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 IPHONE NEWS

Lodsys responds to in-app purchases 'trademark troll' accusations, reveals 'death threats, hateful bile'

A gruff rejoinder

Product: Apple news | Manufacturer: Apple
 
Apple news iPhone, thumbnail 1
Last week, independent developer James Thomson revealed on Twitter that he'd received a threat of legal action from a company he chose not to name over his use of in-app purchases in the scientific calculator app pCalc.

It transpired that several other small developers had been approached by the company - later revealed to be Lodsys, a technology patent-holder and licensee.

A company that does nothing other than obtain and enforce patents is liable to be called a trademark troll, but Lodsys styles itself as an inventor, even publishing a quote from Thomas Edison on its website.

In response to what it calls a “flash mob” of speculation from bloggers and the press following last week's revelations, Lodsys has posted on its website to address questions and complaints.

It's a long post, involving some legal terminology and a highly elaborate metaphor about a hotel, but the gist is (of course) that Lodsys has done nothing wrong, and defending patents is a perfectly normal part of doing business.

As to why the company appeared to be exclusively approaching smaller developers, Lodsys claims that this is a “rational approach”, ensuring the greatest financial return.

“There is a misalignment in the market where the litigation costs greatly influence the incentives.  At the low end, the cost of litigation exceeds the value of the license and this puts strong pressure on small vendors to take a license rather than litigate.  However, above a certain threshold, there is a perverse incentive for the larger market players to not pay (even if they should) and to force the rights holder into litigation since the higher expenses of litigation and the risk may knock out the need to pay.”

In other words, rich companies can afford lawyers. Hardly an endearing explanation, which is possibly why the company has modified it.

“From a fairness perspective, we have decided that  Lodsys should attempt to license all users of the patent rights.”
 

Reviewer photo
Rob Hearn 16 May 2011
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Joined:
May 2011
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PeterBabiy | 21:25 - 16 May 2011
There's nothing wrong with protecting your patents...but you got to do it right!
 
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