Patent Troll Going After iPhone/iPad Developers Who Use In-App Payments

from the oh-come-on dept

Fri, May 13th 2011 12:40pm — Mike Masnick

Another day, another example of a patent system holding back innovation. The latest is that a typical patent troll operation, named Lodsys, is threatening and/or suing a bunch of iOS mobile app developers for daring to make use of Apple's own in-app payment API to offer the ability to make purchases from within their apps. Lodsys lists out four patents that "are available for licensing."

5,999,908: Customer-based product design module
7,133,834: Product value information interchange server
7,222,078: Methods and systems for gathering information from units of a commodity across a network
7,620,565: Customer-based product design module

It appears that whichever patents Lodsys is using in bringing this claim, it's applying them extremely broadly. Meanwhile, the various developers who have now been sued are pretty freaked out. Most of them appear to be small shops -- perhaps just an individual developer -- whose big "mistake" was to actually use the tools Apple provided to make their software better. I can't see how anyone can defend a lawsuit like this as promoting the progress. The idea that in-app payments wouldn't have come along without these patents is -- on its face, preposterous in the extreme. Putting in-app payments into products is a natural evolution, and any programmer with a modicum of skills could have figured out ways to implement it. To claim that a patent was needed in this arena is simply ridiculous.

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Filed Under: commerce, in-app payments, patents, trolls
Companies: apple, lodsys

24 Comments

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ChurchHatesTucker (profile), 13 May 2011 @ 12:59pm

BS
To claim that a patent was needed in this arena is simply ridiculous.

But, innovation wouldn't have happened unless...

Oh. Right.
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mmm, 13 May 2011 @ 1:05pm

1992
In fairness, the earliest possible priority dates for this is 1992! That predates much of the internet and modern e-commerce.
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E. Zachary Knight (profile), 13 May 2011 @ 1:05pm

If the judge allows this case to continue, I will have lost all hope for our legal system. Even if these patents are valid and the method used is a violation of them, these developers should not be held liable to violating them. The only party this patent troll has standing to sue is Apple because they are the ones who developed the "infringing" technology. These people simply used it.
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mmm, 13 May 2011 @ 1:17pm

1992
In fairness, the earliest possible priority dates for this is 1992! That predates much of the internet and modern e-commerce.
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Atkray (profile), 13 May 2011 @ 1:18pm

Re:
But if they sue Apple they run the risk of Apple fighting back. By suing small shops and individual developers they scare people into settling.
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Florian Mueller, 13 May 2011 @ 1:20pm

Apparently it's the '078 patent
There are different media reports according to which the third patent on the list is the one they assert against those app developers. BTW, this is already the second patent assertion in only six weeks against app developers. I previously reported on H-W Technology's lawsuit against various app developers (those were much larger organizations than the ones targeted this time, however). My advice to app developers: publish your apps only under the protective umbrella of a limited liability company. My blog post on this is here.
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duffmeister (profile), 13 May 2011 @ 1:25pm

Re: 1992
yes, but as is typical the claims have been amended since then to cover things not intended in the original patent application. This is a common tactic of the worst of the patent trolls as they can point to the original filing date and not the last amended date and say, "But it wasn't obvious then." This is clearly an abuse of the system.
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David (profile), 13 May 2011 @ 1:31pm

Smart on his part
If he went after the big pockets (Apple), they would not settle... or license... they would use their legal team to squash him like a bug!!!
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Capitalist Lion Tamer (profile), 13 May 2011 @ 1:35pm

Patent #00000001
"Methods and systems for bringing a patent infringement claim to court."

Followed shortly thereafter by Patent #00000002 - "Methods and systems for bringing patent infringement claim to a court or courts in East Texas."
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DannyB (profile), 13 May 2011 @ 1:58pm

Let's try changing the PTO's incentives
To file a patent you have to pay a fee.

Make the fee very high if the PTO rejects the patent for any valid reason. (Novelty, prior art, non patentable subject matter, etc)

Make the fee very low if the PTO grants a patent.

This will both speed up the process of rejecting patents, and will significantly increase the percentage of rejected patents.

This will also give the PTO incentive to crowd source the finding of prior art, etc. In fact the PTO could pay a bounty to anyone who can show grounds that lead to rejecting the patent application. (eg, it will create jobs)
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Anonymous Coward, 13 May 2011 @ 2:21pm

This company has sent the same royalty demand to users of helpdesk chat software.
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Anonymous Coward, 13 May 2011 @ 2:24pm

Wont the small shops have a claim against apple? I realize apple has a clause in their developer agreement but how is that clause really valid?

Let's say someone patents a special style of bolt. Lets say I buy a bunch of those style of bolts from a manufacturer who doesnt hold the patent. Now when I sell my widget using those bolts I can get sued?

