Sunday, May 15, 2011

Lodsys v. Apple Devs: FUD for the App Store Era?

Is the threat of patent litigation being used to plant fear, uncertainty, and doubt in an attempt to sway developers away from Apple?

As reported earlier, multiple developers have received demand letters from Lodsys over US7,222,078.  One of the developers is James Thomson, developer of DragThing and PCalc.  Thomson reports, "In the claim against pCalc, it was the 59p "Theme Pack" they used in their example.  This isn't just about 'upgrade to full version'".

Patent litigation is expensive.  A 59p "Theme Pack," regardless of the weakness of the US dollar, is not.  No offense intended to James Thomson, but I don't think he's getting rich selling calculator theme packs.  In fact, I wonder whether, applying a reasonable royalty to those theme packs, the expected damages would cover the cost of sending the demand letter via FedEx to Scotland.

So, what motivation would Lodsys have to threaten my favorite purveyor of calculator apps?

The most benign explanation is that the iPhone with iOS by itself does not provide a viable infringement theory.  To have the supposedly offending in-app purchase, you need an app.  Perhaps the developers are being targeted just to add the necessary elements for an infringement case that's really against Apple.  Collateral damage.

Another possibility exists, however.  As Steve Ballmer famously asserted (and then failed to heed), this business is about "developers, developers, developers."  Apple owns a large chunk of developer mindshare.  Competitors are struggling to keep developer interest as the conventional wisdom is becoming: "You make money with iOS, not Android [or WebOS, or Windows Phone, or Symbian...]"

What effect would the fear of patent litigation have on the iOS developer community?  Would developers risk deploying an app with limited revenue potential if the prospect of tens or hundreds of thousands of dollars of litigation expense loomed and Apple was not covering their backs?

Perhaps this really is just about making a little bit of money from a lot of different people.  Perhaps, however, it is about something more.  It's hard to say until we know who is really behind Ferrara Ethereal and Lodsys.


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