Lodsys Responds To In-App Purchasing Patent Controversy

An anonymous reader writes "Last week, a heretofore unknown company named Lodsys sent FedEx packages to a number of independent iOS developers informing them that their use of in-app purchasing infringed on valid patents they owned. Now Lodsys has publicly responded to a number of issues/questions levied at them over the past few days."

Comments

One question they did not answer

[Jailbrekr]

"So why do you think you should profit from something so painfully obvious? This is a natural extension of shareware so why is this unique?"

Re:One question they did not answer

[chemicaldave]

Because they already paid the inventor for the patents. They purchased the cake, realized later that it's actually a shit sandwich, and now they need to make some money.

Re:One question they did not answer

[mellon]

Who cares why they think they should profit from something so obvious? Why do foxes think they should profit from rabbits' foraging? It's a meaningless question. They are just trying to feed themselves, in a way that rabbits might argue is immoral, but that no fox would agree is.

The real question is, when are we going to stop letting foxes gnaw at our bellies and fight back?

Re:One question they did not answer

[Omnifarious]

They did answer that question, rather obliquely.

Starting in 1988, Dan Abelow invented, put in significant amounts of his time, and paid hundreds of thousands of dollars in patent filing, prosecution lawyer fees, and maintenance fees to the US Patent Office to create the patent portfolio.

Clearly, someone who spent so much money at the patent office deserves a return on their investment. That's what the patent office is for after all, blatant extortion over things anybody would've thought of given half a brain.

There are some kinds of cleverness that seem simple when you learn the idea, but weren't obvious before the idea was known. And whether or not you think that sort of cleverness should be rewarded with a patent, this isn't that sort of cleverness. This is patenting the bleeding obvious.

Re:One question they did not answer

[Lumpy]

first you have to get rid of all the corrupt pawns that were put in place at the USPTO that rubber stamp everything in sight. Once you get competent and honest people in there 90% of all software patents will be invalidated.

Re:One question they did not answer

[tripleevenfall]

I don't think that this patent was that bad in and of itself - the real question is, why can they be bought and sold like securities?

They should be non-transferable unless the case is one of a certain company buying another.

They shouldn't be traded like baseball cards and then used to suck money out of the system without adding a cent of value to anything, anywhere.

Re:One question they did not answer

[gstoddart]

So why do you think you should profit from something so painfully obvious?

Well, like any patent ... to actually read this one it's anything but obvious.

It's 79 (or so) points of an 'invention' involving ... well, 'evaluating a commodity' is the closest I could find to any useful noun, and then a bunch of subsequent claims which say various things like "claim n-1 but in fabulous pink".

I'm not a patent attorney (or, any kind of attorney) ... this could have been describing a metaphysical system to measure karma ... who the hell knows what it actually says. It's so convoluted into legalese as to be incomprehensible. It bamboozled the USPTO into approving it, and apparently they did several patent extensions/refilings/amendments ... which, as I recall, effectively reset the clock and the patent stays in the queue but gets back dated to the original date.

So, he came up with a vague idea, and spent literally years tweaking it endlessly to get through the system ... all the while, people were independently creating his 'idea', but he got to keep his work back dated to the original filing.

Of course, the USPTO are morons, and their rules say that say that once they've validated a patent, you have to act like it's legit, and that becomes the law of the land. Trying to overturn a stupid and pointless patent is exceedingly difficult.

Sadly, they now have a patent which covers ... well, it's so vague, it probably covers things we haven't even identified yet. Maybe even the stock market since it's mostly talking about valuation and distribution of commodities.

This is no way to run a legal system.

Re:One question they did not answer

[sqldr]

yeah.. we stop stop wasting people's times with frivolous death threats and actually MURDER the bastards! :-)

Re:One question they did not answer

[Omnifarious]

It wasn't obvious in 1988 because a confluence of technologies didn't exist to make it trivial. Coming up with an idea that's not obvious because its completely impractical and then suing people once it does become practical and they unwittingly implement it is ridiculous.

