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Lodsys sues App Store developers

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Patent holder Lodsys is amping up its legal battles over in-app purchasing technology: fresh from filing suits against selected Android developers, the company has now filed a lawsuit against a selection of iOS developers, claiming their products infringe on its patents. The move comes after a withering assertion from Apple that iOS developers are covered by Apple’s licensing rights to the patents.

The suit was filed in the historically patent holder-friendly Eastern District of Texas, and currently targets Combay, Iconfactory, Illusion Labs AB, Michael G. Karr (dba Shovelmate), Quickoffice, Richard Shinderman, and Wulven Game Studios. At issue are U.S. patents 7,222,078 and 7,620,565, which Lodsys claim cover in-app purchasing.

The move ups the ante in the patent dispute between the two companies. Patent litigation can be a drawn-out, expensive proposition, and Lodsys is apparently betting that most iOS developers won’t have the deep pockets or resources to sustain a drawn out legal battle. The burden is now on Apple and Google to step forward and indemnify their developers, taking on the legal battle against Lodsys themselves, or attempt work out a settlement with Lodsys. However, if either Google or Apple capitulates or settles, it could have a dampening effect on development for the iOS and Android platforms, because if Lodsys can succeed in suing app developers for patent infringement, other patent holders are sure to consider the same strategy.

In its blog, Lodsys claims it has been in discussion with Apple and that there was “clearly disagreement on the interpretation” of the terms of Apple’s license agreement. Lodsys asserts Apple’s claim that iOS developers are covered under the company’s licenses “has no discernible basis in law or fact”—and the company is sure enough of it’s position that it is offering $1,000 to any company to whom it has sent an infringement notice of Apple’s existing license rights prove to cover them. Lodsys also notes that Apple’s contract with its developers limits the company’s legal responsibility for third-party patent infringement to $50.

Neither Apple nor Google have responded to Lodsys’ latest suit or comments. Apple’s World Wide Developer Conference (WWDC) opens next week, and it’s safe to say thousands of iOS developers will want to know how Apple intends to deal with Lodsys.

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