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Another Apple In-App Purchase Woe: Developers Hit With Patent Complaints

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Apple’s in-app purchasing system has been raising controversy among some developers unhappy with the 30 percent cut that Apple (NSDQ: AAPL) takes on in-app sales. Today, the IAP service has brought up another problem: it has become the subject of a number of patent complaints against developers who have been using it in their apps.

There have been at least five developers that have been served papers by a legal firm representing Lodsys, the company claiming the patent infringement, which concerns the use of Apple’s in-app payment API.

The first of these was brought to light in a tweet from Glasgow, Scotland-based developer James Thomson, whose company TLA Systems has developed a popular iOS calculator app, PCalc, which uses the in-app payment mechanism inside its app.

Contacted by mocoNews, Thomson said he has contacted Apple about the letter and will not discuss anything further until he hears back from the company.

In the meantime, at least four other developers have spoken up about also being targeted by Lodsys, accusing them of the same patent infringement related to using IAP. The apps in question cover a variety of services — one, by Chicago-based developer Patrick McCarron, is a game called Shanghai Mahjong — and different geographies.

Patent suits have become a very regular thing in the mobile industry, but most of the cases to date have centred on large companies getting attacked for infringement, either by their rivals or by so-called “patent trolls” that own a trove of patents and are dedicated to licensing (or suing) around them as a business model.

Now they appear to be hitting smaller outfits as well. In March, H-W Technology filed suit against some 32 parties, including those developing apps. Florian Mueller, who wrote about the H-W suit, presciently wonders if it was the beginning of more focus on smaller developers rather than simply the behemoths running the show. Turns out he was right.

The big question now is how Apple will respond to this case: will it come to the developers’ rescue or leave them out to dry?

It’s not clear yet whether Apple, too, is getting targeted by Lodsys, but Macworld points out an alarming-sounding clause in the iOS developer terms of service, which doesn’t bode well for the developers:

You shall be solely responsible for, and Apple shall have no responsibility or liability whatsoever with respect to, any and all claims, suits, liabilities, losses, damages, costs and expenses arising from, or attributable to, the Licensed Applications and/or the use of those Licensed Applications by any end-user, including, but not limited to: (i) claims of breach of warranty, whether specified in the EULA or established under applicable law; (ii) product liability claims; and (iii) claims that any of the Licensed Applications and/or the end-user’s possession or use of those Licensed Applications infringes the copyright or other intellectual property rights of any third party.

And what about Lodsys? It looks like an entity solely created to guard and enforce patents. According to its site, its main inventor, Dan Abelow, “is a prolific inventor and an expert on website usability, ease-of-use and assured user performance. Over 200 companies have licensed inventions created by Dan.” He also consults, and clients (not clear whether these are consulting or licensing clients) have included Accenture, Cisco (NSDQ: CSCO), Harvard, IBM and the IRS.

Some Friday the 13th. Thomson says he was getting ready to release a new version of the PCalc app, which had just been approved by Apple. That has now been derailed. “I have…invented several new swear words today, and intend to patent them,” says Thomson.

5 Responses to “Another Apple In-App Purchase Woe: Developers Hit With Patent Complaints”

  1.  I don’t get it. Scotland is in European Union and not in the United States and we don’t have software patents in EU… so why should we care about idiotic american patent system (no offence, dear Americans)? Why should Thomas not treat that cease and desist letter as low quality toilet paper? The guy is Scotland based and US courts have no jurisdiction over Scotland – how can they threaten him… and all of us, non-US based app developers? Apparently I am missing something… but what is it?

    Anyway… I know that Silicon Valley is the best place for start-ups and whatnot, but I wonder when are pros of being in the Valley going to outweigh cons of being located in United States and start-ups start to move to less anti-innovation countries.

  2. iFonePhag4S

    Hey Thomson, you should move over and start developing calculator apps for Android. I hear the ad revenue waters are nice.Thomson, you should move over and start developing calculator apps for Android. I hear the ad revenue waters are nice.