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Patent troll Lodsys backs out of lawsuit at last minute to avoid a ruling on its claims

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US Patent and Trademark Office logo
US Patent and Trademark Office logo

Notorious patent troll Lodsys abandoned a lawsuit on the eve of a trial rather than face the possibility of losing on the merits of his claims, according to the defendant in the case. Security firm Kaspersky Labs, one of dozens of defendants in Lodsys' two-year-old lawsuit over claims related to in-app purchases, said in a blog post today that Lodsys settled its claims without winning any concessions from Kaspersky. "Churchill was right: 'Never give up,'" company founder Eugene Kaspersky wrote. "We’ve followed his advice in our fight against a particular troll. As a result the troll gave up and ran away with nothing and its tail between its legs."

"Churchill was right: 'Never give up.'"

Lodsys earned its "troll" sobriquet by basing its business on buying technology patents and then using them to sue other businesses for alleged infringement of those patents. In this case, patents on obtaining user feedback from fax machines were being used to extract payments for modern-day technologies like in-app purchases. The other 54 companies sued by Lodsys in the case settled, Kaspersky says, presumably for money. But faced with the prospect of losing to Kaspersky at trial — which would destroy the value of the patents at issue — Lodsys settled. The judge in the case dismissed the case with prejudice, meaning it cannot be brought again. The judge further ordered that each side pay its own legal fees.

Patent cases are often prohibitively expensive for smaller technology companies to fight — the average case is said to start at $1 million and often costs much more. Often, losing the case would threaten to bankrupt the company being sued. But as Kaspersky's experience shows, patent fights aren't unwinnable. His victory could bring hope to the next company that finds itself targeted by Lodsys' attorneys.

Correction: This post has been edited to reflect that each side paid its own legal fees.