Surprisingly, no one has asked this question in the Internet dialog.  

In order to accurately assess the usage and to scope the relevant product revenue (by product or service using, within the United States), it usually is a custom sales dialog between Lodsys and the potential licensee.   The portfolio actually has several different “fields of use”, so the amounts vary depending on the company and its usage.  Some companies have multiple products, multiple fields of use, and complicated economic models to price.  For the direct licensees we’ve had so far, this dialog to correctly ascertain relevant product revenue and fields of use, has been effective to get to a mutually agreeable license, without litigation.  

In the case of an Application doing an in-application upgrade (and only this scenario), Lodsys is seeking 0.575% of US revenue over for the period of the notice letter to the expiration of the patent, plus applicable past usage.  So on an application that sells US$1m worth of sales in a year, the licensee would have an economic exposure of $5,750 per year.

One of the blogs (FOSS patents) speculated that Lodsys sent “cease and desist” letters… actually, the letters were “notice” letters informing companies of usage and requesting to engage in a licensing discussion.  Lodsys wants people to use the rights in their products and services, not to stop using it.  Our goal is to popularize the technology, have it used by many people and to make relatively small amounts per licensee, but to have the large volume of licensees aggregate to be a worthwhile business. 

 


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