You might recall back in mid-2011 when a company called Lodsys LLC filed legal suit against a number of game and app development companies claiming that the use of in-app purchases and/or paid upgrade systems in those companies' apps infringed on patents owned by Lodsys. After sending out threatening letters to a number of these smaller – sometimes just one or two person – development teams, Lodsys went all in and added some of gaming's biggest players to their suit, including Atari, Electronic Arts, Rovio, Square Enix and Take-Two Interactive.

That was nearly two years ago when the Lodsys drama started to happen, and shortly thereafter Apple officially intervened in the situation and claimed that all developers licensed to release apps on the App Store should be protected from any sort of patent infringement or litigation under the umbrella of Apple's previous licensing of said patents. That has caused this particular suit to stall, but in the meantime Lodsys has continued their hunt by targeting an assortment of new companies in similar, separate suits.

As ArsTechnica reports, last week Lodsys unleashed a batch of new lawsuits against mobile gaming companies, including heavy-hitters such as Gameloft, Gamevil, Backflip Studios, and Disney. In months prior to the filings, Lodsys had focused on litigation against dozens of websites, claiming infringement on their held patents for vague things like "interactive chat" and "user feedback form(s)" that are basically on any company's website. It isn't explicitly stated, but it's assumed that this newest round of lawsuits targeting gaming companies is going back to their claim of infringement on in-app purchasing and upgrading patents.

The patent system has long been under fire for its rampant abuse by "patent trolls" who use the ownership of patents to strong-arm those who may be infringing on them into ponying up the dough to license them or the usually much-more-expensive process of taking the whole thing to court and trying to defend against them. For small developers, even if you feel like you're not in the wrong, it's usually quicker and easier just to pay out for the licensing and not deal with the headache of going to court.

By going after the larger companies, the ones with the monetary means to fight back, Lodsys seems confident that they'll be able to come out on top. Even Apple, one of the largest and wealthiest tech companies in the world, is having trouble making a difference, as the courts are currently bundling all of Lodsys' various lawsuits into one giant lawsuit katamari, and Apple's arguments won't be considered until that process is finished, tentatively scheduled for October of this year.

Drawing out the process has only made more companies cave in to just licensing with Lodsys and being done with it, as they claim that more than 150 companies including big guys like Atari and Take-Two are in the process of wrapping up their own settlement terms with the company. For the smaller developers and those who rely on them to populate their digital marketplaces, like Apple and Google, they'll have to wait for their day in court to see how it all shakes out.

I don't understand much of this stuff in a legal sense, but I do feel like this type of "patent trolling" is wrong and some sort of reform is needed, as what was initially designed to protect those who come up with the ideas that advance humanity has now been turned into a form of legal racketeering and extortion. We'll be watching to see how it eventually turns out, but if you're a developer who has received a threat from Lodsys you can check out the Electronic Frontier Foundation's FAQ for some guidance in to what to do next.

[ArsTechnica, Image via Fanpop]

  • http://twitter.com/SquaredApe Robert Cummings

    Software patents should be illegal because due to compiler technology and evolving optimisations, many programmers and developers will reach an identical conclusion. It is essentially unpatentable and not in any way designed for software to begin with. I am sure the current system introduced in 1791, didn't consider software. Let's get that fixed with a nice dose of sanity, shall we?

    • pauldavidmerritt

      Yep, I agree with you. It shouldn't be patent-able. Although, I am thankful for this mishap. IAP's should not be acceptable. It has been used (not a problem), an heavily and uncontrollably abused (HUGE problem). If you understand the repercussion of all the smiling 13 yr. old faces' parents buying it while game dev's are beginning to see "easy" money all over the place, then one can conclude: Games will become mind-numbingly stupid and underdeveloped (because they're making the money to get away with it)! Poo on the nonsense. Their current standing title shall be 'Freemium Developers'. It's not about making games. It's about making successful IAP's and putting a flashy sticker on it that says, "Game."

      • http://twitter.com/SquaredApe Robert Cummings

        Well with the other brothers, we took the hard route of selling it up front for .99c and it's a mistake financially. But hopefully people will appreciate the stand. But IAP is hard for any dev to ignore if simply to want to pay the bills...

      • bobehm

        That's rough. It's a beautiful game.

