

What to Do If You Receive a Lodsys Letter - grellas
http://www.groklaw.net/article.php?story=20110614184205441

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FlorianMueller
What else would you expect a lawyer to recommend than something that makes
lawyers money?

Should app developers with, for an example, revenues of $5,000 to $10,000 a
year pay a patent attorney their entire annual income from their app for just
a cursory (!) look at the issue (far from the cost of searching for prior art
etc., which is way higher)? How practical is that?

Why doesn't the article talk about the cost of such legal defense and the risk
of an East Texas jury handing a multi-million dollar damage award to Lodsys?

Why doesn't he compare the low cost of Lodsys's license for the average app
developer to the cost of legal advice (let alone legal defense or damages
ordered by a court)?

How can app developers without the resources in place to defend themselves
ever even get to the point where they can seriously challenge Lodsys's claim
chart?

How can one be not profoundly concerned when Lodsys sends a letter, given that
Lodsys has already sued 27 entities and is embroiled in seven lawsuits in
three different states?

And why does a self-proclaimed open source site like Groklaw promote a patent
attorney who vigorously argues in favor of software patents on Twitter?

By the way, the same Patrick Igoe doubted in an email to me a few months ago
that Nokia was in a position to turn Apple into the net payer. I predicted it
in March, I reaffirmed that prediction in May, and I was proven right
yesterday.

~~~
malbs
The only real advice he can give is "talk to a lawyer", just the same as
advice you'd give to someone complaining of health issues with "talk to a
doctor", whether you're a doctor or not doesn't matter. It has nothing to do
with him looking after his own.

Your advice is to simply pay the license fees?

~~~
FlorianMueller
My advice is not to simply pay the license fees, but if (1) Apple and Google
don't help their app developers (Apple appears to be willing to help but the
extent of it isn't clear yet; Google has neither said nor done anything so
far) and (2) the licensee fees are in a given case _much_ less than the cost
of even a cursory legal analysis, then they're an economically more
intelligent choice unless the license agreement contains anything that poses a
risk comparable to the one of being sued without a license agreement.

------
grellas
This is an informed and level-headed discussion from a seasoned patent
attorney. Well worth reading.

~~~
elithrar
> "and especially not from a non-attorney blog or a software development
> podcast"

I can't help but point this out as a direct dig at Marco Arment (and the Build
& Analyse podcast) for suggesting that developers consider just settling with
Lodsys.

And whilst this settle vs. fight debate is done to death, it's still worth
saying that for a small indie developer, fighting could fuck you over more
than settling. You might lose sleep over having settled—"[rolling] over
without a fight"—but you'll probably lose a lot more sleep when you're in
massive legal debt.

The only companies (that we know of) who are fighting back/filing declatory
judgements are big ones ("ForSee Results, OpinionLab, ESET, and The New York
Times have all filed such actions").

Note that I'm not saying you should roll over, nor am I saying fighting is a
waste, but anyone—including Patrick Igoe, who is far more qualified in this
area than me—needs to remember that it's easy to talk about the noble path,
but it's harder to walk down it.

~~~
grellas
Your points are good ones but I don't think the author is saying that you are
always better off fighting than not. His point is more nuanced.

My read is this:

1\. Don't panic.

2\. Get professional guidance.

3\. Weigh the calculus well of how the troll will likely respond to resistance
before deciding to fold: the troll is aiming at low-hanging fruit and may not
choose to pursue someone who is prepared to raise obstacles (a matter that
needs to be carefully weighed with professional help).

