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Patent infringement for iOS in-app store purchases claimed, using Apple’s own tactics

By | May 13, 2011, 8:17am PDT

Summary: Hardware 2.0 has the story of two developers who have been ordered to license patents covering in-app purchases from an unnamed company or face legal trouble in 21 days.

A story is surfacing of a mystery company that is sending cease-and-desist (C&D) letters to iOS app developers using Apple’s in-app purchasing technology. Hardware 2.0 has the story of two developers who have been ordered to license the patents from an unnamed company or face legal trouble in 21 days.

I suspect these two developers are just the tip of the iceberg, and as FedEx starts making deliveries this morning in Silicon Valley we’ll start hearing of other developers receiving the threatening papers. It is only logical that this company would not just go after two small developers, and that this will be more wide-spread.

While Adrian Kingsley-Hughes points out that this company is taking the cowardly tactic of going after the small app developers and not Apple, this doesn’t surprise me. Apple took the same tactic with patent infringement lawsuits against Android, suing HTC instead of Google. The tactic is aimed at going after the parties profiting from the alleged infringement, and not the creator of the infringing technology. The timing of this infringement claim is not surprising, as Apple’s big developer conference takes place in just a few weeks.

Hopefully Apple will step up and help developers with these claims. We’ll keep our eyes on this unfolding story to bring you details as they appear. If you are a developer and have been contacted by this mystery company, please let us know in the comments.

Image credit: Flickr user H.L.I.T

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Patent Infringement, Apple iOS, Applie iOS, Mobile Operating Systems, James Kendrick

James Kendrick has been using mobile devices since they weighed 30 pounds, and has been sharing his insights on mobile technology for almost that long.

Disclosure

James Kendrick

James Kendrick has no affiliations or relationships that need to be disclosed.

Biography

James Kendrick

James Kendrick has been using mobile devices since they weighed 30 pounds, and has been sharing his insights on mobile technology for almost that long. Prior to joining ZDNet, James was the Founding Editor of jkOnTheRun, a CNET Top 100 Tech Blog that was acquired by GigaOM in 2008 and is now part of that prestigious tech network. James' writing has appeared in many print publications: Smartphone and Pocket PC Magazine, Information Week and Laptop Magazine to name a few. James' coverage of the mobile technology sector has regularly appeared in the New York Times, Salon.com and CNN/ Fortune online. Not just a writer, James has filmed numerous video reviews and how-tos that have garnered well over a million viewers. He has appeared on local news segments and been interviewed by the Associated Press on mobile technology topics. Additionally, James has been podcasting about mobile technology for years.

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RE: Patent infringement for iOS in-app store purchases claimed, using Apple's own tactics
non-biased 19th May 2011
@Peter Perry That explains why recent studies have shown that developers interest in doing apps for Android over and even more so Honeycomb/tablets has dropped off in recent months. Your small minded hatred view on life is truly pathetic.
View in thread
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Apple's own "tactics"
john@... 13th May 2011
No "tactics" here - these are developers using Apple's API's not "tactics" but the official approach.

There isn't anyone out there that would be interested in trying to stop people developing for iOS now, is there?
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Contributr
tactic
JamesKendrick 13th May 2011
@john@... tactic was referring to going after the ones using the technology rather than the ones who produced it.
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Nah this is much worse
oncall 13th May 2011
@JamesKendrick

This is akin to a Nigerian scam email hoping to shake down a few suckers. You watch, Apple's legal team is going to stomp all over this.
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Really?
Bruizer 13th May 2011
@JamesKendrick

A one person shop doing weekend work is HTC making 3.5 billion per quarter?
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Really?
Bruizer 13th May 2011
@JamesKendrick

A one person shop doing weekend work is HTC making 3.5 billion per quarter?
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And it has nothing to do with Apple tactics; James just slanders Apple
DeRSSS 13th May 2011
@john@... I mean it is quite known that Apple did not sue Google for IP theft because the company does not make any profits of Android directly and there is almost no way how to claim damages. Only phone producers is real goal. The size of the companies has nothing to do with anything -- both Samsung and HTC, among others whom Apple sues, earn billions of dollars of net profits.

James knows all of it but still wants to slander Apple.
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RE: Patent infringement for iOS in-app store purchases claimed, using Apple's own tactics
noagenda Updated - 13th May 2011
@denisrs

... wow! Did you really take that from James blog? Take off your Cupertino glasses and you might see that that is EXACTLY what James was saying. To whit: Apple's tactic (rightfully) was to sue where there was money earned by infringement and NOT sue where there was no profit. The issuers of the C&D are doing the same thing. They are sending C&Ds to developers who make money by using the, alledgedly, infringing technology.

