LinuxCon: Keeping open source open

Keith Bergelt, CEO of the Open Invention Network (OIN), described the circumstances which led the company to recently purchase 22 Microsoft patents, as part of a talk at the first LinuxCon. While the circumstances surrounding that purchase were quite interesting—and indicative of Microsoft's patent strategy—he also described the mission of OIN as a protector of Linux from patent trolls. Because patents are likely to be a threat to Linux for a long time to come, organizations like OIN are needed to allow Linux development to continue with as few patent impediments as possible.

Linux Foundation (LF) executive director Jim Zemlin introduced Bergelt by noting that OIN had done a great service for the Linux industry and community by purchasing those patents, which otherwise would have gone to "non-operating" companies—essentially patent trolls. Bergelt caught wind of the sale and headed off what might have been a potent attack against Linux, Zemlin said.

OIN was started by six companies (Sony, IBM, NEC, Red Hat, Philips, and Novell) four years ago to anticipate and preempt these kinds of patent sales, Bergelt said. It is a "very unusual entity" and when he was approached to be the CEO, it took some time to understand the "active benevolence" that was the mission of OIN. The members put a "very significant amount of money" into OIN, which means that, unlike a pledge fund, the capital is available, allowing Bergelt the autonomy to make decisions about how to deploy it.

OIN licenses its patents for use by others, with the proviso that those companies not assert their patents against Linux. It is, essentially, a defensive patent pool for the entire Linux community.

He sees the mission of OIN as allowing Linux to "be beneficial, at a macro level, to economic growth", by reducing the patent threat. The most recent patents were purchased from Allied Security Trust (AST), which represents its 15 members (including three that Bergelt named: HP, Ericsson, and IBM) by buying patents, licensing them to the members, and then reselling the remaining rights on the open market. Bergelt contrasted AST and OIN, saying that the latter is not just representing the six companies who are its members, but is, instead, "representing society". In his view, "patents will continue to exist", so it is important to "ensure that they don't have a negative impact on Linux in the future".

Bergelt described Microsoft's patent suit against TomTom as being a part of the software giant's "totem strategy". By getting various companies to settle patent suits over particular patents, Microsoft can erect (virtual) totem poles in Redmond, creating a "presumption of patent relevance". According to Bergelt, Microsoft tends to attack those who try to create parity with it in some area, which TomTom did. But, TomTom had overextended itself with a large amount of debt from their acquisition of mapping company Tele Atlas. That made it an opportune time to put the squeeze on TomTom, which is exactly what Microsoft did.

But, Microsoft was surprised to find that TomTom had allies in the form of OIN and others. Originally, Microsoft had asked for an "astronomical" sum to settle the suit, but after TomTom joined OIN and countersued Microsoft, the settlement number became much smaller. In fact, it was small enough that it was not necessary to report the amount under Dutch securities regulations. Because the cost to defend a patent suit—even successfully—could be upwards of $14 million, the TomTom board really had no choice but to settle.

But, patent suits are generally fairly high-profile, and there are other means to attack Linux companies more quietly. One of those is to sell patents to "non-practicing" (or "non-operating") entities who have no other business besides patent litigation. These trolls do not have any products that could be the target of patent countersuits, which is a standard way of combating patent suits. Bergelt said that $20 billion has been spent this decade by multiple organizations to acquire patents for trolling.

Companies with large patent portfolios have been pressured by investors to use those patents to generate revenue. One way to do that is to sell them to trolls, which brings in money and insulates the company from actually bringing suit itself. In some cases, this has led to patent trolls attacking the customers of the company who originally held the patents, Bergelt said.

Over the last three years, OIN has been one of the three largest patent acquirers, so it could not have been an oversight that Microsoft did not approach OIN about buying these patents. The bundle of patents was expressly presented as being relevant to Linux, which has the effect of "pointing the troll in the right direction", according to Bergelt. He clearly indicated his belief that this was an attempt to attack Linux by proxy; Microsoft would have "plausible deniability" because they could claim they were sold to a defensive patent pool such as AST.

