The Lodsys Letter: A Halt For In-App Purchases?

If you love the App Store, you'll do well to follow the unfolding saga of the Lodsys patent suits. Here's the background: earlier this month, a number of developers received letters threatening a suit for their unlicensed use of Lodsys in-app purchase technology. While Lodsys does own the patent for this service, developers believed they were protected by the license Apple has with Lodsys.

That belief was reiterated by Apple today in this letter to Lodsys. They claim that their license of the technology covers all Apple business partners and customers. The App Store and all APIs used by developers are owned by Apple. Thus, "Because Apple is licensed under Lodsys’ patents to offer such technology to its App Makers, the App Makers are entitled to use this technology free from any infringement claims by Lodsys."

This letter may be the end of it. Lodsys may just have gotten greedy and decided to try their luck at rolling a few developers for cash. Since Apple's proved willing to fight back, Lodsys may make the sane move and back off. If they don't, thinks could get very interesting.

In the long run, it can't go well for Lodsys. Either Apple will take them to court and keep them locked in litigation for years, or they'll patent their own method for in-app purchasing and bypass Lodsys entirely. The one thing guaranteed NOT to happen is a future where developers individually pay to license in-app purchasing. I don't see Apple dropping their requirement that all retail apps offer in-app purchasing, either.

Apple doesn't tend to back down, so Lodsys will have to. The stakes are too high for any other outcome.

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