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Update: Apple’s Secret Weapon In Its Lodsys Fight? An In-App Payment Patent

We haven’t heard much lately about the Lodsys case against Apple, Android and RIM developers around the world, who have received letters and in some cases legal threats demanding royalty payments from the Texas-based patent holder over in-app purchasing technology. But the emergence of a new patent application from Apple (NSDQ: AAPL) could point to a new development in that case.

The patent application, which appears to have been first reported by Erik Sherman at BNET, pertains to in-app purchasing technologies, covering such details as the architecture for how they are implemented; how the system would appear to a user; and where such a service could be used.

The patent application dates from April 26, 2010, which means that Apple would have filed it nearly a year after first introducing the in-app payment service with iOS 3 in June 2009. Lodsys’ patent for in-app purchasing was granted in 2009. Apple licenses Lodsys’ technology and its position has been that this license should also cover those third-party developers who create content for its service, a view it outlined in a letter to Lodsys, which mocoNews obtained.

Some have conjectured that if Apple is granted its patent, it could use it in legal actions against Lodsys: “The idea is, in general, very similar to the Lodsys patent, however, it is much more specific. If Apple was granted the rights to the patent, both sides could easily challenge each other’s patents,” writes Wolfgang Gruener in Tom’s Guide. But others point out that this would be complicated, if not impossible. Because Lodsys’ patent predates Apple’s application, “Apple’s patent can’t be used to invalidate Lodsys’s patent,” Florian Mueller noted to me.

Apple applied to intervene in Lodsys’ developer suit back in June and is still waiting to hear back about this.

The case against the developers earlier this month got a new presiding judge, David Folsom, when Judge T. John Ward stepped down from the bench to join a private law frim. The U.S. district of East Texas, where the case has been filed, is known as a hotbed for patent disputes.

To iOS, and beyond? Although this is a patent application from Apple specifically, what’s interesting is that Apple could potentially use it to exercise its own patent rights against other platforms. The application specifies iPhones but it also clearly says that all of the described payment functionality could be used for a number of other devices. From the patent application:

“…the device…is a handheld computing device, for example, a smart phone, e.g., an IPHONE, by Apple Inc. of Cupertino, Calif. However, the device…can be any computing device such as a personal computer, laptop, or personal media-playing device; even a household appliance having a processor and a display can be used with the present technology.”

And what about the developers? One of the app makers who had received initial contact from Lodsys demanding royalty payments over an iPhone app, but has not actually be sued, tell us that for now its a quiet kind of business-as-usual:

“I think most of us who weren’t sued are just keeping our heads down. We’re still distributing our software, but I’m trying not to be too visible on the patent front. I’m just hoping the case gets resolved quickly one way or another so we can move on. If Apple isn’t allowed to join the suit, I think there isn’t a lot of hope for the rest of us.”

3 Responses to “Update: Apple’s Secret Weapon In Its Lodsys Fight? An In-App Payment Patent”

  1. This may sound counterintuitive, but you have it backwards. Lodsys’ patent predates Apple’s effort by several years. Now, by filing their OWN patent years later, Apple has in fact validated Lodsys’ argument that the technology is indeed useful, valuable, and novel.  Therefore this finding will only help the Lodsys effort.

    • HammerOfTruth

      “Therefore this finding will only help the Lodsys effort.”  It depends on whether this new judge decides on Apple’s arguement that they have a blanket agreement that covers their developers.  The interesting thing is that Google, who’s supposedly better at developer relations, hasn’t done a thing to protect android developers who are getting served.

      In the end either Lodsys will get more money, or Apple will spend more than any settlement to squash them.  If I were Lodsys, I would $ettle before it gets ugly.