Re:One question they did not answer

[calzones]

or do you think that inventors shouldn't be allowed to sell patents?

BINGO.

If you set out to patent an invention, you should only be able to profit from patent protection if you actually execute on the patented invention, or if you are waiting to figure out how to execute (waiting on investors, waiting on cheaper technology, etc) and someone else comes along and commercially releases an invention that trespasses on it.

Selling a patent should be worthless unless you are selling it as part of a business that is actively involved in commercially executing / production on that very patent. In which case the entire patent + production bundle exchange hands.

The way it should be: If you are unable to execute on a patented invention then you are SOL unless someone else decides to trespass on it. If you invent something and patent, your only hopes of getting paid are either executing or suing someone who violates your patent before you are able to execute.

In short, inventing something with no known means of executing on it, including the inability to raise investment capital to execute on it should be a worthless enterprise and unworthy of your time and money to patent. Let someone else patent it who can execute on it or who at least thinks they can and is willing to go unpaid on their patent.

Re:One question they did not answer

[Snarky McButtface]

If they do not rubber stamp everything, how do you explain this?

Re:One question they did not answer

[Noughmad]

But what if you don't have the means of production?

Let's say some poor electrical engineer produces a small solar cell with much better efficiency than currently available. But he doesn't have enough money to build a factory and hire people to operate the company. Should he be ashamed of himself for being poor, not allowed to licence his invention?

Do you really suggest that only the wealthy should be allowed to patent things?

Re:One question they did not answer

[calzones]

If the patent is worthwhile, the engineer will have no trouble securing funding for a new company dedicated to producing the solar cell.

Alternatively, the engineer can sit on his hands and just publicize his new invention and set up licensing fees to others that wish to fabricate the invention.

However, the engineer should never be allowed to just shrug and sell off the patent. Buying a patent should be effectively worthless unless you are buying it as part of a package deal that includes production.

Being in the business of owning patent portfolios and not doing anything with them should be 100% non-viable.

Re:One question they did not answer

[SilasMortimer]

Glad you pointed that out, as I'd taken the previous comment seriously and had immediately begun planning how to implement its instruction.

Re:One question they did not answer

[calzones]

Under my proposal:

If you're a serial inventor, you can choose to license all of your patents to other entities, or you execute on one or more of them (or both). At some point after the first successful patent, you would likely have enough money to run a full-blown corporation. From that point on, you could just file all your subsequent patents under your corporation (but the ones you originally came up with would still be in your name). A special exceptional patent process could exist for inventors wishing to consolidate all their patents under a single corporation for which that they hold a majority sake.

If you're a serial inventor, you could be your own patent troll just by patenting a lot of stuff and licensing it out. So patent trolling wouldn't go away, it would just become non-transferrable and benefit the original inventor only.

Obvious patents are a huge deal too. You're right I'm not addressing that, because it is far more complicated. But I'd like to see that reformed.

As for a black market. If you're willing to take the risk of holding on to an idea and not patenting it, then what's wrong with that? The "ready for registration" would be too little too late in most cases because by the time people see value in a patent, it's because it's already being executed on in the market, and you can no longer patent it.

Or are you saying that a serial inventor could come up with a whole portfolio of ideas over a 5 year period, never patent a single one, but then approach a patent troll company and sell them all the ideas for them to patent? That possibility certainly exists and is definitely a good counterpoint to my position. On the other hand, an un-patented idea is worth far less than a patented idea and it's very risky to hold and to purchase and requires a whole lot of NDA and non-compete contracts. I think that would serve to mitigate the potential trouble significantly. Regardless, designing incentives to do away with this aspect, though a murky prospect, is worth thinking about.

At the end of the day, the gist of my position is ideas are a dime a dozen. People are constantly saying "someone should do X...." Anyone can (and does) have an idea. The trick is having the conviction to follow through. We need to reward raw ideas far less than reward those inventors who have the wherewithal to actually follow through.

