“Don’t feed the trolls.” Anybody who has ever participated on a message board or blog knows this is usually good advice.
When it comes to patent trolls, however, some of the world’s largest companies can’t find enough food. When faced with demands from companies that do little more than buy and license patents, tech stalwarts prefer feeding to fighting.
And for good reason: patent litigation is expensive, and a lost lawsuit can be even more expensive.
But Apple is learning the hard way that feeding the trolls isn’t a painless path. Recently, independent developers with iPhone and iPad apps making use of Apple’s in-app purchasing capabilities were contacted by Lodsys, a patent troll, alleging that their use of in-app purchases constitutes infringement of a patent it owns.
Not surprisingly, Lodsys, whose patent bears the lovely name “methods
and systems for gathering information from units of a commodity across a
network“, was more than willing to resolve the matter with the targeted developers, for a fee.
Yesterday, Apple responded: developers building for its platform aren’t guilty of infringement because…Apple has already licensed the Lodsys patent and that covers its developers. In a letter to Lodsys, Apple states:
The technology that is targeted in your notice letters is technology that Apple
is expressly licensed under the Lodsys patents to offer to Apple’s App Makers…These licensed products and services enable Apple’s App Makers to communicate
with end users through the use of Apple’s own licensed hardware, software, APIs, memory,
servers, and interfaces, including Apple’s App Store. Because Apple is
licensed under Lodsys’ patents to offer such technology to its App Makers, the
App Makers are entitled to use this technology free from any infringement claims
Will Lodsys back off now? Time will tell. But even if it does, the drama highlights the tangled web that has been weaved between the world’s top technology companies and the patent holding companies that exist solely to extract money from them.
Under normal circumstances, Apple developers would never know that there might be a patent covering in-app purchasing functionality licensed from a patent troll. But thanks to Lodsys’ aggressive behavior, we have a glimpse of the dirty dancing that goes on around patents.
What’s interesting here is that so many seem resigned to participate in the dancing. When Lodsys’ letters first emerged, Marco Arment of Tumblr and Instapaper fame suggested that developers were better off feeding the patent troll than fighting it.
Patrick Igoe, an intellectual property attorney, took issue with that stance. He noted that Lodsys’ claims against independent developers may not be valid, but more importantly, he observed:
A Lodsys-like business model seems to depend heavily on developers holding beliefs like Arment’s. Making money by collecting small amounts from large numbers of developers requires a low transaction cost for each collection. Developers who roll over based on these beliefs keep transaction costs low.
…If no one stands up and says “we’re not infringing” in this round…what do you think Lodsys will do once it collects its first round of checks? Those who settle in early rounds will likely be funding the actions against other developers.
He’s right, of course, and given the number of patents that have been issues that could conceivably cover all sorts of functionality, developers likely wouldn’t just be dealing with Lodsys. You can be sure that patent trolls, like wild animals, will quickly flock to the nearest source of easy food.
So what’s the solution? Without reform that restores the patent to its intended purpose, there is no way small and mid-sized businesses can fight the Lodsys’ of the world. So it starts with companies like Apple. If they feed instead of fight, you can be sure that this won’t be the last time patent trolls come to developers seeking every last crumb.