The Standards Blog

IBM Adopts Open Patent Policy

Intellectual Property Rights

Updated 12:45 PM EDT:  The original version of this blog entry was based on an article in the New York Times, and then updated when the related IBM press release became generally available.  For the Back Story on that rewrite, see this entry

The New York Times reported this morning that IBM would announce a new patent policy later today, and described in general what the terms of that policy might be.  IBM clearly hopes that this move will increase pressure on other companies to accelerate efforts to improve the quality of software patents, which is an issue of interest and concern to a broad audience, and particularly those that participate in the development of, or that use, open source software. 

The press release that issued later in the day states that the new policy applies to IBM's operations worldwide, and is based on four "tenets:"

  • Patent applicants are responsible for the quality and clarity of their patent applications.
  • Patent applications should be available for public examination.
  • Patent ownership should be transparent and easily discernable.
  • Pure business methods without technical merit should not be
    patentable.   

The Times article states that IBM is seeking to lead the market towards patent reform, despite the lagging efforts of Congress to improve the quality of software patents, which are widely regarded as being too easy to get, and too expensive and difficult to challenge.                                     

The Times article speaks in sufficiently broad terms that make it difficult to determine exactly how broad the impact of the new policy will be, and the press release itself is somewhat heavy going, due to its subject matter.  As a result, I got in touch with IBM's Ari Fishkind, the Public Affairs Manager associated with the press release, to get clarification on a few points, which I'll come back to later on below.

First, though, let's look at the exact text of the new policy itself, which reads as follows:

  • Patent applicants are responsible for the quality and clarity of their patent applications. Patent applications must be written with clear specifications and claims, and include a thorough review of prior art. This includes performing patentability searches in advance of filing patent applications, and of course providing all of the pertinent prior art documents to the applicable patent offices.
  • Patent applications should be available for public examination and comment. Patent applications are generally published automatically 18 months after filing, but where they are not, applicants should request 18-month publication. Applicants should also permit public comment on their published patent applications, so that the best prior art and other pertinent information can be made available to patent offices during the patent examination process.
  • Patent ownership should be transparent and easily discernible.  Patent owners should record their ownership in their own name and not in the name of a shell company, and patent applicants should state in their applications who owns those applications.
  • Pure business methods without technical merit should not be    patentable. All inventions with technical merit should be patentable, provided they meet all of the requirements of patentability. Applicants should seek to publish, not patent, their pure business method innovations if they wish to prevent others from patenting similar business methods.

In some ways, the last point is the most interesting, and requires a bit of explanation for those not versed in patent law.  Under prevailing law, an invention must be "novel," as well as "non-obvious."  Loosely speaking, this means that an invention can't be patented if someone invented it before, or if, based on existing knowledge and patent filings ("prior art") conceiving it would be obvious to anyone who is "skilled in the art." 

Boil all that down, and it means that if you invent something and publish it, it becomes difficult or impossible for anyone else to successfully gain a patent on the same, or a very similar, invention.  In effect, then, publishing an invention is akin to placing it in the public domain in a way that makes it immune from being patented by anyone else in the future.  And this is what IBM is stating it will do in appropriate cases, and what it is urging others to do as well.  I think that's a great idea, and have wondered why this has not more frequently and deliberately done before.

The press release states that IBM will take several actions "to implement and support this new policy."  Those actions (in my paraphrasing) are:

  • To spend "thousands of hours annually" reviewing published patent applications filed by others with the US Patent and Trademark Office (PTO), and make any "prior art" known to the PTO that it discovers that would indicate that a given patent claim should not be allowed.  This effort would be made through a recently launched pilot project launched by the PTO with the collaboration of IBM, Microsoft, GE, HP, Oracle, Intel, and Red Hat called the USPTO Community Patent Review pilot
  • It will make all of its own software patent applications open to community review after 18 months.
  • IBM will "make available" over 100 of its business method patents, constituting over 50% of its portolio of such patents (details are not given in the press release how, or under what terms, these patents will be made available).  It also pledges to "substantially reduce" its filing of business method patents in the future.
  • IBM will "promptly and publicly" record the clear ownership of all patents that it owns

