IBM woos start-ups

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Dane geld / Patent reform

IBM: Give me $25,000 and rights to use your patents or we sue.

But I'm not infringing your patents, which ones am I infringing?

IBM: We have thousands of vaguely written patents, you don't know which patents you're infringing it's up to our clever lawyers and they will sue you into the ground whether you're infringing or not.

So you pay the Dane Geld.

IBM: "Give me 1% of your gross revenue or we sue."

"But I gave you $25,0000 and rights to use my patents"

IBM: "And now we want 1% of your revenue, now you're over $10 million. When you signed the 25k contract you agreed you were infringing, now you pay 1%."

So you pay.

Microsoft "Me too, give me lots of cash for no reason too. We have smarter lawyers and lots of patents, you don't want to mess with us."

Signs check.

IBM: "We're entering your market and you're infringing on patent 7287565, so stop making your product"

But I signed a patent cross license with you?!

IBM: "Patent 7287565 is owned by a third party with which we have a patent cross license, we can use it, but you don't have a cross license with them, so you can't. It's not us suing you, it's our cross licensing partner. Why do you think we bully startups into cross license agreements?"

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1. IBM has lots of BS patents only a tiny fraction are worthwhile.

2. What are you paying for, the technology or the right not be sued?

3. What value are your patents if IBM has rights to them?

Bessen and Hunt:
http://www.researchoninnovation.org/swpat.pdf

If companies do bulk cross license then they're not buying technology because they don't look what they're buying.

Posted by: Nigel Johnstone   Posted on: 12/13/05 You are currently: a Guest | Members login | Terms of Use

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