Lodsys has not gone away yet, for Apple or Android developers. According to at least one report, Lodsys has threatened to sue an Android application developer also, which makes sense. If Lodsys claims (completely bullshit claim though, see earlier posts) that Apple's app developers infringe, then by the same totally misconstrued claim interpretations, then the Android developers would also likely infringe. (But, if facts matter at all, they don't.) The analysis and discussion of the '078 patent I have already posted also applies to Android applications and the results and options are likely the same. See here for developer options.
For a good summary of where things stand for Apple's application developers now, see here.
-USPA
Friday, May 27, 2011
Thursday, May 26, 2011
Preliminary Invalidity Analysis for Lodsys's '078 Patent
Background Info
Patents are presumed valid once they issue, however, a party may challenge the presumption of validity in a reexamination request, as a defense to a patent infringement suit, or in a declaratory judgment action. There are multiple reasons why a party can argue a patent may be invalid, but I will only address the two reasons based on prior art: Anticipation under 35 U.S.C. 102 ("102") and obviousness under 35 U.S.C. 103 ("103").
under 102: For a piece of prior art to anticipate a patent claim and make it invalid, each and every limitation of the claim must be found either expressly or inherently in a single piece of prior art.
under 103: For a combination of pieces of prior art to make a patent claim obvious and make it invalid, the decider (a court or the USPTO) must ask whether "[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results." This is a very quick overview of obviousness and does not explain all the intricacies, which is not the goal here. If you need more thoughts and detail about 103 see other articles (for example, here or here ).
Thus, the ultimate goal of any invalidity search is to find a single piece of prior art that includes all of the elements of the claim that is trying to be invalidated.
In my search, I have found a reference that MIGHT provide a decent 102 argument or could be a good 103 argument. Whether it would be considered 102 or 103 art will depend on the interpretation of the elements in the claim, which can be affected by interpretations of the patent's specification, statements made by Lodsys during prosecution of the patent (or possibly another related patent), statements Lodsys makes during litigation, and other factors. The interpretation of a claim is typically not determined by a court until a Markman opinion is issued during the patent litigation.
As with my previously posted search results (here and here), I am assuming the earliest possible priority date that Lodsys could claim based on the continuations and CIP filed dating all the way back to 1992. Sorry, but I have not had the time to read through all the documents to determine which claims should get what priority date; just trying to beat the earliest listed date is the shortcut at this point.
Analysis
Here is my preliminary invalidity chart:
I have highlighted above what I believe will be the critical issue in any litigation if Lodsys keeps pursuing its patent litigation on the '078 patent. Also see igoeIP for analysis about interpretation of "user's perception". Whether the art I cited invalidates the '078 patent or even Claim 1 will depend almost entirely on the claim interpretation provided to the highlighted element.
For anyone not familiar with interpreting patents, it may seem like the claim chart above is not really addressing what the '078 Patent discusses in its figures and specification. That is because the legal breadth of a patent is defined by its claims and, generally, it is the elements of the claim that need to be shown in the prior art to invalidate the claim. For this analysis, I have assigned what I believe to be a reasonable interpretation of the claim, but I recommend anyone who might use this for an invalidity argument do a much more extensive investigation of claim interpretation.
Conclusion
Based on the above analysis, there is a good argument that Lodsys's patent might be invalid, at least the broadest (independent) claims. I cannot guarantee to anyone that a judge or patent examiner will agree, but that is my opinion. If Lodsys keeps pursuing this, we will keep looking for even better prior art and posting it for everyone to have access to it. If you are aware of any prior art that we can document, please contact me.
These are just my thoughts for discussion, I would love to hear feedback.
-USPA
Patents are presumed valid once they issue, however, a party may challenge the presumption of validity in a reexamination request, as a defense to a patent infringement suit, or in a declaratory judgment action. There are multiple reasons why a party can argue a patent may be invalid, but I will only address the two reasons based on prior art: Anticipation under 35 U.S.C. 102 ("102") and obviousness under 35 U.S.C. 103 ("103").
under 102: For a piece of prior art to anticipate a patent claim and make it invalid, each and every limitation of the claim must be found either expressly or inherently in a single piece of prior art.
under 103: For a combination of pieces of prior art to make a patent claim obvious and make it invalid, the decider (a court or the USPTO) must ask whether "[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results." This is a very quick overview of obviousness and does not explain all the intricacies, which is not the goal here. If you need more thoughts and detail about 103 see other articles (for example, here or here ).
