To really understand why Lodsys is doing what it's doing, we thought it would be worthwhile to ask a patent lawyer to explain it, so we contacted Patrick Igoe,
the lawyer who writes the Apple Patent blog and who has pointed out some
real weaknesses in the Lodsys patents.
Why, we wondered, was Lodsys first going after the little people, so to
speak, first and now hitting up Rovio and Electronic Arts? Is it like SCO,
headline seeking, hoping people will be so scared they'll just pay them
to stop? Is it all just so much "legal" theater, in other words, with
analysts popping up and advising the little people to settle with
Lodsys? I gather that didn't work. If Lodsys was following a
traditional playbook and hoped to use any licensees as a foundation to
after the big fish, are they now acknowledging that failure and
heading for the deeper pockets, in hopes that will work better?
And why only claim 27 of the '545 patent,
which is what Lodsys is alleging is infringed? What is claim 27,
anyhow? How could a game violate it?
Here is how Igoe explained it
to me (so don't read on if you don't want to read claim 27) and how he
analyzes Lodsys's latest moves:
One thing to remember is that we do not know when, or actually even if,
these larger companies got letters. EA's GC doesn't jump on Twitter and
announce that they've received a demand from a troll. So, the addition
of the larger companies could just be a signal of a breakdown of
negotiations from letters sent back in May when the small developers
received them. Any large company would have said the 21-day deadline was
ridiculous and taken more time to assess. Lodsys would have been wise
not to name those companies in a suit if there was any hint an easy
settlement was possible. However, at this point, there would have been
enough time for the attorneys for the larger targets to read the claims,
realize there are strong invalidity and non-infringement defenses, and
tell Lodsys they won't settle for any non-trivial sum.
As you know, Igoe already wrote a detailed
analysis of the '078 patent,
showing why in his view developers don't infringe that patent, despite
Another possibility is that these *are* new additions to the target
pool. In that case, it could indicate Lodsys' strategy is failing and
they are throwing a Hail Mary. Failing to obtain enough small
settlements, or even build their list of licensees to help intimidate
others, they may now want to see if they can get a larger fish to pay up
to fund operations, or to get some payout before this all falls apart in
re-exam or one of the DJ actions.
The assertion of claim 27 of the '565 was in the original
complaint [PDF]. Here's claim 27:
27. A tangible computer readable medium having stored thereon, computer
executable instructions that, if executed by a computing device, cause
the computing device to perform a method comprising:
The app developers don't provide the "readable medium."
monitoring a product for an occurrence in the product of a trigger
event of a predefined plurality of trigger events,
- incrementing a counter corresponding to the trigger event upon
detection of the occurrence of the trigger event in the product;
- displaying a user interface, configured to probe for information
regarding a use of the product, if the counter exceeds a threshold;
- storing an input received from the user interface on a device; and
transmitting the input to a server.
The '565 is easier to infringe than the '078, but far, far easier to
invalidate, especially if you can use Lodsys' broadened interpretation.
Again, consider a Xerox device from the 90s with numerous
component/consumable usage counters, a machine operator interface, and a
"RIC" modem that reported machine stats and operator/machine interaction
data to Xerox. More generally, look for any metered service that warns a
user a limit has been reached, gets a response, perhaps authorization
for purchase of additional units of usage, and reports that interaction
to a server. If you broaden "regarding a use of the product" as Lodsys
is doing, a credit card gas pump may even anticipate these claims.
My gut reaction on day one of this was that there was a FUD component.
v. Apple Devs: FUD for the App Store Era?
What does it all add up to? Well, scare headlines, of course. Lots of
frightening talk, as at this conference highlighting Florian Mueller's
"the Sky is Falling" presentation, now on YouTube. His "advice"
has changed from "just settle" to "organize all the developers and hit
Apple and Google up for protection".
You know what it all reminds us of? Remember when SCO first started to
sue and threatened to go after end users? Talk about scare headlines!
Of course, patents are worse, because the US patent system is broken,
even if the US Supreme Court doesn't yet recognize it fully. The Lodsys
situation is fairly obviously Exhibit A.
But in the beginning of the SCO saga, analysts popped up urging IBM
customers to provide indemnification. Remember all that? Here's one of
the earliest examples:
After sending out 1,500 letters to
corporate Linux users in May of this year, SCO announced this week that
it has received U.S. copyright registrations for its Unix System V code
and is asking commercial Linux users to purchase licenses to run the
open-source software legally.
