How far will Apple go?

May 23, 2011

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Approximately one week ago patent-holding firm Lodsys sent letters to select iOS developers, directing them to license Lodsys technology for making in-app purchases.  Small developers were alarmed at the prospect of having to give a percentage of sales to Lodsys, and others feared giving in to Lodsys meant sliding down a slippery slope.  Would Apple stand up to Lodsys and defend developers, who are ostensibly the lifeblood of the iOS economy?

In a letter sent to Lodsys CEO Mark Small today, Apple defended its “App Makers” by claiming the company’s licensing of Lodsys technology meant App Makers were covered by it as well.

Thus, 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 by Lodsys.

I am not a patent attorney, but the question remains how far Apple will go to defend App Makers. What happens when Lodsys follows up on its letters demanding payment and litigates its claims against the App Makers? Even with Apple’s letter in hand, will App Makers still be forced to defend themselves in patent litigation?  Will Apple indemnify App Makers using its SDK, or possibly seek a preliminary restraining order barring Lodsys from demanding payment from App Makers because of the “doctrines of patent exhaustion and first sale” as mentioned in its letter?  Stay tuned.

UPDATE #1: reports that Lodsys has indeed filed suit against several App store developers, accelerating plans that originally called for a 21-day negotiation window with the developers before filing suit.

UPDATE #2: Apple’s taken a big step in its defense of the App Makers, filing a motion to intervene in the Lodsys lawsuit.

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