This isn't a 'slander Apple' piece at all. Yeesh ...
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However
oncall 13th May 2011
@noagenda

Apple does make money from in-app purchases, in fact Apple is THE big money maker from this system. So no, this group is not going where the money is being made, they are deliberately harassing small time app makers probably because they expect these guys to lack funds for any legal defense.
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RE: Patent infringement for iOS in-app store purchases claimed, using Apple's own tactics
noagenda 13th May 2011
@oncall
First, please don't think I condone patent trolls or the plethora of patent marking trolls out there.

Secondly, as I read the patent, they are claiming it is the method transferring information, by clicking on the upgrade button within the app that is in violation. Since Apple doesn't specificly make any money by directly using the upgrade button (its in the app ... owned by the developer) there is little money to be gained. The developer makes money by using the, allegedly infringing 'button' ... Apple merely takes a commission for the dollars the developer makes. Either way, it pretty scummy ...
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Isn't in-app purchases enabled
oncall Updated - 13th May 2011
@noagenda

By Apple's supplied API in addition to Apple requiring that developers only use Apple's provided API's?
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RE: Patent infringement for iOS in-app store purchases claimed, using Apple's own tactics
noagenda Updated - 13th May 2011
@onecall

Yes it is enabled by Apple but just like Google enabling the handset makers by giving away Android, the money 'target' resides with those who PROFIT from the alleged infringement. In the case Android and Google, they make no money directly from Android but the handset makers do. Therefore, anyone contemplating gaining $ (and I am not saying I condone the Google/Android suit either) from a suit go where the $ using the infringment reside.
I know it sounds squirrely but since the object is to gain $, there is no point in suing the enabler, only those who make money using ...
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Sorry I have to disagree
oncall Updated - 13th May 2011
@noagenda

Apple makes, provides and says you must use their API then collects 30% every time it is used. That's the only way I can see it. Then this company goes and sues makers of single 0.99 kids apps knowing they have no money for even a half-hearted legal defense or even most likely money to do anything but fold up shop. Sorry this is not Apple vs HTC, not even close, not even same ballpark.

Now if this company goes after somebody with actual money using in-app purchases then I might be more inclined to see it another way.
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RE: Patent infringement for iOS in-app store purchases claimed, using Apple's own tactics
noagenda Updated - 13th May 2011
@oncall

That is your perogative

I am just pointing out that to gather in any money, you have to be able to demonstrate 'harm'. The fact that Apple provides anyone the tools to do damage doesn't cause harm. Using the tools does. Now had Apple indemnified the developers for using those tools ... the holder of the patent would be naming the issuer of that indemnification as a defendant in any litigation.
Think gun manufacturer vs criminal who uses the manufacturer's gun. The gun maker isn't likely to be successfully sued for merely making the tool the criminal used to wrongfully injure someone (although in the US .... !).
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noagenda, I thought Apple just changed their rules
Will Pharaoh 13th May 2011
@denisrs
that say they now get a cut of any outside content obtained thru an app on the phone. Like if someone downloads a Rhapsody App, then signs up for a subscription at Rhapsody then streams or gets music from there.

Isn't this the same thing? You download a free app, then purchase the upgrade directly from the developer - Apple gets a cut.
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RE: Patent infringement for iOS in-app store purchases claimed, using Apple's own tactics
noagenda 13th May 2011
@Will Pharaoh
Ahhh but the 'cut' is for the transaction happening at their store. The developer's 'cut' is enabled by the end user using the (absurd as it is) 'protected IP' of the patent holder.
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I think you misunderstood the 'tactics' comment
iTeaBoy 13th May 2011
@john@...

Read the article again... I think you'll find that he was referring to Apples 'tactics' of suing the smaller players (handset makers like HTC etc) than taking on the big gorilla (Google)

So the 'tactics' comment had nothing to do with the developers.
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Conspiracy theories on the first post?
Will Pharaoh 13th May 2011
@john@...
I doubt any company is trying to stop people from creating for iOS, instead some little company got a patent years ago (for something they shouldn't have) with the hope that they'll be able to make money off of it someday.
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Might that anyone be a company whose name...
cosuna 13th May 2011
...starts with a Micro and ends with a Soft...

Although this story sounds like a conspiracy theory, there should be laws that persecute this "pseudo-legal" harassment (which could be a form of racketeering and extortion). If the company had any legal footing, they should be forced to settle in the court system, not on any other plaza, else this would be just another one (of the many thousands) of new nails on American capitalism's coffin.
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Get the lawyers
Robert Hahn 13th May 2011
Is there a patent lawyer in the house? Without knowing whether Apple would have even had a claim against Google, it is not possible to know whether suing HTC was a matter of choosing 'a little guy' to beat up on, or the only course allowed under the law since Google itself was not actually selling anything that violated the patent.
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Google can't just give away someone else's IP
Will Pharaoh 13th May 2011
@Robert Hahn
with the idea they'll profit from in indirectly and not be accountable.

