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Open Invention Network Begins Stockpiling Patents - UPDATED
Thursday, November 10 2005 @ 02:41 AM EST

I was going to put this Wall St. Journal story in News Picks, but then I decided it is so important, it belongs here, so everyone sees it:
Five big backers of Linux are funding an effort to buy up related software patents, the latest in a series of efforts to reduce legal risks that could impede the wider use of the operating system.

A new nonprofit company, called Open Invention Network, is receiving an undisclosed amount of money from International Business Machines Corp., Sony Corp., Philips Electronics NV, Novell Inc. and Red Hat Inc. It plans to buy Linux-related patents, offering royalty-free licenses to companies and individuals that pledge not to assert their own patents against the network's other licensees. . . .

The Open Innovation Network plans to act as an alternative to the trolls. "We are going to be out there, hopefully buying the patents that they would try to acquire and taking them off the table," said Jerry Rosenthal, the company's chief executive.

The network's initial assets will include a collection of patents that were purchased for $15.5 million by a subsidiary of Novell from Commerce One Inc., an electronic-commerce company that filed for bankruptcy-court protection last year.

(The New York Times has the story now too.) And here's the new company's home page.

Thank you, Novell, for buying up Commerce One Inc.'s patents. I still have conversations sometimes about patent pools, and I still come across folks who don't think they have any value. I always try my best to explain why I think they do, and I'm very happy to see that IBM, Red Hat, Sony, Philips and Novell not only agree but are doing something massive about it. The patent threat is real, and GNU/Linux needs protection. Individual FOSS developers can't afford to join the Rich Guy's Patent Club and do cross-licensing deals, so the only legal option for them is to pay royalties, and that's a mighty quick way to ruin the value of GNU/Linux. Let's not even talk about what happens to the GPL if the globe is papered with hostile patents. Companies who see the danger are stepping forward. It's not the total solution, because patent law currently is so noxious, but it's a vital piece.

The real solution is for patents and software to get a divorce on the grounds of incompatibility. However, since that is not likely to happen in the US any time soon, ideas like this can create a safer environment for FOSS development. So if you hear about a company going out of business and you know they have Linux-related patents, tell Open Invention Network, or email me, and I'll pass it along. Don't just leave a comment though. The idea is to buy up such patents before others can.

Imagine a SCO with patents, and you'll understand the urgency, particularly when you remember who funded SCO's little adventures.

UPDATE:

Here's the Open Invention Network's press release. The most significant statement, to my eyes, is Red Hat's Mark Webbink's comment:

"By providing this unique collaborative framework, Open Invention Network will set open source developers free to do what they do best -- innovate," said Mark Webbink, senior vice president at Red Hat. "At the same time, Open Invention Network extends to distributors and users of open source software freedom from concern about software patents."

Here's the complete press release:

*******************************

OPEN INVENTION NETWORK FORMED TO PROMOTE LINUX AND SPUR INNOVATION GLOBALLY THROUGH ACCESS TO KEY PATENTS

Investors Include IBM, Novell, Philips, Red Hat, and Sony

New York (November 10, 2005) - Open Invention Network (OIN), a company that has and will acquire patents and offer them royalty-free to promote Linux and spur innovation globally, was launched today with financial support from IBM, Novell, Philips, Red Hat, and Sony. The company, believed to be the first of its kind, is creating a new model where patents are openly shared in a collaborative environment and used to facilitate the advancement of applications for, and components of, the Linux operating system.

"Open collaboration is critical for driving innovation, which fuels global economic growth. Impediments to collaboration on the Linux operating system seriously jeopardize innovation. A new model of intellectual property management for Linux must be established to maintain advances in software innovation - regardless of the size or type of business or organization," said Jerry Rosenthal, chief executive officer at Open Invention Network. The company will foster an open, collaborative environment that stimulates advances in Linux - helping ensure the continuation of global innovation that has benefited software vendors, customers, emerging markets and investors, among others.

Patents owned by Open Invention Network will be available on a royalty-free basis to any company, institution or individual that agrees not to assert its patents against the Linux operating system or certain Linux-related applications.

Open Invention Network believes that creating a new system to manage and ensure access to key patents for the Linux operating system will have a significant economic impact. According to International Data Corporation, the worldwide Linux business is expected to grow 25.9 percent annually, doubling from $20 billion in 2005 to more than $40 billion in 2008.

"Open Invention Network is not focused on income or profit generation with our patents, but on using them to promote a positive, fertile ecosystem for the Linux operating system and to drive innovation and choice into the marketplace," said Mr. Rosenthal. "We intend to spur innovation in IT and across industries by helping software developers focus on what they do best - developing great Linux-related software with greater assurance about intellectual property issues."

Among Open Invention Network's initial patent holdings is a set of business-to-business electronic commerce patents that were purchased from Commerce One by JGR, a subsidiary of Novell.

For more information go to www.openinventionnetwork.com.

Investor Statements

IBM
"The formation of Open Invention Network signals a growing movement where companies today are looking beyond their own organizational boundaries," said Jim Stallings, vice president of intellectual property and open standards at IBM. "They are strategically sharing their intellectual property and building broader industry partnerships in order to accelerate innovation and drive new economic growth."

Novell
"We are proud to be a founding member of the Open Invention Network," said Jack Messman, CEO of Novell. "While Novell has been a major contributor to the open source community and has shown its commitment to promoting and fostering the adoption of open source and open standards, this initiative raises our leadership to the highest level. With this new initiative, users of open source software will have access to a broad set of technologies that will help foster an even more robust community of developers, customers, business partners and investors. This is a breakthrough idea whose time has come."

Philips
"Philips is actively involved in the creation and funding of Open Invention Network because we believe that OIN will make the Linux platform more attractive for users. This will stimulate developers to focus their resources on creating high-value, innovative software on this open platform," said Ruud Peters, chief executive officer of Philips Intellectual Property & Standards. "We believe that this initiative will widely boost the use of the Linux platform and its applications."

Red Hat
"By providing this unique collaborative framework, Open Invention Network will set open source developers free to do what they do best -- innovate," said Mark Webbink, senior vice president at Red Hat. "At the same time, Open Invention Network extends to distributors and users of open source software freedom from concern about software patents."

Sony
"Linux is clearly an important technology for Sony and the global community in general," said Yoshihide Nakamura, SVP, Corporate Executive of Sony Corporation. "We believe Linux and open standards will provide companies with more options for the development of innovative products. We have and will continue to support initiatives like Open Invention Network that promote a positive environment for these developments."


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