Protecting Open Innovation: A New Approach to Patent Threats, Transaction Costs, and Tactical Disarmament

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Citation: Jason Schultz, Jennifer M. Urban (2012) Protecting Open Innovation: A New Approach to Patent Threats, Transaction Costs, and Tactical Disarmament. Harvard Journal of Law and Technology (RSS)



Download: http://ssrn.com/abstract=2040945

Tagged: Open Innovation (RSS), Patents (RSS)


Summary:

Three reasons why Open Innovation Communities (OIC) have not obtained patents:

  1. Doing so is expensive
  2. Considered anathema
  3. No guarantee to not be used offensively

OIC strategies so far have included:

  1. Defensive publication
  2. Patent pledges
  3. Patent "peace" provisions in copyright licenses
  4. Patent protection groups

Authors propose a Defensive Patent License intended to be stronger than existing strategies, while overcoming objections to obtaining patents above.Their summary of the DPL:

"provides every DPL user a perpetual, worldwide, royalty-free license to every other DPL user’s entire current and future patent portfolio, subject to the following four conditions:
1) Every DPL user (i.e. licensor or licensee) will forgo any offensive patent infringement actions against any other DPL user;
2) Subject to Condition 4, every DPL user will offer her entire current and future patent portfolio under the DPL;
3) Every DPL user will bind any successor-in-interest to any part of her patent portfolio to her obligations under the DPL; and
4) If a DPL user wishes to stop offering her patents under the DPL, she may do so but only with six months’ notice to existing DPL users and future parties. She must continue to grant, and may not revoke, any licenses that are in place before the end of the notice period. Once she stops offering the DPL, other DPL users are free to revoke their licenses to her at will."

All-in nature (2) may be a barrier to participation of entities with large patent portfolios, but reduces potential for gaming the DPL (e.g., by only offering "junk" patents).