If an idea is worth patenting, then even if you can't execute on it, it should be well worth your while to buy a godaddy domain, publicize it and license it. For what it's worth, that will be a drop in the bucket compared to the expense of obtaining a patent.

Re:One question they did not answer

[bugs2squash]

How much investment does it take to start a company ? Answer, close to zero. The easy circumvention is to start a company with, say, $500 capital and then sell the company for the value of the patent (to a troll) + $500. It's one thing to make it mandatory to start a company, quite another to sue someone for being unrealistically under-capitalized to actually bring a patented invention into production.

Re:One question they did not answer

[Sarten-X]

I can. It's an animal toy. The patent does not cover sticks in general, unless they are used as animal toys. More importantly, the patent covers manufactured sticks, made from pressed cellulose or treated wood, infused with flavorings or scents. If challenged, the plain-stick part probably wouldn't hold up. The idea of a flavored, scented stick as an animal toy, made from what could be recycled sawdust, is actually pretty interesting to me.

Re:One question they did not answer

[Kalriath]

Actually, there's a re-examination certificate at the end, and it says that claims 1 through 20 were cancelled.

Most revealing section

[d3ac0n]

Here is the most revealing section of the "answer" given"

http://www.lodsys.com/1/post/2011/05/q-what-is-dan-abelows-involvement-is-intellectual-ventures-behind-lodsys-or-controlling-lodsys-in-some-way.html

For those that don't want to read the section, allow me to sum up: Some guy named Dan invested a crapload of time patenting things he had no intention of making. those patents were resold a couple times until they landed in the hands of a Patent Troll company who set up multiple smaller companies with the expressed intention of Patent trolling.

Yep. It's every bit as obnoxious and evil as you thought it was.

One question though

[Nidi62]

Assuming this patent is valid(playing devil's advocate here), what would it mean to Apple's demands that apps allow for in-app purchases(that Apple takes a cut from)? Apple would essentially be requiring developers to use and therefore have to license this idea, and then pay the Apple royalties on top of that, would it not? Seems like this would be bad for Apple, as it would drive more people away from iOS and the app store, which would mean fewer fees and royalties for Apple.

This one time...

[theghost]

This one time i was at a baseball game and i bought a beer without leaving my seat. Did Lodsys get their cut off that?

Re:So

[DaveV1.0]

They ask for 0.575% of U.S. revenue for the products using the patent.

FTFY.

They get 0.575% of all U.S. revenue from Apple, Google, Microsoft, etc., but rather only the revenue from products that use the patent in question. There is a BIG difference.

Can you be infringing by using a supplied API?

[KreAture]

If apple supplies an API for/with in-app purchasing, then I shouldn't be infringing for using it. Apple should. Then again, there were shopping apps before, and they were not infringing on in-app purchasing patents, but existed before them. Doesn't that void the patent?

And yet.

[thePowerOfGrayskull]

Their responses are all - naturally - based on the assumption that their claims are valid. However, they have yet to explain how their patent -- which specifically encompasses a method of providing feedback to content creators from content consumers... has relevance to an in-app upgrade purchase. Nothing of the sort is referenced in the patent. The suggestion that such a purchase is a form of feedback is specious at best: the customer is offering no suggestions for improving or changing the product (the common example specified in the patent itself), but is rather paying continue using or unlock already-existing functionality.

App Developers are Accessing System APIs

[Salvo]

So Apple, Google and Microsoft have already payed Licensing fees for integrating the Technology into their OS and System APIs?
Whenever this technology is integrated into a Third-Party App, they access it using System APIs.

If App developers use System APIs to playback h.264, MP3s and other Licensed Technolgies, they aren't expected to pay licensing to MPEG-LA or Fraunhaufer Institute. The Licensing has already been payed by the OS Vendor.

How is this any different?