iOS Developers Targeted With Patent Lawsuits For In-App Payment Use


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The Internet is on fire lately after several indie iOS developers received notices of infringement giving them 21 days to respond. The patent that these developers are being accused of infringing is US Patent 7222078 and it vaguely covers the in-app purchase or upgrade process. This sort of patent lawsuit is really worrying because mobile developers in general don’t make a lot of money and cutting into these revenues could stifle the software market. According to the patent firm Lodsys, they would be seeking 0.575% of US revenue. Here is the official statement:

In the case of an Application doing an in-application upgrade (and only this scenario), Lodsys is seeking 0.575% of US revenue over for the period of the notice letter to the expiration of the patent, plus applicable past usage. So on an application that sells US$1m worth of sales in a year, the licensee would have an economic exposure of $5,750 per year.

The various blogs and media outlets seem to be somewhat misguiding their hatred on this issue though. The owner of Lodsys has apparently received multiple death threats and hate emails since the infringement notices went out. But if you had invested in a patent and felt owed, wouldn’t you too file notices? It seems like a logical thing to do. The problem is of course in the US Patent Office and its inability to effectively deal with software patents.

Apparently Lodsys has a licensing deal with Google, Apple and Microsoft and there is no mention of RIM. We haven’t heard of any BlackBerry developers receiving notices of infringement so if you have let us know. Considering the vague nature of these patents, it seems unlikely that a court would force the developers to pay, but anything is possible when you throw enough lawyers in the equation.

To read Lodsys’ official stance, see their long list of blog entries.

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