Paul McDougall writes an excellent article in the October 30, 2006 print edition of InformationWeek. He poses the question, are big tech vendors using their massive patent portfolios to stifle innovation? He writes:
Almost two years ago, IBM donated 500 software patents to the open source community, with a pledge that it would not enforce its license rights to the technologies. But the company remains fiercely protective of its vast portfolio of intellectual property, as Amazon.com learned last week when IBM filed a patent-infringement suit claiming the Internet retailer built its business using IBM-developed technology and processes.
Welcome to the tortuous world of technology patents and IP, where community-minded vendors share original ideas manifest as software code one day--then bring the hammer down on suspected scofflaws the next. Over the past two months, Microsoft has released three internally developed technologies--related to Web services, its virtual hard disk format, and its Sender ID--with promises that they can be used by others in perpetuity. At the same time, Microsoft is aggressively licensing--and protecting--other intellectual property.
IBM's top attorney for intellectual property rights acknowledges his company's position can seem contradictory and confusing. "We've referred to our patent policy as apparent schizophrenia," David Kappos says. Yet he maintains that "on a deeper level, our actions are consistent."
The number of patent lawsuits continues to rise and so does the size of settlements and judgments, says the Coalition for Patent Fairness, a group supported by large tech companies. Before 1990, only one patent damage award larger than $100 million had been awarded; in the past five years there have been at least 10 judgments and settlements of that size and at least four that topped $500 million, the group says.
Tech vendors, IBM and Microsoft principal among them, are trying to change things they don't like about the patent process. In addition to giving away patents to the open source community, IBM wants all patent applications to be subject to public review. And it's urging Congress to do away with patents--including some of its own--based on so-called business methodologies that lack technical merit.
Meantime, the prospect of a more aggressive IBM has some tech companies worried. "We're looking at the patents that IBM is concerned about with Amazon and checking them out," says Daren Gill, VP of development at ChoiceStream, which created an online product-recommendation engine used by AOL, Yahoo, and, soon, a major Internet movie retailer.
Not everyone buys the patent-reform agenda of the big tech companies. Hans Hxu, founder of online gift registry Felicite.com, says the industry's large players are more interested in the appearance of IP openness than in practicing what they preach. "IBM patents almost everything they do, then they sit on it. That doesn't do much to encourage innovation," says Hxu, a McKinsey consultant before launching Felicite.
Read the full article here.