Subject: Re: EY invests in online patent exchange
From: "Stephen J. Turnbull" <turnbull@sk.tsukuba.ac.jp>
Date: Thu, 16 Sep 1999 11:11:25 +0900 (JST)

>>>>> "Brian" == Brian Behlendorf <brian@collab.net> writes:

    Brian> So what if there were a patent marketplace, where patent
    Brian> use was set as an explicit cost per unit, and a unit could
    Brian> be a CPU, a user, 1000 ecommerce transactions, etc.  Later
    Brian> on, you could add priceline-like price setting mechanisms
    Brian> or other forms of automated dealmaking.

There already is.  However, it's highly concentrated on the buyer
side, and (by definition) perfectly monopolistic.  This means that
every transaction involves not only a question of "what is it worth",
but since both the buyers and the sellers are extracting above-normal
profits from their customers, there will _always_ be substantial
transactions costs, ie, negotiation, of who gets to walk away with how 
much of those above-normal profits.

For most patents, they seem to get cross-licensed in bulk.  That's
exactly the kind of market you are looking for.

You give the example of RSA.  RSA is not cross-licensed in bulk, I
will bet, precisely because it's so valuable.  RSA will never be easy
to license.  And that will continue to be true of all such "high
value" (ie, there is no substitute) patents.  The only way to bring
down the price of (and the cost of negotiating) RSA licenses is to
come up with a competing algorithm.

    Brian> If we could give people a URL and state "note: to use this
    Brian> software, you must license the related patents, #5,555,555
    Brian> and #5,666,666.  Go to _this_url_ to pay."  Ideally such a
    Brian> notice would then be sufficient protection against any
    Brian> claim of contributory infringement.

"Keep dreaming, your dreams have strength."  This particular one will
not materialize, _especially_ not for open source.  The only efficient
way to enforce downstream (end user) compliance with the patent laws
is to force the intermediaries (developers) to do the enforcement, by
making them liable for infringement that results from their distribution
activities.

Come up with an alternative way to enforce end user compliance that
doesn't invade privacy, and you've got something.  I don't believe
that's possible.



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