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Your Move, Patent Trolls

By Rob Walch MacNewsWorld ECT News Network
May 27, 2011 5:00 AM PT

"'As the Supreme Court has made clear, "[t]he authorized sale of an article that substantially embodies a patent exhausts the patent holder's rights and prevents the patent holder from invoking patent law to control postsale use of the article.' Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008)."

Your Move, Patent Trolls

-- Bruce Sewell, Senior Vice President & General Counsel, Apple Inc.

And that is how Apple responded to Lodsys.

Shaking Up the Shakedown

What is Lodsys (not to be confused with a load of crap)?

It's a patent troll company. And by all accounts, when it comes time to check in at Hell, patent trolls are said to have a spot right near the front of the line, right next to the people that put kittens in burlap sacks and throw them into rivers.

But Lodsys is not just any patent troll -- it's the type of patent troll that makes other patent trolls squirm. See, Lodsys did not go after big companies in its latest salvo of legal letters. It went after the indie developers.

The short and the long of this is that Lodsys claimed its very ambiguous (at best) patent somehow covered in-app purchases, and even though Apple had licensed its patent, Lodsys insisted indie developers that used Apples development kit / tools to allow in-app purchases still needed to pay up to Lodsys.

The best analogy of this is a low-level mafia punk shaking down a local Wal-Mart store for protection money and then, after getting the money from Wal-Mart, he goes and starts shaking down each supplier for money to be allowed to put products on Wal-Mart shelves. While at first it might have made sense for Wal-Mart to just pay him a little to go away, once he started messing with their suppliers, Wal-Mart would be pissed and bring in its own thugs to put a beat-down on the punk.

And that is basically what Apple did with its letter to Lodsys.

(Note to Wal-Mart lawyers: I am not saying that Wal-mart would actually or has actually hired thugs to beat up anyone -- it is just an analogy.)

Backing Up the Devs

While it appears in this case that Lodsys has been put back in its place and that Apple, to all its credit, has its developers' backs, it does raise the question: Is this the first and last issue like this, or the first of many issues like this for app developers?

Sadly, I think for app developers, this is just the first of many. However, Apple's latest move does cement the build-it-first-for-iOS sentiment out there. Not only is it more profitable to develop for iOS, it is also now safer to develop for iOS knowing that Apple has your back.

I will end this article with another quote from Bruce Sewell's (Apples) letter to Lodsys, and it is meant more as a warning for other patent trolls -- as in, stay away from iOS developers or else.

"Apple intends to share this letter and the information set out herein with its App Makers and is fully prepared to defend Apple's license rights."

Rob Walch is host of the Today in iOS podcast.

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