Thus, the ultimate goal of any invalidity search is to find a single piece of prior art that includes all of the elements of the claim that is trying to be invalidated.
In my search, I have found a reference that MIGHT provide a decent 102 argument or could be a good 103 argument. Whether it would be considered 102 or 103 art will depend on the interpretation of the elements in the claim, which can be affected by interpretations of the patent's specification, statements made by Lodsys during prosecution of the patent (or possibly another related patent), statements Lodsys makes during litigation, and other factors. The interpretation of a claim is typically not determined by a court until a Markman opinion is issued during the patent litigation.
As with my previously posted search results (here and here), I am assuming the earliest possible priority date that Lodsys could claim based on the continuations and CIP filed dating all the way back to 1992. Sorry, but I have not had the time to read through all the documents to determine which claims should get what priority date; just trying to beat the earliest listed date is the shortcut at this point.
Analysis
Here is my preliminary invalidity chart:
Possible Claim Interpretation (note: needs more direct analysis from specification and file histories) | ||
1. A system comprising: | Hand-held computer system (p.243) | |
units of a commodity that can be used by respective users in different locations, | Multiple computer hardware products with a user interface | Hand-held computer systems (p.243) are commodities that can be used by respective users in different locations, as that is inherent in their design. |
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 | Each of the multiple computer hardware products has a user interface | Computer screen can show menus and scrolling lists on the hand-held computer, keyboard allows two-way interaction. (P. 243) Also, the Psion included a keyboard and screen. http://archive.psion2.org/org2/psion1/manual3.htm |
further configured to elicit, from a user, information about the user's perception of the commodity, | The user interface can be configured to ask the user a question about the product. Or, the user interface can receive feedback from a user about the product | A survey can be programmed. Surveys may include questions about conditions or attributes. (P. 244) USPA comments: Inherently, a survey could ask any type of question, including a question about the hand-held computer itself. Thus, receiving user feedback about a product being used to conduct the survey is merely a simple design choice of the survey. Also see http://www.jstor.org/pss/2631354 to establish it was well known to receive user feedback about a specific product. |
a memory within each of the units of the commodity capable of storing results of the two-way local interaction, | Memory in the product | Data can be collected during a survey and stored in a memory to allow the transfer of data to a PC. “… the hand held computer, should prove to be the optimum solution. The data collected during the survey … the transfer of data to the main computer is controlled by programs on the PC and hand held computer…” (P. 243) Also, the Psion Organiser included memory, ROM, RAM, EPROM, and data packs. (P. 243) Also see |
the results including elicited information about user perception of the commodity, | Configured to store answers to the question | Answers can be stored in the hand held computer . “… the hand held computer, should prove to be the optimum solution. The data collected during the survey … the transfer of data to the main computer is controlled by programs on the PC and hand held computer…” (P. 243) |
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 | An interface for transmitting data to a computer | There is an interface or device to allow the data from a survey to be transferred to a PC. (P. 243) “it is assumed that a database will be set up on a PC to handle the storage and sorting of the collected data for all systems.” (P.242) “The transfer of data to the main computer is controlled by programs on the PC and hand held computer…” (P. 243) |
a component capable of managing the interactions of the users in different locations and collecting the results of the interactions at the central location. | Software at the computer to manage the questions and store the results. | The hand-held computer can be programmed using survey design software. A database at a PC can collect the results of the survey from multiple hand held systems. “As with all computers, the Psion needs to be programmed to enable a survey to be carried out. There are commercial packages available which enable the non computer literate user to generate a survey…” (P.243) “The capital costs for the hand held system should also allow for the survey design software…” (P. 243) “it is assumed that a database will be set up on a PC to handle the storage and sorting of the collected data for all systems.” (P.242) |
Also see the following to establish that it was quite well known to elicit user feedback for a product:
(note on last link: scroll down to "User Feedback" section, p. 429)
For anyone not familiar with interpreting patents, it may seem like the claim chart above is not really addressing what the '078 Patent discusses in its figures and specification. That is because the legal breadth of a patent is defined by its claims and, generally, it is the elements of the claim that need to be shown in the prior art to invalidate the claim. For this analysis, I have assigned what I believe to be a reasonable interpretation of the claim, but I recommend anyone who might use this for an invalidity argument do a much more extensive investigation of claim interpretation.
