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A tree fell in the forest – IBM’s Patent Portfolio

In the category of “big news that no one seems to be talking about”, two days ago IBM announced that it was launching a new licensing program with the venture community to allow easier access to IBM’s broad patent portfolio for start-up companies. This is actually a big deal (it is to me at least, which is why I’m shocked at the lack of press on the announcement). IBM is vastly simplifying how companies can gain access to its patent portfolio. It’s catered to the venture community (the program is intended to be administered through the companies’ venture investors) and was in part put together by IBM’s venture capital advisory board. In a nutshell if you are a company that has less than $10m in revenue you can access the entire IBM patent portfolio for $25,000 for a 3 year term. Companies with above $10m in revenue sign a customized five year agreement (the information I saw suggested that the license fee would be 1%).I’m not a big fan of our country’s IP laws – patent law is kind of like the IRS code (its overly complicated for the sake of being complicated, doesn’t do a good job of driving desired behavior, but works just enough for most people to figure its not worth the incredible pain in the ass of trying to reform it). But for the moment, at least, we’re stuck with the current system and moves like this one from IBM vastly simplify the process of navigating the patent waters. Hopefully more companies with large patent portfolios will follow suit.

December 15th, 2005     Categories: Technology    
  • http://www.imjeremystein.com Jeremy Stein

    Patents are useless until they are upheld in a court of law. While they may be important to startups (there are arguments for both sides), they may end up being a burden. If more companies don’t follow in IBM’s footsteps, you will see a lot more lawsuits. Large companies suing startups that threaten their market share, just to distract them and drain their cash (these things get pretty expensive), and on top of that, the patent may be overturned in court!