Tuesday, May 31, 2011

Lodsys: The $1,000 Offer.

Lodsys's inadequate and caveated "offer" hints at a severe lack of confidence in the case.

NewImage

(via Wikipedia)

In addition to blog posts about the filing of the complaint, Lodsys also posted a curious "offer" with regard to its demand letters today:

While it is true that Apple and Lodsys have an obvious dispute about the scope of Apple’s license to the Lodsys Patents, we are willing to put our money where our mouth is and pay you something if we are wrong.  Therefore, Lodsys offers to pay $1,000 to each entity to whom we have sent an infringement notice for infringement on the iOS platform, or that we send a notice to in the future, if it turns out that the scope of Apple’s existing license rights apply to fully license you with respect to our claim relating to your App on Apple iOS.

First, $1,000?  Seriously? Estimates of the number of targeted developers have been in the low teens.  Is $13,000 all Mr. Small is willing to risk? Furthermore that's only around two hours of a senior litigator's rate and would in no way cover a developer's expense for even basic evaluation of this case.

Second, note the caveat in the offer. Mr. Small is not saying you get $1,000 if the Abelow patents are found invalid or, more importantly and likely, if you are found not to infringe since you do not meet all the claim elements. The narrow wording requires that "it turns out that the scope of Apple’s existing license rights apply to fully license you with respect to our claim relating to your App on Apple iOS."

However, even Bruce Sewell did not claim developers are fully licensed within the scope of Apple's license.  He said:

Because Lodsys’s threats are based on the purchase or use of Apple products and services licensed under the Agreement, and because those Apple products and services, under the reading articulated in your letters, entirely or substantially embody each of Lodsys’s patents, Lodsys’s threatened claims are barred by the doctrines of patent exhaustion and first sale.

Sewell recognizes that it is Apple, not the developer, that provides most of the claim elements in any reasonable mapping of the claim, and asserts that Apple is licensed to practice the inventions.  He says developers are protected by Apple's license, not that developers are fully licensed.

This is an empty offer from Lodsys. Make it $100,000 per developer and make the offer payable on a finding of invalidity or non-infringement, as well.  That would be putting your money where your mouth is.

 

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1 comment:

LitigatingApple said...

What a transparent attempt to show strength. Manufactured and weak on delivery. You're right, we might have taken it serious if they actually put themselves in a position to lose something more than $1k (even times 13).