Update: Apple tells Lodsys that license applies to developers

by Phil Hornshaw

This is an update to an earlier story originally published at 1:11pm CST:

Apple has apparently sent a letter to Lodsys addressing the patent infringement claims the company is making to developers selling apps in the iTunes App Store.

According to the letter, which Macworld published, Apple says its licensing of Lodsys in-app purchase technology extends to developers as well. There's a lot of legalese in the remainder of teh letter, but Apple closes it out with the following:

"Therefore, Apple requests that Lodsys immediately withdraw all notice letters sent to Apple App Makers and cease its false assertions that the App Makers’ use of licensed Apple products and services in any way constitute infringement of any Lodsys patent."

Apple is undoubtedly very interested in protecting the App Store from patent claims such as the one Lodsys is making because it fears that those claims could make it too expensive or irritating for developers to try to make software for its mobile devices. But while the letter takes a pretty firm stance, we'll have to wait and see just how far Apple is planning to go if Lodsys doesn't back down.

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This is the original story:

The fear surrounding the recent patent infringement lawsuits brought against App Store developers seems pretty palpable, but since Apple (AAPL) has yet to step up with an official statement on the matter, analysts are urging developers to be cooperative – for now, anyway.

That’s the story from GigaOM, in which intellectual property activist Florian Mueller recommends that developers who play ball with Lodsys will be choosing the cheaper option in a no-win situation. Attempting to go up against Lodsys in court is could be more costly than many or most small developers can handle, even if they band together; so paying the 0.575 percent of revenues on apps using in-app purchases that Lodsys is asking for will at least allow those developers to stay in business.

In case you’re not up to speed, here’s the story: Lodsys, a tech company out of Texas, owns a patent on the technology of in-app purchasing. This is something of a known fact, as Apple, Google (GOOG) and Microsoft (MSFT) all have licenses to use the technology in their apps, which means they pay Lodsys a licensing fee.

Recently, Lodsys started sending out packets of legal information to small App Store developers, threatening to take legal action against them if they also didn’t pay a licensing fee. Lodsys has hit about a dozen developers so far, and claims that the licenses granted to Apple and Google don’t just trickle down to the developers who are using the technology to make money – and therefore, those developers owe Lodsys for the use of its property.

Trouble is, firstly, that Apple hasn’t weighed in on the situation at all, and developers are a bit hamstrung by the Apple licensing agreements they entered into when they developed apps for the App Store. What’s more, developers fear that if they give in to a patent dispute over a small piece of their apps (especially when they’re using technology provided by Apple to make them), they’ll suddenly find themselves paying licensing fees to plenty more “patent trolls” lining up to make claims. Indeed, another tech company, MacroSolve, has started sending legal threats to developers as well over a technology for sending information from questionnaires in mobile apps back to databases.

Mueller has written several posts for his blog advising app developers on what they can do, but right now, barring major action from Apple on developers’ behalf, there really don’t seem to be a lot of options. Lodsys’ plan, regardless of whether they are in the right or not, is not to fight a bunch of legal battles, but to use the threat of them to get developers to pay. App developers should study the arguments of Lodsys and others and know their rights, and they should work together and share intelligence on that front. But when it comes down to it, remaining cooperative will be cheapest in the long haul.

While “patent trolling” could potentially create problems for the iTunes App Store (and the Android Market, Blackberry App World and all those other smartphone app marketplaces), those problems are going to have to be fielded by Apple – it has the resources to mount a real defense of its app space, and Apple has a vested interest in stopping patent claims like these to make it too expensive and difficult to develop for its mobile devices.