As noted in my comments above, some aspects of the new policy could use elaboration.  Here's what Ari had to say on those points:

On the question of what applications would be published and when: 

Regarding community review of patents:  we're starting modestly, with probably less than 100 patent applications of all varieties, being made available for public review and comment.  That number will be probably grow in tandem with the [PTO pilot] program's success.  So, no, not all of our patents.  The goal is to make the public review of all applications, industrywide,

mandatory, but for right now, we want to show that this kind of thing can be done successfully.

Apparently, the PTO pilot program is only able to handle so many applications at this time.  In a later email, Ari told me that IBM is looking forward to that number increasing, and that the patent applications can be of all kinds, and not just software patent applications.

On how to determine what types of business method patents (BMPs) should still be permitted and which should not: 

We're not calling for an end to all BMPs, just the ones without huge technical underpinnings.  If a BMP can still be expressed by a software algorithm, then it probably meets a high standards.  We're going to focus on BMPs that meet those standards, and make about 100 other BMPs available to the public to innovate on.

The new policy is the result of a development process that included external as well as internal input, and is based upon a Wiki that gathered the comments and contributions of "over 50 patent and policy experts from the United States, Europe, Japan and China," offered during May and June of this year.  That document can be accessed at this page at the IBM site.  

The new IBM move follows on the heels of several other initiatives in the marketplace (the PTO pilot project being an example), some supported by other major technology vendors in addition to IBM, and some unilateral efforts by single companies.  Individual actions include a series of "non-assertion covenants" made by some of the same companies, and most recently, by Microsoft, in connection with 35 Web services standards.

It will be interesting to see what reactions this latest unilateral action elicits among IBM's peers and competitors. 

Already, commentators have begun greeting each new pledge by a major technology company not to use its patents oppressively as a challenge to the rest of the industry to not only match, but beat, the latest move in support of open standards and, in particular, open source software development and licensing.

How far can this process go? Lately, the raises in this intellectual property poker game seem to be growing larger rather than more modest, indicating that the pile of patent chips on the table has plenty of room to grow.

Full text of  the IBM press release:

IBM Establishes Worldwide Patent Policy to Promote Innovation

Pledges Thousands of Hours to Community Review of Patent Applications; Reduction in Business Method Patents

ARMONK, NY - 26 Sep 2006: Inspired by a two-month, online forum involving dozens of experts, IBM (NYSE: IBM) today formalized a new, groundbreaking corporate policy governing the creation and management of patents.

The worldwide policy, built on IBM's long-standing practices of high quality patents and transparency of ownership, is designed to foster integrity, a healthier environment for innovation, and mutual respect for intellectual property rights. IBM encouraged others in the patent community to adopt similar policies and practices, more stringent than currently required by law.

The tenets of the new policy, which applies everywhere IBM does business, are: 

  • Patent applicants are responsible for the quality and clarity of their patent applications.
  • Patent applications should be available for public examination.
  • Patent ownership should be transparent and easily discernable.
  • Pure business methods without technical merit should not be
    patentable.   

Additional detail on the policy can be found below. IBM also announced several actions it will undertake immediately to implement and support this new policy: 

  • IBM's technical experts will spend thousands of hours annually
    reviewing published patent applications submitted to patent offices.  For example, they will provide pertinent prior art to assist the United States Patent & Trademark Office (USPTO) in verifying the patentability of submissions more rapidly and accurately, as part of the USPTO Community Patent Review pilot.  IBM urges other qualified experts to similarly provide their time and knowledge by participating in this program.
  • IBM will make its patent applications open to community review.
  • IBM will make available over 100 of its business-method patents -- about 50 percent of IBM's total business method patents -- to the public, where they can be used openly to stimulate innovation.  IBM will focus future business method filings on those with substantial technical content, and as a result, expects to substantially reduce its filing of business method patents.
  • IBM will promptly and publicly record, in its name, assignment of all patents and published patent applications it owns.   

