Intellectual Property in OSS

What is IP?

Intellectual Property (IP) is any work or product of the human intellect. Copyrights and patents are two prominent examples of IP. Trademarks and trade secrets are two other examples. Copyrights and patents play an important role in the vitality of the Open Source software market whereas trademarks and trade secrets are mostly used by proprietary software vendors.

Copyrights protect the expression of an idea or other work. An expression is an original writing, performance, depiction, or software program. Copyright is intended to protect the expression of an idea, but not the idea itself. Patents can be used to protect the idea.

Patents protect inventions. An invention is an idea or method that is new and useful. The complete details of an invention are published when a patent is awarded. Patents try to balance the inventor’s rights with the benefits to society of publicly knowing the details behind the invention. In return, the inventor is granted exclusive control over the use of the invention.

How is IP used in Open Source?

In the software world, copyrights are aggressively used to prevent anyone except the owner from using or copying the software. Software is considered property in the form of expression. It can be transferred, sold or relinquished. Copyright of software is used to enforce a range of ownership prerogatives. Ownership prerogatives typically establish a license or even a contract in return for the right to use the covered software in specific ways. At minimum, recognition and attribution are required, as exemplified in the traditional MIT or BSD licenses. More frequently today, copyright is employed to ensure that the covered work remains an active agent of the collaborative software community. This is exemplified in the GPL, LGPL, and MPL licenses. Proprietary vendors usually demand a “click-through” contract requiring the user to agree to even greater restrictions on the use of the software.

The use of patents is not as prevalent as the use of copyrights in Open Source software. However, patents covering technologies expressed in Open Source, are also being applied for. The intent is to build a war chest that can be used to protect the technologies behind Open Source either directly or through a bargaining strategy of reciprocal patent licensing. Companies like Red Hat are acquiring patents today for Open Source technologies as a leverage to bargain in case of attack by proprietary vendors. Companies like IBM already have thousands of patents - three of which were used to deflate SCO’s attack on Open Source software.

Making Money using IP

The financial value of Open Source IP is almost entirely derived from services related to the support of the software, and not the software itself. Services include support contracts or enhancements and customizations sold separately. In certain cases, the Open Source IP can be multiply licensed, at least by the original owner of the IP, in order to generate revenue through commercial licensing.

The right strategy of using IP in an Open Source product depends on the extent of ownership of IP. If an author owns all the software both open source and commercial proprietary strategies can be pursued simultaneously. If the IP ownership in a product or project is shared, then IP can instead be used for enforcing a level playing field of collaboration amongst all players. In this case, IP is used in the same way that cross-licensing is used in proprietary software. Individuals or organizations that have the ability to perform technology services can benefit enormously by ensuring a level playing field. Services can then be layered on top with additional tools and integration facilities, used as market differentiators.

49ers and the Gold Rush

As the news of prosperity spreads, prospectors will rush in to find the IP nuggets of Open Source. While there is gold to be found, the real wealth is in the infrastructure that Open Source creates – the hardware, the packages and the services built up to support the IP ownership that is at the heart of Open Source software.