Edible Apple

There’s been a lot of movement on the Lodsys front this week, though it’s largely been flying under the radar thanks to WWDC. Florian Mueller of Fosspatents, however, has done a stellar job of keeping us up to speed with the latest developments – namely an action to invalidate Lodsys’ patent portfolio and Apple attempting to intervene as a party to Lodsys’ suit against 7 iOS developers.

First, Lodsys’ entire patent portfolio (4 in total) are the subject of a new suit courtesy of ForeSee Results Inc. ForeSee, based out of Michigan, has filed a declaratory judgment in the Northern District of Illinois seeking to invalidate Lodsys’ patents because the company had “threatened assertion” against some of ForeSee’s customers.

If someone files a declaratory judgment action and wins, there’s none of those effects. It is, as the name indicates, merely declaratory: the court speaks out on an issue, in an effort to clarify who’s right on a disputed question, and that’s it. But that can still have a lot of value in itself. It can prevent a lawsuit, or even a whole series of lawsuits, by resolving an issue pre-emptively.

It happens frequently that declaratory judgment is requested as a pre-emptive strike by those who consider themselves or their customers/partners likely targets of an infringement suit. And that’s what has now happened to Lodsys: a company whose customers received Lodsys’s assertion letters decided not to wait until Lodsys might sue those customers, but instead asked for declaratory judgment.

Mueller points out that Foresee’s action was strategic to the extent it takes the proceedings out of the Eastern District of Texas, which is notorious for being friendly to patent trolls. So instead, Foresee brought its action in the Northern District Illinois on the belief that Lodsys CEO Mark Small resides in and conducts business in the aforementioned district.

And shaking things up even more is a recent filing from Apple looking to intervene as a defendant in the Lodsys’ 7 actions initiated against iOS developers.

If the court grants Apple’s motion to participate as an intervenor, Apple has already submitted its answer to the complaint, and its counterclaim.

Lodsys can oppose Apple’s motion to intervene. That may happen, but I believe Apple is fairly likely to be admitted as an intervenor.

Mueller notes that Apple’s proposed defense relies on the argument that iOS developers are licensed under its own agreement with Lodsys, a sentiment they previously relayed in their open cease and desist letter to the company. Notably, Apple makes no claim that the patent in issue is invalid, though affected iOS developers are free to raise that defense on their own.

But for Apple’s own proposed participation as an intervenor it makes sense to focus on the theory of exhaustion (meaning that Lodsys can’t get paid twice for a licensed use of the patents in question). In connection with that particular defense theory, Apple has by far the strongest basis for asking to be admitted as an intervenor.