But, AST is required to resell the patents it acquires, after licensing them to its members, within 12 months of purchasing them. Normally it would sell them to trolls, but Bergelt was able to arrange a purchase by OIN. He noted that if you wanted to get patents to trolls, but keep your hands "clean", selling them to AST is the right way to do it. Going forward, though, there is a patent treaty forming between AST and OIN, which should help alleviate this particular problem in the future.

The Data Tern/Amphion patent suit against Red Hat, which was based on a relational database patent, was also noted by Bergelt as a successful defense of free software from a patent threat. Red Hat settled the suit on behalf of the community as a whole, rather than allow further suits against free software to be filed. Bergelt said that Data Tern/Amphion were "not anti-Linux", in contrast to Microsoft's intent, but were focused purely on the return on its investment in buying the patent.

Intellectual Ventures is an organization to keep an eye on, Bergelt said, as it has some 23,000 patents, more than any other non-practicing entity. Three weeks ago, it started selling some of its patents—to patent trolls. OIN is also approaching patent trolls to suggest that they contact OIN before suing Linux companies. In some cases, OIN has averted lawsuits by acquiring patent rights from trolls.

The 22 patents in question are listed on the OIN website, but they aren't separated from the rest of the patents that OIN has acquired. They were all issued to either Microsoft or SGI originally, though, Bergelt said, which should assist anyone wishing to study what the patents cover. He noted that they are not the OpenGL patents, as some thought, because those are believed not to read on Linux.

In addition to acquiring patents, OIN has several other projects that are meant to reduce the patent problems for Linux. Peer to patent and post-issue peer to patent are both meant to "crowdsource" the process of finding prior art for patents that are in process or those that have already been issued. The former is meant to help the Patent and Trademark Office (PTO) so that bad patents don't get issued, while the latter looks for bad patents so that they can be submitted to the PTO for re-examination.

Defensive publications are another strategy that companies can take to protect their ideas without patenting them. OIN is advocating the use of defensive publication to create prior art, so that, in the best case, patents will not be granted covering those ideas. Instead of the "negative right" that is created with a patent, defensive publication creates something that everyone can use, but no one can patent. OIN's lawyers will review defensive publication submissions for free, making any necessary changes and then adding them to the IP.com database which is used for prior art searches by the PTO.

Companies who want to patent their ideas can also use defensive publication by patenting the core idea and wrapping that core with published information. This is happening more frequently because the cost of a patent application is becoming "prohibitive". OIN is encouraging the community to use defensive publications to protect its ideas as well.

Bergelt stressed that OIN is not set up as an anti-Microsoft organization, as they are focused on any entity threatening Linux with patents. In the most recent case that was Microsoft, but his expectation is that "Microsoft will go through a painful transition", but will eventually join the free software community. The benefits of free software development will be too strong to resist.

In closing, both Zemlin and Bergelt mentioned the Linux Defenders project, which is a joint venture between OIN, LF, and the Software Freedom Law Center. It is the umbrella organization for the peer to patent efforts along with the defensive publication initiative, but it also seeks to counsel companies who have been approached about patents that read on Linux. Zemlin noted that the traditional approach is to get a potential victim to sign a non-disclosure agreement (NDA) before discussing the patents in question. He stressed that companies should get in touch with Linux Defenders before signing the NDA, as that seriously limits what help it can provide.

In response to questions from the audience, Bergelt noted that there is some hope for patent reforms, which may "narrow the space" for trolls to work in. Judges are starting to recognize the problem he said, but wholesale changes are not likely in the cards. In addition, he noted that even defining "non-practicing entity" is difficult, pointing to Qualcomm as an example of a company that was not very successful using its patents in products, but quite successful in licensing them to others.

He also sees hope at the PTO. Fewer poor patents are being issued and far fewer patents are being issued overall. Things are changing, but they will never be as good as we want them to be, he said.