Lodsys claims progress in fight over in-app purchase patents

The firm says it has won favor with the patent office, as well as licensing deals with third-party developers. Also: Apple gets court's OK to participate in the case.

iOS 6 and apps
Apps are at the center of the Lodsys patent dispute. James Martin/CNET

Lodsys, which is locked in patent disputes with app developers over an in-app purchase mechanism, said it has made progress in winning legal and developer favor.

The nonpracticing entity, which went after app makers on Apple's iOS, Google's Android, and other technology platforms for infringing on its patents, said in a blog post this evening that the U.S. Patent Office has confirmed the validity of one of its patent's key claims, effectively hobbling Google's effort to have the patent invalidated:

As a part of the Inter-Parties Reexamination requested by Google, the USPTO recently issued an Office Action confirming Claim 24 of US Patent 7,222,078. This claim is particularly relevant regarding in-app purchases and free-to-paid application upgrades. In addition, we have every confidence that all claims will ultimately be confirmed through this lengthy process. In-app purchase features and free-to-paid upgrades will be a part of the litigation process that is now swiftly moving forward.

The blog also mentions that Apple, which has intervened in a lawsuit against 11 app developers, has won approval from the court to participate in the case, arguing that its licensing of Lodsys patents extend to third-party developers:

The dispute about the scope of Apple's license rights extending to 3rd parties remains unresolved and clearly contested. This is irrespective of Apple's unilateral declarations to the contrary and their insistence that the documents that underlie the issue remain shrouded in secrecy to prevent application developers and others from determining the scope of Apple's license for themselves.

Lodsys began targeting iOS developers in May 2011, sending letters notifying them that their mobile applications were infringing on four patents. The group sought a percentage of each application developer's revenue, even threatening to go back to collect income that had already been earned. When Lodysys sued a handful of app developers, Apple filed a motion to intervene as a defendant.

The company has also taken aim at Android , targeting at least one developer with nearly identical letters over the use of in-app billing.

The company, which owns intellectual property but doesn't make any real products, also claimed in a separate blog post that its effort to license the in-app purchase patent to third parties has gained momentum, with 80 percent of the new agreements being achieved without litigation.

As of October 8, 2012, there are greater than 150 companies which obtained the rights to use the Lodsys Group patent portfolio, and more than 4 out of 5 of these companies have entered into licenses outside of the litigation process. These companies have realized significant savings by taking advantage of lower licensing rates.

CNET has contacted Apple for comment about its involvement in the case and will update this report when we learn more.

 

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