Subject: Software Pricing
From: "Lawrence Rosen" <lrosen@rosenlaw.com>
Date: Tue, 19 Sep 2006 12:36:11 -0700

Topic changed. Was "Patent-based dual-licensing open source business model"

Scott Capdevielle wrote:
> what will the license look like? I have been researching the same
> problem and coming up with a similar solution. One thing we believe is
> that this type of license needs to have two components to have the
> desired effect. I think these address Thomas' concerns but would also
> like feedback:
> 
> 1. Non discrminatory license. Anyone can obtain the license regardless
> of who they are and no exclusiviity is granted. This is important to
> truly open it up to competition.
> 2. Commodity pricing known up front. The royalty must be small enough to
> look like any other cost of 'manufacturing'.  In other words, if , in
> your example it is bundled with a piece of hardware and the total 'cost"
> of this solution is $100 then the license fee should be some small
> percentage of that amount.  It is also important that the amount be
> known up front so that entrepreneurs can do business modeling and factor
> that cost into the equation. Making it a known quantity and non
> discriminatory enables a wide audience to calulate the cost to produce
> their commercial product in advance of making any investment.

Why is it not sufficient that the pricing be reasonable considering the
value that the software adds to the hardware? Let the market determine the
prices for patents and software, just as it does for oil and water.

I can easily imagine certain patent claims being more valuable than others,
just as certain software is more valuable than other software. These value
calculations can be different in different contexts, just as an anti-spam
solution can be more valuable in a company server than in a single desktop.

As for exclusivity, International Characters is already promising "free for
open source," so exclusivity is kind of irrelevant in some sense. On the
other hand, can you explain why exclusivity for certain commercial
applications is unreasonable in the abstract, or even why non-exclusivity
inevitably fosters competition? 

/Larry