I doubt the courts would charge someone with simple theft if they took Coke's secret recepie and just gave it to Pepsi to reproduce.

Sure Google didn't directly make any money if they used stolen IP without permission, but they could still be held accountable for damages as they released the IP in the software they created free for all to use, thus taking revenue from the company that created it.
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cowardly
buddhistMonkey Updated - 13th May 2011
((( "While Adrian Kingsley-Hughes points out that this company is taking the cowardly tactic of going after the small app developers and not Apple, this doesnt surprise me. Apple took the same tactic with patent infringement lawsuits against Android, suing HTC instead of Google." )))

As Robert Hahn noted above, perhaps Apple has chosen not to sue Google at this time because they determined that Google wasn't producing a product that infringed their patents. But of course, since you're entirely ignorant of the workings of Apple's legal team (not to mention Apple and the law in general), you ascribe a sinister and "cowardly" motive to make your headline pop. And are you SERIOUSLY trying to equate HTC, a company with a $35 billion market cap, with a tiny app developer whose biggest product is an iPhone calculator? Get real.
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Ho hum
guihombre 13th May 2011
He got a patent basically for an 'upgrade' button, which is a 'buy this' button, where the 'this' is an upgrade.

They gave him a patent for that, even after three decades of electronic purchase systems

Pitiful. USPTO, just pitiful.
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RE: Patent infringement for iOS in-app store purchases claimed, using Apple's own tactics
Peter Perry 13th May 2011
This doesn't even matter because the moving of Apps to Honeycomb has already begun and Apple's Politics are the main reason why!

I guess what I am saying is that Apple's in App purchase rules will be negated when the App developers finish creating a competing ecosystem by which they will use to push back on Jobs insanely stupid ideas!
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So honeycomb has 20 apps now;-)
Bruizer 13th May 2011
@Peter Perry

Your hatred toward Apple knows no bounds.
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RE: Patent infringement for iOS in-app store purchases claimed, using Apple's own tactics
Peter Perry 14th May 2011
@Bruizer That isn't it at al... once the two ecosystems are running 90% of the same Apps, the companies like Amazon, Barnes And Noble, Netflix, Hulu and Blockbuster, not to mention the periodicals, will be able to negotiate better terms.

Do you really think this isn't what has been happening?

If jobs weren't so manipulate and controlling, he would have just let his baby grow but now, he's standing on its throat.
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Just when I thought you were starting to make sense
Pete "athynz" Athens Updated - 15th May 2011
@Peter Perry Either I was missing something when I temporarily ran Honeycomb on my NookColor or I wasn't noticing that many of the same apps as iOS for Honeycomb... I could not even find an official Facebook or Twitter app for Honeycomb. I reworked my SD card to run Froyo (I'm running it on the SD Card so I can easily go back to the stock NookColor when I want - I'm running the Cyanogen Mod and the NookColor makes a pretty decent Android Tablet even with Honeycomb but a far better one with Froyo due to the hardware more than anything IMHO) and I found a lot more apps for Froyo.

I'm not saying the number of apps for Honeycomb won't increase but there are nowhere near the numbers as there are for Froyo and definitely way behind the numbers of apps for iOS... and there are more than a few brand new iOS apps being released every day.

Now your argument below about the bigger companies (i.e. Amazon, B&N, Netflix, etc.) does have some merit. I'm beginning to wonder if your hatred for Apple is not for Apple so much as it is Steve Jobs.
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RE: Patent infringement for iOS in-app store purchases claimed, using Apple's own tactics
non-biased 19th May 2011
@Peter Perry That explains why recent studies have shown that developers interest in doing apps for Android over and even more so Honeycomb/tablets has dropped off in recent months. Your small minded hatred view on life is truly pathetic.
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Apple's silly lawsuits come back for payback...
mktpostal@... 14th May 2011
Apple has been on the losing end of their own silly lawsuits. The most recent one against Kodak. So I don't know how much help they can be. For Apple the lesson is what comes around goes around.
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silly
buddhistMonkey 14th May 2011
@mktpostal ((( "Apple has been on the losing end of their own silly lawsuits. The most recent one against Kodak." )))

That's Kodak's "silly lawsuit," not Apple's. Kodak sued Apple first, and Apple countersued.
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its simple
jgoode@... 14th May 2011
Two problems here: 1) patent system in chaos; 2) Apple cares nothing about developers.
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If it's so simple then you should have no trouble answering me
Pete "athynz" Athens 15th May 2011
@jgoode@... How can you say Apple cares nothing about developers? Do you have anything to back this up or is this just more ABAer crap?
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sdf
m3kw9 16th May 2011
Just ignore the suit

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