      • http://twitter.com/SquaredApe Robert Cummings

        The whole issue baffles me. I just got back from the supermarket and realised I was spending a pound here and there on random stuff like tomatoes, or even things I didn't immediately need like a tin of potatoes. I mean, the real cost of $.99 is frankly zero isn't it? Yet it's too expensive for some. Sorry for mini rant :)

      • REkzkaRZ

        This topic is off-topic, but I'll hop in.
        .99c for a game is absurdly low priced -- esp when you realize Apple takes a chunk of that. But the absence of middle-men (besides Apple) & the large user base makes $1 game a potential win-win, in some cases -- like when 1 million are bought & the dev shop is 1-2 people.

        And don't get me wrong -- I've put games on AppShopper to wait for a price drop all the time -- my reason is silly, but I'll explain: I generally have only 300-500megs free on my 16 gig phone, so I freq delete apps I don't use. With most games, I try & delete VERY fast. So I'd rather get free games to try & delete than $5 games. Some games ( ie >500mb or $10) I'm never going to try -- at least not on this device.

        So back to IAP's -- I think one *great* use of IAP's is devs putting in a 'say thanks to dev' IAP option which may or may not give a gift to the user, but doesn't really affect gameplay.

        So far I've dloaded many games & all the constant IAP pressure does for me is make me less interested. If the game's challenge is to amass $$$ to but upgrades, why would I want to spend 'real life' $ to ruin the game anyways?

        Last point, my standard rant: games that push me to go to a 'store' w/in-game currency & then offer IAP ways to have more currency are *FAILS*.
        I want to play a game to have some fun, not to be hammered by a sales 'program' to purchase something which is ultimately worthless.

        I have no beef with legit expansions which are IAP (altho better is a completely new release IMO).

      • metalmandave83

        People need to be willing to pay more for mobile games. I'd be much more willing to pay $20 for a good mobile game, maybe even more. For me, mobile games get played more than console games, simply because I can play them anywhere instead of having to stay in one room or have a bulky laptop to lug around.

        I think a big part of the issue with mobile gaming is many do not consider it a serious platform, which is a shame. These devices are more than capable of having console quality games. We need to be willing to pay for them. I am. I however do not like games with IAP that want you to spend more than you would for a brand new console game.

        If you look at the AppStore you'll see this comment a lot on games:

        "Great game but should be .99!"

      • praxcelis

        Going with another mistake to solve your problem isn't the answer either. Not that you shouldn't be paid by people that want your game… the App Store is a mess, indeed, but IAP isn't the answer.

      • Adams Immersive

        Unfortunately, sometimes it IS the answer and DOES pay the bills. (To be clear: I don't mind IAP that you buy and keep. Just consumable IAP.)

      • praxcelis

        If you stoop to the level of the fool, does that not also make you a fool as well?

        And no, I'm not calling YOU a fool.

      • Dams

        Well it seems that now with lodsys around IAP won't help you to pay your bill but theirs...

    • cuw

      By that logic medical patents should be illegal because its basically all carbon, oxygen, and nitrogen when you get down to the micro level, except without those patents and software parents alike there is very little way to recoup R&D costs before someone takes your idea and makes it cheaper. Since games can't be patented we see this all the time. If the patent system worked and required proof of concept and use of concept as opposed to vague ideas then we would be getting somewhere. That is the difference between drug parents and software ones though.

  • pauldavidmerritt

    Wow. Honestly, I hope the IAP system costs developers a hard-to-manage licensing fee. That way, all the crummy, backstabbing, money-grabbing tactics won't be used. I hope these companies grow up and start developing real games instead of Freemium money-teasers (which currently is the backbone of what they call "games").

    • http://twitter.com/SquaredApe Robert Cummings

      But surely they are encouraged by consumer spending habits. And tarnishing every developer with the same brush is a tad unfair don't you think?

      • bobehm

        Nothing wrong with a good game that uses IAP for funding. IAP can be as simple as new levels and as insidious as new powers in a multiplayer game or score boosters in something with a leader board. Not all IAP is bad. The old shareware model would be considered IAP these days.

      • themostunclean

        As much as people hate to admit it, you're right. The blame lies with the hundreds of thousands of spoiled, wasteful, brainwashed and compulsive consumers on iOS. Freemium only exists because it is a very successful way to earn. The average person playing on iOS is not a core gamer and doesn't care about preserving gaming's integrity. They only care that they get to build another Kwik-E-Mart or whatever.

        Another problem is the fault of both casual and core gamers on iOS. Everyone expects to get a game for .99¢ or free. I see people on the forums moaning constantly saying things like "don't know if I want to spend $1.99" about an AMAZING game that would have cost 20x that 10 years ago! So what do we get? Inexpensive games with lower production value that gouge our wallets. Well, we asked for it.

