By Roger Parloff, senior editor
FORTUNE -- The Open Invention Network, a community set up by an IBM-led consortium in 2005 to foster a safe patent environment for developers and users of the free, open-source software operating system Linux, now has more than 500 signatories, the group announced today. The group surpassed that symbolic milestone last December, according to its CEO Keith Bergelt, and now signs up a new company roughly every three days.
In February 2008, when Bergelt came to OIN, the group had just 32 participants or, technically, "licensees." OIN's rapid expansion since then, Bergelt says in an interview, reflects that "businesses and organizations are becoming increasingly reliant on Linux and open source to grow their technology base and remain competitive," and that "OIN's patent non-aggression model is working to discourage litigation and encourage the kind of open innovation and shared creativity that is the hallmark of Linux and, more broadly, open source."
Linux has quietly achieved an invisible pervasiveness in contemporary society. Though long dominant on servers, Linux has now also captured the largest share of consumer computing, if that category is defined to include, as it should, mobile devices and tablets as well as personal computers. According to a Goldman Sachs (GS) report issued last December, Google's (GOOG) Android -- which is Linux-based -- enjoys a 42% share of all newly sold consumer computing products, compared with 24% for Apple (AAPL) and 20% for Microsoft (MSFT).
Linux now undergirds most cloud-based computing -- what we do, for instance, on Twitter, Facebook (FB), or Amazon (AMZN); consumer electronics such as digital cameras and TVs; supercomputing, e.g., weather forecasting, genetic modeling, and particle physics experimentation; embedded devices like GPS navigation systems, handheld point-of-sale and tracking systems, and entertainment devices; and, financial trading including any transaction on NASDAQ or the New York, London, Tokyo, Frankfurt, Hong Kong, or Shanghai exchanges. It also powers most telecommunications switching equipment, so that even people who use iPhones are probably using Linux to complete their calls.
OIN's 500th licensee, the Privly Foundation, provides software that enables political dissidents to post private messages on public social media, like Twitter. It is a small, relatively unknown, open-source project. Over the years, however, other OIN signatories have come to include such behemoths as Google, Cisco (CSCO), Hewlett-Packard (HPQ), Symantec (SYMC), Facebook, Twitter, Fujitsu, LG Electronics (LGL), HTC, and even Nationwide Mutual Insurance.
Linux was released in 1991 by the then-21-year-old Finnish student Linus Torvalds with the assistance of developers around the world. Though it is still written collaboratively by independent programmers -- and Torvalds, now 43, still helps oversee additions to it -- at least 75% of those who write it today are paid by corporations to do so, according to a 2012 Linux Foundation white paper. The companies that have made the most contributions in recent years are Red Hat (RHT), Intel (INTC), Novell, IBM (IBM), and Texas Instruments, according to the paper.
Though all technology companies must worry about patent suits, such attacks pose special threats for open-source software users. Unlike proprietary code, like Microsoft's Windows or Apple's iOS, open-source software permits users to freely examine, copy, alter, and customize source code. A patent claim against open-source software, if found to be valid, would prevent users from exercising any of those freedoms.
OIN was one of the first defensive patent aggregators. Such groups acquire patents for the protection of their members, clients, or licensees, rather than to seek revenue through licensing and litigation. (Two other defensive patent aggregators, the nonprofit Allied Security Trust and the for-profit public corporation RPX (RPXC), were launched in 2007 and 2008, respectively. While Nathan Myhrvold's Intellectual Ventures investment fund billed itself as partially defensive when it launched in 2000, it is today widely regarded as the opposite: the largest patent aggressor -- or, pejoratively, "troll" -- in the world, actively seeking revenue from a war chest of between 30,000 and 60,000 worldwide patents and patent applications, according to a 2012 law review article by Professor Robin Feldman, of the University of California at Hastings Law School, and Thomas Ewing.)
OIN has acquired a strategic portfolio of more than 600 worldwide patents and patent applications, according to Bergelt, including more than 400 that are specific to the U.S. It buys these to make sure they do not fall into the hands of potential trolls, and also to make them available to its licensee companies for potential use in counterclaims in the event that they face a patent suit from an outside aggressor. For instance, in May 2010, when Microsoft sued OIN licensee Salesforce.com (CRM) for alleged patent infringement relating, in part, to its use of Linux, OIN assigned (i.e., transferred) two of its patents to Salesforce.com, apparently to be available for use in counterclaims. The case settled shortly thereafter.
In exchange for gaining access to OIN's portfolio, each licensee also commits not to use its own patent portfolio against any other licensee vis-à-vis Linux-related software. Collectively, OIN licensees hold more than 320,000 worldwide patents. (Though, of course, only some fraction of those have any potential relevance to Linux.)
The money for OIN's portfolio acquisitions is provided by its six founding "full" members -- IBM, Red Hat, Novell, Philips, Sony (SNE), and NEC -- and its two "associate" members, Google and Canonical. Google's status as an associate member has not previously been reported. It became an OIN licensee in 2007, when it was still just an end-user of Linux, but has since become a major writer and purveyor of Linux-based code for its Chrome browsers and Android operating systems.
TomTom, the GPS navigation company, also plays a "heightened" role in OIN, Bergelt acknowledges, though he declines to elaborate further. TomTom joined OIN in March 2009, after Microsoft sued it for alleged patent infringement relating, in part, to its use of Linux. That case also settled quickly.
