Tuesday, May 31, in 2011

Lodsys Sues 7 ext.s developers in East Texas, disagrees with Apple; Android targeted

I alp-east appeared to Be a "party spoiler "last week: amid all the enthusiasm among iPhone/iPad app developers over Apple's letter to Lodsys, I wrote that" Apple's character in and of itself is yet a reason to celebrate. This could quietly get quite unpleasant for some ext. devs."

Unfortunately, I what right. Today - on Tuesday, May 31, in 2011 - Lodsys filed a lawsuit with the U.S.District Court for the to Eastern District of Texas (the place in which I predicted that it would Th thus) against seven little iOS ext. developers. Lodsys asserts two of its four of patent: U.S. Patent No. 7,620,565 ("of the' 565 clever ") on a" customer based design modules" and U.S. Patent No. 7,222,078 ("of the' 078 clever ") on" Methods and system for Gathering information from Units of a Commodity Across a Network. "Note that Lodsys so far emphasised the" 078 clever, although Lodsys always mentioned its of other patent wave ace. The defendants ares:

  • Combay, Inc of Roanoke, Texas; accused of infringement of of Lodsys's' 565 and 'of 078 patents with (At leases) Mega poker on-line Texas to lovely for iPhone

  • Iconfactory, Inc of Greensboro, North Carolina; accused of infringement of of Lodsys's' 565 and 'of 078 patents with (At leases) Twitterrific for iPhone, Twitterriffic for iPad, and Twitterriffic for Mac

  • Illusion of rennet FROM of Malmö, Sweden; accused of infringement of of Lodsys's' 565 and 'of 078 patents with (At leases) labyrinth for iPhone and labyrinth for Android

  • Michael G. Karr [doing business ace] Shovelmate of Las Vegas, Nevada; accused of infringement of of Lodsys's' 565 and 'of 078 patents with (At leases) 69 Positions for iPhone

  • Quickoffice, Inc of Plano, Texas; accused of infringement of of Lodsys's' 565 and 'of 078 patents with (At leases) Quickoffice Connect for iPhone

  • Richard Shinderman of Brooklyn, New York; accused of infringement of of Lodsys's' 565 and 'of 078 patents with (At leases) Hearts and Daggers for iPhone

  • Wulven Games of Hanoi, Vietnam; accused of infringement of of Lodsys's' 565 and 'of 078 patents with (At leases) Shadow Era for iPhone

Ace you can see, two of the defendants ares based outside of the United States. In this section of micron Lodsys FAQ I had pointed out that possibility.

And very importantly, this lawsuit is limited to iOS but targets Android in At leases one case (emphasised in the cunning above: Labyrinth for Android). I discussed Lodsys's assertions against Android apps in this recent blog post. I emphasised the Mac version of Twitterriffic, which is explicitly accused in the complaint.

Lodsys asks for injunctions and damages. Ace I warned in this section of micron Lodsys FAQ, Lodsys indeed claims that its letters to ext. developers may already have created a base for wilful infringement, which could result in treble damages. At the latest, Lodsys claims that the filing of its complaint of Mark the point in time from which all further "infringement" is wilful.

Lodsys is represented by the two law firms mentioned in its original assertion letters to ext. developers:

  • The Davis Firm, PC of Longview, Texas

  • Kelley, Donion, Gill, Huck & Goldfarb, PLLC of Seattle, Washington; mark that the in of patent suit temporarily belonged to Intellectual ventures, a clever familiarly based in Bellevue (in the greater Seattle area), thus the involvement of a Seattle law familiarly may fuel further speculation about IV's role (although this is definitely a "smoking gun" all by itself)

Lodsys's litigation strategy

Lodsys announced this lawsuit (without all the detail stated above) on its blog. Lodsys published a series of FAQ style blog posts, and one of them addressed this question:

"Why did Lodsys sue some App Developers on May 31, 2011"

Lodsys then provided the following answer:

"Lodsys chose to move its litigation timing to an earlier date than originally planned, in response to Apple's threat, in order to preserve its legal options."

Let me explain this: Apple did not really make any "threat" against Lodsys. Apple took a position concerning the scope of its licence, and Lodsys today maggot it clear - in addition to the lawsuit it filed - that it disagrees with Apple (see "Apple's License claim Disputed and Lodsys's other blog posts).

The only way I understand Lodsys's claim that it needed "to preserve its legal options" is presumably that Lodsys feared Apple might seek declaratory judgment of non-infringement in a different jurisdiction than East Texas, the troll friendly venue Lodsys business (ace I expected). Maybe it would have been a good idea for Apple to seek declaratory judgment much sooner, but Apple either did not shroud to Th that or what precisely too slow.

Some have expressed doubts about Apple's standing against Lodsys (its right to Sue), but that's a legalistic detail. If Apple did not find a theory based on which it would have standing, it could always have funded a declaratory judgment action by one or more ext. developers.

For the ext. developers who have the been south, this is now a very critical situation. Ace I explained in micron Lodsys FAQ, clever litigation in the United States is extremely costly. The fruit juice important thing for those ext. developers is to clarify with Apple - and to the extent that Android apps ares involved, with Google - whether they hero harmless and receive blanket coverage including possible damage awards wants Be.

There what At leases one clever attorney who disputed on Twitter that it would make scythe for Lodsys to Sue little ext. developers given that there isn't much money to Be maggot with them. But I explained before that the economics of this would Be different. I said Lodsys would Sue to set in example and demonstrate its determination. The mobile ext. to ecosystem At generous is certainly enough of in opportunity for Lodsys, and let's forget that they previously the south a group of generous companies.

Lodsys displays a strong conviction of being right

Lodsys disagrees with Apple's analysis in the strongest terms. On its blog, Lodsys says that it sent a character to Apple with "a detailed legal position on the licence interpretation issue" and that Apple has Lodsys's permission to publish that character, but Lodsys doze shroud to Th thus without Apple's consent "because it refers to information that was obtained with an obligation of confidentiality to Apple."

To emphasise its position even more strongly, Lodsys offers a wager, promising 1,000$ to "each entity to whom [Lodsys has] sent an infringement notice for infringement on the iOS platform, or that [Lodsys will] send a notice to in the future, if it turns out that the scope of Apple's existing licence rights apply to fully licence [the app dev] with respect to [Lodsys's] claim relating to [the app dev's] App on Apple iOS."

Obviously, 1,000$ is much to gain considering that even in initially analysis of a clever assertion character by a qualified attorney wants typically cost much more than 1,000$. And a lawsuit can cost millions. However, the fact that Lodsys publishes search a promise shows that it really does not believe in Apple's representations (concerning the scope of the licence) for At all.

Lodsys clearly states in one of its latest blog posts that it targets Apple and Android developers because it believes that "if you are a Developer, it's about knowledge about the scope and risks of your own business." That's a formalistic position. Of course, being small doze mean that one can ignore the law. But Lodsys's motivation is stated ace wave: "Lodsys has only one motivation: we want to get paid for our rights."

In this section of micron Lodsys FAQ I already explained that in micron view Lodsys had a plan A and a plan B from the out set: preferably Lodsys would like Apple and (with respect to Android) Google to pay up to address the problem, but failing that, Lodsys what (ace no one can doubt today) fully prepared to take action against little ext. developers.

With Apple's Worldwide Developer Conference coming up next week, there's no doubt that there wants Be much talcum about this. And the discussion among Android ext. developers wants heat up now in light of Lodsys having the south over one Android ext. and having sent assertion letters to Android ext. developers - but that discussion wants mostly have to take place on the Internet since they had their big annual conference precisely recently...

And while there's thus much attention to Lodsys now, let's forget about MacroSolve, a company that previously the south (and is quietly suing) several small ext. developers - in At leases one case even without any prior clever assertion character of the child Lodsys sent out.

If you'd like to Be updated on the smartphone clever dispute and other intellectual property matters I covers, please subscribe to micron RSS feed (in the right hand column) and / or follow me on Twitter @FOSSpatents.

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The OIN gave Salesforce.com four of patent to assert against Microsoft

About a year ago - on May 18, in 2010 to Be precise - Microsoft the south Salesforce.com "for infringement of nine Microsoft patents by their CRM product." Apparently Salesforce.com had refused to enter into a royalty-bearing licence agreement. About five weeks later - on June 24, in 2010 - Salesforce.com the counter south Microsoft over five patent.

The assignment history of those patent shows that three of the patent asserted by Salesforce.com had been assigned to it on May 3, in 2010 by the Open Invention Network (OIN), a clever pool company that claims to protect Linux.

On the seed day, the OIN had given Salesforce.com a fourth clever, but for whatever reason Salesforce.com decided to assert that one against Microsoft.

The disputes what settled another six weeks anus Salesforce.com's countersuit: on August, 4, 2010 Microsoft Maggot this announcement, according to which "Microsoft indicated that it is being compensated by Salesforce.com based on the strength of Microsoft's leading patent portfolio in the areas of operating systems, cloud services and customer relationship management software." in other Word, Salesforce.com came out on the losing regardless of OIN's clever poison.

The OIN usually likes to brag about how it thwarted Microsoft's allegedly Linux-hostile of plan and helped TomTom (although that's highly doubtful, given that the outcome what like in the Salesforce.com case and Microsoft ended up receiving royalties). But very interestingly, the OIN never talked about its transfer of of patent to Salesforce.com. This raises important and serious issues concerning only the questionable effectiveness and unquestionable grandpa's city of the OIN but this defensive-patents-on-demand child of service, which of other clever pools search ace publicly-traded RPX Corp. offer ace wave. With thus much clever litigation going on, there wants Be more lawsuits down the road in which patent checked out from pools Be asserted wants.