Several commercial Linux users, including Red Hat (NYSE: RHT) and SuSE,
have expressed doubt about the need for the licenses –- which have yet
to be priced officially by SCO. However, Yankee Group senior analyst
Laura DiDio is advising customers not to dismiss SCO's licensing offer,
despite the arguments of those who think SCO's claims will not be taken
seriously in court. It's funny, looking back in time, but when this
junk first showed up, everyone was terrified. It went on
and on for months, with Laura DiDio and Rob Enderle over and over
issue. Well, IBM never did offer indemnification, because it
said SCO's claims
were meritless. They did, in time, prove to be exactly that. So that
was the right call. Imagine if IBM had done so, by the way.
"The customers who received these 1,500 letters from SCO have been told
this isn't going anywhere," DiDio told TechNewsWorld. "I don't think
anyone should listen to such empty assurances."
Soft Pitch for License
DiDio, who said SCO's copyright registrations illustrate the company's
seriousness about its claims and represent a step toward possible
litigation, described SCO's actions as "a very wise course."
"They went out of their way to say they are holding Linux customers
harmless," she said. "They're not being greedy. Under the law, if they
prevailed [in the IBM suit], they could hold the infringers liable."
DiDio criticized IBM's lack of indemnification of customers in the legal
case and noted that by stating Linux creator Linus Torvalds had
inherited the copyright violation and was therefore not
responsible for it, SCO is "trying to ruffle as few feathers as
Why, then, did analysts claim that it was urgent for everyone to get
IBM to provide indemnification? Did they simply not understand, or were they receiving "encouragement?" We don't really know, but it is a fact that in due time,
Microsoft came out with indemnification
for its customers, did it not,
using it as a distinguishing
factor for choosing them instead of Linux. The same day a report
from DiDio was splashed on Microsoft's Get the Facts page, saying how
great indemnification was. It's disappeared now, of course. But here's
a snip from what she wrote:
Corporations that use proprietary
Microsoft Windows and Office software get the broadest, most
comprehensive indemnification coverage in the industry because it’s
bundled into the cost of the license. Corporations that use open source
and Linux distributions receive only conditional, limited
indemnification protection—or in some cases, none at all—because they
don’t pay for the license. And here's
DiDio advising to factor in a lack of indemnification in the total
cost of ownership. Blah blah blah. Total and complete nonsense, as time
proved. SCO never even owned the copyrights they were threatening folks
with. You don't need indemnification if a claim is without merit.
Now it's Lodsys. It's patents now, but the strategy seems very similar,
to us. Step one is Scare Everybody. Here's one of Florian Mueller's early
analyses, urging Apple and Google to pay off Lodsys, or the
developers would have to:
Apple's letter to Lodsys is not enough. Not by far. It didn't prevent
Lodsys from suing, and the defence presented by Apple is not necessarily
going to work in court.
If Lodsys is just SCO-with-Patents, what do you bet that, down the
road, you find analysts
urging everyone to develop for Microsoft or vendors to
only use Microsoft stuff in their products?
I understand that large companies need time to turn things around, but
in this case, they've already had several weeks. Lodsys's lawsuit was
not at all surprising. When I analysed Apple's letter to Lodsys, I said
that unless Apple and Google pay something to Lodsys to make the threat
go away, there was going to be some next step in the pcess. And it was
very obvious that Lodsys would sue developers. Lodsys had consistently
said, from the beginning, that Apple's and Google's licenses to the
patents in question don't extend to the way the accused apps allegedly
practice the claimed inventions. So Apple and Google have known for
weeks now where this was heading, and what they've done so far is
insufficient. Apple's letter was good news at the time being, but all by
itself it's not enough. Google hasn't said or done anything (at least
nothing that the media would have reported on).
And even though I repeat myself, the real issue with little app
developers is that they can't really afford to defend themselves, which
will in many cases require them to take licenses from patent holders no
matter how doubtful the validity of the relevant patents or the
infringement allegations may be...
Call us cynical, but this just smells very familiar to us. Apple, the
primary target of all this as far as we can see, has
already asked the court to let it intervene. What? Did you
*really* believe that
Apple would allow all their apps developers to be scattered
to the winds by a patent troll? Or just pay Lodsys off to
make it stop? It clearly plans to fight to the death. And, my friends,
as we saw in the Psystar litigation, Apple knows how to fight.