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At first glance, patent law appears to impede those engaged in the free distribution of software: Software patents give their owners the right to prevent others from practicing the claimed software. However, patent law may in fact be a potential friend to those engaging in open-source/free software development. (For ease of reference, open-source and free software will be referred to collectively as “open source” in this article because the distinctions between the two are irrelevant to the points made herein.) But the picture is not all rosy. To evaluate how best to take advantage of patent law to achieve an open-source software developer’s business objectives, IP attorneys and consultants need to be aware of both the potential benefits and pitfalls that patent law poses to open-source development. PLUG THE GAP Patent protection may help to supplement the incomplete coverage provided to open-source firms by other forms of intellectual property protection. Copyright law protects only specific manifestations of an idea, so open-source developers cannot rely on it to protect their inventions, per se. Since open-source development is based on the premise of sharing information, trade secret law is completely inappropriate. Patent protection affords the intellectual property managers of open-source development firms or projects the opportunity to fill in the holes left by copyright and trade secret law. ENJOY THE BENEFITS OF CROSS-LICENSING Patenting open-source software inventions also may afford a developer the benefits of cross-licensing. Patent infringement suits often end in settlements that involve cross-licenses between the parties. In return for licensing the open-source patent to a proprietary software company, an open-source litigant could get a license to the proprietary software company’s closed-source patent. The benefits of such a cross-license then also might flow through to all of the open source company’s licensees, thus enabling the open-source community to enjoy immunity from the proprietary software company’s patent. In this way, patents obtained by the open-source community could be useful weapons in both fending off the software patents held by proprietary software companies and forcing closed-source patents into the open-source community. PROTECT YOUR RIGHTS VIA PUBLICATION Open-source development has the potential to further one of the intended ends of patent law: prevent the issuance or enforceability of software patents claiming inventions that lack novelty or that are obvious. By promoting the publication of software developments and discussions, open-source development may create a greater volume of prior art. This will help to protect the public from undeserving software patents. Certain organizations, such as the Software Patent Institute (www. spi.org), already are stockpiling vast databases of software technologies. The two most popular open-source licenses, the GNU General Public License (GPL) and the Mozilla Public License (MozPL), require licensees to make their improvements to the licensed program publicly available. By helping to represent accurately the standard for inventiveness for software patents, open-source development helps to prevent the issuance and enforceability of software patents that claim inventions that lack novelty or that are obvious. Further, publishing and requiring others to publish all developments creates publicly available records for proving the dates and scopes of software inventions under U.S. patent law. These records also help to refine the proper definition of “average skill in the art,” which the PTO and the federal courts use in scrutinizing the validity of software patents. These records also can support open-source parties in interference proceedings by establishing dates of invention, and in patent litigation by establishing prior user rights. Thus, conducting collaborative software development in a public medium (like the Internet) may establish evidence that can be useful in resolving patent disputes. However, open-source developers may not always want to rush to publish their ideas because, by doing so, they might lose potential patent rights in other countries. BEWARE OF POTENTIAL PITFALLS It is important to take patents into account when implementing an open-source licensing scheme. Several mass market public-software licenses, including the notable MozPL and the IBM Public License (IBMPL), grant royalty-free licenses to patents that cover the licensed software in return for requiring the licensee to grant licenses to any patents it receives covering improvements to the software. Open-source patent licensing implicates several issues beyond those of typical patent licenses. To avoid potential pitfalls, give these issues specific attention. The method of achieving public-patent licensing must be procedurally enforceable. Many articles have addressed the enforceability issues involved with mass-market public software licenses like the GPL, the MozPL and the IBMPL: relative bargaining power, adhesion, unconscionability and pre-emption by U.S. copyright law. See, e.g., “Facilitating Collaborative Software Development: The Enforceability of Mass-Market Public Software Licenses,” 5 Va. J.L. & Tech. 11 (2000). However, there are also issues regarding the substantive enforceability of the patent provisions of these licenses, such as whether such provisions are preempted by U.S. patent law or whether such provisions act as a misuse of the patent grant. Also, although it could be argued that public patent licenses have the potential to promote competition by, for example, enabling the integration of complementary capabilities necessary to bring software to the market, those preparing public patent licenses must be wary of running afoul of applicable antitrust law. Public patent licenses present antitrust concerns in that they may establish “pooling arrangements” or qualify as illegal restraints of trade. Although pooling arrangements, in general, need not be open to all who would like to join, under some circumstances, exclusion from cross-licensing among parties that collectively possess market power may be held to harm competition. A public patent license also may be held to deter competition because the license under the patent is only available subject to certain restrictive covenants (namely the requirement that the licensee offer the public at large a royalty-free license to derivative works of the software licensed to it) that deter or discourage new market participants from engaging in research and development (because they cannot reap a return on their investment through license royalties), thereby retarding innovation. Finally, consider whether royalty-free patent licensing vitiates any potential for the open-source patent holder to receive damages in a patent infringement suit. Unlike the copyright law, which contains statutory minimums for copyright infringement, patent law uses a “reasonable royalty rate” for the patent as one baseline for assessing damages. If the patent holder cannot adequately prove lost profits, the court will award this “reasonable royalty rate” to the patent holder once infringement is proven. Since open-source licenses are royalty free, it is arguable that a “reasonable royalty rate” for the open-source licensed patent is zero-the amount the patent holder asks for in its public software licenses. One answer to this problem may be to grant royalty-charging licenses to the open-source licensed patent also. For instance, a software firm may fork its program by releasing both a closed, royalty-charging version and an open, royalty-free version. Doing this will enable the patent holder to establish the true value of damages in an infringement suit. In conclusion, open-source developers can benefit from the proper use of current patent law. Intellectual property managers for such firms or projects should familiarize themselves with patent law’s opportunities and pitfalls. This familiarity will help the open-source firm to compete successfully with both other open-source development projects and closed-source/ proprietary software projects. Nigel Howard is a partner in the New York office of Brobeck, Phleger and Harrison, where he serves as the head of the firm’s Technology Practice Group. E-mail: [email protected] brobeck.com. Dan Ravicher and Ken Johnson are registered patent attorneys. They are members of Brobeck’s Technology Practice Group and work out of the firm’s New York office.

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