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Volume 2, Number 3 -- January 18, 2005

Will IT Vendors Set Up a Patent Trust?

by Timothy Prickett Morgan

In a move that was both generous and surprising, IBM has announced that it will bequeath 500 of its own software patents to the open source software development community, free of charge. With Europe in the midst of a controversial plan to enact laws that mimic software patent practices in the United States, people on both sides of the Atlantic are used to thinking of patents as a black or white issue. Either software patents are good, because they protect the innovations of IT vendors, or they are bad, because software is not patentable and to pretend otherwise is to stifle innovation. Now IBM has created a gray area.

IBM is not letting loose 500 software patents in the world for just anyone to use. Under the agreement it has in effect for those 500 software patents, IBM is specifically saying that it will not enforce its patents when these 500 are used in open source programs, such as Linux, Apache, MySQL, and other popular programs. IBM is firmly retaining control of those patents, and is in no way relinquishing control of them to the open source community. It is, however, allowing them to be used in the creation of open source programs without the normal intellectual property licensing fees. To use the patents freely, an individual, company, or community project has to be working on or using open source software that meets the definition of open source created by the Open Source Initiative (OSI), a nonprofit corporation that promotes open source.

The value of the patents IBM has released into the "patent commons" is estimated by the company to be worth around $11 million, so this is not a lot of money to IBM, even though it would be a lot of money to open source developers, who would never have enough money to license patents from IBM. And even if they did, IBM doesn't license patents piecemeal, but in whole blocks. (The company, in fact, has more than 40,000 patents and sells about $1 billion a year in licensing of those patents.)

The patent practices of big IT companies like IBM are obviously incompatible with the open source community's budgets, and to its credit, IBM found a third way, by allowing the open source community to use some of its patents free of charge and by also agreeing to enforce those IBM patents if a third party comes after an open source project claiming that it is infringing a third party patent. We hear a lot about the indemnification needs of open source software users, but IBM is thoughtfully providing indemnification for programmers involved in open source projects.

Last summer at LinuxWorld, Jim Stallings, who was in charge of IBM's Linux strategy and is now vice president of standards and intellectual property at the company, said that if code in the Linux operating system were found to violate IBM's patents, the company would not pursue them. Novell, which now owns a Linux distributor and has a vast software intellectual property portfolio, soon thereafter agreed to the same. But what IBM has done goes one step further and formalizes the process by which open source projects can legitimately use the company's intellectual property--and without fear of reprisal.

What IBM has done may confuse the whole software patent issue that is raging in Europe, and those who hate software patents, as many Europeans do, are not going to be happy about this. And there is no question that the Patent Office in the United States has made some bonehead moves in granting software patents, so don't think that I am defending software patents in general. I regard the whole concept as dubious. But the fact remains that the United States has issued software patents, and unless every software vendor agrees to give up those patents, software patents will be an issue for the whole world, because a U.S. company will have no quibbles about suing a foreign company that is violating its software patents.

The patent commons idea that IBM is initiating has enlightened self-interest, of course. The patents cover sophisticated microcode for multiprocessor systems, cache coherency, system interfaces, storage management, database management systems, image processing and video, speech processing, data compression and encryption, software development, Internet and e-commerce, networking, and number of other areas in which open source programs could use a little help. IBM is keen on Linux taking over the IT market, because that is the best way (it believes) to combat the Unixes of its rivals as well as Windows.

While many vendors, such as Sun Microsystems, Hewlett-Packard, SGI, Red Hat, Novell, and myriad others, have contributed to open source projects, they have viewed their patent portfolios as the family jewels. They selectively choose what to let go of, and they let go of it completely to the open source community. If IT vendors were to get together and imitate IBM, they could create a patent trust whereby they all allow open source developers to use their software patents free of charge, but still hold onto their software patents so they can license it to companies that do not believe in open source or that want to embed software based on these patents into their closed-source programs.

It will be interesting to see if a patent trust can be established, or if this will be something that only IBM does to benefit itself through benefiting the open source community.

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Editor: Timothy Prickett Morgan
Managing Editor: Shannon Pastore
Contributing Editors: Dan Burger, Joe Hertvik, Kevin Vandever,
Shannon O'Donnell, Victor Rozek, Hesh Wiener, Alex Woodie
Publisher and Advertising Director: Jenny Thomas
Advertising Sales Representative: Kim Reed
Contact the Editors: To contact anyone on the IT Jungle Team
Go to our contacts page and send us a message.


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