Last week we told you that a company had started sending out legal letters to a number of iOS developers, claiming that the developers were infringing on their patents by using in-app purchases on their apps in Apple’s App Store.
Now it turns out that the company behind these letters has been identified as Lodsys, and they have revealed what they are after from the developers, which obviously includes developers paying them a fee.
In the case of an Application doing an in-application upgrade (and only this scenario), Lodsys is seeking 0.575% of US revenue over for the period of the notice letter to the expiration of the patent, plus applicable past usage. So on an application that sells US$1m worth of sales in a year, the licensee would have an economic exposure of $5,750 per year.
Why Target Individual Developers?
It still isn’t clear why this company has gone after the individual developers rather than Apple, as the developers are using Apple’s in-app payment system. One possible reason could be that Lodsys believes individual developers are less likely to have the resources to fight a legal battle compared to a giant like Apple. By targeting smaller entities, Lodsys might be hoping for quicker settlements and less resistance.
Another theory is that Lodsys might be trying to set a precedent by winning cases against smaller developers first, which could then be used to strengthen their position in any future litigation against larger companies like Apple. This strategy could potentially make it easier for Lodsys to claim larger sums in the future.
Apple’s Response and Legal Implications
We heard previously that Apple’s legal team were looking into the matter, although they have yet to release an official statement as yet. Apple’s involvement is crucial because the in-app purchase system is a core part of their ecosystem. If developers are forced to pay additional fees to Lodsys, it could discourage innovation and development within the App Store, ultimately affecting Apple’s bottom line.
Moreover, this situation raises broader questions about the patent system and its impact on software development. Patent trolls, companies that hold patents solely for the purpose of litigation, can stifle innovation by creating a climate of fear and uncertainty. Developers might be less inclined to create new features or apps if they constantly have to worry about potential lawsuits.
In the past, Apple has taken a strong stance against patent trolls. For instance, in 2011, Apple intervened in a similar case involving Lodsys and app developers. Apple argued that its license to the patents in question should extend to its app developers. The outcome of this case could set an important precedent for how such issues are handled in the future.
As soon as we get some more information, we will let you guys know. The situation is still developing, and it will be interesting to see how it unfolds. Will Apple step in to protect its developers, or will Lodsys succeed in extracting fees from individual app creators? Only time will tell.
Source ZDNet
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