It seems the time for amicable discussion between Lodsys and the iOS app developers is over.
Lodsys owns a patent on the technology Apple (AAPL) uses to complete in-app purchases in its apps. Apple pays a licensing fee to Lodsys to use that technology, but Lodsys doesn’t collect anything from app developers. That might change in the future, as Lodsys filed seven lawsuits against developers on Tuesday.
It was only earlier this month that Lodsys first started sending packets out to app developers, asking them to pay licensing fees from the revenue of their apps that use in-app purchases. Lodsys claimed that Apple’s license for the technology doesn’t apply to third-party developers making apps for Apple’s platform, though.
Originally, Lodsys’ letters out to developers stated that the company would leave 21 days for developers to formulate their responses. Apparently, though, that grace period has been tossed given recent events – specifically, because Apple weighed-in on the situation by sending a letter to Lodsys.
According to a story from MacWorld, Lodsys has kicked up its lawsuits because of the “threatening” letter that Apple sent last week. That letter basically put Apple behind its developers, stating that app makers were “undeniably licensed” to use the Lodsys patent under the agreement that company had reached with Apple. According to Lodsys’ blog, the company felt it needed to move forward with lawsuits to “preserve its legal options.”
MacWorld makes a good point about some of what Lodsys says on its blog with this quote, following one from Lodsys that implies that Apple, Google (GOOG) and other mobile platform companies are making promises to developers they can’t keep:
“The post reads as a somewhat clumsy attempt to drive a wedge between Apple and its developers by suggesting that not only is Apple’s liability in legal matters limited, but also that the company doesn’t care about its developers.”
As it stands, Apple’s situation would go from potentially bad to absolutely horrible if it abandoned developers to their fates against Lodsys; it would shake the confidence of every developer in the App Store, as well as cause many to leave for fear that the next volley of patent disputes could come their way. But developers are in a tough spot as well, since the developer agreements they’ve entered into with Apple limit their abilities to fight off claims like that of Lodsys, or to enter into agreements or settlements that would affect Apple.
Meanwhile, Lodsys is making another bold move. Perhaps in an attempt to demonstrate confidence in its position, it has offered to pay developers involved in the lawsuits $1,000 should a court rule against Lodsys:
“While it is true that Apple and Lodsys have an obvious dispute about the scope of Apple's license to the Lodsys Patents, we are willing to put our money where our mouth is and pay you something if we are wrong. Therefore, Lodsys offers to pay $1,000 to each entity to whom we have sent an infringement notice for infringement on the iOS platform, or that we send a notice to in the future, if it turns out that the scope of Apple's existing license rights apply to fully license you with respect to our claim relating to your App on Apple iOS.”
Regardless of lawsuits, it still seems the next move is Apple’s, especially with its Worldwide Developers Conference taking place in less than a week. The company will surely respond in some way to Lodsys in order to waylay any fears the development community might have. What that might entail, however, is still open to speculation.