4\. Part of this calculus (not emphasized in the article) is the position of
the larger company whose platform is being targeted, whether Apple, Google, or
whomever. I find it intriguing that the developers first targeted were very
quick to publicize their plight and then went dark after being sued. This
_may_ signify that Apple has privately agreed to hold them harmless in
exchange for their agreement to keep this confidential. And this would make
sense. Apple would be foolish to make a blanket commitment to indemnify all
developers when its agreement with them says that all the risk falls on the
developer. At the same time, it can't afford to let a vulture come in and feed
on the people who ultimately make the platform work. Hence, a strong letter to
the world saying that it will vigorously defend its license rights (but with
no public commitment to hold developers harmless), a motion to intervene in
the lawsuits already filed by Lodsys against select developers, and dead
silence (and, we assume, a forthcoming defense) from those same developers who
normally would have taken the extortionist license terms and folded. This very
likely means that the developers will stay the course with support from Apple,
and that support almost has to include a private agreement to indemnify for
this scenario to make sense. I am of course speculating here and might be dead
wrong. The point for developers who have been threatened, however, is not to
fold reflexively in such situations before exploring what Apple (or any other
party defending its platform) is _really doing_ behind the scenes. Even though
this article did not get into this aspect, its main point really brings one to
this sort of examination: if you are threatened, get good advice from
knowledgeable people who know how to help steer you through this sort of maze.
_That_ is money well spent and it does not require you to spend a fortune
fighting a troll one-on-one. The fact that a proper assessment might show the
troll to have a flimsy case only reinforces the idea that there may be room to
resist, if you do it right.

~~~
FlorianMueller
What is your proposal for how an app developer with, say, annual income of
$10,000 can afford "professional guidance" on his own?

------
bermanoid
According to this article, Lodsys is asking for "0.575% of US revenue over for
the period of the notice letter to the expiration of the patent".

In other words, if you accepted the offer, you'd end up paying Lodsys $100 for
roughly every $17,000 that you make. I'd guess you could count on one hand the
number of devs that will ever be on the hook for more money than a good iOS
consultant could make by booking a single day's worth of work, which is at the
very least the amount of time that will be spent figuring out what the hell to
do to fight against something like this if you end up taking it to court _even
before legal fees_ (unless you happen to be an expert on patent law to begin
with).

"Lodsys needs developers to think it is cheaper to settle than it is to
fight."

Well, it _is_ probably cheaper if you include lost time, even if you win in
court, and that's the whole problem - as a pure business decision, it's a no-
brainer, especially when you consider the stress of being sued and having to
think about this garbage when you'd rather be coding...

I only hope that the publicity of this crap means that enough people are
pissed off to fight it at a loss instead of paying up, and they make Lodsys
lose money on this tactic overall.

But I worry, I worry...

~~~
bensummers
You just need 174 entities like Lodsys, and over 100% of your revenue has
gone.

~~~
FlorianMueller
The likelihood of any one developer being contacted by "174 entitiesl ike
Lodsys" is extremely low -- the same developer is more likely to be struck by
lightning.

I have repeatedly pointed out, especially on my blog, the problem of
encouraging other trolls to go after app developers. But in the example, $100
is a much better deal than paying thousands of dollars to lawyers. The thing
that should happen is for Apple and Google to take care of their app
developers.

~~~
bermanoid
Further, that $100 is assuming that your app actually makes $17k, which from
my limited knowledge of the app market means you're actually doing fairly well
compared to most developers.

Though maybe they're only targeting the apps that they know have made a decent
amount, I'm not sure...

------
Steko
Great advice yes but missed the most important thing you should do: call
Apple's Legal Dept (or other platform owner should they start pursuing Android
et. al.).

~~~
Steko
Oh and don't miss Patrick Igoe's informative and entertaining walkthrough of a
claim chart at:

[http://www.applepatent.com/2011/06/lodsys-anatomy-of-
bullshi...](http://www.applepatent.com/2011/06/lodsys-anatomy-of-bullshit-
claim-chart.html)

------
FlorianMueller
The best course of action now depends largely on the success of Apple's motion
for an intervention. If that motion is granted, which is reasonably likely
(though never certain), it will be time for Apple to clarify what support and
coverage it gives to the sued app developers.

I know from at least one of them that he is NOT covered by Apple. If that
continues to be the situation, the advice may unfortunately have to be at some
point to sign Lodsys's license agreement if that results in dismissal from the
lawsuit or helps avoid one.

For Android developers, the question is what Google will do. So far they say
nothing and do nothing. If Apple's motion is granted, the question must be
asked why Google doesn't intervene. One of the accused apps is an Android app
("Labyrinth for Android"). If Google doesn't protect Android app developers,
they will also have to consider very seriously a license deal with Lodsys.

I have seen Lodsys's license agreement. I would recommend that many app
developers share the cost of having it reviewed by a lawyer (rather than get
into Patrick Igoe's claim chart stuff, which is neither convincing nor useful
to those who can't afford a multi-million-dollar lawsuit over that question).
If a lawyer agrees that the license agreement is reasonable, which in my
personal opinion it is, then that's definitely better than going to court.

Patrick Igoe also came up with a "divided infringement" theory, which I
rebutted on my blog. Apple apparently doesn't believe in his theory either, so
why should you?

------
thyrsus
While talking to your lawyer, I'd ask about the practicality of this advice:
[http://www.groklaw.net/comment.php?mode=display&sid=2011...](http://www.groklaw.net/comment.php?mode=display&sid=20110614184205441&title=Practical+Solution+for+Small+Companies&type=article&order=&hideanonymous=0&pid=923666#c923674)

