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Apple Has Devs' Backs in Lodsys Patent Scuffle

Apple Has Devs' Backs in Lodsys Patent Scuffle

Apple has asked a Texas court to allow it to enter a patent infringement case against several iOS developers, which could substantially change the game. Lodsys, the patent holder that started the fight, maintains that Apple's license for its tech does not extend to third parties. "With a big player now weighing into the Texas case, we shall see if Apple's hand of Texas hold 'em will succeed," said tech attorney Ray Van Dyke.

By Rob Spiegel MacNewsWorld ECT News Network
06/10/11 12:52 PM PT

Apple filed a motion on Thursday to intervene in Lodsys' patent infringement lawsuit against seven iOS developers, arguing that it has the right to intervene because technology it licensed from Lodsys is central to the case. Apple believes that its license for Lodsys patents allows its developer community to use the Lodsys patented technology in their APIs.

If the court allows Apple to intervene, Lodsys will have to face the Apple defense team as well as the developers it originally sued.

Lodsys first made waves two months ago, when it sent letters to developers claiming that their use of in-app purchase APIs from Apple was a violation of its patents. The results of this squabble could have long-term consequences in the world of developer licensing agreements.

Rights of License Holders

For Lodsys' part, it does not think that Apple utilized the licenses in an appropriate manner.

"Lodsys is claiming infringement based on an allegation that its license to Apple did not flow the proper rights to the developers," Christopher M. Collins, an attorney with Vanderpool, Frostick & Nishanian, told MacNewsWorld.

"Apple has taken the common-sense approach that the license does, in fact, grant sufficient rights -- otherwise, why would Apple have been satisfied with the terms?" he wondered.

"Apple has some very sharp IP lawyers, as recent court battles have shown," continued Collins. "I'm not familiar with Lodsys' track record in this area, so I will be interested to see what arguments they aggressively pursue once Apple intervenes in the Texas suit."

This case could also affect licenses Apple holds with other companies.

"The case, as I understand it, depends almost entirely on the scope of the patent license and what rights Apple accepted from Lodsys," said Collins. "The fight between Lodsys and Apple will continue on both grounds."

Apple is a veteran in the technology world and has some powerful resources. Facing Apple will force Lodsys to seriously consider whether the battle is worth it.

"Lodsys, as a non-operating patent holder, really is trying to determine whether its patent portfolio has value in court, so in that sense a significant portion of the value of this portfolio hangs on the outcome of this case," said Collins.

"Having Apple's legal team on the side of the developers is much more than a mere psychological benefit in the case," added. "The experience and resources of Apple in these fights is likely to be a significant asset as this case winds its way through the early motions practice and expected discovery."

Is Lodsys a Patent Troll?

Apple's move is an attempt to come to the aid of its extensive developer community. It isn't questioning Lodsys' ownership of the patents -- Apple simply believes its license covers its developers.

"Apple, after carefully examining the situation, has taken the initiative and moved to intervene in the district court action against their developers," Washington, D.C.-based technology attorney Raymond Van Dyke told MacNewsWorld.

"Apple thus far is not attacking the validity of the patents in question, but argues that its developers, by virtue of their license with Apple, have the requisite rights to create the various apps. Apple, being a stand-up player, has demonstrated their support for their developers by this intervention."

Apple stepped in partly because its developers do not have the substantial resources needed to effectively stand up to Lodsys.

"The issue in this intervention motion will be whether Apple's interests matter in the underlying suit by Lodsys against seven Apple developers," said Van Dyke. "Apple argues that its developers are small companies unable to easily fend off the Lodsys claims. With a big player now weighing into the Texas case, we shall see if Apple's hand of Texas hold 'em will succeed."

Securing the Apple Ecosystem

Apple is interested in this suit because there could end up being a lot at stake. Protecting the respected Apple ecosystem is an important consideration.

"It's obvious that Apple is the 800-pound gorilla in the room, and they believe the agreement with Lodsys is all-encompassing for the application community," Brian Marshall, senior equity analyst at Gleacher & Company, told MacNewsWorld. "Apple has hundreds of thousands of applications. Apple wants to protect those applications and developers and make sure they can continue to develop in the Apple ecosystem."

The outcome of the case could change what developers are allowed to with these patents. Apple obviously has a very different take than Lodsys on what its license allows.

"The patent would create problems if every developer had to license from Lodsys," said Marshall. "Some of the developers are small and don't have the ability to buy the license. Apple believes its agreement extends to the developer community. It could be a bump in the road in respect to continued creation of applications for the App Store if each developer has to license from Lodsys."


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