Blog Post

Another app maker sues to stop Lodsys patent troll

Creative Mobile, maker of popular games like Drag Racer, is the latest company to fight back against a shell company that is demanding app makers pay up if they include a common “in-app purchase” button.

In a complaint filed in Wisconsin, Creative Mobile is asking a federal court to declare that it’s not infringing and that the patents in question are not valid. The Estonia-based company also claims that it is protected by Lodsys licenses acquired by Apple (s aapl) and Google (s goog).

While the practice known as patent trolling (in which shell companies formed by lawyers and investors acquire patents and sue real companies) has become increasingly pervasive, Lodsys has gained a special infamy. It has sued or threatened to sue not only large companies like Adidas and the New York Times but also hundreds of one- or two-person app makers.

In the case of Creative Mobile, Lodsys is demanding it pay for a license whose price is based on 0.575 percent of all sales between 2007 and 2012.

While a handful of small companies have attempted to stand up to Lodsys in the past, they have typically withered quickly under the legal cost. More recently, major companies like Oracle(s ORCL), Apple and Google have gone to court in attempts to smash the troll and protect app makers.

The identity of Lodsys itself remains a mystery. The Guardian has accused it of being a front for Intellectual Ventures (IV), the giant patent trolling venture run by former Microsoft(s MSFT) executive Nathan Myhrvold. The allegation appears credible given that IV sold patents to Lodsys in the first place and considering that Lodsys’s lawyers are based in IV’s home town of Seattle.

But in an email message, Intellectual Ventures on Wednesday stated that it had no ownership interest in Lodsys.

A copy of Creative Mobile’s complaint that describes Lodsys’s threats against many other companies, including Wolfram Alpha and the New York Times, can be found below.

In a final bit of irony, Creative Mobile is also being accused of stealing its hit game Drag Racer from a company that may have actually made the game. In a report last month, Toronto’s XMG Studio claimed that Creative Mobile is an opportunist that looks for other games to take off and then simply copies them, polishes them and markets them themselves.

Creative Mobile v Lodsys