Conclusion
Based on the above analysis, there is a good argument that Lodsys's patent might be invalid, at least the broadest (independent) claims. I cannot guarantee to anyone that a judge or patent examiner will agree, but that is my opinion. If Lodsys keeps pursuing this, we will keep looking for even better prior art and posting it for everyone to have access to it. If you are aware of any prior art that we can document, please contact me.
These are just my thoughts for discussion, I would love to hear feedback.
-USPA
Tuesday, May 24, 2011
Troll Blasting Strategy
Here is a strategy that a community of developers could implement to try to kill a troll. It has risk, but the benefits are huge.
Generally, trolls know exactly what they are doing when they set the license price for small application developers very low. They probably chose this to give the application developers a huge incentive NOT to go to court. Most trolls business plan is predicated on the idea that a certain percentage of companies will pay to avoid legal costs because the troll also wants to avoid legal costs. (note: A troll, such as Lodsys, that wants a percentage of revenue does not guarantee that agreeing to the license will be the cheapest resolution to the problem.)
Below is a strategy that I would love to see implemented in response to a troll, though it carries with it a certain amount of risk. But, it basically lets the application developer community slap the Troll down in a huge first round. It would also make an amazing statement to other Trolls that might attack application developers.
The Troll Blasting Strategy:
1. Prepare a declaratory judgment action to be filed based on non-infringement. For Lodsys '078, the details found here and the details in Apple's letter to Lodsys lay out the non-infringement argument against Lodsys's '078 Patent. Thus, the cost of preparing a detailed argument hopefully could be $10,000 or under.
2. Find developers across the nation, hopefully in 100+ different jurisdictions, willing to file the declaratory judgment action.
3. Each developer files the declaratory judgment action ON THE SAME DAY. That way, the troll would be required, at least initially, to respond to them all at the same time. Each developer may have to retain a local counsel to do this, but hopefully the costs for that are low (<$2,000 each? though we would need more specific quotes on this).
Goals of the Troll Blasting Strategy are 1) cause the troll to spend so much money defending against the claims that they will never recoup more than that from the app developer who filed the action; 2) bankrupt the troll; 3) show other trolls that the application developers will not be pushed around without a costly fight; 4) win the fight in a final battle.
Even if the developers are found not to have standing to sue (possibly due to no direct threats, though we can argue otherwise) or their actions are consolidated, the Troll will be required to at least respond in each jurisdiction. The goals of the Troll Blasting Strategy could be accomplished.
This strategy does start litigation, so it definitely has risk. Though, in the case of Lodsys '078 the likelihood of winning the declaratory judgment action is definitely in the application developers favor.
Requirement for this strategy really to work is 1) funding to write the declaratory judgment action (ideally, I would love to see one of the application developers who has made a ton of money step up to fund this part); 2) a commitment from many other developers to file the action on the same day.
As with any strategy, businesses need to consult their own patent attorney to receive feedback and determine if this minimizes their risk. That risk needs to include what the app developer will do about the next troll that comes along if Lodsys is successful in getting some good money.
These are just my thoughts for discussion, I would love to here feedback.
- USPA
(FYI - my definition of a troll is any party that intentionally misconstrues the claims of their patent to assert it against another. They don't have to be NPEs, all that is required is an intentional misconstruing of the claims. Lodsys has clearly done this.)
Generally, trolls know exactly what they are doing when they set the license price for small application developers very low. They probably chose this to give the application developers a huge incentive NOT to go to court. Most trolls business plan is predicated on the idea that a certain percentage of companies will pay to avoid legal costs because the troll also wants to avoid legal costs. (note: A troll, such as Lodsys, that wants a percentage of revenue does not guarantee that agreeing to the license will be the cheapest resolution to the problem.)
Below is a strategy that I would love to see implemented in response to a troll, though it carries with it a certain amount of risk. But, it basically lets the application developer community slap the Troll down in a huge first round. It would also make an amazing statement to other Trolls that might attack application developers.
