Re: [Patents] pooling patents for progress and protection

[Peter Vandenabeele <peter.vandenabeele@mind.be>]

On Sun, Dec 29, 2002 at 10:20:35PM -0200, riel@nl.linux.org wrote:
> Here is a rough sketch of an idea I have to end the predatory
> practices that are effectively keeping the small inventor and
> small software companies from the market.  For now it is a rough
> plan, none of the details have been worked out yet.  Comments
> are always welcome...
> 
> 
>       Pooling patents for progress and protection
> 
>               Rik van Riel <riel@surriel.com>
>                       december 26-30, 2002

Rik,

I fully support the idea, but I already patented it ... [joke !!], and I am 
sure there is years of prior art on this idea; but I didn't see it 
implemented 
on a large scale.

> On 20 Dec Peter wrote:
>> So, what I suggest is that with the movement of people that are opposed to
>> Software patents for the reasons argued above, we start also asking massive
>> amounts of software patents on anything that we believe could be somewhat
>> inventive.  After some of these patents are granted, we could assign the
>> ownership of these software patents (trivial and less trivial) to some sort
>> of "Free Patent Foundation".
[...]
>> - some of the patents we request would pass the examination and could
>>   be used as a counterweight if any large, foreigh company attacks a
>>   small SME in Europe or attacks a Free Software implementation. If the

     [and of course other parts of the world]

>>   companies that are opposed to SW patents put some money in this Free
>>   Patent Foundation, it could also sue those other companies that try
>>   to use SW patents to sue small companies of even Free Software
>>   initiatives that are not companies, but just people movements.
>>
>>   In this way, this movement could also obatain the "patent pool"
>>   that is so typical for large SW companies. This could be used to
>>   actively fight against abuses of SW patents by others organisations.

> My goals are to give small innovative companies a fair chance again and
> promoting technical progress and innovation once more, all while following
> the rules of the patent game to the letter.
> 
> The basic ideas behind the patent pool idea are:
> 
> 1) Any person or organisation can participate by contributing all of
>    his/her/its patents to the pool.

OK (but, this does not solve the problem that claiming a patent on a 
large scale costs a lot of money, in contrast to Copyright that is 
automatic and gratis).

> 2) Contributing a patent to the pool means giving every participant
>    the right to use the technology described in the patent, while
>    gaining the right to use the technology described in all the other
>    patents in the pool.

OK. 

> 3) Each participant can use all of the patents in the pool for
>    defensive purposes, when faced with a patent infringement lawsuit.
>    I'm not yet sure what legal construction can be used to achieve this
>    effect, but it is important that all the participants can rely on
>    the whole patent pool to defend themselves against patent infringement,
>    using the standard "but you're infringing on my patents, too" counter
>    suit trick that almost always leads to a cross-licensing agreement.

OK (this is the real strength of the idea; in a further push, this could be 
combined with a Copyright based license that also targets companies that 
act against Free SW using patents; that is not a new idea, but it may become
more actual if we move in this direction).

> 4) A participant can withdraw from the patent pool, losing the rights to
>    use the patent pool for protection in the future.  However, once a
>    patent has been contributed to the pool, that patent cannot be
>    withdrawn from the pool and will stay in the pool until the patent
>    expires; this to protect the other participants in the pool.

OK.
 
> 5) If a participant's last patent in the pool expires, the participant
>    needs to do an invention and contribute a new patent to the pool.
>    This clause is present because the patent pool should promote
>    technical progress and inventions, like patents are supposed to.

Please elaborate.

> 6) Participants retain the right to grant usage rights on their
>    technology to anybody else for any reason, outside of this agreement.
>    This includes cross-licensing agreements with third parties, granting
>    the right to the use of the technology in non-profit or free software
>    situations, etc...

