Patent troll Lodsys expands in-app purchase witch hunt to Rovio, EA

Patent holding company Lodsys has amended a lawsuit alleging that a number of iOS developers are violating its intellectual property rights by implementing in-app purchase options within their iPhone and iPad solutions, targeting five additional defendants including Rovio Mobile, maker of the smash Angry Birds. The amended complaint also targets gaming firms Electronic Arts, Atari, Square Enix and Take-Two Interactive while leaving out Wulven Game Studios, one of seven developers named in the original Lodsys suit filed in May. The Lodsys suit now names 11 developer defendants in total.

Lodsys alleges that developers are violating 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 (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) 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 issued a formal response to the Lodsys charges stating that its existing patent license applies to its developer partners as well, explaining that the developers identified in the suit "are individuals or small entities with far fewer resources than Apple and [...] lack the technical information, ability, and incentive to adequately protect Apple's rights under its license agreement."

In June, Apple filed a motion to intervene in the Lodsys suit. "Apple Inc. hereby respectfully moves to intervene as a defendant and counterclaim plaintiff in the action brought by plaintiff Lodsys, LLC against seven software application developers for allegedly infringing U.S. Patent Nos. 7,222,078 and 7,620,565," reads the Apple motion, filed in the U.S District Court for the Eastern District of Texas. "Apple seeks to intervene because it is expressly licensed to provide to the Developers products and services that embody the patents in suit, free from claims of infringement of those patents."

Mobile software developers are removing their applications from the U.S. outposts of digital storefronts like Apple's App Store and Google's Android Market over fears posed by patent trolls like Lodsys and Indian firm Kootol Software, which earlier this month 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, 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."

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, N.C.-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."

For more:
- read this FOSS Patents blog entry

Related articles:
Developers withdrawing from U.S. app stores as patent fears mount
Apple strikes back in Lodsys in-app purchase patent fight
Apple iOS developers sued as in-app purchase patent fight escalates
Patent troll Lodsys shifts in-app purchase license threats to Android
Apple to Lodsys: In-app purchase patent license covers iOS developers, too
iOS developers targeted over in-app purchase patent infringement

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