Another patent-owning company has targeted app developers on both Apple and Android platforms, intensifying concerns among developers that smartphones are the new hunting ground for so-called “patent trolls”.
MacroSolve, a US-based company traded “over the counter”, has so far sued 10 app development companies, claiming that they infringe a patent 7,822,816, entitled “system and method for data management”, which covers the collection and transmission of data for questionnaires and puts them online.
The patent was filed in August 2003 and awarded in October 2010, and the discussion specifically relates to “handheld computers” – a category that has now come to include smartphones.
Jim McGill, chairman of MacroSolve, has said that the patent covers “thousands of existing apps” that collect data and send it to a central server. The company has chosen to sue app developers in the “rocket docket” jurisdiction of Texas Eastern District in Tyler – where patent-owning companies frequently file cases in the expectation that the courts will process them quickly, and in their favour.
The news will further discomfit app developers, who have already seen Lodsys – a company which bought a small portfolio of four patents from another patent licensing company, Intellectual Ventures – send demands for payment to a number of iPhone app developers.
Software patents issued by the US Patent Office have the potential to strangle the burgeoning mobile app business, because they can tie up small developers in court cases that they cannot afford to defend – or where they may be unable, for geographical reasons, to organise a defence.
Apple’s legal department is understood to be investigating the claims by Lodsys, but it is not known whether it has been alerted to the claims being made by MacroSolve against the 10 developers.
If the patent cases are upheld, the app developers could be liable for damages and for royalty payments on the use of the patent.
Developers could aim to have the patent invalidated, but that would be a long and expensive legal process.
The cases have highlighted a problem with the US Patent Office, which has already been criticised for awarding patents that are too broad, or even cover impossible inventions such as antigravity vehicles.
The patents owned by MacroSolve might be challenged and nullified on the basis of being “obvious”, given the time when they were filed, when the mobile web was already being used in a number of countries. But that would involved developers in long drawn-out legal battles which they are ill-equipped to fight.
Lodsys and MacroSolve may, if successful, chase hundreds or even thousands of app developers in Apple’s iTunes App Store and Google’s Android Marketplace, as well as the rapidly-growing Windows Phone Market.
Apple, Google and Microsoft have not commented on the latest claims and lawsuits.
Since 18 April, MacroSolve is suing:
• Canvas Solutions, which makes Smart Business Forms;
• Kony Solutions, which generally writes mobile apps;
• Widget Press provides a “FormEntry Touch Private Label” program to deliver custom forms to iOS users;
• Pogo Corporation, which provides apps such as cinema information;
• and SWD Interactive, which helps people build iPhone apps.
These join four companies it began suing in March:
• Blue Shoe Mobile Solutions, which helps people create mobile apps;
• Brazos Technology, which provides ticketing system apps for public officers such as police;
• On The Spot Systems, which offers survey apps for businesses to offer to customers;
• and Formstack, which provides billing apps.
Over-the-counter investors are being told that MacroSolve’s stock – which has dropped from .50 in late 2009, when it was first listed, to around 25c now – represents a “phenomenal and solid investment”.
MacroSolve, founded in 1997, itself says it is “a pioneer in delivering mobile apps, technology, and solutions to businesses and government” through its two divisions, Anyware and Illume Mobile, and says it has “long-standing” relationships with companies including Apple, BlackBerry maker RIM, Microsoft and Motorola.
It does produce its own apps through its mobile divisions, such as Elmer’s BBQ “It Be Bad”, which shows a menu of smoked meats from a food chain.
However, according to details released by the company on 17 May, its sales in the first quarter of 2011 were just 6,000, down from 4,000 in the same period in 2010, with losses widening to 7,000 compared to 6,000.
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