The Troll Blasting Strategy:
1. Prepare a declaratory judgment action to be filed based on non-infringement. For Lodsys '078, the details found here and the details in Apple's letter to Lodsys lay out the non-infringement argument against Lodsys's '078 Patent. Thus, the cost of preparing a detailed argument hopefully could be $10,000 or under.
2. Find developers across the nation, hopefully in 100+ different jurisdictions, willing to file the declaratory judgment action.
3. Each developer files the declaratory judgment action ON THE SAME DAY. That way, the troll would be required, at least initially, to respond to them all at the same time. Each developer may have to retain a local counsel to do this, but hopefully the costs for that are low (<$2,000 each? though we would need more specific quotes on this).
Goals of the Troll Blasting Strategy are 1) cause the troll to spend so much money defending against the claims that they will never recoup more than that from the app developer who filed the action; 2) bankrupt the troll; 3) show other trolls that the application developers will not be pushed around without a costly fight; 4) win the fight in a final battle.
Even if the developers are found not to have standing to sue (possibly due to no direct threats, though we can argue otherwise) or their actions are consolidated, the Troll will be required to at least respond in each jurisdiction. The goals of the Troll Blasting Strategy could be accomplished.
This strategy does start litigation, so it definitely has risk. Though, in the case of Lodsys '078 the likelihood of winning the declaratory judgment action is definitely in the application developers favor.
Requirement for this strategy really to work is 1) funding to write the declaratory judgment action (ideally, I would love to see one of the application developers who has made a ton of money step up to fund this part); 2) a commitment from many other developers to file the action on the same day.
As with any strategy, businesses need to consult their own patent attorney to receive feedback and determine if this minimizes their risk. That risk needs to include what the app developer will do about the next troll that comes along if Lodsys is successful in getting some good money.
These are just my thoughts for discussion, I would love to here feedback.
- USPA
(FYI - my definition of a troll is any party that intentionally misconstrues the claims of their patent to assert it against another. They don't have to be NPEs, all that is required is an intentional misconstruing of the claims. Lodsys has clearly done this.)
Monday, May 23, 2011
In light of Apple's letter...
(Note - The first draft of this post was done prior to Apple releasing their letter to Lodsys. I have updated it based on that significant development.)
I think some of the non-attorney advice givers should admit to their followers that they are not qualified to give legal advice when they do not fully understand the underlying legal issues. I think the Apple letter to Lodsys this morning has undermined some of the more widely distributed non-attorney advisers and, in my opinion, shows that their advice might be wrong.
I am particularly referring to those who basically said "pay Lodsys what they want or go bankrupt". At least one such commentator, who in my opinion has such a large ego that he believes his non-attorney legal advice is better than good patent attorneys, has also questioned the abilities of patent lawyers to provide real solutions to problems. Sadly, this person seems somewhat mis-informed and not qualified to comment on legal matters. A little knowledge is a dangerous thing...
Problems with the comments I have seen is that the authors clearly do not understand that all business decisions with legal risks have to be based on a close examination of the underlying legal risks. Thus, BE WARY OF NON-LAWYERS GIVING LEGAL ADVICE. Just because someone knows a little bit about business does not make them a qualified patent lawyer.
About the non-lawyer articles giving advice, they all seem to make major assumptions that are in many cases just plain wrong. For example, some state that the risk to application developers by Lodsys is independent from how meritorious Lodsys's assertion is. This is completely wrong; the amount of risk is completely dependent on the underlying claim by Lodsys, as was clearly shown in Apple's letter to Lodsys that was released this morning.
I've tried to explain to such commentators that understanding the underlying legal risk is necessary to gauging the risk to an application developer; thereby allowing the developer to be able to make a well-informed business decision. They also claim that no application developer can afford to fight Lodsys; this is also wrong (though I agree it may not be the cheapest solution). Other dubious claims are that signing the license will make everything okay and be the cheapest course of action; again, this is not necessarily true and I highly question whether anyone making such statements has ever done any actual licensing in a settlement negotiation setting. There are a lot of variables that each business has to understand and evaluate to make the best decision for their business. Advice based on generalizations can lead to very bad outcomes.
