Apple General Counsel Bruce Sewell contends that since Apple is licensed to certain Lodsys patents its developers are protected by extension.
There has been an outpouring of support for several iOS developers that received letters from Lodsys on May 13, 2011 accusing them of infringing on the company’s license for in-app purchases and demanding a 0.575% royalty from apps that use the relatively common feature.
Apple's argument has two components:
First, Apple is licensed to all four of the patents in the Lodsys portfolio. As Lodsys itself advertises on its website, “Apple is licensed for its nameplate products and services.” Seehttp://www.lodsys.com/blog.html (emphasis in original). Under its license, Apple is entitled to offer these licensed products and services to its customers and business partners, who, in turn, have the right to use them.
Second, while we are not privy to all of Lodsys’s infringement contentions because you have chosen to send letters to Apple’s App Makers rather than to Apple itself, our understanding based on the letters we have reviewed is that Lodsys’s infringement allegations against Apple’s App Makers rest on Apple products and services covered by the license.
It sums it up nicely by saying:
Because Apple is licensed under Lodsys’ patents to offer such technology to its App Makers, the App Makers are entitled to use this technology free from any infringement claims by Lodsys.
Then it puts some teeth into the letter:
Therefore, Apple requests that Lodsys immediately withdraw all notice letters sent to Apple App Makers and cease its false assertions that the App Makers’ use of licensed Apple products and services in any way constitute infringement of any Lodsys patent.
Pretty clear, right?
The problem is that there's a lot of money on the table and Lodsys isn't likely to just roll over. Apple's letter is short and sweet and is mostly posturing at this point. I suspect that Apple will end up settling with Lodsys on behalf of its developers rather than letting them twist in the wind. Lodsys knows this and is trying to squeeze as much money as possible out of Apple.
What's your take on Lodsys? Entitled? Or bottom-feeders?