The Lodsys patent infringement lawsuit against seven different iOS developers that was filed last Tuesday has been subject to a motion to intervene from Apple, which claimed that it was licensed to use Lodsys’ patents and that the lawsuit was in violation of the doctrines of exhaustion and first sale.
Lodsys had earlier claimed that developers were violating one of Lodsys’ portfolio of four patents when they used Apple’s in-app purchase API in their apps. They started the motion by sending letters to the developers informing them of this violation and cited Patent #772,078 which regards systems which gather information through units of a commodity in a network. The letter further demanded that either the developers start paying a licensing fee to Lodsys for using its patented technology or face an infringement lawsuit within 21 days.
Apple stepped in because they made the APIs in question. They claimed that had already licensed said patents from their previous owners, Intellectual Ventures. Apple further stated that this license extended to all of its customers as well as business partners including iOS developers who use the in-app purchase API.
Despite this, however, Lodsys went ahead and filed a lawsuit against seven different independent developers in the Eastern District of Texas, which is generally regarded as being patent-holder friendly, on May 31. The lawsuit claimed that the APIs that the developers were using violated at least two of Lodsys’ patents.
The lawsuit is a big problem for these independent developers because they are typically very small companies who do not have the financial resources to defend an expensive patent lawsuit. In these circumstances, most developers would be forced to settle the case and pay the licensing fee demanded from them by Lodsys. This aspect and past decisions in similar cases seem to have encouraged Lodsys to go after more developers and compromised Apple’s license rights.
However, the situation might not be as bad as envisaged because the motion to intervene by Apple could prove to be a shot in the arm as it may bankroll their defense to protect their interests as well as its own. While the judge has yet to allow the motion to pass, Apple’s motion further goes on to cite cases wherein companies like Microsoft and Intel successfully intervened in similar patent disputes where licensing was the major issue.
