Summary:

Apple filed a motion to intervene in the lawsuit against seven small app developers started by patent holder Lodsys on June 9 related to the use of in-app purchases. If granted, Apple would be added to the Lodsys suit as a defendant and counterclaim plaintiff.

in-app-purchase

Apple has made its move in support of the seven small app developers sued by Lodsys over in-app purchases in U.S. District Court, Eastern District of Texas on May 31, filing a motion to intervene in the proceedings on June 9 according to FOSSpatents’ Florian Mueller. If granted, Apple would be added to the Lodsys suit as a defendant and counterclaim plaintiff.

Mueller believes that even though Lodsys may oppose Apple’s motion to intervene, the Mac maker is likely to be admitted as a defendant, in which case it has already submitted its answer to Lodsys’ complaint of infringement, and its counterclaim. Apple also cites a number of other precedent-setting similar cases where tech companies were allowed to intervene in patent disputes, which back up and strengthen its motion. If Apple joins as a defendant, Mueller thinks it’s very likely it will take on any legal costs incurred by its developer partners.

Apple’s answer to the Lodsys complaint basically echoes what Apple General Counsel Bruce Sewell said in a public letter from the company to Lodsys, claiming Apple is licensed to use the patents, and that the license “expressly permits Apple to offer and otherwise make available to its Developers products and services that embody the inventions contained in the patents in suit.” Apple’s argument rents on the doctrines of patent exhaustion and first sale, which would allow the products and services provided by Apple to developers to be used free of any patent infringement claims. As Mueller has noted before, it isn’t necessarily an airtight defense against the claims made by Lodsys, but Apple appears to be sticking with it, rather than trying to invalidate the four patents held by Lodsys, as analysts firm ForeSee Results Inc. is attempting.

I talked to Mueller about why Apple is sticking so closely to this defense. He said, “Apple does a lot of inbound patent licensing,” and the Lodsys patents are actually part of a batch of “30,000 other patents from Intellectual Ventures” that it also licensed, and Apple also “regularly does license deals with many others.” It’s key that Apple win on these grounds, then, to avoid being made to pay twice for patents already licensed in other cases, too. In fact, as mocoNews points out, Apple states upfront that this case could have tremendous impact on its fortunes, when it says in its filing that “Apple’s interest is direct, very real, and of extraordinary importance to the continued success of Apple’s business.”

When asked how far he thinks this might escalate, Mueller said that while “usually the most probably outcome would be a settlement,” in this case it’s “possible that Apple makes this a matter of principle, with a view to many other cases in which patents that Apple has licensed might be asserted against iOS developers.” Apple would then want to score a precedent-setting win against Lodsys, rather than just agree to pay a settlement to make it quietly go away, in which case others could come calling looking for double-dip license payouts.

Since Lodsys clearly seems to have targeted small developers first in a district court that appears to decide quickly and historically favor patent holders with the aim of overwhelming the developers, it’s great to see Apple support those developers in a way that also offsets their financial burden. Mueller points out that one Android app is included in the current lawsuit, and Google has yet to act. “It’s important that Google make this a matter of principle and defend, alongside Apple, [...] and clarify what it will do if other Android app developers also get sued,” Mueller says.

Any company that depends on the support of third-party developers and makes use of software development toolkits will want to watch this case closely, because the outcome could have a significant impact on development as a whole.

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