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Summary:

Patent troll Lodsys became infamous after it extracted a license from Apple but then turned around and sued small iOS app developers for including features like “in-app purchase” in their products.

Norwegian Troll
photo: Flickr / Jacob Bøtter

Patent troll Lodsys became infamous after it extracted a license from Apple only to turn around and sue small iOS app developers for including features like in-app purchasing in their products. But one startup is now taking a stand and has asked a federal court to examine the case.

Lodsys, a shell company that doesn’t do anything but file lawsuits, appears undeterred by the pressure from Apple or by popular contempt. This month alone, it used the same patents to sue dozens more companies, including names like Dell, Rosetta Stone and Overstock.com. Last month, a federal court finally gave Apple permission to intervene in one of the lawsuits and argue that its own license should protect the app developers.

But it appears that Lodsys is continuing its shakedown of small app makers by offering them a “licensing solution” they can’t refuse in return for a share of their royalties. The troll’s latest antics came to light this week after a brave Seattle app maker, A Thinking Ape, refused the shakedown and instead asked a federal court to declare that apps like “In Your Dorm” don’t infringe the patents.

The complaint by A Thinking Ape lists Lodsys’ campaign of lawsuits against everyone from the New York Times to Wolfram Alpha and sums up the nature of the racket:

Defendant does not create products; it solely engages in aggressive litigation tactics to compel licenses of their AssertedPatents from companies that do produce products.

A handful of other developers have tried to stand up to Lodsys in the past but most capitulated soon after and agreed to pay the troll a tax (rumored to be 2.5 percent of revenues).

The Soul of a Patent Troll

Patent trolling took off after the U.S. Patent and Trademark Office began issuing a flood of questionable “business method” patents related to things like software and, believe it or not, a crustless peanut butter and jelly sandwich. In 2006, lawyers used such a patent to threaten Research in Motion with an injunction against the BlackBerry and extract a $612 million payout.

Lodsys appears to have perfected the art. The troll has been sending identical threat letters (you can see one below) that extol the virtues of patent developer Daniel Abelow. The letter explains that “Dan” has been to several Ivy League schools and “an independent consultant on presenting information via the internet.”

So who is this latter-day Ben Franklin? Here’s a shot from his homepage:

Dan repeatedly describes himself as an “inventor” but it doesn’t appear he has any training in science or engineering. An average person would be as likely to call Dan an inventor as they would call former Yahoo CEO Scott Thompson a computer scientist.

But given the state of the patent system, it appears we’re stuck with the likes of Dan for a while. Or at least until courageous app developers or Apple can flush Lodsys and its shadowy backers from the patent system once and for all.

Here’s a typical Lodsys letter. Scroll down to see Dan’s marvelous inventions in action:

Lodsys Letter Copy

  1. Jeff Kibuule Tuesday, May 22, 2012

    Honestly, stuff like this needs to stop.

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  2. I’m not a violent guy, but honestly, that photo sort of makes me want to punch him in the kisser.

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  3. The problem is the patent system. If SIMPLE software ideas or algorithms like synchronizing notifications can be patented and restrict companies … then the whole system is outdated and laughable. Its broken and nee to adopt a more modern rules and mind set.

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  4. Here is a factual correction. RIM was actually sued, there was a jury trial, and the jury ruled against RIM. Final settlement came only when RIM faced a permanent injunction.

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  5. Are you perhaps a little out of line on Mr. Abelow? The Lodsys website says this “Abelow does not receive any revenue from the licenses granted by the patents new owners”. The website also says that he did not have any licensees when he sold the patents to Lodsys. Creativity should be recognized (patents granted) and respected. I don’t have the expertise to fully understand whether the patents should have been granted, but the fact is that they were and whoever holds them has a property right that in this country must be respected.

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  6. As a patent owner and software developer, I want to see a higher bar set by the USPTO on patentable inventions with further narrowing of claims and a fast and inexpensive way to invalidate bad patents on prior art and obviousness. Though, the courts may also help. A federal judge threw out a case by Kelora, another troll, against several e-tailers and is requiring Kelora to pay the legal expenses of the defendants, a rare move that could cost Kelora millions.

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  7. The peanut butter and jelly sandwich patent is not just a crustless sandwich – read the damn claims. And its not a business method patent. Neither were the patents used against RIM. Nor are the Abelow patents. And Thomas Edison was a drop out so he wasn’t an inventor either. Seriously, it seems every single word written about patents on the Internet is selected to get the facts exactly wrong and make readers dumber.

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  8. Patents are useless. Get rid of them and u see technology and society leap lightyears in no time. Those who produce the best product to the best price win. The only thing protected should be tradenames of products that are actually sold.

    China didnt care JACK for the last 30 years on patents. Look what they archieved in this 30 years.

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