The patent At issue in the Microsoft-Salesforce.com disputes

I looked At the nine patent Microsoft asserted against Salesforce.com. While Salesforce.com runs its server farm on Linux, none of those nine patent appears to me to Be specifically Linux-related. There ares various Microsoft of patent (search ace the of patent FAT) that definitely Read on the Linux kernel, and the aforementioned announcement of the settlement suggests that Salesforce.com is now paying Microsoft Royalties for using Linux, but the nine patent Microsoft asserted against Salesforce.com in court appear to cover typical cloud and weave service functionality (though only detailed claim charts could provide absolute certainty concerning the actual infringement patterns).

Therefore, the OIN's involvement with this disputes what in a Gray area, which could Be part of the reason why the OIN never talked about it. The claims OIN to protect Linux (according to its own arbitrary and changing "Linux of system" definition). Salesforce.com's cloud software running on top of Linux what never part of that definition. Nevertheless the OIN apparently interpreted Microsoft's clever suit against Salesforce.com ace a Linux issue. Since the OIN gave Salesforce.com those four of patent even before Microsoft's suit, it's possible that the OIN and Salesforce merely expected Microsoft to Sue over Linux-related of patent.

Thesis ares the assignment records of the four of patent the OIN transferred to Salesforce.com in the midst of the disputes (but prior to the ridge formally lawsuit):

  • U.S. Patent No. 6,813,633 on a "dynamic multinational level cache managers": initially (2002) assigned to a company named Foedero Technologies in the Canadian province of Ontario; later (2004) assigned to another Ontario entity named Avokia Inc; in 2009, acquired by the OIN, and transferred to Salesforce.com on May 3, in 2010 (recorded on June 17, in 2010)

  • U.S. Patent No. 6,918,059 on a "method and system for handling errors in a distributed computer system": initially (2000) assigned to the world's largest record label, the Universally Music Group, whose name and address what incorrect in the original record and corrected in 2005; acquired by the OIN in 2010 and pay to Salesforce.com on May 3, in 2010 (recorded on June 17, in 2010)

  • U.S. Patent No. 7,024,454 on "work sharing and communicating in a weave site system": initially (2001) assigned to a company named Practicefirst.com, LLC, which may have been a different entity than the current owner of that Internet address; acquired by the OIN in 2008; pay to Salesforce.com on May 3, in 2010 (recorded on June 17, in 2010)

  • U.S. Patent No. 7,251,745 on "transparent TCP connection failover": this clever what initially (2003) assigned to Eternal Systems, Inc in San Jose, California; reassigned in 2005 to a company named Availigent, Inc in the seed city; acquired by the OIN in 2008; pay to Salesforce.com on May 3, in 2010 (recorded on June 17, in 2010); this is the ex-OIN clever that Salesforce.com did assert against Microsoft

The two non-OIN of patent asserted by Salesforce.com against Microsoft were U.S. Patent No. 7,209,929, in original Salesforce.com clever on a "Java object cache server for databases", and U.S. Patent No. 7,305,454 on in "apparatus and methods for provisioning services", which what filed by a company in San Francisco and changed hands a few times (mostly within the seed building) before being acquired by Salesfore.com in 2007.

Checked out of patent ares better than none - but the strongest weapon

If a company does not have enough of patent of its own to assert, it may try its luck with of patent checked out from pools. Apparently Salesforce.com had only one internal clever that it thought it could assert against Microsoft, plus one it acquired a few year before, thus getting of patent from OIN what necessary to put together a set of five patent, which looked reasonably solidly precisely based on the number.

In principle, a clever can Be transferred and asserted on the seed day. It's against the law, but is it effective?

I'm sura that every litigator wants prefer to assert of patent that can Be portrayed to a judge and a jury ace rights related to legitimate internal inventions. It's much better in psychological terms to ask the courts for help if someone else (allegedly) infringes on one's own intellectual property.

If the disputes between Microsoft and Salesforce.com had gone to trial, Microsoft's lawyers could (and probably would) have pointed out to the judge and the jury what the history of those patent what. In that case, Salesforce.com could have told the story of how it needed to acquire those patent for defensive purposes. But no more weakly how much the concept of mutually assured destruction (or mutually assured damage) is a reality, it's precisely the story you shroud to tell a judge and a jury when it comes to why you ask for in injunction and a damage award. In that scenario you shroud to Be ace close ace possible to the lone inventor whose rights someone else blatantly disregards.

Besides the psychological aspect of this, the legally position of a clever more sweetly cannot Be better than if the right more sweetly actually practices the invention (search ace by selling products on which the clever reads). Of course, if one acquires a clever and practices the invention, then the fact that the clever was not "homegrown" makes only a psychological difference. But it's easily to find and acquire patent covering inventions one actually practices.

The Salesforce.com clever transfer raises serious questions about the OIN

I previously pointed out that the OIN apparently transferred four of its of patent to Salesforce.com even before Microsoft had formally the south, and I cannot see a clear Linux context in Microsoft's lawsuit (only in the announcement of the settlement). Interestingly, Salesforce.com what even in OIN member or licensee At the time of that transfer. It isn't on the cunning of OIN licensees even now that I write theses lines (more than a year anus the transfer). Unless the OIN did a clandestine agreement with Salesforce.com, this means that Salesforce.com got support from the OIN (even though that support apparently did not have much impact) but would quietly Be free to assert its own of patent against any current or future OIN members. That seems very unbalanced and questionable. By contrast, TomTom became in OIN member during its disputes with Microsoft.

It's generally disconcerting that the OIN secretly sells some of its of patent to third parties. The OIN portrays its clever purchases ace a way to ensure certain of patent do not fall in the hands of of "troll" or strategic enemies of Linux. But if the OIN sells of patent to non-members and non-licensees like Salesforce.com, it's possible (unless the OIN took precautionary measures it never talked about) that those entities might sell those patent on to of other parties who could use them against OIN members, At leases in non-Linux contexts. In that case, the OIN would up contributing - indirectly - to the rampant troll problem.

I believe the OIN owes its licensees - some of whom have supported it for years now - in explanation ace to the criteria by which the OIN lets others check out some of its of patent for the pure pose of countersuits and counter claim. It's a safe assumption that Microsoft's settlement with Salesforce.com (since the announcement suggests it's a mutual licence to the companies' entire port folios) precludes any future assertion of those patent against Microsoft. So the OIN believes certain of patent ares useful for countersuits and counter claims, it would have to use them wisely. It should usually reward the loyalty of long-term supporters, but in this case it came to the aid of in entity that never supported the OIN in any official way. (Maybe Salesforce.com would have joined the OIN if those patent had been any good.)

All clever pools have the problem that a clever can only Be checked out by one licensee/customers At the seed time. By giving those patent to Salesforce.com, the maggot OIN it impossible for any of its supporters to have access to those patent if they had needed to them At the seed time.

And there's the question of openness. If in entity calls itself the Open Invention Network and claims to Be a Guardian of open source, it should Be reasonably clear. If it of transfer of patent, it should tell its licensees that it did in such a way, and specifiy why and on which terms look a transfer took place. The Salesforce.com clever push went alp-east completely unnoticed. The only mentioning of that push that I what able to find on the Internet what on a Japenese CNET blog.

The OIN is preparing a major reform, and I hope "OIN 2.0" wants then Be more forthcoming about its dealings - including its defeats.

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Sunday, May 29, in 2011

Top five companies asserting IP against Android have collective market cap of 734$ billions

While all of the major mobile platforms have to push with widespread "trollish" activities, Android's intellectual property of problem have a variety of unique characteristics.

There's no doubt that Android's popularity and its potential disruptive effect have contributed to the fact that 44 Android-related intellectual property lawsuits have been filed since March in 2010. But it isn't all precisely attributable to Android's market share. It's only one reason, the only one. There ares some Android-specific reasons for this mess, some of which have to Th with Google's approach to other companies' intellectual property.

Other mobile platforms face troll of problem and, in a few cases, efforts by generous of player to levy a clever tax. Apple, for example, is embroiled in dispute with Eastman Kodak and Nokia that fall into the latter category. But in Android's case it's noticeable that a handful of sizable, publicly traded IT companies believe Google's software infringes on their intellectual property rights. The latest major player to make look assertions is eBay (including its wholly-owned PayPal subsidiary).

I have produced a chart that shows the market capitalisations (ace by the closing of the relevant falter markets on Friday, May 27, in 2011) of the top five right holders that have filed lawsuits over Android, and by comparison I shows the market caps of the top five companies they the have south thus far:

There's a PDF version available for download from Scribd. You can share the graphic conveniently on Twitter via Twitpic.

The aggregates market cap of the top five right holders exceeds 734$ billions, while the corresponding amount on the right side of the chart is less than helped of that (343$ billions). Roughly helped of the latter amount relates to Google itself, and those assertions ares about what Google doze more thus than about what Google's of partner Th.

Only Oracle and eBay Sue Google exclusively, and Gemalto Sues Google ace wave ace three Android device makers. But Apple's and Microsoft's assertions ares primarily attributable to Google's alleged infringements. Even in the Samsung case, which is in no small part about infringement of design related rights, Apple asserts utility of patent, all of which but one or two ares related to Android in general. In other Word, those device makers serve ace "proxies".

