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In-app payment patent scattergun fired at small devs

Will Apple step in to protect its ecosystem?

Internet Security Threat Report 2014

Mobile developers using in-app purchasing have been hit with letters requesting they hand over half a per cent of their US revenue as a licence for using the patented concept.

The letters arrived by FedEx on Friday, addressed to individual developers of applications that allow the user to unlock additional functionality in exchange for money. That's a very popular use for in-application billing, and one facilitated by all the popular mobile platforms including Apple's iTunes and Google Marketplace as well as Nokia's Ovi Store.

But Lodsys, which owns the patent, isn't targeting the facilitators as they aren't providing the functionality to end users, as explained in the company's blog. It's the developers who are creating applications that infringe on US patent 7,222,078, therefore it's the developers who should cough up 0.575 per cent of their US revenue to Lodsys in licence fees.

Lodsys freely admits it didn't invent the technology, or even buy it from someone who invented it. The patent was filed by one Dan Abelow around 20 years ago. He sold it as part of a bundle of patents to Intellectual Ventures, who then sold them on to a "private rights ownership group" which "set up independent companies, with sufficient capital and talented staff to focus on licensing the patent rights broadly to the marketplace".

The patent is hugely broad, even at a glance, and could well be challenged. But the developers being targeted lack the resources to challenge it, while the facilitators (Apple, as iOS developers are the only ones targeted so far) aren't being accused of any infringement. One might argue that Apple is facilitating the patent infringement, but there's little reason for Lodsys to bring Cupertino into the fray.

Though Lodsys is drawing Apple into the matter anyway, as all the developers have gone running to Cupertino for advice. Patent blogger Florian Mueller reckons Apple will have to provide some sort of legal aid to the developers, or risk the whole ecosystem; but he also points out that even Apple can't risk taking responsibility for every patent that iOS developers infringe.

With millions of mobile apps now being commercially distributed a lot more valid patents are going to be infringed, and a lot more frivolous claims are going to be made. But mostly, a lot of patent lawyers are going to get paid to sort out which is which. ®

Internet Security Threat Report 2014

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