Apple files motion to join developers in Lodsys suit

Jun 10, 2011
Finance

It’s official – Apple (AAPL) wants in on the legal action between patent holder Lodsys and several iOS developers over the use of in-app purchases in iPhone and iPad apps. Apple has filed a motion to join the lawsuit as a co-defendant with seven iOS developers being sued by Lodsys, according to a story from […]

It’s official – Apple (AAPL) wants in on the legal action between patent holder Lodsys and several iOS developers over the use of in-app purchases in iPhone and iPad apps.

Apple has filed a motion to join the lawsuit as a co-defendant with seven iOS developers being sued by Lodsys, according to a story from Ars Technica. If the motion is granted, it would allow Apple to defend the case along with the developers and give it the right to countersue as well. Apple claims it has a stake in the case because its technology is at issue.

The situation has been developing over a few weeks now and started when Lodsys issued letters to about a dozen iOS developers about the use of in-app purchases in their apps. Lodsys owns a patent on technology that allows purchases to be made from within mobile apps – a patent that Apple, Google and Microsoft all pay to license for their various mobile operating systems. But Lodsys contends those licenses don’t apply to developers on Apple’s platform, and that each needs to pay a licensing fee to Lodsys for the use of the patent.

Apple disagrees and sent an open letter to Lodsys last week, arguing that the company should back off app developers because Apple is allowed to include that technology in the software development kits it issues to developers. That led to Lodsys abandoning the 21-day grace period it had previously given developers to figure out how they wanted to move forward (either responding to the legal threat or paying royalties of 0.05 percent of app revenues), and the company began issuing its lawsuits on May 31.

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Here’s a quote from the Ars Technica story:

“Apple’s motion to intervene could prove a major thorn in Lodsys’ side. Apple argued in its motion that is has the right to intervene because it has a vested interest in the property at issue, namely Lodsys patents for which Apple holds a license to use. Furthermore, Apple claimed, independent developers ‘lack the resources to fully and fairly litigate the issue of whether Lodsys’s claims are exhausted’ under the doctrines of first sale and exhaustion.

“‘While the Developers will likely be interested in resolving this case as quickly and inexpensively as possible, Apple’s interest is in protecting its broader license rights with respect to thousands of App developers for Apple products who may be the subject of future Lodsys lawsuits or threats,’ Apple said in its motion.”

That’s bad news for Lodsys but good news for developers, who were potentially staring down the barrel of a long and costly battle, or acquiescing to Lodsys stipulations and paying up for the use of its license. Industry analysts feared success for Lodsys would draw out more patent holders looking to flex some muscle over small developers; ultimately, developing apps would lose its financial incentive and the whole app ecosystem could be chilled by those patent developers, they said.

Life is better when Apple has your back

With Apple coming out in support of developers, though, developers are in much better shape, as it’s likely that Apple will foot the legal bill to deal with Lodsys. At the very least, developers should get their day in court and the whole thing will be sorted out by a judge, rather than settled out of court because developers were without the resources to mount a defense.

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A judge will have to determine whether Apple’s motion will carry, but legal precedents suggest Apple could be successful in joining the suit. If that happens, the whole situation could be vastly different, with Lodsys on the defensive rather the offensive.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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