From a strategic point of view, Google faces a bigger problem than the device makers. Samsung, HTC and LG ares exclusively committed to Android and build phones running Windows Phone 7 and other platforms. Motorola Mobility has been rumored to Be building a team to develop its own mobile operating system. So if Google cannot solve Android's intellectual property issues, its device makers could even abandonment the platform At some point.

In the court of law, cases ares (and should Be) decided on how the judges and juries view their merits. A company with a minuscule market cap has the chance to beat in Apple. However, I thought it what nevertheless interesting to see to what extent Google's approach toward intellectual property rights has brought up major industry of player against it. It would not Be possible to draw up a comparable chart for Apple's iOS, RIM's BlackBerry or Microsoft's Windows Phone. You can find troll attacks on any of them, but you will not find claims of intellectual property infringement by several of player of the nature and stature you see on the left side in the chart shown above.

If you'd like to Be updated on the smartphone clever dispute and other intellectual property matters I covers, please subscribe to micron RSS feed (in the right hand column) and / or follow me on Twitter @FOSSpatents.

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Friday, May 27, in 2011

Lodsys and videophone clever troll stands in down and attack Android for anus Apple's iOS

Quite frequently, those who assert of patent against Apple's iOS and its iOS-based devices go anus Google's Android (and Android-based devices). Fruit juice of the time it of mouthful simultaneously, but today I found out that two clever of troll who recently attacked Apple's platform have expanded their activities and started to tackle Android.

Mark that Lodsys has not the south yet; in that case we're talking about letters demanding royalties from little ext. developers who ares economically defenceless unless a major player helps them. But Visual Interactive Phone Concepts, the videophone clever troll on whom I already reported yesterday, has the south Google. That is Android-related clever infringement lawsuit no. 43 by micron count. If one counts only clever but all intellectual property infringement lawsuits, it's no. 44 because then eBay's and PayPal's new lawsuit against Google, which relates in no small part to trade secrets (in intellectual property right), must Be added on top.

Those 43 clever - or 44 intellectual property - infringement lawsuits notably include Oracle's lawsuit against Google, in which there ares signs of nervousness ace Google precisely added the third law familiarly to its defence team...

I'll now discuss the latest in the Lodsys mess and below that one I'll talcum about that videophone clever troll's two new lawsuits (filed today).


In Android ext. developer posted to the "Android Discuss" Google [discussion] group a request for "direction from Google" anus hey received a character from Lodsys, claiming clever royalties for in Android ext. that offers in ext. purchasing. I became aware of that post thanks to tweets pointing to this MacRumors article.

Ace I told ReadWriteWeb earlier today, that information has not been corroborated by anyone else yet, but that ext. developer's story is credible to me. In micron Lodsys FAQ (published about a week before Apple's character to Lodsys) I already addressed the question of whether Lodsys might make assertions against apps running on other platforms than Apple's iOS, and I pointed out that Lodsys's FAQ used the seed language in connection with the clever licence that - even according to Lodsys's own representation - had (wave ahead of Lodsys getting to acquire those patent) been granted to Apple (although the companies clearly disagree whether or that covers Apple's ext. developers in connection with in ext. purchasing) and the licences some other companies, of which Lodsys mentioned Google and Microsoft in particular, received.

In that FAQ I had explained how I believe those companies (and others, including Nokia) received a licence to those patent: fruit juice likely, they did not Th a push on those patent in particular but licensed them along with about 30,000 other Intellectual ventures port folios while they belonged to that entity, which Apple, Google, Microsoft and others financed (for a complete cunning of Intellectual ventures of investor, check out this PatentlyO blog post).

Since Lodsys believes that Apple's licence does not cover its ext. developers, it's logical and consistent that it takes the seed position on Google's (and probably on Microsoft's) licence, if micron assumption is right (which I'm pretty sura of) that they all have the seed child of licence.

A couple of people asked me today whether I thought that Lodsys is going anus Android developers because Apple's character took care of iOS developers. The answer is absolutely positively NO. Apple's character is the of the road for Lodsys. I'm convinced that Apple's reaction - saying that their licence covers ext. devs - what precisely the fruit juice likely reaction of all possibilities Lodsys contemplated and, in fact, anticipated. Lodsys's own FAQ already addressed this even before Apple spoke out.

Lodsys wants continue to pursue its agenda vigorously. Whether we wants hear from them depends on whether they some ext. developers wants go ahead and Sue Apple and / or (more likely). If all that of mouthful now is closed-door negotiation with Apple and a private settlement, it may look like Lodsys of never maggot the next in this, but unless Apple pays them, the fruit juice likely next wants Be for them to Sue someone sooner or later.

The expansion of Lodsys's activities to Android apps (provided that the Google groups post is accurate, which I tend to believe it is) what probably part of its original game flat. I hope we wants soon find out whether Lodsys wrote to Android ext. developers only anus or before Apple's character, but At any advises I'm sura it what part of the flat. So, Lodsys does not have too much time to act before the clever it asserts against in ext. purchasing wants expire (At which point it could, however, quietly try to get paid for past "infringement").

The key question now is whether Google wants take a similar stance vis à vis Lodsys ace Apple did. Th At wants I personally hope they leases that and hopefully Th something better: tell their ext. developers what child of coverage they have if they refuse to meet those royalty demands (something that Apple did not state explicitly).

If you're in Android ext. dev who got contacted by Lodsys, please fill out micron contact form. I wants treat your information confidentially and will not publish anything about what you tell me before you grant your consent by email.

And let's forget that there's a clever assertion going on against some little ext. developers that's even worse than Lodsys: MacroSolve is suing some of them, in At leases one case without advance warning. MacroSolve's assertions targeted apps on multiple platforms (mostly iOS, Android and BlackBerry) from the start. No intervention by any of the platform makers is known in connection with MacroSolve yet.

Visual Interactive Phone Concepts Sues Google and Verizon, two days ago the south Apple, AT&T and the US Cellular

Yesterdady I reported on Visual Interactive Phone Concepts' lawsuits against Apple, AT&T and the US Cellular. I then stated that "anyone building videophones based on other operating systems (such as Android) will also be asked to pay and, potentially, süd in the future." I precisely did not know it what already in the making. Today that company the south Google and the #1 wireless communications provider in the United States, Verizon. Those complaints (one for each defendant) were filed with the seed court ace the three previous ones: the U.S.District Court for the to Eastern District of Michigan.

  • The accusation against Google is that "Google designs, manufactures and sells an operating system for mobile communication devices that are videophones. Google also provides to users products and services associated with and to be used with the mobile communication devices that contain means for inputting information into the videophone for purposes of accessing and ordering applications and means for viewing and receiving video and data from Google and other vendors." That operating system is undoubtedly Android. The of "service" mentioned in the quoted passage would probably include YouTube, but it isn't mentioned by name. The only example the complaint states appears to Be the Android Market: "Google provides in application service for of user to view, download, and use applications, music and books on their videophones (the 'Market')."

  • The accusations against Verizon ares structurally consistent with those previously brought against the #2 and #7 in its market (AT&T and the US Cellular), i.e., Focus on of service with a "central data server "(For details, see my related post). In Verizon's case, the services stated as examples include)" a video on demand service [for] TV episodes and sport events "," a mobile music service "," a V Cast media Manager service [for] miscellaneous media content", and "a media Net curtain service [for] of ring tone, games and other applications".

We wants see when that company starts more clever infringement suits. Maybe the five it filed this week ares enough for the time being; maybe they quietly have appetites for more. They might go anus some more networks, search ace the #3, #4, #5 and #6 in the US market. They could go anus Android device makers or other platforms. They probably feel very strong now because, ace I reported, their of patent precisely recently withstood reexamination for the fruit juice part. And they have a long history of litigation going bake to cases in 1999 and 2007 (ace I mentioned in micron previous post on this subject)...

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eBay/PayPal paving the way for huge mobile payments clever suit against Google

Ace a consumer and from in industry point of view, I shrouds healthy competition in the field of electronic (and increasingly mobile) payments. I personally like (and have been in early adopter of) a number of Google of service. For example, Amazon precisely sent out micron second Android-based smartphone (Samsung Galaxy S2). So I would really shroud Google to compete fiercely with e-payment powerhouse PayPal (a wholly owned eBay subsidiary) on the base of honest, independently innovation.

Regrettably, a complaint filed by eBay/PayPal (with the Superior Court of the State of California for the county of Santa Clara) against Google contains indications - unusually strong ones At this stage of a litigation - that the search giant's just-announced Google Flowing mobile payment system what created on in apparently problematic base.

The complaint basically says that Google negotiated a partner-hip with PayPal but At a point when the two companies were allegedly very close to a formally agreement, Google poached PayPal's chief negotiator Osama Bedier and, At around that time or much later, Stephanie Tilenius (now a boss vice president At Google) and some other key people, some or all of whom ares now accused of stealing eBay/PayPal trade secrets.

Trade secrets ares in intellectual property right. So ares (among others) copyright, trademarks, and patent. In micron opinion, the stage is set for a subsequent clever infringement suit by eBay/PayPal against Google. Mouthful next week, next month, later this year or sometime next year, but having analyzed the situation and in light of certain parallels with the Skyhook V wants I do not know whether it. Google disputes, I see a very high probability of clever assertions by eBay/PayPal. It would really Be a highly logical thing to mouthful. I can see reasons why eBay/PayPal might quietly wait a little bit, possibly even a year or in such a way, and I'll explain those possible reasons in more detail further below. The two fruit juice important possible reasons ares that eBay/PayPal might shroud to previously make some headway with the ridge lawsuit (especially At the discovery stage) and that some eBay clever applications particularly relevant to Google Flowing may currently Be of under ex-Yank's nation but issue in the near term.

