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Why I’m wrong about Lodsys and everyone should go bankrupt fighting them

UPDATE: Shortly after I published this post, Apple came to the rescue, which will hopefully render most of the Lodsys problem moot. Glad to be proven wrong so quickly on this one.

On last week’s Build and Analyze, prefaced by a big disclaimer that I’m not a lawyer and this should be taken with a grain of salt, I said that developers threatened by the Lodsys patent troll should probably just pay the small extortion fee that they’re demanding because any sort of legal fight would be extraordinarily expensive and would likely bankrupt any small developer.

I thought this was pragmatic, but it was a surprisingly controversial stance.

Patrick Igoe, a patent lawyer who has previously written well about why developers probably aren’t infringing on the Lodsys ‘078 patent, dedicated an entire post today on why I’m wrong:

Marco Arment’s advice to simply roll over and pay Lodsys could be damaging not only to the developers taking his advice, but to the independent development community as a whole.

After a wall of irrelevant personal attacks on my knowledge of the patent system (the lack of which I guess I didn’t adequately disclaim in my casual remarks during a podcast about software development), and criticizing me for not reading and understanding the actual patent (try it and get back to me when you fully understand it), he clarifies:

Arment is correct that standing up will cost money. I take serious issue with his assertion to developers, however, that “you’re going to lose,” especially when it appears he has not even read the patent claims.

With the claim limitations described above, I have been unable to come up with a plausible explanation as to how the targeted developers could be, especially without Apple as a joint infringer, directly infringing the patent. Patent litigation is unpredictable, and yes, developers could lose nonetheless, but based on my read, this is far from a slam dunk for Lodsys.

I didn’t mean to imply that winning a patent infringement suit against Lodsys would be impossible. Rather, my stance was that any attempts to fight this patent are going to be so expensive that no small developer will be able to afford to finish the fight, and will therefore likely “lose” in every way — but instead of paying a small tax until the patent expires, they’ll probably lose their entire business (and maybe more).

Igoe and I are both biased. A patent attorney working for large companies wants to be right that there’s a valid case against this alleged infringement, and that the ideal move is to fight it by giving vast amounts of money from somewhere (?) to patent attorneys. A software developer wants to be right that the ideal move is to keep developing software and forget about this as quickly and inexpensively as possible.

I’m not the only one arguing for a pragmatic, just-pay-them approach. Florian Mueller, who knows a lot more than I do about patents, also said that developers should avoid a fight:

Your #1 priority should be to avoid a lawsuit

…[If] you’re just a little app developer and if Apple doesn’t give you blanket coverage for whatever the consequences of a legal fight would be (also including the risk of a devastating damage award), your paramount consideration must be to avoid that Lodsys files a U.S. patent infringement lawsuit against you.

Being sued by Lodsys can ruin your little business. In case you don’t have a company that comes with limited liability, it can ruin you personally, possibly for the rest of your life. In a situation like this, there’s no way that you can afford the luxury of defending a principle, or depend on anyone’s solidarity.

Dr. Drang said I’m wrong about patents in many ways (which I want to write about separately), but does make a very good point if you choose to license the patent from Lodsys:

You can’t “just pay it and get on with life” because it isn’t well defined. How long will the payments last? How will the base of the 0.575% be determined? How long will that rate be applicable? … The answer, in a nutshell, is “As long as we (Lodsys) say it is.” You cannot make a business decision with such an open-ended liability in front of you.

So if you settle, it’s a good idea to hire a lawyer (which I hope you’ve done already if you’re being threatened by Lodsys) and see if you can negotiate a fixed royalty until the patent’s expiration as part of the agreement. (Or whatever the lawyer says you need. I’m just a software developer with “a lack of understanding of the patent system.”)

I don’t agree with Igoe at all that the right move for small developers is to avoid cooperating with Lodsys, risk being sued, and spend what it takes to attempt to win.

You can’t depend on Apple to step in. They probably won’t. (UPDATE: They did. Very happy to be wrong about this.) Apple’s behavior toward developers has repeatedly shown that we’re on our own. Apple’s not going to go out of their way for us unless our benefit is an accidental side effect to a much bigger upside for Apple that they wanted for other reasons.

You can’t depend on other developers taking any legal stand against Lodsys, because they probably can’t and won’t. Even if someone fights, you can’t afford to wait for the result, and it might not even help you.

The right move is to consult with a lawyer and take the advice you’re given, and a sensible lawyer will almost certainly tell you to avoid a lawsuit and just settle with Lodsys as cheaply and contractually safely as possible.

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