        Freemium isn't going away unless consumer habits change drastically. Bitching and moaning about the developers using it isn't going to jack, the blame lies squarely on the people buying into it.

      • metalmandave83

        Well said, my point exactly. Sorry, didn't see your post.

      • praxcelis

        I can't stand IAP for one reason. How much will it cost me to fully enjoy a particular game with IAP? Take a particularly solid game with all sorts of attention to detail. How much should it cost? I'll pay X for it. Now, take that game and change it to require IAP to be just as entertaining. How much will I have to spend to enjoy it? Not to play it, but to enjoy it as thoroughly as I would have with no IAP? If that cost is over X, then IAP is lousy and damages the game.

        In the end, someone wanting to make money from a game needs to play that game and ENJOY it before its wrapped and set on the shelf for purchase. Would most developers play the IAP-heavy games themselves?

      • http://twitter.com/SquaredApe Robert Cummings

        My own stance is, if I'm ever going to add IAP it will always follow this golden rule: Never, ever, ever use it to lock out the main game. Cos when I buy a can of beans, I expect a FULL can of beans. Thats right! Every single fart capsule needs to be included in the price. I don't want to have to open the can and find it half full. That's Simian Squared's stance at least. I do need to think about going IAP at some point because I'm not breaking even on dev costs, but will need to make it strictly 100% optional for diehard fans.

      • dancj

        Strangely the kind of IAP you're ruling out is one of the only kinds I find acceptable - but as long as either the game is free or has enough levels to qualify as a full game.

        What I don't find acceptable in IAPs are consumables (in-game-money) or power-ups.

      • REkzkaRZ

        Funny, I am ok w/a game that is clear "first 10 levels are free then unlock more for .99" or whatever.
        Then I can play, see whether it'd be worth more time (and minimal $) to buy -- most games wouldn't make the grade.
        What I don't like is games which seem open but you can't advance w/o buying something. Occasionally I see 10+ complaints in Appstore re: impossible to advance games w/o IAP, & then one person saying, "I finished game w/o IAP."
        Makes me seriously wish Appstore had a way for me to rank responses, block commenters who lie, block apps / devs that suck, etc.
        AppStore seems deliberately designed to make it harder for people to find the best apps!! How's that for a flawed design?!?

      • Crystalmyst

        I completely agree. You buy a product, you expect that full product, not a product with a giant paywall in it.
        The main problem here being that the title of the application does not dictate that it is a limited product, but simply the whole thing with a side note if you look carefully that it contains money grabbers.

        Outside of the mobile sector we have the following equivalents:
        - Consumables: Almost non-existent excluding "freemium" MMOs.
        - DLC: Offers small upgrades, and perhaps a limited amount of Consumables
        - Expansions: Sold as a separate product that ties into the same binary, like a paid upgrade.
        - Subscriptions: Used for games with a constant cost like online games.

        If the App Store displayed the product, but the "Download" button is next to a "Chapter 1" (or whatever) option, with the prices of each expansion underneath and maybe a "Complete" version at the top with everything, then people would get a much better idea as to what they're getting.

        We do NOT however need consumables. At all. At least not sold seperately!

      • Skullinton

        Well if people want to spend their cash on consumables it's their call. I remember in Zenonia 2, there was a premium store were you could buy stuff with in game currency, so you could either grind to get the stuff or buy cash iAp... But in the end these premium items were optional.

      • dancj

        Sounds like you like the Walking Dead model.

      • ssmoot

        I'd ignore the naysayers. An IAP to unlock the full game is fine. As someone else mentioned the gaming industry was built on that model. I remember unlocking my Doom shareware. No problem with that.

        $100 game credit buys are annoying though. The nickel & dime aspect of lots of IAP is a frustration. Don't sell "perks" like that. Just charge a fair $10 to unlock the whole thing past the first couple free demo levels.

        My 2c.

  • SporadicMovement

    If most people didn't spend $100's on a iOS game that encourages pay to win/pay to advance tactics, the "cash grab" IAPs would be unsuccesful and mostly go away.

    The fact is that consumers vote with their dollar (or whatever currency). If you mindlessly spend money on anything, you're setting up things like these lawsuits to happen.

    You have to be really gullible or dim to not be able to spot these IAP fests anyway.

  • SporadicMovement

    How to spot IAP Cash Grabs:
    Does it have colorful fancy text covering the screenshots?
    Is one of the selling points: 100 free gems/diamonds/etc for joining?
    Does it say, "made by Gamevil"?

