Why Apple Being Sued Over Passbook Brings Back Unpleasant Memories Of Lodsys

Apple has been sued over Passbook, newly discovered court documents show. The suit was filed by Ameranth, a San Diego company that wears its patents proudly on its sleeve (or the front page of its website, in a literal sense). The suit claims that Apple infringed four patents that revolve around wireless synchronization tech to do with mobile payments, point-of-sale systems and other issues related to Passbook’s ability to digitize hotel bookings, airline tickets, reward cards, coupons and other items.

Ameranth has played this tune before. The company is currently engaged in suits against companies like Hilton, Marriott, Kayak, Expedia, Hotels.com, Ticketmaster, Stubhub, Fandango, Urbanspoon and many more. The company has managed to also engage around 14 firms in licensing agreements already, including SubtleData, whose founder Richard Bagdonas I spoke to in an interview. That interview proved troubling to me.

It’s hard not to see Ameranth as a patent troll (though it isn’t technically a non-practicing entity), given its past actions and website design choices. But Bagdonas says that in fact, the company’s technologies have actually improved its products since entering into a licensing agreement, and he points out that Ameranth does in fact sell product including payment processing modules and wireless ordering systems for restaurants. It’s also worth noting that Apple in fact does cite Ameranth’s patents as prior art in a patent related to the iPhone, so Bagdonas says they are aware of the existing intellectual property.

In addition to being trouble for Apple, however, Bagdonas notes that this suit could go well beyond the electronics giant and affect everyone on the fledgling Passbook platform. “This exposes every developer building Passbook applications to a lawsuit,” Bagdonas said, in no uncertain terms. Sound familiar? That’s what happened with Lodsys, which targeted individual developers using Apple’s in-app purchasing mechanism, claiming that existing licensing relationships it held with Apple didn’t extend to other parties working within its iOS software ecosystem.

Bagdonas’ warning comes with a caveat, with him essentially entreating independent developers to license Ameranth’s patents in favor of getting burned in a lawsuit that seems to show no signs of slowing its growth. But note that part of SubtleData’s deal with Ameranth include it being able to offer sub-licensing to companies: in other words, SubtleData stands to gain considerably if developers follow Bagdonas’ advice.

This is a dance I’ve seen before, wherein independent developers end up bullied by bigger companies with more money and resources to dedicate to legal proceedings, essentially forced to enter licensing agreements because the alternative is a drawn-out legal battle. Ameranth is also seeking triple damages in this case, owing to what it calls Apple’s “willful infringement,” which means it could target Passbook developers with similar severity.

Long story short, this is gross. I spoke with many developers back when Lodsys was playing the bully, and it caused a lot of unnecessary stress and frustration for people doing hard work trying to make a living on Apple’s software platform. I’m hoping Bagdonas is wrong, and that Ameranth will stick to targeting big fish, but where are the licensing fees in that?