Subject: Re: How do you convince IBM to oppose software patents?
From: "Karsten M. Self" <kmself@ix.netcom.com>
Date: Mon, 27 Sep 1999 08:00:23 +0000

"Stephen J. Turnbull" wrote:

> As for published information, I saw somewhere recently that Microsoft
> paid $20 million for a license on IBM's entire patent portfolio.  (I
> seem to recall that IBM will make the same deal with anyone who has
> $20 million lying around.)  I doubt that MSFT is interested in many of
> the hardware patents.
> 
> But I am sure that IBM contracts many many licenses, both wholesale
> like with MSFT and retail.  I figure that MSFT contract pays for 10
> lawyers and support staff for 10 years at a shot.  Not bad for just
> one license contract.

Information from IBM is that there are essentially three classes of
patents:

 - Take 'em if you want 'em -- though some royalty may apply it's on
fairly easy-to-come-by terms.

 - Take 'em, but you'll have to pay for 'em -- more valuable, tier-two
patents.

 - Forget about it, pal -- patents which aren't licensed at any price.

This is markedly similar to the suggested multi-tier licensing model I
suggested for an Open Source Patent Pool last winter, as some
participants here may recall.  Such tier pricing makes managing
licensing of a portfolio a much simpler exercise than haggling each
patent.  I suspect there's some degre of "ability to pay" built into the
model, hence MSFT's US$20m fee.  I'm given to understand that others who
may understand the process better than I have recently joined the list. 
Welcome.

-- 
Karsten M. Self (kmself@ix.netcom.com)
    What part of "Gestalt" don't you understand?

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