Mobile software developers are removing their applications from the U.S. outposts of digital storefronts like Apple's (NASDAQ:AAPL) App Store and Google's (NASDAQ:GOOG) Android Market over fears posed by patent trolls like Indian firm Kootol Software, which last week sent notice to multiple tech companies alleging their services and products infringe on Kootol's patent rights.
Kootol claims that more than two dozen firms--including Apple, Google, Microsoft (NASDAQ:MSFT), Research In Motion (NASDAQ:RIMM), Facebook and Twitter, as well as smaller startups like The Iconfactory, Seesmic and Ubermedia--are infringing on U.S. patent application 11/995343--"A Method and System for Communication, Advertising, Searching, Sharing and Dynamically Providing a Journal Feed"--which covers core messaging, publication and real-time search technologies. Kootol contends it retains exclusive license to the solutions and "expressed concern that said companies may violate [its] intellectual property by using it for their websites, networks, applications, services, platforms, operating systems and devices."
Kootol's allegations follow on the heels of a lawsuit filed by patent holding company Lodsys claiming that iOS developers are violating its intellectual property rights by implementing in-app purchase options within their iPhone and iPad solutions. The Lodsys suit targets seven iOS programmers--The IconFactory, Combay, Illusion Labs, Shovelmate, QuickOffice, Richard Shinerman and Wulven Game Studios--and contends the developers violated Lodsys patents related to in-app payments and data collection applied to user interactions. Lodsys is seeking 0.575 percent of U.S. revenues over the period of the notice letter to the expiration of the patent, plus applicable past usage. "So on an application that sells U.S. $1M worth of sales in a year, the licensee would have an economic exposure of $5,750 per year," Lodsys wrote on its blog. Lodsys previously confirmed Apple, Google and Microsoft have all licensed its nameplate products and services, but contends that "The scope of their current licenses does NOT enable them to provide 'pixie dust' to bless another (3rd party) business applications." Apple has filed a motion to intervene in the suit.
The Guardian reports that some overseas developers are abandoning the U.S. mobile application market in an effort to avoid the headaches and financial strains caused by companies like Lodsys and Kootol. "All my apps removed from US app stores (all platforms)," tweeted London-based iSimples developer Simon Maddox last week. "0.575% of total revenue put in a spare bank account. Screw you, Lodsys." Cheltenham, UK-based Shaun Austin added "Selling software in the US has already reached the non-viable tipping point." Craig Hockenberry of Greensboro, North Carolina-based IconFactory, named in both the Lodsys and Kootol suits, tweeted "I became an independent developer to control my own destiny. I no longer do." The Guardian adds The IconFactory was recently granted a 30-day extension to respond to Lodsys's claims.
- read this Guardian article
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