    • FlipBeef97

      Haha LOL I agree! XD

    • Adams Immersive

      Does it have tons of 5 star reviews that say "Add me"?

      • dancj

        Yup the moment I see those reviews on a game one out of there.

      • dancj

        Oops "I'm out of there"

  • iValerio90

    In-app =cancer

    • wildperson

      Haha cancer is funny to joke about!! Rite guize? Amirite?
      -_-

    • Skullinton

      I don't think iAps are as bad as cancer. For once they don't spread as fast as the cancer does. Also, if you'd really want you could simply ignore iAps and stop complaining about them, which is something that you can't do as easily with cancer.

      • Skullinton

        Forgot to add that iApps can't kill you...

  • http://twitter.com/MobotStudios James

    Karma is a bitch though. Maybe companies shouldn't count on 9 year olds racking credit bills at $99 bucks a pop.
    I dont have any real fundamental issues with fair IAP and i realize parents should be smarter but ,
    I'm just saying....

  • diaskeaus

    IOS games should be developed with the same love and care as most traditional, console games. IAP should be used to manage the price of the game, not for a lower price, but in smaller chunks. A game that has 20 chapters and each chapter is 2$? Heck yeah.

    Of course, the problem today is that gamers today are not the same as the gamers who jump started the industry. Today, gaming is a lifestyle, and people initiated into that lifestyle consume games faster than it would take to run down to FuncoLand and buy the latest Nintendo Power for the secret hints in how to beat the game faster.

    • cuw

      Are you saying AAA titles with cash grab DLC are better and have more heart and soul behind them than something like ridiculous fishing? Because IMO that is just dumb. AAA games are focus grouped and tested so they hit the market they are aiming and make that market love the game. Then they stretch the game out with horse armor and other tiny tiny chapters for 1/20th the game price. Look at Sleepy Dogs(a great game) then look at the either purely aesthetic or minor side quest DLC and explain to me how this is different from pay to win or tiny chapter IAPs. Not to mention almost every AAA has a 2.99 DLC to unlock like a gold hand cannon or something that ruins any game balance.

  • Phoen1x1

    Where is anonymous when you need them?

  • HatfulOfHollow

    Not all IAPs are inherently evil cash grabs. You've obviously got the $99 game currency purchases but there is another end of that spectrum. The majority of IAPs I've bought are to support a small dev who put a great game out for free or .99 cents. I want to give those guys/gals a monetary pat on the back for bringing entertainment into my life worth more than the price of admission. 30% of it is already going to Apple, I'd like them to be left with something. I daren't even mention any of them specifically in case they get a lawsuit in the morning. A site such as this seems an excellent place to go hunting for new people to extort.

    • SporadicMovement

      You're absolutely right, not all IAP is cash grabs. I've spent $ on Punch Quest, for example. I didn't NEED to in order to advance, but you can just tell when games are developed with real TLC.

  • Eidaven

    I don't really understand how a company can patent something like In App Purchasing... That doesn't seem right.

    Secondly, I think the App Store's current pricing structure has been a combination of consumers driving the price down and the effects of what IAPs have done to keep those prices down. The App Store was introduced in the Summer of '08 with a couple games like "Super Monkey Ball" and "Enigmo". Both of which were $9.99. I purchased both on day one and was happy to do so. I honestly thought that $9.99 for a game I purchased on my Game Cube for $49.99 was a steal. Unfortunately, I think consumers didn't take to the $10 price too well and prices didn't stay there very long. I remember most Apps stayed in about the $5 range. Then a year later IAPs were introduced and I think developers realized the potential to make money while keeping the initial App price at what consumers set the market at. Not short after App prices started dropping to $2 or less, because that's all people were/are willing to spend. Honestly, I don't really blame devs for using IAPs to fund themselves. They don't really have a choice.

    I don't really agree with the way things have turned out, but what are we going to do about it? Maybe this lawsuit will actually force something to change... Sorry for the rambling...

  • Webarger

    Can somewone tell me What dis mean but not with so Much lettere just eser

    • Skullinton

      Basically a company is suing big companies saying that the ability to use iApps is their property and they should get money for it.

      • metalmandave83

        lol he was being funny (I hope)

      • Webarger

        Maybe ;)

  • Haliaeetus

    Hubris is the downfall of man.

    Things seem to be going ok for Lodsys and their patent claims. Then someone woke up and said, "Hey, I have an idea. Let's take Disney to court and challenge them in patent law."

    I'm pretty sure that, somewhere in the Library of Congress it says, "The House that Mickey Built"