Scoop: Bounty set for invalidating Lodsys patents

Lodsys, a group that's targeted companies big and small for infringing on its patents, is now in the crosshairs of a company offering to pay a bounty for research that seeks to invalidate those patents.

Article One Partners, a business that crowdsources intellectual property (IP) research, has launched three new studies into patents held by Lodsys (1,2,3). Each offers a reward to the party that finds prior art, or examples of pre-existing technologies or other IP that could be used as evidence to invalidate one or more of Lodsys' patents.

Article One Partners became involved in a similar crowdsourced hunt last month on a patent held by MacroSolve, a Montreal-based entity that--like Lodsys--began suing mobile appl makers back in April. That effort offered $5,000 to the winners, whereas this has the potential to bring in $15,000 total across all three of the studies.

Lodsys CEO Mark Small declined to comment.

Lodsys is what's known as a nonpracticing entity, or NPE, which means a company that licenses patents but doesn't actually have any other business. It began its aggressive efforts back in February with a patent infringement lawsuit targeting printing technology made by Samsung, Brother, Canon, Lenovo and others. In May, the company began a campaign against mobile application developers, sending out letters to a number of developers saying that they were infringing on Lodsys-held patents, and offering up a licensing deal to those who did not want to duke it out in court.

Despite getting afirm and public rebuffing from Apple Senior Vice President and General Counsel Bruce Sewell, Lodsys forged ahead, filing a lawsuit against seven app developers and launching a similar letter campaign against Android developers.

Lodsys has not just targeted smaller mobile application makers and technology companies, it's also gone after retailers and other big businesses, too, including Sam's Club, Best Western, Black & Decker, The Container Store, The Teaching Company, Vitamin Shoppe, Vegas.com, Adidas, CVS, and Best Buy. These companies were all named in a patent infringement lawsuit that wasfiled last week.

All of these threats and suits are based on the group's patents, which means invalidating them could impact any existing and future litigation efforts.

"The combination of MacroSolve and Lodsys is marking a time when litigation by patent owners who assert has reached a new level," said Article One Partners founder and CEO Cheryl Milone in a call with CNET. "It's been a big pain point for larger companies, but it's now spilling over into the technology industry itself, and in that sense the use of crowdsourcing here has become a revolutionary change in the industry because the people who are now being impacted aren't really able to help themselves in defense."

Milone says the company has a community of around 1 million people who work on research projects that have been posted to the site. Most studies run around six weeks from the date of post, with the company getting responses within hours of launching, Milone said.

The wide net that's cast can end up pulling in any number of experts, from patent agents and attorneys to senior partners at law firms. The company also sees responses from the author of a publication, or the inventor of a patent sent in as evidence.

Milone would not disclose the entity behind the reward on the three studies. Anyone can come to the company and fund one of the research projects without having to disclose who they are. Milone said that others could add to a reward total with the approval of the original party.

"That's what's so interesting with these types of studies," Milone said. "We--in a sense--have been able to come almost full circle in merging our client community and our community of researchers because the app developers who have expressed interested in these patents can also be the ones researching."

Updated at 4:55 p.m. PT with Lodsys response.