Fundamental Flaws in Lodsys Patent

In my opinion, there are fundamental flaws in Lodsys’s ‘078 Patent due to Divided Infringement, especially in a typical situation of an independent application developer.  

Divided Infringement means the limitations of a claim require actions by more than one party (company) to infringe the claim.  In a divided infringement claim, the owner of the patent would typically have to assert that the actions (or products) of all of the parties together constitute joint infringement.

However, when actions of more than one party are necessary to infringe a patent claim, U.S. patent law has very strict requirements for the patent owner to establish infringement of the divided claim.  I will start with an explanation of the three general types of patent infringement allowed by U.S. law – direct infringement, induced infringement, and contributory infringement.

Direct Infringement occurs when a single party makes, uses, offers to sell, sells, within the U.S. or imports into the U.S. any patented invention during the term of the patent, without the authority of the patent owner.  For a method claim, there must be a single party performing ALL of the steps of the method.

Induced Infringement occurs when a second party actively induces (encourages, teaches,) a first party to commit Direct Infringement.

Contributory Infringement occurs when the participation and combined action(s) of more than one person or entity cause a patent claim to be infringed.  The patent owner can establish infringement only if the other 

parties operated under the control or direction of the accused infringer (the mastermind).  See BMC Resources v. Paymentech, L.P.  The Court of Appeals for the Federal Circuit (CAFC) stated “This court acknowledges that the standard requiring control or direction for a finding of joint infringement may in some circumstances allow parties to enter into arms-length agreements to avoid infringement.”

Now, we look at the claims to see what party or parties might infringe the claims.  I will address the four independent claims because if those are not infringed, then there is no reason to evaluate any of the dependent claims because those will also not be infringed.  I am not yet diving into a discussion of what “user perception” means, because I think we can arrive at some initial thoughts on infringement without that.  However, igoeIP has some good analysis of some of those issues already posted.

US Patent 7,222,078	What might be used to do the claim element?
1.  A system comprising:	N/A
units of a commodity that can be used by respective users in different locations,	Computer or mobile device (which is a computer as discussed herein) Note – I believe the next element requires this to be hardware and not software, thought this assumption will not change my conclusions
a user interface, which is part of each of the units of the commodity, configured to provide a medium for two-way local interaction between one of the users and the corresponding unit of the commodity, and	Computer with a user interface
further configured to elicit, from a user, information about the user's perception of the commodity,	Software on the computer
a memory within each of the units of the commodity capable of storing results of the two-way local interaction, the results including elicited information about user perception of the commodity,	Computer hardware
a communication element associated with each of the units of the commodity capable of carrying results of the two-way local interaction from each of the units of the commodity to a central location, and	Computer hardware
a component capable of managing the interactions of the users in different locations and collecting the results of the interactions at the central location.	A server

Generally, Claim 1 requires a party to make, use, or sell the computer hardware listed in the claim.  To be clear, “use” requires use of the invention (i.e. a party performs all of the claim elements or steps in a method).

Therefore, for direct infringement of Claim 1, a party needs to make, use, or sell the computer, the software, AND the server.  A typical independent application developer does not make, use, or sell the computer and possibly does not even make or use the server. 

For contributory infringement of Claim 1, a party would need to control or direct the accused infringer.  In the recent situation of the application developers, they are the accused infringer but they do not control the device hardware or the servers.  Therefore, a contributory infringement claim against them for Claim 1 would likely be unsuccessful.

The only party with control might be a computer or mobile device manufacturer, such as Apple because they produce the hardware, likely control the app store servers, and seem to have controlled the use of the in-app purchase technology; however, from the reports out there and Lodsys’s own statements, Apple already has a license, so they probably cannot be an accused infringer.

Thus, I do not see how Lodsys could win an assertion that any independent application developer could infringe Claim 1.

As for Claim 54, a similar analysis applies, but the claim requires a direct infringer to make, use, or sell facsimile equipment.  For contributory infringement, a party would have to control or direct the vendor of the facsimile equipment in addition to the other elements.  I do not see how an independent application developer would infringe this claim either.

As for Claim 60, again a similar analysis applies, a party needs to make, use, or sell a computer, the software, and the server for direct infringement to occur.  For contributory infringement, a party would have to control or direct all of those elements.  Again, I do not see how an independent application developer would infringe this claim either.

Moving onto Claim 69.

Claim 69 is a little harder to determine.  However, with a method claim, the party executing the method would typically be the infringer.  Therefore, the method claim may be only assertable against an end-user of a computer if such user executes a method (software, process, etc.) that infringes the claims.  As stated above, “use” requires use of the invention (i.e. a party performs all of the claim elements or steps in a method).

US Patent 7,222,078	What party might do the claim element?
69. A method for gathering information from units of a commodity in different locations, each unit of the commodity being coupled to a remote database on a network, the method comprising:	N/A – for sake of argument, I am assuming the preamble may be non-limiting.
eliciting user perceptions of respective units of the commodity through interactions at a user-interface of the respective unit;	Software in a commodity with a user interface.
generating perception information based on inputs of the users at the respective user-interfaces;	The software of the commodity.
transmitting the perception information to the remote database;	Transmitter hardware or software of the commodity.
receiving the transmitted perception information from different units of the commodity; and	A server connected to a network.
collecting and storing the received information at the remote database.	The server and software at the server.

Even if an end-user executes software to elicit perceptions, etc., a party would also have to perform the steps at the server to infringe Claim 69.  If an independent application developer does not perform the server steps, then there cannot be direct infringement.  From my understanding, for at least the in-app upgrades and purchases, Apple’s servers for their app store manage that.  (someone please correct me if I am wrong about this.)   

For an assertion of contributory infringement, I doubt if any of the developers have control or direction over how Apple manages their app store servers.

If Lodsys tries to assert a theory of induced infringement for Claim 69, they will likely run into the problem of not having a single party that they can point to for direct infringement.  Especially considering the last step is probably completely done by and under the control of whomever owns the purchasing servers (Apple?) and not an application developer.

Conclusion

In conclusion, I believe Lodsys has a very weak patent - I haven’t even gotten to the “user perception” issues (see igoe IP for a start) or the invalidity arguments that could ALSO be made.  Further, I believe the ‘078 Patent is a badly drafted patent that will make it very difficult for Lodsys to assert and win a patent infringement claim against an independent application developer.  Although, even if my analysis is correct, there is no guarantee that Lodsys will not sue an application developer, but there is a good likelihood that anyone who fights Lodsys may win.

Patent Drafting Note -

I consider the divided infringement claims to be an error on the prosecuting patent attorney’s part.  I’ve been writing claims for my clients to address these issues since at least 2005 and I believe any patent attorney that does not take BMC into account while drafting claims is not doing a good job for their clients.  See Lemley for claim drafting suggestions, however the legal analysis cited there regarding joint infringement is not correct due to more recent case law.  If you have paid for a patent to be drafted, you should expect better work than this.

These are just my thoughts on the patent mess that is Lodsys.

- USPA