Lodsys Sues App Developer For Patent Infringement Because He Called Them A Patent Troll

from the wow dept

Mon, Jul 8th 2013 12:27pm — Mike Masnick

Lodsys, as you may recall, is the rather infamous patent troll, which is demanding payment from a ton of app developers, claiming to have broad patents (which it got from Intellectual Ventures, of course) that cover all sorts of smartphone apps. Todd Moore, who runs app developer TMSOFT, was recently sued by Lodsys, claiming patent infringement, because his White Noise app has a hyperlink that would open a URL in another app -- a rather basic thing that tons of apps do. However, it seemed odd to go after TMSOFT, given that, as Moore notes, the app itself only made $500, and Lodsys itself insists that it's often just asking for less than 1% of revenues. But, in this case it's not:

Lodsys is seeking a percentage of revenue from the time they sent me the letter to the time their patent expired. Usually they request around 1% of your in-app-purchases. My company made about $500 with in-app-purchase during this time period and 1% of that is $5. What? I'm getting sued for $5? Given it cost Lodsys $350 to file the lawsuit I assumed they would ask for more than that. And they did.

Lodsys offered to settle with my company for $3,500.

Why? Well, it appears this has little to do with actual patent infringement, and a hell of a lot to do with Lodsys trying to get Moore to shut up:

This all started in May, 2011 when my co-host and I re-launched Tech 411, formerly a radio show in Washington DC, as a podcast on iTunes. Our first couple shows discussed how Lodsys was going after app developers. I commented that Lodsys was "patent trolling" with "evil letters" that were "complete b.s." Around this time Apple had featured our show and it quickly became the #1 tech news show on iTunes.

[....] Dan contacted the lawyer for Lodsys, who actually admitted to him that this wasn't about money. It was about the things I said on my tech podcast and blog. During that time, the CEO of Lodsys, Mark Small, was getting a lot of negative media coverage and even wrote on his blog that he received several death threats. Mark obviously didn't like the comments I made about his company and retaliated by sending a patent infringement letter.

Moore is refusing to pay, and has smartly filed a motion to dismiss under Texas' anti-SLAPP law, the Texas Citizens Participation Act. Texas currently has probably the best anti-SLAPP statute around, and that's useful since Lodsys, like so many patent trolls like to sue in Texas. In his blog post, Moore notes that paying up would only lead to more trolling:

If I pay them off, what is stopping the next troll from knocking on my door? Nothing. And I've heard that if you pay a troll to go away it can lead to more trolls showing up. It's like your company gets added to a spam list. That's not a list I want to be on. I'd rather be able to talk about this issue and hope that at some point in the future our patent and legal system will change to address this serious problem. In the end, it's dragging down our economy because small innovative companies have to spend time and money defending themselves against bogus lawsuits instead of hiring new employees.

Moore is being represented by Dan Ravicher of PUBPAT and the motion to dismiss is a worthwhile read. I've actually been wondering in the past if those who speak out against patent trolls, and then are sued by them, might have a First Amendment/anti-SLAPP argument, and now we'll have a test case to see how that works, at least under Texas law.

Tmsoft Lodsys Motion to Dismiss (PDF)Tmsoft Lodsys Motion to Dismiss (Text)

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Filed Under: anti-slapp, free speech, patents, texas, todd moore
Companies: lodsys, tmsoft

14 Comments

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Anonymous Coward, 8 Jul 2013 @ 1:18pm

1968 called and wants their links back
Doug Engelbart demoed linking from on app to another in 1968, prior art wins. F-off Trolls!
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Steph Kennedy, IPTT (profile), 8 Jul 2013 @ 1:40pm

Coming to you from the "And, and, and, and...THENhe called me a baby and took my lunch money *pout*" department.

