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 (s aapl) 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 (s goog) 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.