A search of the U.S. Patent and Trademark Office database by Fortune for this article turned up the fact that OIN transferred some patents to two of its member companies last year -- the first time it had done so since the Salesforce.com transfers in 2010. Specifically, it assigned 11 patents to Google last March, and 25 to Red Hat last June.
Google declined to comment on its acquisitions. Asked to examine those patents by Fortune, Erin-Michael Gill, the chief intellectual property officer at MDB Capital, an IP investment bank, said that it was "immediately obvious" that at least three of them (available here, here, and here) were "very, very broad;" "very very fundamental;" "potential crown-jewel type patents" that neither OIN nor Google would want to fall into a troll's hands. One, for instance, granted in 1996, enables a Web surfer, upon returning to a previously visited Web page, to recognize which hyperlinks he has previously clicked on by their changed color.
Rob Tiller, the vice president and assistant general counsel, IP, for Red Hat said that the patents it acquired from OIN last June were not "aimed against any particular aggressor." They included, he said, patents relating to web services, virtualization, enterprise collaboration, and internet browsing, and "are now part of our deterrent force available against any aggressors that attack Linux and open source."
One important early licensee of OIN, Oracle (ORCL), which joined in March 2007, effectively withdrew from the group last March (though its cross-licensed portfolio as of that point remains available to OIN members). Oracle was then, and still is, involved in patent and copyright litigation with Google over Google's use of Java in Android. Oracle did not respond to a request for comment. In an interview, Bergelt commends Oracle for its early entry into OIN and says he hopes it will return upon resolution of its dispute with Google.
Bergelt is also hopeful, he adds, that Intel and Samsung will soon become OIN licensees, especially in light of their prominent involvement in the Tizen Association. Among other things, the Tizen project is currently providing automakers with Linux-based software to run in-vehicle navigation and infotainment systems.
The Justice Department is investigating whether a "patent pool" is abusing the system to try and cripple a new Google-developed open-source video standard.
Google's (GOOG) YouTube and other video downloading websites like Netflix (NFLX) license the video streaming technology for the video they provide (called H.264) from a consortium of companies that collectively operate a LLC Patent pool called MPEG LA. The group says that they are a patent pool or "convenience store" MORESeth Weintraub - Mar 4, 2011 10:30 AM ET
Fragmentation and the Verizon iPhone will not limit Android growth.
In a report today, Canalys remained rosy on Google's (GOOG) Android. According to its Q3 2010 estimates, the Google-backed platform already claims 25% of the worldwide smart phone market. Those numbers are expected to grow significantly in 2011.
"The growth of Android has been phenomenal, but so too has the number of related devices launched with different hardware and software specifications," said Canalys principal MORESeth Weintraub - Jan 13, 2011 11:02 AM ET
Not a shocker considering Oracle is suing Google over Java patents.
According to Joshua Bloch of Google (GOOG) Open Source Programs Office, Google won't be attending Oracle's (ORCL) Open World and specifically the Java One subconference.
Like many of you, every year we look forward to the workshops, conferences and events related to open source software. In our view, these are among the best ways we can engage the community, by sharing MORESeth Weintraub - Aug 29, 2010 9:10 PM ET
According to recent surveys, more large companies are committing to open-source software. How the platform went from closet to corporate.
By Kit R. Roane, contributor
There was a time when open-source software was the domain of computer geeks and do-it-yourselfers with more time than money. But, as Oracle's legal salvo against Google highlighted last week, those days are long gone.
Oracle (ORCL), through its purchase of Sun Microsystems, has become one of the MOREAug 16, 2010 12:50 PM ET
In this episode of Techmate, Jon and Michael compare Apple's (AAPL) closed-system strategy to Google's (GOOG) more open approach.Mason Cohn, Producer - Mar 31, 2010 1:04 PM ET
In a special Presidents' Day episode of Techmate, Jon and Michael discuss Intel (INTC) and Nokia's (NOK) strange alliance to develop mobile software and compete with Apple (AAPL) plus the on-going mess at MySpace (NWS)
Undoing the dupe: A way out of your Big Software contracts
By Roger Burkhardt, CEO, Ingres
(Last month Burkhardt wrote about how Big Software companies lock customers into restrictive software licensing agreements and continue to raise prices, even during tough economic times. Here Burkhardt offers some tips for effectively renegotiating contracts with your current Big Software suppliers.)
For decades now many of us in corporations have been paying loads of money to work MORENov 5, 2009 9:45 AM ET
By Scott Moritz
NEW YORK - A brief hands-on experience with the Google (GOOG) G1 phone gives the impression that after a slew of touchscreen duds from other telcos, Apple's (AAPL) iPhone finally has a worthy rival.
The highly-anticipated HTC phone for T-Mobile (DT) was unveiled in New York Tuesday, and kiosks with technical experts were set up so media people could run the first Android-powered phone through some tricks. T-Mobile will start MOREsmoritz - Sep 23, 2008 2:14 PM ET
By Michael V. Copeland
Sun Microsystems is acquiring open-source database company MySQL in a deal worth $1 billion, Sun announced Wednesday.
MySQL CEO Marten Mickos has told me in the past of his intention to take the Swedish company public. He even rebuffed a 2006 offer by Oracle for the company. In recent months, the volume on the chatter about a looming MySQL IPO was increasing, and you can bet Sun MORETodd Woody - Jan 16, 2008 1:17 PM ET
|Make $30 an hour, no bachelor's degree required|
|The Obamacare myth about small business|
|Apple set for showdown on Capitol Hill over corporate taxes|
|Stocks: Focus on Apple and JPMorgan|
|Best Buy's sales spook investors|