Patent holding company aims to boost embedded Linux

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Nov. 10, 2005

IBM, Sony, Philips, Novell, and Red Hat have jointly created a patent holding company aimed at increasing Linux use, particularly within consumer electronics. The Open Invention Network (OIN) will acquire patents and license them royalty-free to companies that agree not to enforce their own patents against the Linux operating system and "certain Linux-related applications."

Initially, the OIN has acquired the rights to Novell patents pertaining to electronic commerce.

IBM explained the rationale behind OIN in a statement published on its website: "The dispersed nature of Linux [means] there is no single entity to collect patents and make them generally available. Patents encourage businesses to invest and innovate because their creations can be protected."

"Patents owned by Open Invention Network are available on a royalty-free basis to any company, institution or individual that agrees not to assert its patents against others who have signed a license with OIN, for their use or distribution of Linux-related software," IBM continued.

According to a story at eWEEK.com, an industry consultant at the Envisioneering Group of Seaford, New York, stated, "This is the green light that a lot of companies have been waiting for. Unless your name was Novell or Red Hat, you couldn't be sure you had clear legal title to Linux. We will see Linux go into medical devices, consumer electronics, and traffic lights where patent uncertainty may have held companies back."

The OIN will be headquartered in Westchester County, NY, near IBM's main offices, and will be headed up by Jerry Rosenthal, a former IBM VP of Intellectual Property who came out of retirement to take up the CEO post.

Rosenthal said in an OIN statement, "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."

IBM's current VP of IP, Jim Stallings, said, "The formation of Open Invention Network signals a growing movement where companies are strategically sharing their intellectual property and building broader industry partnerships in order to accelerate innovation and drive new economic growth."

Novell CEO Jack Messman said, "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."

Red Hat Senior VP Mark Webbink said, "[OIN] will set open source developers free to do what they do best -- innovate. At the same time, [OIN] extends to distributors and users of open source software freedom from concern about software patents."

Sony Senior VP Yoshihide Nakamura said, "Linux is clearly an important technology for Sony. We believe Linux and open standards will provide companies with more options for the development of innovative products."

Philips CEO of IP, Ruud Peters, said, "We believe this initiative will widely boost the use of the Linux platform and its applications."

Additionally, Rosenthal reportedly told Reuters, "I am very comfortable that I have sufficient funding to do what I need to do for the foreseeable future."

IBM is the 10th largest US company, and 20th largest globally, with revenues of $96,293M, and profits of $8,430M, according to Fortune Magazine's 2005 "Fortune 500" list. Sony ranks 47th on the magazine's Global 500 list, with revenues of $66,618M and profits of $1,524.5M, while Royal Philips Electronics ranks 116th, with revenues of $37,709.6M and profits of $3,527.3M.

In comparison, Microsoft ranks 41st among US companies, and 127th globally, with revenues of $36,835M, and profits of $8,168M, according to Fortune.

For more details, read the eWEEK.com article:

Linux Backers Form Patent-Sharing Firm

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