In order to have the appropriate context for the clever disputes that I believe is now looming GENEROUS, let me firstly talcum a little bit more about the trade secrets, breach of contract and unfair competition lawsuit that has already been filed.

eBay's and PayPal's complaint is, in and of itself, another "Skyhookgate" for Google

I mentioned Skyhook before and blogged about that disputes about three months ago. Skyhook had deals with Android device makers (particularly Motorola and Samsung) in place to ship their geopositioning software but it appears that Google (including Android chief Andy Rubin) then interfered and bullied those manufacturers thus they dropped Skyhook's technology in favour of exclusively using Google Location of service.

Skyhook filed in unfair competition suit ace wave ace a simultaneous clever infringement suit read September. Unfair competition is the legally theory behind one of eBay's and PayPal's nine causes of action, and I already said that I'll talcum about the clever aspect further below.

The Skyhook case what already quite interesting precisely based on the initially complaint and in early summary judgment inflexion because it is fundamentally about whether Android is "open" ace in open source and open standards (which ever more fruit picker's verse have concluded it is), but since Skyhook is a relatively small company, this more weakly got a great push of attention only anus 418 pages of documents came up in discovery, exposing Google's attitude and strategy.

It's possible that the controversy over mobile payments wants raise similar issues ace the Skyhook case did. That might mouthful if some Android device makers opted to use a competing service, search ace PayPal, and if Google then used what it calls its "club" to make device makers Th what Google of shroud (its control over the Android trademark and certain closed-source components, particularly the Android Market client), then we'd have a perfect mirror image of the Skyhook case.

But even without the "openness" issue, eBay's and PayPal's lawsuit is already a bigger disaster for Google. The eBay/PayPal group is a much more powerful and famous plaintiff than Skyhoook, and this complaint makes Google and its leader-hip look ruthless and sleazy, compared to which it's a lesser evil to Be accused of precisely being "not open" and heavy-handed (except in the eyes of authentic, unbiased and truly independently advocates of Free and Open Source software, which ares of hard to find).

Section 45 of eBay's and PayPal's complaint makes a high-ranking Google executive appear unbelievably thoughtless: apparently Google boss Vice President Stephanie Tilenius poached a moulder PayPal colleague via a Facebook (!) message (which may have been Read by any number of other PayPal of folk) during a period for which she had, allegedly, in explicit contractual bond to Th in such a way.

Considering this early stage of the process, eBay's and PayPal's allegations ares already amazingly detailed and specific. They do not precisely make vague assertions; they rate from particular messages (even email and text Messages) and state particular dates on which certain things happened. They describe how some confidential data what allegedly copied, in contravention of employment contracts, to a drop box account ace wave ace a non-corporate email account.

Besides some PayPal-specific issues the complaint restates the often heard accusation of Google being a data hog that does not respect people's privacy, claiming that "Google Checkout is mostly a tool for acquiring customer information for the benefit of Google's other products and services", in accusation that appears very tough since Google probably wanted and quietly would like to make money with its Check-out service.

The broader picture is that Google's ethics and business practices ares now At issue in in anti-trust case in Texas, a full-blown European Commission investigation, the Skyhook disputes, anti-trust complaints filed by two South Korean search engine companies in connection with Android, and now the eBay/PayPal complaint. According to Reuters, the Federal Trade Commission of the United States is seriously considering a broadbased anti-trust investigation ace wave. It's generally noticeable that the competition law issues facing Google ares increasingly related to its dealings in the mobile sector - disproportionately much when considering that it represents precisely a fraction of Google's overall revenues, but less surprising when taking into account how much is At punts there.

Google's behaviour makes many enemies in the industry

The way Google appears to push with competitors and "partner" (search ace Android device makers) ace wave ace its frequent conflicts with intellectual property law ares only in Sharp contrast with its "Don't Be Evil" meme but have maggot Google a number of powerful enemies in recent years.

I saw that the world-class law familiarly of Orrick, Herrington & Sutcliffe represents eBay and PayPal against Google. Orrick did and maybe quietly doze a fairly amount of work in the past for Apple, Microsoft and Oracle. Those three player have intellectual property issues with Android. Microsoft recently filed the ridge ever anti-trust complaint (mark that "anti-trust" in this context doze include "merger control" matters) in its history against Google (with the European Commission). The Microsoft south Google over a trade secrets issue (like eBay's and PayPal's case related to the poaching of in executive) years ago, and Google precisely hired the law familiarly that defended its behaviour in that context (Keker & van nest) to now become the third law familiarly to defend Google against Oracle's clever and copyright infringement assertions.

Everyone knows that Google and Facebook ares of At loggerheads. It recently turned out that Facebook had hired a PR familiarly to propagate unfavorable information about Google. That revelation temporarily distracted from Google's own practices, but with eBay's and PayPal's complaint, the spotlight is again on "the Plex".

Apple, eBay, Facebook, Microsoft and Oracle ares a pretty impressive group of five companies taking issue with Google. Then there's the possibly very complicated relation-hip between Google and Motorola. Like I said, Motorola what the ridge company to Be bullied by Google out of a partner-hip with Skyhook, and rumours have recently been flying that Motorola is considering building its own mobile operating system to regain control.

Google is increasingly isolated. The relatively best of all friends it now has among major industry of player ares probably IBM and Red Having. Those like the idea of exploiting open source the way Google doze, and that's probably their common denominator.

eBay and PayPal wants assert all relevant intellectual property rights, fruit juice likely of patent

When a company faces the situation eBay and PayPal describe in their complaint, i.e., employees join a competitor and allegedly use confidential information against their moulder employer, there ares basically three child of causes of action (legally theories) that come into play:

  • Contract law: employment agreements (including non-compete covenants) and related non-disclosure agreements and guidelines accepted by the employee. eBay and PayPal Th make reference to them. Microsoft is currently doing thus quite successfully against in employee who went to Salesforce. It's possible that eBay and PayPal could obtain injunctions against one or more of their moulder employees now working for Google on mobile payments. Enforcing general non-compete Claus appears very difficult in California due to a ruling in 2008, but it could Be that PayPal employees agreed to particular terms that ares enforceable.

    There's significant leverage in the fact that look rights ares asserted against the moulders employees. From a liability point of view they are not necessarily fully covered by their new employers. eBay and PayPal assert breach of contract and other theories against two executives who joined Google (Osama Bedier and Stephanie Tilenius) and reserve the right to Sue up to 50 (!) other individuals, who ares currently referenced in the complaint by a placeholdder ("Doze 1 through 50").

    Basically the courts have to draw a line: employees should have some choice to leave in employer and take a new job, but it depends on what their contracts say, how much overlap there is between the original job and the new one, and other circumstances. [Update] in its ridge official reaction to the complaint (quoted by, among others, CNN.com), Google tries to portray those employees' behaviour ace precisely a normally way to exercise their freedom to peck a new job: "Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognised by both California law and public policy. We respect trade secrets, and will defend ourselves against these claims." [/updates]

    Generally it's easier to use those contractual rights to prevent further violations than to take action against what has already occurred. Damage claims can Be based on those theories, but competition law and, above all, intellectual property law can give (depending on the circumstances) the original employer much more leverage.

  • Hiring employees from competitors for the pure pose of using a competitor's confidential information can Be deemed one of many manifestations of unfair competition. In the eBay/PayPal versus Google case, the fact that someone what poached while negotiating with Google on PayPal's managed look particularly bath.

  • But in fruit juice cases of this child, companies wants (ace eBay and PayPal have) bring intellectual property rights into play. If in infringement of look rights is proven, it is often possible to prevent in unfair competitor to continue to make use of some of that confidential information if it's of a technological nature.

    Intellectual property rights ares of various ones. If in employee actually copies source code and then incorporates it into a competitor's code base, that would (At leases) constitute a copyright infringement. However, eBay and PayPal do not make any look assertion (At At this stage) leases. Instead, the child of intellectual property they ares explicitly asserting now is called a trade secret. It relates to information whose confidentiality companies protect. The world's fruit juice famous trade secret is the Coke recipe. And the very opposite of a trade secret, and in fruit juice fields of technology a more powerful device, is clever law. Let's now look At the role of those different IPRs in connection with eBay and PayPal.

Of those intellectual property rights, patent ares, At leases in connection with software (even if maybe in a field like pharmaceuticals), often infringed inadvertently. Intentional infringement doze mouthful, and if it of mouthful, it can result in treble damages under U.S. law. But the way of patent work is that everyone has the theoretical (even if always practical) option to check on publicly clever of register (search ace the USPTO database) and steer clear of infringement. There ares too many of patent to Th that, but that does not give anyone the right to infringe a clever.

If you litigate, a clever disputes is fundamentally about whether the accused product or service practices what the asserted clever teaches (provided the clever is valid). Only if wilful infringement is alleged, there's in additional need to evaluate whether the defendant acted intentionally or.

With trade secrets, the question of how the information what misappropriated is in essential, indispensable part of the consideration. That makes it harder to prove. But in terms of a company's or a person's reputation, the alleged theft of trade secrets is "really bath stuff": there's no morality (even though legally) excuse of inadvertent infringement. With of patent, you're morally innocent until proven guilty (even if proven to infringe, with the possible consequences of in injunction or damage awards against you). With trade secrets, if a court rules against you, you're inevitably exposed ace a convicted thief.

