[grellas]

A few thoughts:

1. Nothing in the letter commits Apple to defend the developers or to hold them harmless. Legally, Apple does not have to do this. One can only hope that its self-interest in protecting its app-store ecosystem will be enough to cause it to do what is right. For now, Apple is saying only that it will fully defend its "license rights." One can read more into this than is stated but that is all that is stated (of course, Apple's throwing its weight behind developers even at this level is no small thing).

2. The letter does not quote the license agreement in any way. Normally, if there is something definitive in such a document, it is put front and center in a letter of this type. This could mean that the license language is not as definitive as the tone of this letter might suggest. Only time, and a detailed review of the license language itself, will tell on this point.

3. It is plain that Apple wants to do the right thing for its developers. Yet the situation is trickier than that. As of now, Apple has no legal obligation to defend or hold them harmless, and that step is an order of magnitude greater than that of saying it will merely defend its license rights - and hence the hedging in the letter.

If the goal of the patent system is to promote innovation, then this case is Exhibit A for how it is failing. Thousands of patents are gathered up in a portfolio held by an IV affiliate and licensed in bulk ("monetized") to big players such as Apple, Microsoft, Google, etc., who in turn believe that they have clear rights to build systems around them. But the patents are "monetized" again to lesser players with shadowy relations to the original IV group, who in their turn try to "monetize" them further by attempting to double-dip with the original licensees based on limitations in the original licensing language. At each step, threats of lawsuits abound and nowhere can one find even one example of a patent developed by a company for its own innovative uses. Instead, we have the equivalent of shadowy trafficking in intangibles that are now being used, not to encourage innovation, but to attack the very developers who are trying to innovate. Positively Kafkaesque.

[SoftwareMaven]

From the letter:

Apple intends to share this letter and the information set out herein with its App Makers and is fully prepared to defend Apple’s license rights.

The letter explicitly states they think their rights include being able to let developers use the technology.

Because Lodsys’s threats are based on the purchase or use of Apple products and services licensed under the Agreement, and because those Apple products and services, under the reading articulated in your letters, entirely or substantially embody each of Lodsys’s patents, Lodsys’s threatened claims are barred by the doctrines of patent exhaustion and first sale.

At this point, isn't Apple saying there is nothing to hold developers blamess for?

Apple intends to share this letter and the information set out herein with its App Makers and is fully prepared to defend Apple’s license rights.

This seems pretty clear (if not within full legalese) that Apple will go after Lodsys if they don't retract the letters.

Bigger question for me (as a legal noob): What is Apple's recourse? Is it to sue Lodsys for breach of contract? Would a cease and desist request be part of that?

[grellas]

Apple likely can sue Lodsys for declaratory relief if Lodsys persists in its claims against developers. This would be an action by Apple against Lodsys seeking a court judgment that its license covers the challenged activities and a related declaration that no infringement exists by reason of such activities. Developers clearly benefit from any such action by Apple but this is a little different from committing to hold the developers themselves harmless from any legal action. A "hold harmless" would mean that Apple commits to defend any developer who is sued and, further, agrees to pay any damages suffered should that developer be found to infringe. Since Apple has not yet committed to do this (indeed, I believe its contract terms say that it will not do this), in theory, the developers might still be sued and have to defend their individual cases even if Apple does bring a declaratory relief lawsuit against Lodsys. Of course, a court in any such action might act to consolidate the various lawsuits and stay those brought against the developers pending resolution of Apple's primary suit. My point is not that developers are not helped by Apple's stance, as they plainly are. It is only to state that Apple has not yet committed to cover them against all harm here, regardless of what Lodsys might do. Apple might choose to take this further step as events develop but the letter as worded is more guarded than that. I think Apple is waiting to see if the in terrorem effect of its letter will solve this before considering further options.

[SoftwareMaven]

Thanks for clarifying! You are a great asset to the community here.

[andybak]

Yes that was great.

You might want to consider hitting the return key a few more times with posts of that length though. :)

[Tyrannosaurs]

Are hold harmlesses common?

I'd have thought they'd be exceedingly rare in cases like this given the open ended liability that could result, certainly as part of an opening gambit.

[Philip_M]

Why does everyone assume that Lodsys is incorrect? If you sell someone a patent they can't arbitrarily declare everyone else owns that patent too. If apple wanted developers to be allowed to use lodsys patents they should have made it clear when they bought the rights to this bullshit patent that they could arbitrarily allow anyone they wanted rights to the patent..

[Turing_Machine]

Isn't that exactly what Apple is claiming? "Under its license, Apple is entitled to offer these licensed products and services to its customers and business partners, who, in turn, have the right to use them."

[flipbrad]

hey grellas - I hope you don't mind tangential questions from a trainee. Whilst (clearly) none of us can do more than speculate as to the terms of the licence, I was wondering whether you thought it possible (in light of industry practice) that Apple licensed the patents for anything less than the full remaining term of the patent? Even if so, is the licence likely to be revocable by IV or Lodsys? And what happens to patent licences when the patent they cover is invalidated, further down the line - is it typical to see clawback provisions allowing the licensee to recover money already paid?

[grellas]

Even in a bulk deal, the term of the license would undoubtedly be the full remaining term and the license would be irrevocable. Thus, I would doubt that Lodsys is staking its claims against the app developers on any such ground.

If I were to speculate, the likely issue is whether the licensing for Apple's products (iPad, iPhone, iPad) effectively covers the downstream development of software intended to run on those devices. Lodsys would be arguing that the license does not extend to what the app developers do; Apple is saying in this letter it does and that Lodsys is misusing its patents if it claims otherwise (such misuse, if legally tenable, constituting grounds to invalidate the patents).

As to clawback, that would be highly unusual and would almost certainly not be in a license of this type made to major players.