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Friday
May202011

Thoughts on the whole Lodsys mess

It's been one week since the whole Lodsys mess broke. For those who don't know what I'm talking about, a patent holding company, Lodsys, sent letters to about a dozen independent iOS app developers, claiming that they had infringed on Lodsys's patents and asking for 0.575% of all profits, past and present.

For a lot of smaller developers, this a bone-chilling development. And, it feels grossly unfair. In most cases, the app developers were simply using Apple's in-app purchasing system. That's just wrong. Apple created the in-app purchasing framework. They promoted the system, encouraging developers to use it. Shouldn't they be responsible if it violates a patent?

If Lodsys succeeds, this really opens up Pandora's box. As a developer, I use third-party libraries all the time. Why build something from scratch, if I can find a mature, well-tested implementation that already meets my needs. My time is better spent building new things--not reinventing the wheel. But, Lodsys seems to imply that I might be financially responsible for any patents that those libraries violate. And that is scary. I mean, it's sit-bolt-upright-covered-in-cold-sweat scary. It's Zombie-werewolf-vampire crossbreed scary. Hell, it's Justin Bieber scary.

How can I build great software if I can't trust my own tools?

To make matters worse, what can an independent software developer do? Fighting lawsuits quickly gets unbelievably expensive. I've heard that the cost would be in the tens of thousands of dollars, if you're lucky. Many patent lawsuits stretch into the tens of millions.

Most small developers simply cannot afford to fight. If we get sued, we're out of business--or worse. I suspect very few small developers have thought to set up a limited liability companies (LLC) before putting their apps on the app store. This means they are personally responsible for the business. Lodsys could go after their families. They may have to declare bankruptcy; they may lose their house and their car, not to mention the potential damage to their credit rating.

The sad truth is, even if Lodsys's claims have absolutely no merit, most of us can't afford to fight them. So, what choices do we have?

The safest rout is to just pay up. Lodsys isn't asking for that much. As wrong and as unfair as it may seem, this may be the best option. In the short run.

The problem is, Lodsys is just the tip of the iceberg. If they are successful, others will follow. It's the death of 1,000 cuts. And worse, it will suck the fun out of the whole business. I don't want to face a daily gauntlet of bullies, rattling my teeth for lunch money. For many iOS developers, we do what we do because we love it. If it stops being fun, we'll just go do something else.

So, if Lodsys succeeds, the entire app ecosystem will suffer.

We could ignore Lodsys and hope they won't actually sue. However, this is a bit like playing russian roulette. True, filing a lawsuit would be expensive for Lodsys, and most small developers don't have much money, so they'd have trouble recouping the costs. Still, that hasn't stopped the RIAA. Additionally, Lodsys has sued Brother, HP, Lexmark and others. So they're clearly not afraid of going to court.

We can always pull our in-app purchases. While this works for new apps, it isn't a complete solution. After all, Lodsys is asking for money from past sales as well. Removing in-app purchases from an existing application may make them less likely to sue--but its just russian roulette with a larger cylinder. Lodsys could still go after the money from past sales. Worse yet, this cripples our ability to make money, and if we can't make money, we can't keep building great apps.

Even more frightening, we don't exactly know what Lodsys is claiming. Most of the letters seem to focus on in app purchases, but other developers are claiming that they have received letters for just having links in lite versions of their software pointing to the full version. Some seem to claim that just having a lite version is enough. It's not clear, and without clear borders, it's hard to know when you've crossed the line.

All things considered, I think Mike Lee has the right idea. This is too big for us to face alone. We need to get Apple involved. And the best way to do that is to boycott in-app purchases and file bugs. He recommends the following:

 

Summary:

Use of the system-provided In-App Purchase API opens developers to patent infringement lawsuits from patent troll Lodsys, who are demanding licensing fees above and beyond Apple’s 30% cut.

Steps to Reproduce:

1. Ship an app that uses the In-App Purchase API
2. Wait to be contacted by Lodsys
3a. Pay Lodsys, and every patent troll that inevitably follows them
3b. Be sued out of existence

Expected Results:

Apple steps in using their nearly infinite financial and legal resources to protect their developer ecosystem, removing the threat of Lodsys, and ultimately pushing for reform of our broken patent system.

Actual Results:

Apple remains quiet, while their developer community privately and publicly freaks out.

Regression:

Dozens of developers, including James Thomson and Apple Design Award winner Iconfactory, have already been targeted by Lodsys.

Notes:

Some reassurance from Apple would be nice.

Hopefully Apple's black-ops legal team will swoop in and help fix this mess. But that really just treats the symptoms, not the root cause. At some point, we really need to reform both our patent and our legal systems. The patent system is supposed to encourage innovation. The legal system is supposed to be fair and just. But both have been corrupted. They too easily become tools of the powerful used to squash those who cannot defend themselves.

With all that in mind, I have a couple of thoughts:

Does Apple also have to pay 0.575% of their 30% cut on in-app purchases? On the one hand, Lodsys says that Apple already has a license, but they also say that Apple's license doesn't cover third-party apps. They also claim that they want to go after the people who profit from their patent (the app developers), but Apple is also profiting. They get 30% on each and every purchase. That's a lot more than any single developer makes. If Apple doesn't have to pay, why not?

Also, this type of patent just feels wrong. Patents are supposed to encourage the development of technology and the spread of innovation. It's a two-way street. I reveal my secrets, and the government protects my rights to the technology for 20 years. After that, the technology is released to the public, and society at large can benefit.

The alternative is to keep the idea secret, but then you risk having someone else discover it or reverse engineer it. Worse yet, the idea may be lost if you die or if your company goes out of business. All in all, society benefits from a free exchange of ideas. New innovations stand on the shoulders of the old.

Software patents are a hotly debated topic. Personally, I think they may make sense in some cases. Imagine that Amazon invents a great new recommendation algorithm. This isn't obvious. It's not something a typical developer is likely to stumble upon by accident. Most importantly, there's a real benefit to making the algorithm public. Others can look at it, refine it, improve it. Amazon invested a significant amount of effort in the algorithm's development, and society as a whole benifits if the idea is made public. So a patent makes a certain amount of sense.

But in-app purchasing? How does a patent on in-app purchasing benefit society? This isn't some complex process. It's barely an idea. Once you see it, you understand it completely. There's no mystery. There's no need to reverse engineer anything. It's just a land grab in the realm of ideas. And I really don't think things like this should be patentable.

-Rich-