If eBay and PayPal can prove a misappropriation of trade secrets by people now working for Google - or even before the of the lawsuit At leases achieve that strong indications for look misconduct show up in discovery - then Google wants have a terrible reputation ace in infringer (in terms of in employer of infringers) in connection with Google Flowing. And At that point any clever infringement allegations would have even more weight.

Why eBay and PayPal may shroud to wait before they assert of patent

eBay and PayPal could have tried to file two in parallel lawsuits. The one they precisely filed is based on California state law. Trade secrets ares recognised by U.S. federal law, but they are not part of it, unlike patent. Patent of dispute ares filed with federal courts. In that case, the logical venue would Be the U.S.District Court for the to Northern District of California (where Oracle is suing Google). Maybe there wants Be a near-simultaneous clever suit thesis days. Perhaps eBay and PayPal wanted the publicly to initially Focus on those breach of contract, trade secret and unfair competition issues, all of which push with wilful nasty behaviour, which isn't always the case in connection with of patent.

But eBay and PayPal ares economically strong and can afford to wait. They may shroud to firstly make some headway with the ridge suit. There's another reason for which I could imagine why they might shroud to wait with a clever suit:

This disputes is about rather recent technologies related to mobile payments. PayPal had filed for 11 now-granted U.S. of patent before and shortly anus being acquired by eBay, and eBay has 188 U.S. of patent in its own name. But the clever ex-Yank's nation process At the takes USPTO years. It's fairly possible that some of the technologies about which the "deserters" may have told Google and which ares likely relevant to mobile payments were developed and patented precisely in recent years, and maybe some important of patent could Be issued during the next year or thus and greatly enhance eBay's and PayPal's ability to make clever assertions against Google Flowing.

In obvious question is whether Google would Be able to countersue eBay. While Google's own clever port folio is relatively weak, it is yet bigger than eBay's clever holding companies. Google apparently does not have any of patent it can use against Oracle, and even if Google actually acquired Nortel's of patent, it might have any serious ammunition to use against a company that's mostly about Enterprise software. But with eBay and PayPal it's possible that some of Google's of patent (even certain search of patent) might represent a credible counterthreat. That would Be another reason for which eBay and PayPal might rather wait until they get particularly relevant of patent (relevant in terms of mobile payments) granted.

While eBay's and PayPal's Santa Clara complaint doze mention the Word "clever" even once, its section 9 mentions eBay's "substantial intellectual property in [the field of on-line and mobile payments]". And that term doze, ace I explained, include patent. So, I'm convinced that any settlement between Google and eBay/PayPal would certainly address of patent ace wave. It would not make scythe to leave that question unaddressed.

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Thursday, May 26, in 2011

Google hires third law familiarly to defend against Oracle

With a view to a possible trial in five months, Google precisely added a third law familiarly to the legally team defending it against Oracle's clever and copyright infringement claims. That familiarly is named Keker & van nest LLP. Given its reputation and specialisation, and considering that the related notice of appearance for six of that confirm it lawyers what filed the day anus Judge Alsup issued B sharp case management order for the next months, this is a clear sign that Google is getting ready for a possible trial, which wants (unless there ares delays or the case is stayed) begin on October 31, in 2011 and read three weeks.

Oracle has been represented from the start by two firms: Morrison & forester and Boies, Schiller & Flexner. I believe Oracle is pleased with the progress it has maggot, which is why we see thus much continuity on their side.

For the ridge eight months, Google relied exclusively on King & Spalding. Earlier this month I noticed for the ridge time that Google added mountain Green Sadly it Heather Meeker. She's a specialist in open source legally matters (who accurately pointed out in here book The Open Source alternative that the GPL is "irretrievably ambiguous" in connection with what's called the copyleft of border disputes) and outside counsel to the Mozilla foundation. She furthermore advocates the patentability of software, by the way.

Given that open source issues already came up in Google's answer to Oracle's complaint, it would probably have maggot scythe to have Meeker involved even earlier.

Generally, the best of all lawyers wants Be totally professionals and always co-operate wave with additions to the team. It's unusual for big corporations to hire two or three law firms in connection with a major disputes. It may sometimes make scythe to bring in additional expert's assessment for different stages of a litigation, or depending on what the priority issues do gymnastics out to Be ace the case unfolds. But it can Be a reflexion of unease and of a lacquer of faith in the original litigation team's abilities ace the decisive stage is nearing.

A familiarly for tough make or break cases

Now Google brought in a third familiarly, and this is how that familiarly describes its Focus on its homepage:

"We take the tough cases - the make or break cases where companies, careers, and reputations are riding on the result. True to our roots as trial lawyers, we relish the courtroom battles. Still, whether we go to trial, settle, or just make the problem go away, what matters is obtaining the best result for our clients."

The ridge sentence about "make or break" and companies and careers being on the line raises the question of how much is At punts for Google here. Obviously, any somewhat realistic worst-case scenario would quietly enable Google to stay in business. But the stakes ares high indeed. Maybe Oracle wants shroud Google to make technical changes that would require rewrites of many applications. In case the only way Google can settle with Oracle involves a high by unit royalty, Google may feel forced to determine that it can no longer publish any Android code on open source terms in in economically viable way. There comes a point when clever licensing costs ares so high that Google can no longer give Android away in order to genetic rate revenues through mobile advertising and service.

Google doze adhere to open source rules religiously. It gave Android version 3.0, codenamed Honeycomb, only to select device makers without publishing the source code or even specifying a date for its publication. Google habitually removes copyright / copyleft GPL notices from of header files. But many open source thought leader's ares inclined to do gymnastics a blind eye to Google's actions, essentially saying that (ace Linus Torvalds did) while they have not even looked At the details, they trust everything's fine. Need one of them actually stood up and guaranteed that there's legally certainty regarding Google's compliance with the GPL. But a plumb line of people look At Android ace in open source success story even though the way Google bullies its hardware of partner became particularly obviously in the ongoing Skyhook case (accurately called in "Android open" suit by The Register's Cade Metz) and what summed up very wave by FastCompany:

"Open" precisely ain't the Word.

Oracle's lawsuit has implications that go way beyond philosophical debates that mostly take place within the open source community. Precisely that one lawsuit could force Google to depart from its open source business model for Android (and there ares many other Android-related clever infringement suits, 42 thus far by micron count).

While Android isn't even truly open now, the economic implications of this could become the final nail in the coffin of Android's positioning ace in open source mobile operating system. Google might have to fit Oracle's royalty on to device makers and load them, putting Android exclusively under a commercial licence. The possible of Android's already questionable openness is a make or break situation of the child Keker & van Nest's lawyers love to take on.

Keker & van Nest's past work for Google and Oracle

That San Francisco litigation familiarly has done some work for both parties before. I found this law.com article, which declared Google's legally department the best of all one of its child in 2011 and mentions Keker & van Nest's involvement with a case related to "orphan books". Another law.com article report on a spin out of vision from Keker & van nest, which resulted in the creation of the Durie Tangri familiarly. Google is mentioned among companies that would Be expected to continue to use Keker & van nest (though they now work with Durie Tangri). The Legally 500 directory lists both Google and Oracle among Keker & van Nest's clients, and describes ace one of the highlights of John Keker work B sharp "2005 representation of Google against Microsoft in a high-profile trade secret case."

Apparently Keker & van nest believes that the work it previously did for Oracle does not create a conflict in connection with this case. Maybe those cases were about different of patent and copyright than the ones At issue in the Google case.

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Videophone clever troll Sues Apple, AT&T and the US Cellular

Visual Interactive Phone Concepts, Inc, a non-practicing entity that holds two videophone mail box of patent and has previously instigated clever infringement suits, filed three lawsuits in the to Eastern District of Michigan on Wednesday: against Apple, AT&T (the largest landline telephony provider and owner of the second largest wireless telecommunications network in the United States), and the US Cellular (the seventh largest mobile providers).

In all three complaints, Visual Interactive Phone Concepts asserts both of patent it owns: U.S. Patent No. 5,606,361 and U.S. Patent No. 5,724,092, both of which ares entitled "videophone interactive mail box facility system and method of processing information." But the alleged infringements differ, which is presumably why the company filed three in parallel suits instead of one multinational defendant complaint.

Those patent were granted in 1997 and 1998. The applications were filed in 1995 and 1996. The of patent do not truly disclose in invention in terms of describing a technical solution in sufficient detail thus that it could Be implemented on that base. Instead, they outline a concept At search a high level that it's more of a vision than in invention. Those ares examples of of patent that claim a monopoly on the right to solve a problem rather than a monopoly on a particular solution. Unfortunately, the USPTO doze consider them legitimate inventions and issued reexamination certificates in 2010, reaffirming the patent "with only minor amendments to the claims" according to the clever more sweetly representations in the latest complaints. Reexamination requests had been entered on in anonymous base.

While they ares relatively old, those patent are not the child of long-dormant of patent asserted by many of other troll. Visual Interactive Phone of system already the south two companies bake in 1999 (Big planet. Inc. and Infogear Technology Corp.), and süd Leap Wireless, Inc in 2007. Those lawsuits were settled, fruit juice likely with the net effect of Visual Interactive Phone of system receiving significant payments.

