Edible Apple

By Josh Rosenthall:

It’s been confirmed today that a company called Lodsys recently sent out a number of letters to independent iOS developers, including James Thompson – the developer of PCalc – and Dave Castelnuovo, creator of Pocket God , informing them that their use of in-app purchases in iOS infringes upon on this particular patent. Of course, Lodsys is going after small developers who lack the resources of larger development companies to fight back, presumably to frighten them into striking a licensing deal as soon as possible.

So who exactly is behind this unabashed case of patent trolling?

Well, we did a little leg work and though we can’t say with 100% certainty who is pulling the strings, it’s looking a lot like Intellectual Ventures is behind this disgraceful lawsuit.

Intellectual Ventures was founded in part by former Microsoft CTO Nathan Myhrvold. The company’s business model is simple – it purchases and applies for a ton of patents. It then licenses out those patents to others under the threat of litigation coupled with a promise not to sue if a deal is struck.

So let’s go through the chain of patent ownership.

The original patent was given to Daniel Abelow and was subsequently to Ferrara Ethereal LLC on 12/10/2004 and then to Webvention LLC on 11/16/2009 and then to Lodsys LLC on 8/3/2010.

But who are these mysterious players?

Well, there’s good reason to believe that Ferrara Ethereal LLC is just a shell company for Intellectual Ventures. This was noted in a 2009 Law.com article as well in a 2010 Wall Street Journal article.

What about Webvention LLC. Who are they?

Well, this isn’t the first time Ferrara Ethereal LLC has assigned their patent rights to the company. They previously did so on patent 5,251,294 which is  “directed to structures and methods for organizing, presenting and accessing information.”

Part of Intellectual Ventures business model is to sell its patents or patent rights to aggressive patent trolls willing to take matters to court in exchange for a split on any potential profits. It’s a clever way for Intellectual Ventures to get paid for its patents without having to do any of the dirty work and legal heavy lifting.

And of course, it’s no coincidence that Webvention LLC is based out of Marshall, Texas, smack dab in the middle of the Eastern District of Texas, a jurisdiction notoriously favorable to patent trolls.

Is Webvention wholly independent from Intellectual Ventures though?

Maybe, but Intellectual Ventures has long been criticized for operating an insane number of shell companies in order to hide its litigious and arguably disgraceful litigious bent. To wit, the company is rumored to be using over 1,000 shell companies in order to hide its patent trolling activities.

So is it possible that Webvention and Lodsys are both IV shell companies?

It’s a leap, but wouldn’t be all that surprising.

Another note of interest is the potential link between Webvention and Lodsys.

In July 2010 Webvention sued Abercrombie and Fitch and Bed Bath & Beyond and a host of other companies for patent infringement. Webvention’s attorney on the case was William Elsworth Davis II of the Davis Law Firm.

In 2009, Lodsys famously sued a slew of Printer companies in 2009 for patent infringement. Who represented Lodsys? Why none other than William E Davis of the Davis Law Firm.

Coincidence?

Perhaps, but given Intellectual Ventures’ practice of hiding behind shell companies in order to make money grabs from patent trolling, it’s hard to put off all of these connections to chance.

At the very least, Intellectual Ventures acquired the patent from Abelow and sold it to a patent troll to get in on some of that licensing revenue. In the worst case we-wouldn’t-be-surprised-scenario, Lodsys is a shell company employed by Intellectual Ventures to get their litigation game on without attracting attention or controversy to their public persona.