Tuesday, May 31, 2011

Lodsys: Developers Do Not Infringe the '078 Patent.

Lost in the anti-patent/anti-NPE discussion of Lodsys is a fundamental fact: Developers do not infringe the Abelow '078 patent.

Screen shot 2011 05 31 at 11 03 07 PM

In his odd blog at Lodsys.com, CEO Mark Small expresses his views about Lodsys being an unfairly persecuted non-practicing entity just trying to assert its rights. Among his posts today is this one lamenting the coverage of Lodsys's actions:

The stories have focused on narrow complaints

Patents and the licensing of them:  a complicated system and how it’s wrong or broken (although many aspects do work well and a few aspects have challenges… like any complicated system).

The small developer being unfairly picked on (without mentioning the many developers that do understand and play by the rules).

Rolling developers into belonging to the enabling platform (Apple’s developers or Android developers) and how they are under attack from a troll (rather than it being a rights holder attempts to get paid for its property and questioning the full scope and veracity of the platform provider’s promises, or that App Developers have choices of what functionality to put in their applications and which platforms to sell on)

My primary complaint about this case, however, is simply this:

iOS developers do not directly infringe the '078 patent and their only potential joint infringer, Apple, is undisputedly licensed.

Asserted claim 1 and dependent claim 24 of the '078 require multiple units of a commodity that each comprise a UI, a memory, and a communication element. These are physical elements of a system claim. The iOS developers do not provide a physical system, let alone one with multiple units of a commodity each with a UI, a memory, or communication element.  Apple, if anyone, provides those elements. Apple has not been named as a defendant.  Apple is licensed. (We haven't even reached other issues with the claims.)

Lodsys asserts in the complaint that each developer-defendant "has infringed and continues to infringe, directly, indirectly, literally, under the doctrine of equivalents, contributorily, and/or through the inducement of others, one or more of the claims of the '078 patent."  In the claim charts I have seen, however, Lodsys implies only direct infringement by the iOS application itself, with strategic omission of claim language referencing hardware or the role of Apple servers.  Does Lodsys actually have a joint infringement theory under which developers infringe in conjunction with Apple as an already-licensed non-co-defendant? If so, they certainly have not articulated that theory, and the theory would certainly be novel.

@jharrier pointed me to a nice article from Wilson Sonsini on divided/joint infringement defenses in EDTX, which summarizes the law as of early 2010 as follows:

The Paymentech court ruled that direct infringement of a patent claim only occurs when a single actor either commits the entire act of direct infringement, or directs or controls the actions of all parties needed to commit the entire act of infringement. If multiple unrelated actors are required to perform all the actions of a method claim, then there can be no direct infringement. Furthermore, if there is no direct infringement, there can be no contributory infringement or inducement either. In other words, if no single actor is a direct infringer, then there can be no infringement of any kind.

If any "mastermind" existed in the context of the '078, directing or controlling the actions of all parties, it would be Apple, not the developer. Apple, again, is licensed, by Lodsys's own admission.

With only "notice pleading" required for the initial complaint, Lodsys is not yet required to explain its theory of how developers could possibly be infringing. It will be fascinating to see if they ever produce such a theory, or instead, whether the economics of patent litigation let them collect their checks before they are required to do so. Sadly, I suspect the latter is the business model.


Note: I plan to take a look at the Abelow '565 in a future post.


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