Patent troll Lodsys shifts in-app purchase license threats to Android

Weeks after threatening a number of iOS developers with legal action for implementing in-app purchase options within their iPhone and iPad solutions, patent holding company Lodsys is now turning its attention to Google's (NASDAQ:GOOG) Android platform. According to this thread on the Android Discuss forum, Lodsys contacted a developer using the screen name 'markusn82' to allege his Android app infringes on the firm's patents: "Has Google given direction to any developers that have been hit by this?" markusn82 writes. "We are obviously a small shop and are not financially capable of defending ourselves over a litigation." At press time, it is unclear whether other Lodsys has contacted other Android developers.

Approximately a dozen iOS developers received letters contending they are infringing on Patent 10/732,102, which Lodsys acquired in 2004 from inventor Dan Abelow and which covers "methods and systems for gathering information from units of a commodity across a network"--e.g., in-app purchases like upgrades from lite to premium versions. In a series of Q&A entries posted to its blog, Lodsys says that in cases where iOS applications are offering in-app upgrades, it 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 states.

Lodsys previously confirmed Apple (NASDAQ:AAPL), Google 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. The value of the customer relationship is between the application vendor of record and the paying customer, the OS (is acting as an enabler) and the retailers (are acting as a conduit to connect that value), and taking their percent for that middleman role." 

Apple issued a formal response to the Lodsys charges last week, stating that its existing patent license applies to its developer partners as well. "Apple is undisputedly licensed to these patents and the Apple App Makers are protected by that license," writes Apple senior vice president and general counsel Bruce Sewell in a letter addressed to Lodsys CEO Mark Small. "There is no basis for Lodsys' infringement allegations against Apple's App Makers. Apple intends to share this letter and the information set out herein with its App Makers and is fully prepared to defend Apple's license rights."

For more:
- read this CNet article

Related articles:
Apple to Lodsys: In-app purchase patent license covers iOS developers, too
OS developers targeted over in-app purchase patent infringement 
Apple bolsters password controls on iPhone in-app purchases 
FTC confirms probe into iPhone in-app purchases
Lawmakers urge FTC to probe iPhone in-app purchases
Distimo: In-app purchases now half of iPhone developer revenues