Martha Stewart Joins the Fight Against Lodsys as Apple Takes a Timeout
The competition is fierce, but Lodsys might be the worst patent troll in America. Using vaguely worded early-90s patents that barely rise above gibberish, it has waged a massive campaign of lawsuits and intimidation against small application developers. Last week saw two big stories in the ongoing Lodsys saga.
The first story is that Martha Stewart’s media company has sued Lodsys in federal court in Wisconsin. How did Lodsys end up in a patent fight with Martha Stewart? Well, the troll claims that everyone who uses Apple's in-app purchase APIs infringes its patents. (In reality, the patents discuss a method for providing remote customer feedback for early 90s technology like fax machines.) So it sent Martha Stewart Living a demand for $5,000 for each of four iPad apps. Faced with such a demand, many companies pay up since it is cheaper than the cost of even the initial stages of litigation. Patent trolls rely on this strategy to rack up as many settlements as possible.
But Martha Stewart Living did not fold. Instead, it took the fight back to the patent troll, filing a declaratory judgment action in federal court in Wisconsin. (Although Lodsys pretends to operate out of the Eastern District of Texas, its CEO conducts the company’s business from Wisconsin.) We applaud Martha Stewart for standing up to Lodsys. Fighting back makes the patent troll business model more expensive and reduces trolls’ ability to use weak patents to impose a tax on productive companies.
The week’s other Lodsys story received less media attention but is probably more important. On Tuesday, a judge in the Eastern District of Texas dismissed Apple’s intervention in a case Lodsys had filed against seven app developers. Back in 2011, Apple intervened in the case to assert that its license to Lodsys’s patents protects iOS developers. After two years of litigation, the case had reached the point where this question was ready for decision. But after the individual developers in the case settled, Lodsys asked the court to dismiss Apple’s intervention as moot. Clearly, Lodsys wanted to avoid a ruling on the merits of the license issue. Understandably. If it loses, then it can no longer assert its patents against app developers.
Together with the Application Developers Alliance, EFF filed an amicus brief asking the court to decide the question now. Basic justice required the court settle the still live issue of whether Apple’s license protects the millions of iOS developers. Delay allows Lodsys to continue its massive campaign of harassment against small developers who should be shielded under the principle of patent exhaustion. Unfortunately, the judge disagreed and dismissed Apple from the case.
This is a big setback. But there is hope Apple will step back in. The court explained that its decision does not preclude Apple from intervening in other cases or from filing its own declaratory judgment action. We hope Apple acts quickly. In the meantime, we will push for patent reform that undoes the business model of bottom-feeder trolls like Lodsys.