Good on TMSoft for not paying the troll toll! http://iptrolltracker2.wordpress.com/2013/07/06/tmsoft-says-no-thankyouverymuch-to-the-troll-toll/
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Mason Wheeler, 8 Jul 2013 @ 1:41pm

Re: 1968 called and wants their links back
Umm... what? In 1968, neither apps nor links existed, as many of the fundamental concepts they're built upon did not yet exist.
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Anonymous Coward, 8 Jul 2013 @ 2:02pm

Re: Re: 1968 called and wants their links back
I invite you to go watch the video and learn some computer history my dear uninformed friend:

http://www.techdirt.com/blog/innovation/articles/20130703/12450823708/to-honor-doug-engel bart-who-passed-away-last-night-please-go-watch-his-1968-demo.shtml
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Anonymous Coward, 8 Jul 2013 @ 2:05pm

Re: Re: 1968 called and wants their links back
I disagree. App is a shortened form of application, which is itself just a program. A URL is a standardized way of referring to the location of a given resource... a shared address if you will.

So what you have here is a patent on a way to have one program act upon some data that's hosted on a shared address and was placed there by another program.

This was clearly already being done by 1968.... in fact, depending on the particulars of the system in question, there may well have been no way to AVOID this happening (see protected versus shared memory addressing).
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John Fenderson (profile), 8 Jul 2013 @ 2:12pm

Re: Re: Re: 1968 called and wants their links back
Not only that, but all of those concepts (and more) existed in the '50s in some military computers.
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Digitari, 8 Jul 2013 @ 3:40pm

Re: Re: Re: Re: 1968 called and wants their links back
For the love of UNIVAC's!!
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kill bill, 8 Jul 2013 @ 5:32pm

lol what
can we just have lodsys people assassinated by the nsa ...they at least know everythng about them where when and all....
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Matt Heaton (profile), 9 Jul 2013 @ 6:42pm

Patent troll stalking indie game developers
Unfortunately I'm gearing up to have to deal with a similar situation. There's a patent troll, Treehouse Avatar Technologies that started sending out threats of litigation in mass to small game developers earlier this month.

My game company was the recipient of one of these threats, and I decided to go public with it in hopes that other small game developers won't just been intimidated and roll over.

Who knows if they will actually follow through on their litigation threats against me, economically it doesn't make sense, but like Todd's case they could potentially do it just out of spite.

More can be found here:

http://www.gamepolitics.com/2013/07/08/treehouse-targets-indie-studio-threat-patent-infring ement-lawsuit

http://www.reddit.com/r/gamedev/comments/1hvlnb/patent_troll_threatens_small_game_d evelopers/
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Anonymous Coward, 10 Jul 2013 @ 6:17pm

wow
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Anonymous Coward, 10 Jul 2013 @ 6:20pm

running away
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Apptooth (profile), 24 Jul 2013 @ 1:51pm

What complete joke. We too are a small development company and if this is justifiable, every developer out there is on their way out, including the big boys.
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DB, 17 Sep 2013 @ 5:50pm

Some Lodsys Claims Rejected
I'm just picking up on this, but it looks like on June 18, 2013 in a Reexamination, Claims 1-6, 10, 11,1 6, 22, 25, 30-32, 38, 46-48, 50-53, 69 and 71-74 of the Lodsys 7,222,078 patent were rejected in Reexam 95-000639.
This patent, and the 7,620,565 patent had terminal disclaimers, which indicate that they expired when patent 5,999,908 expired -- which looks like August 6, 2012. And Lodsys is still sending out communications "offering" to "license." (You can't license an expired patent)
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Glyst, 24 Jan 2016 @ 1:35pm

Where is Lodsys now?
This was a satisfying read of recent history, especially the document granting the motion.
Call me crazy; I think Lodsys is dead and gone. You can call the number on the correspondence and it's disconnected. The website lodsys.com leads to something that appears to have a lot of Laotian text (I don't read Laotian, so I'm not certain, but it looks similar). Happy thought for all of us who just want to make software.
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