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Summary:

The best course of action for iOS developers faced with patent infringement suit threats issued by patent holding firm Lodsys earlier this month might be to play nice with licensing requests, according to one intellectual property researcher. It might be the only affordable course of action.

in-app-licensing

UPDATE: Apple has now issued a formal response to Lodsys, and indications are that developers should hold off agreeing to the Lodsys licensing agreements for now. Apple seems intent on taking a hard line with Lodsys, which is great news for developers.

The best course of action for iOS developers faced with patent infringement suit threats issued by patent holding firm Lodsys earlier this month might be to play nice with licensing requests, according to one intellectual property researcher. Florian Mueller, who runs the FOSS Patents blog that posted an in-depth FAQ for concerned developers last week, says that indicating a willingness to play nice with Lodsys could be far less costly than the alternative, in the long run.

Apple has yet to provide any official response as of this writing, and as Mueller points out, the 21 day consideration period Lodsys extended to developers is nearing its end, at least for those who received their notices first. It’s not guaranteed that Lodsys will begin legal proceedings once this grace period expires, but if the patent holder is serious about its claims, then a lawsuit is the next logical step. Mueller doesn’t want developers to agree to licensing deals sight unseen, he told me via email, but he does think the best course of action is threatened developers to get “Lodys to show [them] its proposed agreement, and to take it from there.” He argues though “chances are that Lodsys’s license agreement doesn’t contain anything particularly dangerous,” it’s still something that “must be reviewed by lawyers.”

Mueller argues that small developers could find themselves facing the very costly prospect of trying to mount a legal defense against a patent infringement claim, which, according to one lawyer speaking to MacWorld, could cost over $1 million in legal fees. Even if an initial defense is successful, Lodsys can and probably will appeal the decision and drag out the process by bringing it before higher and higher courts.

Developers risk confusing concrete legal threats with immediate, real-world consequences with moral and ethical considerations, Mueller warns. Devs may feel strongly that Lodsys is wrong, and that its behavior constitutes patent trolling, but that doesn’t mean you have the funds required to defend that belief. The harsh reality is that even if you end up paying Lodsys the full 0.575 percent cut it’s demanding from developers, you’ll still probably be far better off than had you chosen to mount a legal defense and taken this to court. Which, of course, is precisely the basis of the Lodsys business model: Threaten to sue and make the alternative much cheaper.

As for how developers can go about reaching a favorable agreement with Lodsys, if it comes to that, Mueller suggests that “developers share the cost of legal advice in connection with the proposed license agreement.” He says that more than a dozen of those targeted are already in contact and, that those devs should “share intelligence and [...] jointly analyze Lodsys’s proposed agreement,” but that ultimately, the costs associated with U.S. patent litigation are too high even for a combined effort mounted by small developers. Mueller sees no “alternative to a license deal unless Apple steps up to the plate,” he told me. Even the EFF made clear in its statement last week that while it disapproves of Lodsys’s actions, Apple is in the driver’s seat in this case.

In the long run, acquiescing to Lodsys’ demands means that developers are setting up the App Store model to die by a thousand cuts, since it means other patent holders can make similar claims on those using software tools provided by Apple and others as part of software development kits. But that’s a concern for Apple, Google and the other huge and powerful multinational companies that can afford to take a stand. Developers need to think about staying in business right now, and unfortunately, sometimes that means absorbing a few body blows so you can avoid the knockout punch.

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  1. David HM Spector Monday, May 23, 2011

    One small problem.. Apples developer agreement FORBIDS developers to enter inter agreements around technologies that Apple delivers as part of its offerings. Ie., if you sign an agreement with Lodsys because Apple is violating Lodsys’s patent by providing you with an in-app purchase capability you are violating the apple developer agreement.

    Apple needs to take the lead and get Lodsys’s bogus patents revoked, or pay up on behalf of all developers.

    1. Wonder what makes you think Lodsys’s patent is bogus and in the same breath you say Apple needs to pay on behalf of all developers? Why pay if its bogus?

      1. Well, that’s my point, really.. Apple is the true target Lodsys is going after — developers are just using Apple’s in-app purchase infrastructure; so they (Apple) either need to work on getting this patent revoked and indemnify all AppStore developers until it is, or if the patent is upheld, they need to pay for it on behalf of developers.

        If developers are responsible for patents inside of products made by other organizations, it’ll just be a matter of time before indie devs get sued because their software runs on hardware that uses a patented chipset (like a wireless chip) that used a patented antenna design, etc… its a never ending problem that the actual developers in reality should have no part of….

      2. To the article writer, “The harsh reality is that even if you end up paying Lodsys the full 0.575 percent cut it’s demanding from developers, you’ll still probably be far better off than had you chosen to mount a legal defense and taken this to court.”

        So why is giving in to highway robbers the best thing.???

        The developer is using Apple software to write software, which only Apple can present and collect money for. The developer gets a fee (70% of charge that Apple collects). Just where does Lodsys think that the developers are doing anything wrong. They must use Apple software for in app purchases and only Apple can post the app.

        Greed, just unbridled greed. Its just scary.

        en

    1. Darrell Etherington David Doran Monday, May 23, 2011

      Thanks David. Check out the updated story for more on that Apple letter you linked to. Great to see Apple helping out with this.

      1. It seems developers are shielded – However, just because Apple says they are doesn’t mean they actually are. Apple hasn’t said it’s legally indemnifying developers against actual lawsuits from Lodsys — we’ll see how far Lodsys wants to take this game of chicken.

        However, this is just the opening salvo in this war:

        http://macindie.com/2011/05/apple-stands-up-will-it-be-enough/

        It’s going to get a lot uglier really soon.

  2. patent litigation Monday, May 30, 2011

    Apple pretty much had no choice except to come out swinging on behalf of its developers. The company’s been under so much pressure and scrutiny about this that, had it not defended the developers, its image would have suffered terribly, perhaps irreparably. That said, however, I’m glad Apple finally did step up to the plate. Hopefully, Apple’s actions will make Lodsys and other trolls think twice about trying to take out one-man app shops and other “easy targets” via patent litigation — especially those that have big guns on their side.

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