what happens when someone just copies the tech anyway, without paying?

 

They are then made, by a body in charge, to pay for a retroactive license for the tech they have used. 

 

Huh?  Tallest Troll?

 

I fail to see what was contradictory to what I'd said before.

 

Maybe I just expect people not to be complete idiots about this sort of thing. When you see something you want to use has been patented, you license it or buy it from the owner. That just seems like a no-brainer to me. If so, that's my fault. I don't see why the "entire patent system needs reformed/destroyed", but I'm definitely willing to look at ways of improving the system as it is.

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post #19 of 21
Quote:
Originally Posted by Tallest Skil View Post

 

They are then made, by a body in charge, to pay for a retroactive license for the tech they have used. 

 

 

And what compels this body in charge to enforce such a thing?

 

Quote:

Originally Posted by Tallest Skil View Post

I fail to see what was contradictory to what I'd said before.

 

Maybe I just expect people not to be complete idiots about this sort of thing. When you see something you want to use has been patented, you license it or buy it from the owner. That just seems like a no-brainer to me. If so, that's my fault. I don't see why the "entire patent system needs reformed/destroyed", but I'm definitely willing to look at ways of improving the system as it is.

 

 

Your statements are terribly short-sighted and assume that everyone plays fair and will never make a mistake.  I do not speak to reform here, but simple logic.

 

What if someone never sees your patented thing but unwittingly implements the same solution?

What if you even try to verify that what you're doing isn't patented but fail to find the existing patent and go ahead thinking you're in the clear when, in fact, you aren't?

What if the "body in charge" accidentally grants a patent that is ambiguously similar to an already existing patent?

What if someone willfully copies your stuff and says they didn't copy you?

 

How does a body in charge decide who's right, what's fair, and how to proceed?  Do you think that we should pay some "body in charge" to constantly police every tiny bit of manufacturing to ensure that nobody is copying?  My god, the nation would grind to a halt.  Companies police their own products and, when they find someone doing something that they think is wrong, they sue them.  That's the only way this body in charge knows that something is wrong and that's the only way they can do something about it.

 

So your basic argument is that people shouldn't do anything wrong and they shouldn't make mistakes either.  I sort of agree, or at least it sounds nice, but it's ridiculous.  Totally implausible.  The system you describe in your first statement only works because people can sue.

post #20 of 21
Originally Posted by brutus009 View Post

What if someone never sees your patented thing but unwittingly implements the same solution?

What if you even try to verify that what you're doing isn't patented but fail to find the existing patent and go ahead thinking you're in the clear when, in fact, you aren't?

What if the "body in charge" accidentally grants a patent that is ambiguously similar to an already existing patent?

What if someone willfully copies your stuff and says they didn't copy you?

 

Then you do what they do now: show proof of independent development.

Then you do what they do now: show proof of independent development.

Same as what happens now: the patents are brought before a board (call it a jury, even) and that is deliberated. If they're unambiguously similar, both stay. If not, the original patent is granted future rights and the second, if proven at fault of the body in charge, remains valid for implementations put into place before the decision was made.

Apple v. Samsung showed us what happens then. 

 

Companies police their own products and, when they find someone doing something that they think is wrong, they sue them.  That's the only way this body in charge knows that something is wrong and that's the only way they can do something about it.

 

Like I said, I don't necessarily want the system to change very much. But the people that make patents just to sue others for using them after 19 years, 11 months, and 29 days need reined in (forced to ask for licensing prior to lawsuits), as do the ambiguous similarity patents. 

 

Someone really just needs to come up with a system* for intelligently, automatically searching through this stuff. What are we up to now, 7 million? And how many of those remain active? Still way too many for 9,000 people to go through by hand. Until there's an easier way to answer questions of previous patenting and similarity, it doesn't matter how many reforms there are if that many patents exist. 

 

*and NOT PATENT IT

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post #21 of 21

It's particularly disconcerting when you realize there may be a single software patent out there somewhere that could be almost impossible for Apple to work around, and perhaps even owned by someone who has no intention of licensing it.  Worse yet they could go to court and demand an injunction on all iOS devices using that protected IP. . . and get it! All over one single software patent out of 10's of thousands.

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