While I have tried to explain this theory of making informed business decisions to such commentators, they dismiss this so that they can send out their headline grabbing statements that basically say sign the license or DIE! While such commentators may truly be attempting to help the application developers, they are actually doing the developers a disservice by pretending to give knowledgeable advice when it is really short-sighted and may discourage application developers from hiring an attorney to properly advise them of their legal risks.
Every application developer that is threatened should hire a patent attorney experienced in litigation and licensing, at least to advise them of their options and risks. A job of an attorney is to advise each client about the options and legal risks associated with taking different courses of action. Attorneys do not make the decisions, they just try to minimize risk for the client. The client makes the decisions, and the best decisions are based on a full understanding of the underlying LEGAL risks, not just someone's assumptions about business; in the Lodsys mess, the risks would include the legal analysis of infringement of the patent and costs associated with different actions.
In rebuttal to the SIGN OR DIE options put forth by non-attorneys, there are the other options available to the application developers, each with different inherent risks that need to be explained to the threatened application developers by their LAWYER:
1. Do nothing. Basically you would be calling Lodsys's bluff. In light of Apple's letter, this might not be a bad strategy. Though, nothing in the letter prevents Lodsys from suing or offers indemnity to the application developers. As you are aware if you have read my other posts, their patent is shit. Will Lodsys go all in by filing suit or not?
2. Send Lodsys a letter telling them that you do not infringe and that any further threats by them may result in you filing a declaratory judgment action against them. Maybe even threaten filing a suit based on patent misuse or violation of antitrust laws.
3. File a reexamination. This costs some money, but I will be posting more info on an invalidity analysis that could help defer such costs.
4. File a declaratory judgment action.
5. Enter into a joint defense arrangement with other application developers or Apple.
6. Agree to License the patents from Lodsys. Though, this is also not a guaranteed cheap option depending on the license terms and amount of negotiation needed.
7. (added to differentiate from just taking the license they offered) Negotiate a Settlement and License with Lodsys. If an application developer has done their due diligence (some of which is provided on this site), they would have very good leverage to negotiate with Lodsys, considering that most application developers would not infringe their patent and their patent may be invalid.
Whichever option you go with, there will be different costs and risks, application developers should hire a patent attorney with licensing and litigation experience to advise them on each of these. Please do not take your legal advise from non-attorney commentators that are not qualified patent attorneys. A threatened party needs to do their due diligence to make an informed decision.
-USPA
I think some of the non-attorney advice givers should admit to their followers that they are not qualified to give legal advice when they do not fully understand the underlying legal issues. I think the Apple letter to Lodsys this morning has undermined some of the more widely distributed non-attorney advisers and, in my opinion, shows that their advice might be wrong.
I am particularly referring to those who basically said "pay Lodsys what they want or go bankrupt". At least one such commentator, who in my opinion has such a large ego that he believes his non-attorney legal advice is better than good patent attorneys, has also questioned the abilities of patent lawyers to provide real solutions to problems. Sadly, this person seems somewhat mis-informed and not qualified to comment on legal matters. A little knowledge is a dangerous thing...
Problems with the comments I have seen is that the authors clearly do not understand that all business decisions with legal risks have to be based on a close examination of the underlying legal risks. Thus, BE WARY OF NON-LAWYERS GIVING LEGAL ADVICE. Just because someone knows a little bit about business does not make them a qualified patent lawyer.
About the non-lawyer articles giving advice, they all seem to make major assumptions that are in many cases just plain wrong. For example, some state that the risk to application developers by Lodsys is independent from how meritorious Lodsys's assertion is. This is completely wrong; the amount of risk is completely dependent on the underlying claim by Lodsys, as was clearly shown in Apple's letter to Lodsys that was released this morning.
I've tried to explain to such commentators that understanding the underlying legal risk is necessary to gauging the risk to an application developer; thereby allowing the developer to be able to make a well-informed business decision. They also claim that no application developer can afford to fight Lodsys; this is also wrong (though I agree it may not be the cheapest solution). Other dubious claims are that signing the license will make everything okay and be the cheapest course of action; again, this is not necessarily true and I highly question whether anyone making such statements has ever done any actual licensing in a settlement negotiation setting. There are a lot of variables that each business has to understand and evaluate to make the best decision for their business. Advice based on generalizations can lead to very bad outcomes.
