Lodsys vs. Apple Devs: EFF helps us dig deeper

The developers targeted by Lodsys’s patent infringement accusations last week has been in a sleepless holding pattern, awaiting response from Apple before making their next moves. Electronic Frontier Foundation (EFF) staff attorney Julie Samuels says that Apple legal is probably going hard at work reviewing the patent in question, however, and may be in contact soon. Though it is very unlikely that Cupertino won’t offer assistance, devs can also be ready to turn to EFF for advice, where they could also be paired with pro bono patent attorneys. Besides offering this little bit of excellent news, Samuels was ready to help us dig deeper into Lodsys , and the dirty business of patent suits. To get some perspective, we reached out to Lodsys CEO Mark Small and EFF (which tends to side with developers). We now have yet to listen to back from Mr. Small, but EFF was kind enough to provide us its tackle the location. Click through for the complete rundown.

The Origin of U.S. Patent 7,222,078

We’ve only been in a position to confirm a couple of details here, as a result of mysterious nature of patents and shell corporations. U.S. patent 7,222,078 was born on December 10, 2003, when an application was filed by inventor Daniel Abelow. He owns a Florida-based consulting firm called Breakthrough Usability, Inc., and his patents are currently owned by Webvention, LLC, in line with his website. He’s the last person who we’re ready to trace this patent to. According to U.S. patent documents, a Las Vegas-based company called Ferrara Ethereal, LLC currently holds the patent. And, as we already know, Lodsys, LLC — a 3rd party that does not appear at the patent — is pursuing the infringement to that end. Each LLC (Limited Liability Company) is extremely easy to create, and Lodsys clearly threw its website together overnight (the domain was registered in 2009, using a bogus address and telephone number), so it isn’t yet clear who attorneys are reporting to. These companies fit the patent troll mold, however, meaning that they own patents and license them, in place of use them for research or to make a product. (Because “patent troll” is a pejorative term subject to interpretation, we’ll seek advice from these as “non-practicing entities,” instead.)

Apple’s Patent License

Consistent with a post at the Lodsys blog, “Apple is licensed for its nameplate services and products.” So is Google, and Microsoft, the firm claims. Apple’s decision to license the patent shouldn’t be viewed as any indication that the patent is applicable as a result, however. Rather, the corporate may need decided to license the patent because it was cheaper to pay a fee than to run the dangers of litigation, as is usually true with intellectual property (IP) cases. Additionally it is possible that Apple licensed the patent for an additional product, unrelated to iOS. Samuels expects Apple to present its full support to developers targeted by Lodsys, even perhaps extending its license to hide them.

EFF’s Julie Samuels explains:

The truth that Google and Microsoft and Apple have taken licenses in this already doesn’t say that the patent is a brilliant patent, however it does show that sooner or later Apple decided it was more financially beneficial to take the license than to litigate. Because Apple has already made that value judgement before, they could make it again.

What Lodsys Wants

Though it’s obvious that potential licensing fees are motivating Lodsys, it isn’t clear why the firm is targeting individual developers. Fees of 0.575 percent would add up if paid by a handful of developers, but even then, they hardly seem definitely worth the hassle and expense for Lodsys, let alone the entire bad publicity. For instance, if developers usher in $100,000 in annual gross revenue from an affected app (and in accordance with what we’ve heard from devs, even this figure is inflated), Lodsys would collect $575 per year, per app, assuming these developers continue to supply in-app upgrades (and people who do, also elect to buy a license from Lodsys). It also includes possible that Lodsys already reached out to Apple, asking the corporate to increase its license to hide third-party developers, by which case Lodsys may simply be using the letters sent last week to pressure Cupertino into signing an agreement. While purely speculative, that plan could easily backfire, however. “Apple might litigate because they wish to teach developers that they have got their back,” Samuels said.

Apples and Oranges

EFF sees intellectual property cases day after day, though it recognizes that elements of this example peculiarly are unique. Cases like this don’t often receive this level of attention, especially after they don’t visit trial (and patent cases very rarely do visit trial). Additionally, it’s rare for a plaintiff to defend its actions publicly, but Apple’s involvement has made this front page news, pressuring Lodsys to succeed in out through its blog. Additionally it is very unusual that Apple’s licensing agreement doesn’t cover third-party developers, Samuels said. Since Apple provides the framework (and takes a 30 percent cut of profits), iOS developers should feel safe using the dev tools without caring about infringing patents that haven’t been licensed. Unfortunately, that does not mean they would not be held accountable if an infringement case went to trial. As it must provide a secure development environment, however, it sure looks like Apple should take the lead on a defense or licensing solution, or risk losing its devs.

Wrap-Up

Though we may never know exactly what motivated Lodsys to focus on individual developers, we are hoping that Apple offers to assist, providing assurance that future cases may be handled swiftly and directly. This action would go away developers with the resources essential to continue innovating, in preference to wasting their time worrying about infringement accusations from non-practicing entities. Apple’s framework was provided by Apple, and while the corporate will not be legally accountable for protecting developers, those relationships are critical to maintaining — and continuing to grow — a healthy, solid infrastructure.

P.S. We just received word that Iconfactory (Twitterific) received a letter from Lodsys today.

Source

This post is tagged: electronic frontier foundation, limited liability company, llc limited liability, llc limited liability company, Patent Infringement, shell corporations