Saturday, June 11, 2011

Lodsys sues another ten companies including Adidas, Best Buy, Best Western and Black & Decker

After suing ten large companies (including HP, Samsung and Motorola Mobility) in February and seven little app developers at the end of May, Lodsys filed a new complaint yesterday -- as usual, with the U.S. District Court for the Eastern District of Texas -- against another ten companies. All of the defendants in the new lawsuit are reasonably large companies: Adidas, Best Buy, Best Western, CVS Caremark, Sam's Club, Black & Decker, The Container Store, The Teaching Company,, and Vitamin Shoppe. A total of 27 businesses have now been sued by Lodsys, and there may be more to come...

I have uploaded the new complaint to Scribd, a document publishing site. If you're generally interested in smartphone and tablet computer patent issues, I encourage you to follow me there (similar concept to following someone on Twitter). For example, I also have a Scribd folder related to disputes between big players such as Apple, Microsoft, Motorola, Nokia and Samsung.

Connection with ForeSee Results' proactive lawsuit against Lodsys

The latest lawsuit is at least in part related to ForeSee Results' declaratory judgment action filed in Chicago on Wednesday against all four Lodsys patents. ForeSee took that action because some of its customers -- of which it named Adidas, Best Buy and WE Energies -- had been approached by Lodsys. Adidas and Best Buy are among the defendants in the latest Lodsys suit; WE Energies has not (yet) been sued by Lodsys.

It's literally foreseeable that ForeSee will move to transfer at least parts of the new East Texas suit to Chicago. The fact that ForeSee filed its lawsuit two days before Lodsys did is a strong argument in favor of a transfer, but it will depend on the judge in Texas granting such a motion against Lodsys's equally foreseeable opposition.

In my observation, companies anticipating a lawsuit in East Texas frequently launch pre-emptive strikes (by way of declaratory judgment actions) in other places because "first to file" is a key concept in connection with not only patents but also transfers of lawsuits between districts. Even a few hours can be relevant, such as in the embedded Java-related dispute between Oracle and Myriad Group.

Whether or not parts of the new lawsuit get transferred out of Texas has different implications for Apple and the app developers that have been sued. I will comment on that as the disputes unfold and decisions get taken.


In the new lawsuit, Lodsys asserts two patents:

  • U.S. Patent No. 7,222,078

    • This is the patent based on which Lodsys produced colorful infringement claim charts that were attached to its letters to app developers, such as this letter to Illusion Labs, which entered the public domain as a result of Apple's motion to intervene.

    • It's also one of the two patents asserted in the lawsuit against seven app developers. The other patent asserted in the complaint against app devs is U.S. Patent No. 7,620,565. That one is not at issue in the new "Adidas et al." lawsuit.

    • Previously, Lodsys asserted the '078 patent against all defendants in its first lawsuit (the one against Brother, HP, Samsung and others). In that suit, Lodsys also asserted two other patents, but this '078 patent was the only one to be asserted against each and every one of them.

  • U.S. Patent No. 5,999,908

    • This one was listed in Lodsys's letters to app developers, but as far as I know, Lodsys never showed a related claim chart to app developers -- and I know for sure that this patent was not asserted in Lodsys's complaint against seven app developers.

    • In its first lawsuit, Lodsys asserted this patent against only two of the ten defendants (Samsung and Trend Micro).

Details on the assertions in the new lawsuit

The latest infringement allegations mostly relate to website surveys in general, in a couple of cases to a special kind of survey that Lodsys describes as "feedback soliciting FAQs", and in one case to "live interactive chat".

Only Black & Decker and Vitamin Shoppe are sued over both asserted patents. Adidas, Best Buy, Best Western, CVS Caremark and are sued over only the '908 patent. Sam's Club is sued over only the '078 patent.

The asserted claim (a patent can have multiple claims) of the '078 patent in this lawsuit is claim 1. Against app developers, Lodsys asserts that claim 1 and additionally claim 24. Claim 1 is the original independent claim, meaning it stands on its own. Claim 24 makes reference to "a transaction for sale of a product or a service contract", which is why Lodsys believes it can assert it against in-app purchasing. The assertions in the new "Adidas et al." suit are not about transactions, which is why claim 24 doesn't come up in that new complaint.

Here's a list of the specific assertions (which are all phrased in an "including but not limited to" form in the complaint in order to have room for further allegations):

Since Lodsys also makes assertions in connection with surveys, it's possible that some companies conducting online surveys of whatever kind will sooner or later be asked to pay royalties to both Lodsys and MacroSolve. A lot of people think that only one company can assert that it owns a patent that reads on a given technology, but that's not the case. Some technologies contain multiple patentable elements; some patent holders interpret their patents very broadly; and patent offices grant broad and overlapping patents all the time, which is why many of them are narrowed or invalidated once there's a serious challenge -- more serious than the very limited amount of time spent per application by patent examiners.

The most important take-away for app developers is this: Lodsys is relentless in its pursuit of alleged infringers. They want to be paid and they are prepared to fight for it. On Twitter, Texas patent attorney Patrick Anderson said the following (which is true): "they [the app developers] need to understand #lodsys is not a game, a joke, or a scam. It is real. They [Lodsys] mean business."

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