While I have tried to explain this theory of making informed business decisions to such commentators, they dismiss this so that they can send out their headline grabbing statements that basically say sign the license or DIE! While such commentators may truly be attempting to help the application developers, they are actually doing the developers a disservice by pretending to give knowledgeable advice when it is really short-sighted and may discourage application developers from hiring an attorney to properly advise them of their legal risks.
Every application developer that is threatened should hire a patent attorney experienced in litigation and licensing, at least to advise them of their options and risks. A job of an attorney is to advise each client about the options and legal risks associated with taking different courses of action. Attorneys do not make the decisions, they just try to minimize risk for the client. The client makes the decisions, and the best decisions are based on a full understanding of the underlying LEGAL risks, not just someone's assumptions about business; in the Lodsys mess, the risks would include the legal analysis of infringement of the patent and costs associated with different actions.
In rebuttal to the SIGN OR DIE options put forth by non-attorneys, there are the other options available to the application developers, each with different inherent risks that need to be explained to the threatened application developers by their LAWYER:
1. Do nothing. Basically you would be calling Lodsys's bluff. In light of Apple's letter, this might not be a bad strategy. Though, nothing in the letter prevents Lodsys from suing or offers indemnity to the application developers. As you are aware if you have read my other posts, their patent is shit. Will Lodsys go all in by filing suit or not?
2. Send Lodsys a letter telling them that you do not infringe and that any further threats by them may result in you filing a declaratory judgment action against them. Maybe even threaten filing a suit based on patent misuse or violation of antitrust laws.
3. File a reexamination. This costs some money, but I will be posting more info on an invalidity analysis that could help defer such costs.
4. File a declaratory judgment action.
5. Enter into a joint defense arrangement with other application developers or Apple.
6. Agree to License the patents from Lodsys. Though, this is also not a guaranteed cheap option depending on the license terms and amount of negotiation needed.
7. (added to differentiate from just taking the license they offered) Negotiate a Settlement and License with Lodsys. If an application developer has done their due diligence (some of which is provided on this site), they would have very good leverage to negotiate with Lodsys, considering that most application developers would not infringe their patent and their patent may be invalid.
Whichever option you go with, there will be different costs and risks, application developers should hire a patent attorney with licensing and litigation experience to advise them on each of these. Please do not take your legal advise from non-attorney commentators that are not qualified patent attorneys. A threatened party needs to do their due diligence to make an informed decision.
-USPA
2 Major Issues with Apple's Letter: Analysis of Apple's letter to Lodsys
While the letter Apple sent to Lodsys, and released publicly, is very encouraging in that Apple is trying to assert some pressure on Lodsys, there are some glaring holes that Apple did not address.
1) Apple's letter does not prevent Lodsys from suing an application developer. (And to be clear, Apple likely can NOT prevent Lodsys from doing whatever Lodsys wants to.) All Apple's letter does is basically argue that the actual infringement is done by Apple, and since Apple is already licensed, Lodsys should go away. (The letter's analysis is basically the same as outlined in my divided infringement analysis earlier.)
2) Apple did not publicly tell all application developers that they would indemnify the developers. This is what everyone needs, not just a well-written letter. Hopefully, Apple has made a private commitment to indemnify the threatened developers; although I personally have no knowledge of this.
Without the promise to fully indemnify application developers, the application developers still need to determine what might be their best course of action, as the threat of a lawsuit is still there. While some support from Apple is nice to see, their letter does not completely negate the legal consequences and risks posed by Lodsys to application developers. Hopefully, Lodsys chooses to take Apple's advice and tells the application developers that they are no longer threatened.
I have a detailed post about options and advice for developers in the works that I will be posting later today.
-USPA
1) Apple's letter does not prevent Lodsys from suing an application developer. (And to be clear, Apple likely can NOT prevent Lodsys from doing whatever Lodsys wants to.) All Apple's letter does is basically argue that the actual infringement is done by Apple, and since Apple is already licensed, Lodsys should go away. (The letter's analysis is basically the same as outlined in my divided infringement analysis earlier.)
