Patent troll Lodsys became infamous after it extracted a license from Apple (s aapl) only to turn around and sue small iOS app developers for including features like in-app purchasing in their products. But one startup is now taking a stand and has asked a federal court to examine the case.
Lodsys, a shell company that doesn’t do anything but file lawsuits, appears undeterred by the pressure from Apple or by popular contempt. This month alone, it used the same patents to sue dozens more companies, including names like Dell, Rosetta Stone and Overstock.com. Last month, a federal court finally gave Apple permission to intervene in one of the lawsuits and argue that its own license should protect the app developers.
But it appears that Lodsys is continuing its shakedown of small app makers by offering them a “licensing solution” they can’t refuse in return for a share of their royalties. The troll’s latest antics came to light this week after a brave Seattle app maker, A Thinking Ape, refused the shakedown and instead asked a federal court to declare that apps like “In Your Dorm” don’t infringe the patents.
The complaint by A Thinking Ape lists Lodsys’ campaign of lawsuits against everyone from the New York Times to Wolfram Alpha and sums up the nature of the racket:
Defendant does not create products; it solely engages in aggressive litigation tactics to compel licenses of their AssertedPatents from companies that do produce products.
A handful of other developers have tried to stand up to Lodsys in the past but most capitulated soon after and agreed to pay the troll a tax (rumored to be 2.5 percent of revenues).
The Soul of a Patent Troll
Patent trolling took off after the U.S. Patent and Trademark Office began issuing a flood of questionable “business method” patents related to things like software and, believe it or not, a crustless peanut butter and jelly sandwich. In 2006, lawyers used such a patent to threaten Research in Motion with an injunction against the BlackBerry and extract a $612 million payout.
Lodsys appears to have perfected the art. The troll has been sending identical threat letters (you can see one below) that extol the virtues of patent developer Daniel Abelow. The letter explains that “Dan” has been to several Ivy League schools and “an independent consultant on presenting information via the internet.”
So who is this latter-day Ben Franklin? Here’s a shot from his homepage:
Dan repeatedly describes himself as an “inventor” but it doesn’t appear he has any training in science or engineering. An average person would be as likely to call Dan an inventor as they would call former Yahoo CEO Scott Thompson a computer scientist.
But given the state of the patent system, it appears we’re stuck with the likes of Dan for a while. Or at least until courageous app developers or Apple can flush Lodsys and its shadowy backers from the patent system once and for all.
Here’s a typical Lodsys letter. Scroll down to see Dan’s marvelous inventions in action:
Lodsys Letter Copy