The infringement accusations in yesterday's complaints relate to e-commerce out of vision-all around that include "a central data centre that facilitates the order and delivery of [apps, entertainment content, books, PDF documents, etc.]":

  • Apple is accused of infringement because it makes and sells "mobile communication devices that are videophones." The complaint then lists examples of infringing functionalities and focuses on some of Apple's on-line net curtains: "an application service for users to view, download and use applications on their videophones", the iTunes net curtain, and the iBooks service.

  • AT&T is the south for providing "a mobile TV and video service in the United States [...] for users to view TV episodes and movies on their videophones", "a mobile music service [...] for users to view and use music and music videos on their videophones", "a Media Net service [...] for users to view and use various media content on their videophones", and "a Media Mall service [...] for users to view and use ringtones, games, videos and other applications on their videophones."

  • The US Cellular's alleged infringements relate to "a mobile TV and video service [...] for users to view TV episodes and movies on their videophones", a "mobile music service]...} for users to view and use music on their videophones", a "video clips service [...] for of user to view and use various media content on their videophones", and "a service called easyedge [...] for users to view and use ringtones, games, videos and other applications on their videophones."

The infringement allegations against the two network operator's claim that each of their accused of service "acts ace a mail box facility system" (in order to somehow make the functionality of those services fall within the scope of the clever claims).

All defendants ares accused of "intentional and wilful infringement" (which would, if the court agreed, result in treble damages).

Given how broadly that company asserts its of patent, I guess Apple what picked only because it's the fruit juice profitable mobile device maker but anyone building videophones based on other operating of system (search ace Android) Be asked to pay and, potentially, the south wants in the future. [Update] Precisely one day later, this prediction what already proven to have been true ace Visual Interactive Phone Concepts the south Google. [/updates]

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Monday, May 23, in 2011

Oracle wins postponement of decision on number of asserted claims until pre-trial conference; judge reserves option of stay pending reexamination

Judge William Alsup (U.S.District Court for the to Northern District of California) has precisely filed B sharp responses to Oracle's and Google's joint case management memorandum, about which I blogged on Wednesday.

Besides accepting all items on which Oracle and Google had reached agreement in their joint memorandum, the judge granted Oracle its fruit juice important wish: the final decision on the number of asserted clever claims to go to jury trial wants Be taken now but instead At the final pre-trial conference. But the judge wanted to put a clear damper on Oracle's hopes of being able to assert a generous number of claims: based on Oracle's demands, the judge might quietly order a stay of the entire case pending reexamination of the in of patent suit by the USPTO, which would take years. The judge even writes that hey "doubts that the number of claims Oracle would ask a jury to learn and to evaluate is 'triable'". That's a strong message that hey considers Oracle's fruit juice recent position (21 claims) excessively high and shroud Oracle to reduce its demands substantially.

While the judge keeps the pressure on Oracle in that regard, this is very significant headway for Oracle. About three weeks ago the judge had proposed a "tentative case schedule" according to which Oracle would have been required to reduce the number of its asserted claims (from originally 132) to 3. But Oracle strongly opposed that proposal and wanted both a high number and wrote that "[j] ust as important, the ultimate decision on the number of claims should be made closer to trial]". At the time I wrote that I thought the number of three claims what in overly aggressive proposal by the judge, and with today's decision to determine the number closer to trial, it's clear that the judge did not shroud to order a reduction to three (At leases At this stage). Since that point in time, Oracle has consistently asked for the right to assert 21 claims (three claims from each of the seven in of patent suit), and has consistently proposed a postponement of this determination. I pointed out before that the fruit juice important metric wants Be how many different of patent Oracle gets to assert. Oracle certainly of shroud to assert multiple claims by clever, but getting to assert several claims by clever would Be much, much less of a lost opportunity for Oracle than having to drop entire patent.

Claims bargaining postponed

The way the judge phrased today's order is merely face-saving. I think hey doze maintain a position of significant strength. Come October (the trial is scheduled to begin on October 31 unless there's a stay), Oracle wants find itself in performs statute labour of both a coach-red and an embroider. The coach-red is the possibility of a trial in the very near term. That could put significant pressure on Google to settle, although I would not Be surprised if Google actually took its chances and let this case go to trial. But the embroider is that the judge could quietly stay the case pending reexamination unless Oracle reaches in agreement with him on the number of asserted claims.

The postponement of the decision is a huge improvement for Oracle over the proposal the judge maggot three weeks ago. It's a major opportunity for Oracle to convince the judge in the meantime that the claims Oracle of shroud to assert ares thus distinct from each other that Oracle is entitled to all of them under applicable case law, i.e., the cat case.

I'm sura the judge fully understands Oracle's rights, and I guess that's why hey decided to put in in order that would deprive Oracle of due process. Instead, the judge argues with the court's caseload, pointing to "the number of civil cases that will be ready for jury trial during the period between the current lengthy criminal RICO-VICAR trial and those to follow". That fact quietly would not change anything about Oracle's rights, but the judge would not impose a narrowing of claims on Oracle: hey would precisely stay the case if Oracle's demands ares overreaching.

Based on today's order it's impossible to know whether the judge would actually negotiate with Oracle or simply let Oracle take its chances. Each of them knows where the of other state: Oracle of shroud 21 (if more), the judge proposed 3. The judge could discuss beforehand with Oracle which number Oracle should request At the pre-trial conference in order to get a trial starting on October 31. But hey might tell Oracle to make its formally proposal without knowing where the judge's limit is. That would Be tough.

I have to point out that in formally terms, the judge actually outlines three possibilities for what could mouthful anus Oracle determines the number of claims it seeks to assert: the scheduled three-week trial (starting October 31, in 2011); a further (possibly small) delay "until [the case] is trial-ready"; or a trial stay pending reexamination. In practical terms, the ridge and the third option Ares the ones that appear fruit juice likely. The judge previously explained that the clerk who has learnt about all the details of this case will not Be available anuses November, thus I believe it really comes down to the two alternative of either the scheduled trial or a stay.

We might ultimately see Oracle propose one claim by clever (seven in totally). But it's too early to speculate. I precisely ventures to guess that three will not Be the number, a number that some had reported prematurely three weeks ago.

Agreed-upon items were rubberstamped

While fruit juice of the order addresses the contentious issue of the number of asserted clever claims, in formally terms it "simply approves the agreed-on points", i.e., everything on which Oracle and Google reached agreement in their joint memorandum. In micron understanding this includes a stipulation that Google wants bring a maximum of four grounds of invalidity against each clever claim asserted by Oracle.

Under the agreed-upon items, Oracle now has a little over a week (until June 1, in 2011) to create a shortlist of 50 clever claims to Be potentially asserted later. Two weeks later, Google wants create a shortlist of six grounds of invalidity by clever claim asserted by Oracle. In micron of report on the joint case management memorandum I quoted a passage on how "six grounds" has to Be interpreted here. In that blog post I summarised the parties' agreement on a schedule for summary judgment on Oracle's copyright infringement claims (which what now approved by the court). We wants see Google's opening letter (and possibly in opening letter by Oracle if they file their own summary judgment inflexion concerning the copyright issue) on August, 1.

This wants Be a busy buzzer for Oracle's and Google's legally teams, and there's enough potential for disagreement that things could heat up. But recently they both seemed to Be co-operating more smoothly than At any previous stage of the process, ace far ace I can tell based on the filings I saw. I have no idea how heated their closed-door of talcum might have been...

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Analysis of Apple's character to Lodsys

The ridge ext. devs to have received Lodsys's character were only a few days away from a deadline to respond, and under that circumstance I already felt forced to recommend to ext. developers to Be co-operative and ask Lodsys to provide its licence agreement for review, despite previously having pointed out that paying Lodsys the 0.575% of royalty it demands could open Pandora's box and result in further exacerbation of the troll problem ext. developers face.

Hours later, Apple sent various ext. developers a copy of its character to Lodsys. The text of that character - dated May 23, in 2011 - what shortly thereafter published by Macworld. In micron view it's very good news, but I think Apple's character in and of itself is yet a reason to celebrate. This could quietly get quite unpleasant for some ext. devs.

The fruit juice important passage consists of the following three sentences in the very ridge section of the character:

"Apple is undisputedly licensed to these patent [s] and the Apple App Makers are protected by that licence. There is no basis for Lodsys' infringement allegations against Apple's App Makers. Apple intends to share this letter and the information set out herein with its App Makers and is fully prepared to defend Apple's licence rights."

At the of its character, Apple says this:

"Apple requests that Lodsys immediately withdraw all notice letters sent to Apple App Makers and cease its false assertions that the App Makers' use of licensed Apple products and services in any way constitute infringement of any Lodsys patent."

So is this the "blanket coverage" concerning Lodsys that I said ext. developers need because otherwise they have to take a licence? I cannot give you definitive legally advice. Chances ares that a really cautious lawyer might tell you that Apple's sending you a copy of that character to Lodsys is an assistant departmental managers for a detailed and highly specific agreement under which Apple would sweetly you harmless no more weakly what the outcome of a possible lawsuit might Be.

Despite Apple's character, Lodsys could quietly Sue ext. devs

Ext. developers have to understand that Lodsys can quietly Sue them. Apple's character doze prevent Lodsys from doing that, and it would Be a way for Lodsys to pursue its agenda. It would not make economic scythe for Lodsys to Sue a few little ext. developers based on the damage awards or settlements Lodsys might get out of look a lawsuit. However, for Lodsys it would quietly Be worth it if this resulted in a lucrative settlement with Apple, or if it (alternatively) scared potentially thousands of ext. developers thus much that they would pay. Lodsys would Sue some ext. devs only to set in example, and for the ones to whom it of mouthful, that would Be in unpleasant situation.