2) Apple did not publicly tell all application developers that they would indemnify the developers. This is what everyone needs, not just a well-written letter. Hopefully, Apple has made a private commitment to indemnify the threatened developers; although I personally have no knowledge of this.
Without the promise to fully indemnify application developers, the application developers still need to determine what might be their best course of action, as the threat of a lawsuit is still there. While some support from Apple is nice to see, their letter does not completely negate the legal consequences and risks posed by Lodsys to application developers. Hopefully, Lodsys chooses to take Apple's advice and tells the application developers that they are no longer threatened.
I have a detailed post about options and advice for developers in the works that I will be posting later today.
-USPA
Saturday, May 21, 2011
Apple's Interests May Conflict with App Devs
As I was discussing my post about the Fundamental Flaws in the Lodsys Patent with a friend, I started thinking about what possible issues Apple may have that are different than the Application Developers. Here are some hypotheticals and questions that I do not know the answers to, but I would like to see someone press Apple for an answer to these.
1) Does Apple have any contractual obligations due to their license with Lodsys (or Intellectual Vetnrues "IV" or whomever) not to interfere in the assertion of previously owned IV patents? There are a lot of huge business issues here at stake if Apple were to help invalidate or defend against an IV owned patent. If Apple were to step in and defend against an IV patent, what would be the business consequences? As a contributing member/partner/licensee/whatever of IV, would that cause a conflict of interest with regards to IV?
2) Could Apple be sued for contributory patent infringement for being the "mastermind" behind any infringement? From my analysis earlier, Apple may be the only entity that practices and controls all of the elements of the Claims of the '078 Patent. It is possible their license to the Lodsys patents does not give them the right to cause contributory infringement. Thus, if Apple steps in to help the App Developers, might they be identifying themselves as a defendant and possibly admitting that they are an infringer and not the App Developers? (to be clear, I am not asserting that Apple infringes - I personally do not believe any applications likely infringe the '078 due to non-infringement and invalidity.) [UPDATE: Apple, in its letter to Lodsys, pretty much says that they would be the only direct infringer and, since they are licensed, their is no basis for claims against application developers.]
While from the viewpoint of the App Developers this is a straightforward issue of Apple needing to step up, this is likely a very difficult issue for Apple to deal with. These are some of the issues I thought of that could prevent Apple from taking a position to help the Application Developers. I do not have any internal information from Apple nor do I have any connection to Apple. I hope Apple does help out, but I am just putting these questions out there for a realistic business discussion, rather than just demanding that Apple step up.
If anyone has any links or information that could answer any of these questions, let me know.
- USPA
1) Does Apple have any contractual obligations due to their license with Lodsys (or Intellectual Vetnrues "IV" or whomever) not to interfere in the assertion of previously owned IV patents? There are a lot of huge business issues here at stake if Apple were to help invalidate or defend against an IV owned patent. If Apple were to step in and defend against an IV patent, what would be the business consequences? As a contributing member/partner/licensee/whatever of IV, would that cause a conflict of interest with regards to IV?
2) Could Apple be sued for contributory patent infringement for being the "mastermind" behind any infringement? From my analysis earlier, Apple may be the only entity that practices and controls all of the elements of the Claims of the '078 Patent. It is possible their license to the Lodsys patents does not give them the right to cause contributory infringement. Thus, if Apple steps in to help the App Developers, might they be identifying themselves as a defendant and possibly admitting that they are an infringer and not the App Developers? (to be clear, I am not asserting that Apple infringes - I personally do not believe any applications likely infringe the '078 due to non-infringement and invalidity.) [UPDATE: Apple, in its letter to Lodsys, pretty much says that they would be the only direct infringer and, since they are licensed, their is no basis for claims against application developers.]
While from the viewpoint of the App Developers this is a straightforward issue of Apple needing to step up, this is likely a very difficult issue for Apple to deal with. These are some of the issues I thought of that could prevent Apple from taking a position to help the Application Developers. I do not have any internal information from Apple nor do I have any connection to Apple. I hope Apple does help out, but I am just putting these questions out there for a realistic business discussion, rather than just demanding that Apple step up.
If anyone has any links or information that could answer any of these questions, let me know.
- USPA
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.
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
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