This scenario is meant for my understanding because I'm sure it probably isnt a good analogy.
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Anonymous Coward, 13 May 2011 @ 2:46pm

I have to wonder at this point if any software can be created or sold that is patent free. As I expect the answer to this question is in the negative then I would think patents are pretty detrimental to promoting the progress of science and the useful arts.
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Anonymous Coward, 13 May 2011 @ 3:13pm

The big thing here seems to me that they used Apple's own API. Unless I'm seriously misunderstanding what "API" means, the code these people are being sued for using was not written by them, it was written by Apple.
Of course, Apple has enough money to put up a fight in court. Much easier to pick on the little guy...
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Mike42 (profile), 13 May 2011 @ 3:15pm

Re:
You are correct. The only thing that protects you from patents is obscurity. Almost all the checks and balances of the USPTO have been nullified. The reviewers are unskilled in the field of programming, but they should be able to rely on the submitter who claims that the patent is not obvious or trivial. There is no consequence for lying, however. Also, prior art defenses have proved weak if not useless in recent years. Add to this poorly written patents which over-generalize, and you have the modern-day disaster.
Basically, the patent system never really was all that great, but it's been perverted to massively favor litigious patent-holders over community-minded innovators.
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Lawrence D'Oliveiro, 13 May 2011 @ 4:12pm

Re: Smart on his part
David wrote:

... they would use their legal team to squash him like a bug!!!

You mean, the way Microsoft squashed Eolas?
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Anonymous Coward, 13 May 2011 @ 4:17pm

"My advice to app developers: publish your apps only under the protective umbrella of a limited liability company."

and preferably work with an API that has an agreement which indemnifies it's users from the systems and methods used therein, ie. within the API itself... good luck.
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Michael Kohne, 14 May 2011 @ 5:49am

Don't the developers have an easy out here?
It seems to me that if they say they only did these features because Apple made them available, can't the developers easily deflect these suits onto Apple (where they belong, if they belong anywhere).

I don't know much about the law, so I may be off the mark here, but since the devs didn't come up with this on their own, I can't see how they wouldn't be able to deflect.
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Jan Bilek (profile), 14 May 2011 @ 7:31am

Re: Re:
That's probably why he would lose hope for your legal system. Because if defending yourself is so expensive that it can destroy you even if you win so you rather give up even if you are innocent, it means that there is justice just for rich... which means there is no justice at all.
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Jan Bilek (profile), 14 May 2011 @ 8:33am

jurisdiction?
I hear that the first news about small developers getting C&D was brought to light in a tweet from Glasgow, Scotland-based developer James Thomson who got one of those... and I don't get it.

As far as I know Scotland is in European Union and not in the United States and we don't have software patents in EU... so why should we care about idiotic american patent system? Why should Thomas not treat that cease and desist letter as low quality toilet paper? The guy is Scotland based and US courts have no jurisdiction over Scotland - how can they threaten him... and all of us, non-US based app developers? What am I missing?

Anyway... I know that Silicon Valley is the best place for start-ups and whatnot, but I wonder when are pros of being in the Valley going to outweigh cons of being located in United States and start-ups start to move to less anti-innovation countries.
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Gordon (profile), 14 May 2011 @ 10:02am

Yet another reason......
...to abolish software patents, IMHO.

I've said here before and I'll say it again now, software patents should not be recognized under US law. Only copyright should cover software (the exact coding of the software in question).

No patents should be granted for something that can be achieved by two or more separate people using different software languages. If it's also something that was going to naturally come to pass, just by the natural progression of technology, it should also never receive a patent.

My 2 cents.
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Brand Troll, 14 May 2011 @ 11:39am

Patents
LODSYS PATENT TROLL don't give in !!! don't give him a dime! They are represented by http://www.kdg-law.com/ a small firm in Seattle. They were the only one that would take him on a contingent base! Trust me they will dump Lodsys soon, as they will be attacked by the BIG firms! Hey lets make a movie...
PATENT TROLL rated R for RIP OFF!
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Don, 15 May 2011 @ 7:22am

Response to: Anonymous Coward on May 13th, 2011 @ 2:24pm
Your analogy is good for the OEMs that got sued by Microsoft over Google, I think. I'm wondering if Apple's controlling ecosystems would add yo the defence?
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patent litigation, 16 May 2011 @ 4:13pm

The point is not whether a patent was "needed," nor is it whether the innovation is obvious now. The question (or one of the questions) is whether the invention was obvious at the time that the patent application was filed. Anyway, sounds like Lodsys just wants to settle and nab some licensing deals. Honestly, it probably would have been smarter for them to go after Apple and/or other deep pockets, if money's all they want, instead of pursuing one-man development shops; after all, you can't bleed a stone.
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