Protecting Open Innovation: The Defensive Patent License as a New Approach to Patent Threats, Transaction Costs, and Tactical Disarmament

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IV. THE DEFENSIVE PATENT LICENSE: A NEW STRATEGY FOR ADDRESSING PATENT THREATS TO OICS

Each of the above approaches goes some distance in addressing patent threats for OICs, but each has limitations in its reach and effect. Therefore, working from our framework, we propose a new model for addressing OIC patent threats that is designed to maximize important benefits of existing models and address some of their limitations. Specifically, we model a distributed cross-licensing system anchored by an OIC-style standardized open patent license--the Defensive Patent License, or DPL. The DPL blends the general strategy of defensive patenting with the OIC values of openness and freedom, using a FOSS-inspired, decentralized and standardized intellectual property license to distribute costs and benefits, and to provide an interoperable, technologically neutral, reliable, and legally binding commitment to defense.

The DPL draws upon and reflects three basic principles, articulated for us by Brewster Kahle, founder of the Internet Archive, during our initial conversations with OICs about this idea.

   The DPL is a license that reflects a public commitment to defense,
   so our patents are forever defensive.

   Any organization may freely use these licensed patents while also
   being publicly committed to defense.

   An organization that commits a breach of this license is ceasing
   its commitment to defense.

Overall, we believe that this approach could significantly lower the barriers and maximize the benefits of defensive patenting for OICs. In this Part, we describe the DPL and explain how it can help OICs protect themselves against patent threats.

A. The DPL Model

The DPL is a standardized open patent license designed to encourage the creation of a broad, decentralized network of OICs that both patent their innovations with a commitment to defensive purposes and license them on a royalty-free basis to any others who will do the same. (168) In doing so, the goal is to build up a collective network of patents that has the same deterrent power as a large proprietary defensive "portfolio"--but a portfolio that has its costs and benefits distributed across the users of the DPL, and that does not require separate centralized management. (169) As such, we harness the network effects of OIC distributed cost and benefit structures, the commitment to OIC values, and the reliability of other standard distributed OIC licenses, such as the GPL or Creative Commons' copyleft licenses, and apply them in the patent context.

The DPL operates by creating a set of viral, bilateral obligations focused on preventing offensive patent litigation and promoting freedom to operate and innovate. Specifically, the DPL provides every DPL user a perpetual, worldwide, royalty-free license to every other DPL user's entire current and future patent portfolio, (170) subject to the following four conditions:

1. Every DPL user (licensor or licensee) will forgo any offensive patent infringement actions against any other DPL user;

2. Subject to Condition 4, every DPL user will offer her entire current and future patent portfolio under the DPL; (171)

3. Every DPL user will bind any successor-ininterest to any part of her patent portfolio to her obligations under the DPL; (172) and

4. If a DPL user wishes to stop offering her patents under the DPL, she may do so, but only with six months' notice to existing DPL users and future parties. She must continue to grant, and may not revoke, any licenses that are in place before the end of the notice period. (173) Once she stops offering the DPL, other DPL users are free to revoke their licenses to her at will, but the DPLs she granted previously remain in effect.

All DPLs are irrevocable for the full term of the relevant patents, except if one or more of the above conditions are not met or if a DPL user provides six months' notice under Condition 4. …