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Apple moves to protect revenue-generating developer relationships from patent suit

Apple Inc. filed a motion to intervene as a defendant and counterclaim plaintiff in the patent lawsuit filed two weeks ago by Lodsys.

The Lodsys suit claims seven app developers are infringing its patents. Apple said in the motion that it is filing to intervene because it is expressly licensed to provide developers that the products and services covered in the suit.

?Apple is clearly interested in protecting its brand and good relationships with revenue-generating application developers,? said Jason Koslofsky, an attorney with legal firm ArentFox LLP, Washington. ?By intervening, Apple is protecting its developers and the in-app purchase ability.

?Essentially, Apple is making sure the developers have some muscle behind them in the suit.?

The claims made by Lodsys are based on the developers? use of products and services provided to them by Apple.

While Apple has licensed the patents in question, the suit claims that third-party developers are not covered. Lodsys is giving the app developers 21 days to license the company?s in-app purchasing technology.

Apple did not respond to a request for comment by the press deadline.

Patent suits multiply
This is another example of how the jockeying around technology patents is heating up.

Oracle is reportedly seeking significant damages in a year-old patent suit against Google over Android.

In addition, the U.S. Supreme Court recently upheld a lower court?s $290 million judgment against Microsoft for infringing a patent held by i4i related to document manipulation.

Apple recently won a round in a patent fight with Nokia, with a judge saying Apple did not infringe the five patents related to wireless handsets.  

"This is just one of many mobile patent cases out there," Mr. Koslofsky said. "Patent litigation on mobile technology is definitely a strategy used by all of these companies to complement their standard marketing efforts.

"None of the companies want their intellectual property appropriated by a competitor when the competition is as tough as it is now," he said.

The motion to intervene in the Lodsys patent suit reflect's Apple desire to protect its important mobile application business.

Apple accounts for 59 percent of all mobile application downloads, according to recent research from Research2Guidance.

According to Apple, 14 billion apps have been downloaded from the iTunes App Store. The store?s offerings continue to grow, with 425,000 apps available from tens of thousands of unique app developers.

However, the company?s app market share has declined by 22 percent over the past three years. The drop was concurrent with Google?s Android platform gaining prominence as more people bought Android phones and developers followed with applications for Android.

The popularity of the iTunes App Store helps Apple sell more mobile devices, such as iPhones, iPads and iPod touches. 

In the motion, Apple points to the importance of its business with developers.

?Apple has an interest in property that is at the center of this dispute, namely, its license to the patents in suit and its business with the developers, which depends on their use of products and services that Apple is expressly licensed under the patents in the suit to offer them. Both Lodsys?s complaint and its threats to other Apple developers adversely affect the value of Apple?s license and its business with developers,? the motion reads.

Apple is paid a percentage of the revenue developers generating from selling apps using Apple?s products and services.

If the courts were to determine that app developers did infringe Lodsys? patents, this could negatively impact Apple.

?A determination that the developers are not permitted to use Apple?s licensed products and services will significantly diminish the value of Apple?s license rights, impair its relationships with the developers, and lead to loss of significant revenue from all developers,? the motion reads.

Final Take
Chantal Tode is associate editor on Mobile Marketer