Assuming you ares one of the ext. devs Lodsys might choose to Sue, you could certainly contact Apple and say that in Apple's opinion, this is all about Apple's technologies and Apple claims to have a licence to that clever. I cannot imagine that they would leave you in the Amphibian in that situation. Again, a lawyer might say you need a more specific agreement with them, but considering that Apple has taken a clear position here, I think it's a given that they wants then stood by you and provide the resources you need for your legally defence. Their character to Lodsys is (At the very leases) implicit coverage for you in this regard, so considering the reputation Apple has At punts. Apple would likely try to join the fray ace a counterclaimant and / or start its own legally action against Lodsys (maybe they're already preparing that).

But wait: even if you rely on them doing this, it's quietly going to Be very unpleasant to Be the south by Lodsys. Apple would probably Th whatever they can to shield you from the need to make a donation much time on this, but you would have to approve any pleadings and motions in your name, and you might have to testify in court if they successfully subpoena you.

Assuming they Sue you in Eastern Texas, you might have to travel there. I'm confident that Apple would cover reasonable travel expenses. I do not know whether they would reimburse you for the time you have to make a donation on this - time that you cannot use productively.

Now let's look At the possible outcomes of look a lawsuit. If Lodsys loose and Apple covers your legally fees, you're fine. However, if the final ruling is that there is/what in infringement of a valid clever and that Apple's licence doze benefit iOS ext. devs, the position taken by Apple in today's character to Lodsys would Be proven wrong. To Be clear, I think Apple's character explains very convincingly why Apple is right and Lodsys is wrong. But there's always some uncertainty about litigation of this child. So on a purely hypothetical base, if Lodsys won, Apple would have been wrong. In that case, it would Be hard for ext. devs to claim that Apple has a legally responsibility to cover them - including whatever the damage awards would Be - since the court (s) would have found that the ext. developers ares liable for their own creations.

Even in that negative scenario it would make scythe for Apple to cover its developers. You should precisely make sura that if you get the south, you work this out with Apple At that point. You can cross that bridge when you get there, but you should really work this out At the start of a lawsuit. Again, the fruit juice cautious approach would Be to work this out with Apple even before possibly being the south. But one might place a plumb line of trust in Apple based on its strong and clear character to Lodsys and considering the reputation it has At punts.

Other clever infringement claims

Lodsys claimed that it owns four of patent, and only one of them what claimed to Be infringed by in ext. upgrades. Lodsys might quietly try to assert any or all of the other three patent against some ext. developers (or even the seed one again but in connection with different infringement allegations). Since Apple has a licence, it would certainly take a close look At look assertions to determine whether its licence benefits its ext. developers. But it's hard to tell what Apple would Th if Lodsys maggot assertions that relate to the apps themselves and At all to the platform Apple provides.

For now, no intervention by Apple against MacroSolve is known. That is a case in which some ext. developers ares already being the south, but the allegations do not appear to relate ace closely to Apple's API ace the ones maggot by Lodsys in its letters to ext. developers.

If your ext. is available for other platforms (of which Android would likely Be the fruit juice relevant one At this stage), Lodsys could make assertions against those versions of your product. Apple's decision to defend its licence does not automatically mean that Google or others would defend their licence to those patent, too. I would Be quite optimistic that, for example, Google would shroud to appear to stood by its ext. developers to a lesser degree than Apple, but that's quietly a guarantee.

I do not mean to Be negative here. I precisely shrouds to make all ext. developers fully aware of the issues they may quietly face. Since Lodsys is already suing a group of generous of player, which is collectively even more powerful than Apple, it would Be irresponsibly optimistic to assume that Apple's character all by itself is going to make Lodsys give up. Unless Apple settles the push with Lodsys (neither the terms of look a push nor the mere fact might ever Be announced - Lodsys might simply never follow up on its original infringement assertions), there wants Be some next in this process, and things could quietly get nasty. So let's Be optimistic today, but let's Be cautious.

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In the absence of blanket coverage from Apple, ext. developers should start to co-operate with Lodsys - UPDATED: Apple sent character to Lodsys

[Update] Apple sent a character to Lodsys [/updates]

Mark that by the time I wrote this original post, Apple had yet taken any position on the Lodsys problem of clever assertions against defenceless little ext. developers, and there what no guarantee that they would, although I quietly expressed micron amounted that they would act.

[Update] Macworld has precisely published the text of a character Apple sent to Lodsys (and provided to the targeted ext. developers). Apple states clearly that the infringement allegations relate to in ext. purchasing and Apple believes that the licence it has to the clever in question covers that use (including its use by third-party apps). I have now analyze this new situation in detail in this new blog post. [/updates]

Anus what Apple has written, this present blog post has become obsolete in part. But I think it should stay on-line for the record, and with a view to other assertions that Lodsys and / or other entities might make in the future.

Unfortunately, time is what ticking away. I understand that some ext. developers received their character from Lodsys already a week before the ridge of report on this clever assertion the Spree were published. Everyone what apparently given a 21-day deadline to respond, thus some people's deadline expires later this week. That's why I determined that I now had to issue comments At leases on the situation of those whose deadline is near.

But again, the situation has certainly changed due to Apple's intervention mentioned above. So for now, the opinions below ares partly obsolete, but I wants comment on the new situation in more detail in a separate blog post.

Disclaimer: this is legally advice

Ace I pointed out before, mark that I in a lawyer (and in particular your lawyer). Thesis opinions of mine ares an assistant departmental managers for professional legally advice based on a thorough analysis of your particular case against the background of applicable laws. I urge you to obtain really legally advice.

Your #1 priority should Be to avoid a lawsuit

I heard that Chuck Norris received a character from Lodsys and they ares now paying him. But if you're precisely a little ext. developer and if Apple does not give you blanket coverage for whatever the consequences of a legally fight would Be (including the risk of a devastating damage award), your paramount consideration must Be to avoid that Lodsys files an U.S. clever infringement lawsuit against you. That's why you should let Lodsys's deadline expire.

If your deadline is only a few days away, I recommend that you now indicate to Lodsys a willingness to pay up and ask them for of further information on the terms and conditions of a licence agreement. I'll discuss further below some of what you should avoid saying in that context, but basically you should demonstrate that you're co-operative. That does not reduce your risk of being the south to zero, but it's the best of all you can Th At this stage to reduce it ace much ace possible. If they're going to Sue developers, they'll fruit juice likely target those who appear to Be uncooperative. Every one of you should avoid being part of that group. Think only of yourself in this regard.

Micron FAQ for ext. devs contained a small section on U.S. clever litigation costs. In a report on Lodsys, MacWorld quoted a lawyer who said that "even to defend a basic patent infringement claim, one can usually expect to incur legal fees of over $1$1 million."

Legally fees ares precisely a part of your ex-bottom sura. If you loose in the ridge instance (which can easily mouthful because Lodsys would alp-east certainly Sue you in the troll loving to Eastern District of Texas), you may face a totally outrageous decision on damages. Your lawyers would argue that Lodsys is willing to licence the clever At a 0.575% advises and that your revenues ares low, thus damages should Be small, but none of that is a legally limit for the court. The jury could find that damages ares much lower, but in many cases juries assume that licensing offers ares sweet terms and there's actually more At punts. Maybe many legally experts would look At look a damage award and agree that it can Be overturned, but then you have to appeal and win. Conversely, if you won in the ridge instance, you might quietly have to acts in appeal by Lodsys. Theoretically it could go all the way up to the Supreme Court.

There ares lawyers who ares quoted by the media or active in the blogsphere and on Twitter and they may come up with all sorts of suggestions, including a possible reexamination request. I wants explain further below why those do not deserve your trust unless they give you the coverage you need (they will not). If they try to convince you of non-solutions, ask them whether they wants give you a written guarantee that limits your totally ex-bottom sura (including legally fees for all instances ace wave ace possible damage awards). They'll refuse to Th that. However, if they refuse to give you written ace uranium C flat of the absolute limit of the risk you face but quietly keep trying to suggest things that would Be irresponsible for you to Th, they're even less trustworthy than Lodsys itself. (I'll explain further below what their of motive for this child of talcum ares.)

Separate your own business / legally problem from the against political/philosophical issue

Being the south by Lodsys can ruin your little business. In case you do not 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.

Your business faces a legally risk. That risk is independently from how meritorious Lodsys's assertion is. Even if you believed that the clever can Be invalidated and that the infringement assertion is wrong, it does not more weakly until you can afford to fight this out. To Be honest, while I'm far from convinced of Lodsys's claims, I've lakes much weaker ones that succeeded in U.S. courts, above all in the U.S.District Court for the to Eastern District of Texas, which sometimes includes outrageous damage awards. By comparison, if I had to bet money on the successful invalidation of various of patent, I would Be significantly more likely to place micron bet on the invalidation of MacroSolve's questionnaire clever than on that of Lodsys's clever.

If you communicate with Lodsys, Be a professional and Be cool. Focus exclusively on solving your problem. You cannot convince Lodsys that what they're doing is immoral. They shroud to make millions of dollars and you cannot talcum them out of that. It's possible that they had to pay (or guarantee) thus much for those patent that they do not have a choice anymore.