This is tricky. If in a defense action (as in point 3), one particular
patent, filed e.g. by a small company ABC, is really hurting the big 
player DEF that originates the case, then there might be a large temptation 
for ABC to accept an offer of many $ from DEF to enter cross licensing with 
the big player, rather than stick with the Free SW patent pool. This is very
typical, e.g. in the RIM case, where parties that were originally sueing
against RIM (with practical support from FSF) eventually teamed up with RIM
and signed cross-licensing, further enlarging the body of restrictive patents
that could be used against new market entrants. 

> This patent pool is primarily meant for small inventors and companies,
> who have few patents each and are a frequent target for bullying and
> predatory practices by large patent holders, who use patents as a way
> to prevent small companies from entering the market, thereby stifling
> technical progress itself.

A practical questions: do we have strong examples of the practices described
above ("the bullying of small companies"). One of the arguments that I heard 
against my reasoning is that as long as we don't make proprietary technology
that will have huge licensing revenue streams, nobody will actually take the 
pain and the cost to sue us; only when we would have some proprietary 
technology 
that would happen, but in that case, we could also find investors that would 
be prepared to bear the cost of the legal defense. Do we have strong 
examples, 
where small or Free SW is bullied, even if it is not a technology that will 
leverage a lot money (one example I see now is the patent based attack on 
Samba, 
where a Free technology is attacked and there is no large proprietay revenue 
stream from Samba licensing that could cover the expenses of the legal 
defense).
 
> This patent pool should:
> 1) protect inventors and companies making products
> 2) promote technical progress
> 3) be a win-win play for all participants

Challenges I see are:
1) it costs extra money that is currently spent on technical development and 
not
   on legal issues (e.g. writing this mail is 1 hour not spent on running the
   regular business, so this system also manages to steal time from us)
   
2) it gives a serious chance for miscontent as soon as a few parties would 
accept
   a grand sum of money for surrendering into cross-licensing, thereby leaving
   the others behind, vulnerable for the initial claim.

Patent pools and cross-licensing are classical methods in other industry 
sectors,
so we should learn more how it is operated in those industries (do they allow
for further cross licensing by one party of a pool, or should the entire pool
be part of further cross licensing ?). 

If we are forced by the law, then this patent pooling would be a pressing 
reason
to start with some Industry Association for Free SW, that would really need to
spend dollars to organize a legal framework for this. In this case, we will 
need 
to charge more for our "Free SW" to also pay this legal structure (and the 
cost 
benefit, compared with proprietary SW wiil slightly shrink).

As most Free SW defenders will argue, it would be much better, if all of this 
would
not be required, but if we have to, there is little other alternative in the 
long
run. 

In that case, we probably should also look into a license change to further 
support our defense. Because Copyright based licensing does not cost upfront 
money,
it is much easier to apply for a large volume of Free SW developers to enter
some clause in the sense that 

  "this software may be used under [GPL|BSD|X11|...], but you loose your 
rights to 
  Freely use this SW if you use patents to restrict the use of any SW 
licensed under 
  [this license|GPL|BSD|X11| ...]; in that case, you may regain the right to 
us this 
  SW if you reach an agreement with the [Industry Association of Free SW 
developers]". 

In this way, the Industry Association could force the large companies to:

- pay money to support its own operations (since all large companies use GPL 
SW, 
  effectively commercial use of GPL would become paying for these companies 
that
  use patents to protect SW, with fees payable to this Industry Association)

- grant some sort of Free license on all their SW related patents for all 
non-commercial 
  use of the Free SW.

(the example between FSF and FSMlabs, was (IMHO) based on political pressure 
on
 FSMlabs; if you would add legal means to it, throught the license, that 
would be
 a much stronger argument).

Such an Industry Association will gain a lot of power if succesfull. So the 
controls
on that power (by the Free SW community) and the statutes need to be 
carefully 
drafted.

There is a chance that this becomes a messy situation, but I don't see a 
realistic
alternative to push Free SW to a market leading, professional level, without 
beeing
seriously hampered along the way by SW patents.

Good luck with your initiative. In my current understanding, I think we 
should go
forward with it and I will support it where I can.

Peter