The patent trolls are back, and this time they’re after you

Out of sight, out of mind — after a burst of deservedly bad publicity, Lodsys, a notorious alleged patent troll, seemed to disappear. No such luck: Lodsys and its cadre of lawyers have been busily suing the pants off developers large and small. Since the beginning of the year, Lodsys has filed suits against 20 technology companies related to techniques for upgrading those apps’ capabilities, according to the Justia database of legal filings, including Walt Disney and 10 independent developers of mobile games or apps.

Unfortunately, Lodsys is hardly the only so-called troll ramping up its efforts, says Julie Samuels, an attorney with the Electronic Frontier Foundation. “These lawsuits against app developers are just part of a dangerous recent trend of patent trolls going after users. For example, a shadowy collection of shell companies [known as Project Paperless] has been blanketing the nation with letters demanding that companies pay them $1,000 per employee for the privilege of using standard office technology like [email-capable scanners]. And another patent troll [named Personal Audio] is targeting the podcasting community,” Samuels wrote last week. (Kudos to Ars Technica, which broke and stayed with the scanner story.)

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The burst of troll suits once again underlines major flaws in both the patent and legal systems and shows that even the intervention of heavyweights Apple and Google is not enough.

Trolls are companies that buy patents and do nothing with them until they suddenly pop up with a claim that someone who is actually using related intellectual property is violating their rights and had better pay. What’s more, trolls can shop their suits around until they find a court that’s likely to be sympathetic, which is why all of the 65 suits filed by Lodsys since early 2011 are in the notoriously troll-friendly federal Fifth Circuit’s Eastern District Court in Marshall, Texas.

Unfortunately, the blackmail seems to pay off. As of late last year, more than 150 companies had agreed to buy rights to its patent portfolio, Lodsys boasts.

Apple and Google step up, but patent abuse is widening

Although Lodsys is suing the developers, it appears that much of the “click to upgrade” technology under dispute actually belongs to Apple and Google. But Lodsys is targeting those who implement the technologies, not Apple or Google. “The developers don’t even create this technology themselves. In other words, when they use this technology, they are taking on risks that they never could have contemplated,” says the EFF’s Samuels. (The EFF has produced a FAQ about Lodsys and offers help for defendants looking for lawyers. If your business is at all related to these cases, I suggest you go there.)

In a sense, the developers are actually users of someone else’s technology, which is why Samuels mentions the Lodsys cases in the same breath as the Project Paperless and Personal Audio cases. What they have in common is that they aren’t targeting the makers of the technology but businesses employing it, claiming the use of that commercial available technology is a form of patent infringement. It appears they intend to scare smaller developers and small businesses into paying claims, while avoiding expensive legal fights with the likes of Apple, Google, Hewlett-Packard, Canon, and Brother International — some of the companies whose products use the allegedly infringing patents.

To its credit, Apple jumped into the Lodsys fray two years ago, warning Lodsys that it’s “fully prepared” to defend its license right and saying, “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.” What’s more, Apple filed a successful motion to intervene in the case, which should be a big help to the developers. Google stepped up as well, arguing that the U.S. Patent and Tradmark Office should side with the app developers.

Even so, that particular case, which named 11 app developers as defendants, is still pending in, you guessed it, the federal district court in Marshall, Texas. That leaves a huge cloud, not to mention huge legal expenses, hanging over the heads of the developers.

The technology economy at risk

Not only do these lawsuits threaten the developers, they threaten the technology economy as a whole. If businesses have to start worrying whether buying a network printer or producing a podcast or purchasing an app exposes them to a patent-infringement claim, they’ll stop paying for new technology.

Perhaps the biggest threat is to mobile technology, which is now in a period of fervent experimentation and innovation. “Lodsys is trying to abuse the patent system in a way that could ultimately destroy the entire mobile apps economy, which is not only thriving on its own but has been and continues to be a key factor in making new mobile devices so useful and popular,” said Florian Müller, a European patent consultant who has pushed for reforms.

I’ve watched this case over the last couple of years, and the new burst of malicious activity convinces me that I was overly optimistic that the intervention two years ago by deep-pocketed companies like Apple would make Lodsys go away. Not only is Lodsys still playing the patent-abuse game, but new companies like Project Paperless and Personal Audio have joined in.

Here, by the way, is how Lodsys explains itself:

There are lots of bills in life that it would be preferable to not pay if one didn’t have to. Lodsys is just trying to get value for assets that it owns, just like each and every company selling products or services is, trying to do business and make a profit. It’s odd that some of the companies that received notices had such a visceral reaction. Some of these companies have our favorite apps, for which we paid the asking price. We realize you have to get paid for your work, and so do we.

What a load of bull. Frankly, I’d have more respect for Lodsys if it simply manned up and said what it really means: Greed is good.

The patent system itself is ultimately at fault and needs radical surgery.

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This article, “The patent trolls are back, and this time they’re after you,” was originally published by InfoWorld.com. Read more of Bill Snyder’s Tech’s Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.