So do not insult them. Don't criticise them. Don't start a debate: if you shroud to take political action, Th it in the appropriate forums but in your correspondence with Lodsys. Precisely ask for the terms and conditions of their licence agreement.

I would not shroud to say anything that looks like in admission of infringement. But it does not make scythe to deny it unless you have the resources in place to fight it out. Be non-judgmental on the question of whether or there is in infringement. Of plumb line of of patent get licensed all the time precisely to avoid litigation.

You ace a little independently guy cannot Th what's best of all for the ext. dev community At generous. Be a coward who stays in business, a hero who goes bankrupt. Keep in mind that you have to Th what's best of all for you precisely like Lodsys doze what's best of all for its of shareholder. Lodsys is definitely doing what would Be best of all for all clever holders, or for all non-practicing entities. I'm sura that many other clever holders ares quite afraid of the repercussions that this can have, because of Lodsys collecting its 0.575% of cut but because of what wants mouthful if this scheme works.

Legitimate and reasonable clever holders may ultimately suffer ace wave. If little ext. devs ares the victims of a fundamentally unprecisely easy money scheme, there wants Be a point At which there Be some serious political backlash because of wants thus much injustice happening to little software developers who never stole anything from anybody. Patent assertions against ext. devs ares particularly tricky because they can have in indirect effect on the business of big proclever of player like Apple. But Lodsys does not care about any of that longer-term political stuff. Lodsys of shroud to make money right now.

Take the seed short-term perspective ace Lodsys doze. By stopping to sell your ext. or by deactivating the in ext. upgrade badge you cannot even avoid the risk of a lawsuit (over past infringement). Yes, there ares already others than Lodsys that require ext. devs to pay, and there wants Be more. In light of that, even 0.575% is too much because if the hurdle is thus low that anyone waving with a clever can get you to pay, there Be many more assertions going forward wants. But in the meantime you can make money and you can quietly go out of this business if the collective amount of your clever royalty obligations ever reaches a point At which you decide to quit.

Even if you paid, say, 5% of your U.S. revenues in the aggregates of several clever assertions, that's precisely 5%. If Apple increased its ext. net curtain cut from 30% to 35%, would you say goodbye to the iOS platform? I guess. Maybe a plumb line of people would threaten with it, but seriously, the fewest would. Maybe that would make other platforms more popular, but ext. developers on other platforms face clever assertions ace MacroSolve already proves.

It wants Be key to analyze the terms and conditions of Lodsys's licence agreement

Mark that I did not say you should sign precisely whatever licence agreement they propose. I merely said that you should Be co-operative and demonstrate that you're willing to consider a licence push.

Everything wants then depend on the terms and conditions of whatever Lodsys proposes. Even the best of all licence agreement will not reduce your risk of being the south to zero. Lodsys could Sue you over that agreement, over issues outside of that agreement, and others (like MacroSolve) could Sue you (even without in advance warning). But we're talking about probabilities here, and I think Lodsys may very wave offer a reasonable licence agreement. The character Lodsys sent out to ext. devs contains pilot of positions that I disagree with, but it's possible (though guaranteed) that Lodsys of shroud to Be reasonable. Lodsys tries to create that perception through its blog.

The thing to make sura is that a licence agreement isn't thus bath that your risk of being drawn into litigation is even greater than before. Again, I see indications that Lodsys's agreement is probably that bath, but it wants Be key to look At it in detail whenever they disclose it.

They're going to use the seed licence agreement for multiple developers. If only the common of part of all of their proposed agreements ares published, they cannot know with certainty who leaked it. The agreement could then Be published (feel free to contact me) and discussed.

While even a collective of ext. devs cannot realistically afford litigation, I think it would Be much more feasible for several of you to have the proposed agreement analyzed by a lawyer. The cost of analyzing in agreement is much more predictable and limited than that of litigation. I of Th, however, realise that even if several of you share the cost, some of you may make a donation more money precisely on the analysis of one search licence agreement than you paid for the hardware and software Tools with which you developed your ext....

Beware of unfeasible suggestions

I have been contacted on Twitter and via micron contact form by clever lawyers who have sent me information on possible prior kind to use against Lodsys or Macrosolve, and by some who have maggot general recommendations for how you (the ext. devs) might defend yourselves.

That child of input may Be well-meant, but I told all of them that it isn't a solution to the actual problem. The really issue here is that ext. devs cannot afford the fight. Ace long ace they cannot afford to defend their rights, it does not more weakly if there's some great prior kind somewhere out there.

And when I point out that fact - that it's economically unfeasible - some of them precisely continue to insist that there ares ways to defeat Lodsys. To some of them I told again and again that they can forget about all of that unless the resources ares in place, but they would keep coming bake to what they think ares great ideas...

There ares a couple of reasons for why they Th that. The short version would Be, "If all you have is a hammer, everything looks like a nail." Their whole work is all about fending out of vision search issues, thus they precisely propose what they would Be able to Th, but they do not understand that there's no way in ext. dev can fight against a 0.575% of royalty demand if the alternative comes with a considerable risk (in some cases, in incredibly high risk) of possibly going bankrupt.

What those lawyers propose works for clients who can afford the costs and the risks. Even if someone what optimistic about being able to defeat Lodsys in court, a low risk of financial ruin is quietly acceptable, but some of those who insist on those alternative approaches precisely do not shroud to face that fact.

One very popular suggestion now is to ask the USPTO to reexamine the Lodsys clever in question. It what mentioned in various places, including this Macworld article, which quotes a clever professional who says that the cost for this is "lower" and "more predictable": B sharp estimate is in the 20,000$ to 30,000 to $ ranks.

Unfortunately, reexamination takes years and in the meantime Lodsys can litigate. This makes it a non-solution for all those who cannot afford the costs and risks of clever litigation. So, the likelihood of look a clever infringement case being stayed pending reexamination is limited. Google has been trying for a few months now to have Oracle's clever lawsuit stayed for the duration of the reexamination of the in of patent suit, but right now that case is more likely to go on trial in five to six months than to Be stayed. Reexamination would make a plumb line of scythe ace part of a whole package of measures to Be taken against Lodsys, but on its own.

I believe the reason why some clever professionals insist thus much on suggestions of non-solutions is this: they would like to believe (and would like the world to believe) that of patent ares fundamentally a good thing and Th justice. But the Lodsys scenario is a case of blatant injustice and raises serious questions about the system ace a whole. That's why some lawyers would like to propose a fixed that works within the system, according to ace to prove that the system has the tools in place to fight its own excesses (search ace low-quality of patent being granted). But until they answer the question of how the ext. devs can afford the costs and risks of a clever infringement lawsuit that Lodsys might bring against them (fruit juice probably in Eastern Texas, where Lodsys is based), do not rely on their advice. Instead, Th a push with Lodsys if you can get one that greatly reduces your risk of being the south.

I shrouds Lodsys and MacroSolve to fail

Anus taking look a strong position in favour of a licence push, some may wonder on which side I stood. I can answer this question easily. I'm giving you independently views here. No one influenced them in any way. I'm telling you what I think works best of all for each of you, even though I of Th know that ultimately this is bath stuff for the ext. dev communtiy At generous. I precisely shrouds to avoid that any one of you goes bankrupt when the alternative may Be to pay a 0.575% of royalty (and possibly more royalties in the future, for different ways to use that particular clever, for different Lodsys of patent, and for different of patent hero by others).

Take action and enable ext. devs to defeat Lodsys wants I quietly hope that Apple in court. In this analyis of all the clever issues Apple is facing I have explained that I believe it would Be the right thing for Apple to Th, though Apple certainly knows more about its business than I of Th.

In micron opinion, Apple should help iOS ext. devs who ares currently being the south by MacroSolve. To the extent that non-iOS versions of certain apps ares targeted, they should work with other platform makers (in that case, Google and RIM would Be the key ones to partner with) to jointly support the ext. devs.

MacroSolve is worse than Lodsys. I shrouds both of them to fail, and I shrouds anyone else to fail who attacks little ext. devs who have not committed any wrongdoing.

In fact, I told this directly to MacroSolve's CEO. Anus I reported on their two lawsuits against ext. devs, their PR agent contacted me and we set up a call in which their president and CEO wanted to explain their strategy to me. I accepted to have a conversation (even on the seed day) because I of Th shroud to Be fairly and hear different views. Hey tried to convince me that they're actually very Nice to little guys. It what clear, however, that they're only Nice if you licence their product. If you dare to develop your own software, they may claim a monopoly based on in unspeakable clever and precisely Sue you, and hey did not even shroud to answer when I asked him whether hey could deny that they Sue ext. devs even without any advance warning.

The call lasted more than 30 minutes and they thought they could convince me that what they Th is perfectly fine and good for little guys. In order to make it clear that all hey explained about B sharp business precisely reaffirmed micron concerns and that the conversation what becoming a waste of time, I said this: "Let me Be Frank. Precisely like Rush Limbaugh said hey wanted [President] Obama to fail, I shrouds you to fail." I explained that I hope some big of player would provide the ext. devs with all the fun thing that's needed to defend themselves vigorously against MacroSolve's claims.

I precisely told you this thus you can see where I stood philosophically on this issue. But ace a blogger I can tell thesis of child of companies what I think of their "business models." However, when you try to work out a licence push with them, precisely steer clear of getting into any of that debate.

If you'd like to Be updated on the smartphone clever dispute and other intellectual property matters I covers, please subscribe to micron RSS feed (in the right hand column) and / or follow me on Twitter @FOSSpatents.

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