IP with retrospective bite

Monday 16th May 2011
The patents of Dan Abelow now belong to Lodsys and Webvention who are retrospecting.

Several iOS developers, including one based in Glasgow, have received letters from a company called Lodsys, which claims they are violating its patent for in-app software upgrades as it holds a patent covering Apple's in-app purchase tool, which allows users of a free app to upgrade to the paid version.

TG Daily reports  that Lodsys LLC  which features The Inventor, Dan Abelow (right) whose IP was effectively sold to Webvention LLC  and Lodsys.

Lodesys CEO is Mark Small who has previously been VP Enterprise Sales North America at Websense Inc, and at Code Green Networks Inc as well as senior VP, sales at McAfee.

Curiously the notice of 21 days takes the iOS developers right up to Apple's World Wide Development Conference.

James Thomson, the Glasgow developer of PCalc  Lite and DragThing queries on Twitter whether that is just coincidence?

It is not known whether Apple itself has received a similar letter. "They seem to be effectively claiming the rights to in-app purchase, but going after me, not Apple," he notes.

Lodsys is using Apple intellectual property under license from Apple, in such a fashion that small developers cannot even settle, without violating the iOS Developer Program License Agreement, comments OS News.

At least half a dozen other developers are believed to have received similar letters, demanding license fees within 21 days including MASH developer Matt Braun of Ohio, Patrick McCarron of Chicago and Rob Gloess of the UK's Computer LogicX.

The patent 7,222,078, entitled 'Methods and systems for gathering information from units of a commodity across a network.'  The Lodsys LLC blog notes the portfolio has several different "fields of use."

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

Lodsys also adds that:  Dan Abelow does have a consulting agreement to work with Lodsys on matters pertaining to the Lodsys patents. This agreement is for a fixed fee, and if that fee is exceeded, then he is paid a consulting day rate. Dan has no direct economic interests in the patent licensing activity.

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