Should You Be Scared of Lodsys?

You may have seen the reports yesterday, but in case you missed it, patent troll Lodsys added several others to their mobile gaming patent lawsuit. More on that in a moment, but first, let’s re-cap on what this Lodsys thing is all about. Lodsys LLC has stepped into the spotlight fairly recently for targeting small iOS developers (who don’t have the resources for a legal battle) for allegedly infringing on a patent that they hold. The patent has to do with in-app upgrade buttons (seriously), and they gave developers two options: pay a license fee, or get sued. A pretty grim scenario there.

Thankfully, Apple stepped in and wrote a letter to Lodsys. The letter basically states that since Apple is licensed, so are their developers, since developers aren’t actually selling anything—Apple is.

That makes a lot of sense when you think about it. If you make a “sale” of one of your apps, you’re not actually making a sale, Apple is—they are simply paying you a hefty commission for it (70%). What I think it boils down to is this: Apple owns the store, Apple is processing the payments, Apple is distributing the apps, Apple handles customer support, and they also cut the royalty checks. It’s clearly all Apple (aside from the actual development of the app), so if Apple is licensed, so should developers of their App Store be.

Of course, the final word is up to the judge, but I think Apple makes a pretty strong case in their letter. However, since Apple doesn’t own the app (the developer does) one could argue that a developer could infringe on a software patent separately from Apple, despite the rest. But since all the in-app upgrades are just more sales within Apple’s own App Store, you can then argue back that it’s all still under Apple’s umbrella (e.g. license).

The whole thing could literally go back and forth forever (I guess that’s why it’s likely going to court).

Should you be scared?

If you’re an iOS developer, the obvious question would be, am I next? Should I be scared?

I don’t think so. And here’s why…

Among the “several others” Lodsys recently added to the patent lawsuit include: EA, Atari, Square Enix, Take-Two Interactive, and Rovio. Surely they did this because they are confident that they have a very strong case, but in all actually, they just shot themselves in the foot (IMHO).

Before, if Apple was—for whatever reason—unable to participate in the lawsuit, then the developers that Lodsys originally targeted would be screwed. Small developers simply do not have the resources to fight a patent lawsuit on their own, and some of the Lodsys “victims” have even expressed it.

However, Lodsys just picked on the biggest players in the App Store now. Companies who are much bigger than Lodsys and surely have the legal resources to fight (and win) this lawsuit. This is great news for developers, because if Lodsys loses, it’ll make it even harder for patent trolls to do the same thing Lodsys tried to do.

Of course, I’m getting ahead of myself here, because nothing has actually went to court and been settled here… but I think it’s obvious where things are headed now.

Source: http://www.macworld.com/article/161297/2011/07/lodsys_aims_angry_birds.html

To read more entries, visit the archives or subscribe to the RSS feed.