"The centerpiece of this policy, and our actions to support it, is based on the principles that patent quality is a responsibility of the applicant," said Dr. John E. Kelly III, IBM senior vice president for Technology and Intellectual Property. "These principles are as relevant in emerging regions of the world as they are in more mature economies. IBM is holding itself to a higher standard than any law requires because it's urgent that patent quality is improved, to both stimulate innovation and provide greater clarity for the protection and enforcement of intellectual property rights."  

The impetus to share this policy and to encourage an open discourse on best practices for patent holders was sparked by a two-month online forum facilitated by IBM (please see below for more detail). The forum brought together dozens of the world's most prominent intellectual property experts from the fields of government, academia and economics. IBM used wiki technology to enable the participants to debate and suggest solutions for pressing intellectual property issues.  

"As advances in information technology and basic science transform the nature of innovation and increase the relative value of intellectual property, it is crucial that we modernize the systems for creating and protecting those assets," said Ronald Mann, University of Texas School of Law, and one of the wiki participants. "Until that time, having the community work together to adhere to a set of principles that sets a higher standard for behavior is even more important."  

IBM believes that widespread adoption of a more formal code of conduct around patents could ease the burden on legal and government administrative systems. Those systems now deal with growing numbers of questionable patent applications and patent lawsuits.

IBM Patent Policy 

  • Patent applicants are responsible for the quality and clarity of their patent applications. Patent applications must be written with clear specifications and claims, and include a thorough review of prior art. This includes performing patentability searches in advance of filing patent applications, and of course providing all of the pertinent prior art documents to the applicable patent offices.
  • Patent applications should be available for public examination and comment. Patent applications are generally published automatically 18 months after filing, but where they are not, applicants should request 18-month publication. Applicants should also permit public comment on their published patent applications, so that the best prior art and other pertinent information can be made available to patent offices during the patent examination process.
  • Patent ownership should be transparent and easily discernible.  Patent owners should record their ownership in their own name and not in the name of a shell company, and patent applicants should state in their applications who owns those applications.
  • Pure business methods without technical merit should not be    patentable. All inventions with technical merit should be patentable, provided they meet all of the requirements of patentability. Applicants should seek to publish, not patent, their pure business method innovations if they wish to prevent others from patenting similar business methods.
       

Intellectual Property Marketplace Wiki

Creating, capitalizing on, and protecting intellectual property have become vital business functions. Firms are increasingly striving to become globally integrated enterprises that collaborate with their extended value chains, and the resulting intellectual property plays a central role in the evolving future of this trend.

 These issues were a consistent undercurrent throughout IBM's Global Innovation Outlook, a worldwide conversation with 248 thought leaders from nearly three dozen countries and regions, representing 178 organizations.

 IBM assembled a worldwide community of 50 experts in the fields of law, academia, economics, government, technology and others. These experts collaborated with IBMers to discuss the issues, determine the key characteristics of a properly functioning IP marketplace, and establish a blueprint for meaningful change.

 Throughout May and June 2006, the group collaborated in the online IP Marketplace wiki. Wikis are a new media Web 2.0 tool that enables documents to be collaboratively written and rewritten through a common Web site.

 The wiki was divided into six sections, each of which also contained a corresponding discussion area. These discussion areas were designed to encourage a free and open exchange of ideas, and provoke new approaches and new thinking about the IP marketplace.

The participants debated some of the most significant challenges surrounding intellectual property -- sometimes reaching consensus on the solution and sometimes agreeing to disagree.

 The result of the project is a collaboratively written document that establishes the foundation for building a functioning marketplace for the creation, ownership, licensing and equitable exchange of intellectual property. This document has been published and is now available at www.ibm.com/gio/ip. Hard copies of the book are also available by contacting ipeditor@us.ibm.com

For further blog entries on Intellectual Property Rights, click here  

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