The Defensive Patent License and Other Ways to Beat the Patent System

Let's start with the obvious: The patent system is broken. Inventors are shutting down their businesses, small developers are removing their products from the U.S. market to avoid bogus legal threats, and industry groups are warning members that obvious technological improvements might draw lawsuits.

Last year, Congress passed patent reform legislation; it didn’t help. The courts, too, have failed to pick up the slack. The result? A chill on innovation. American inventors—especially those who don’t often engage with the patent system until they’re facing a lawsuit—want to dedicate their resources to building the next great product or service, not fighting patent wars.

Now, here's the less obvious: We keep learning of more and more ways innovators can navigate the system and hack it to serve its original purpose. We’re particularly excited about the newest, the Defensive Patent License. Below we explain that and some other self-help options we’ve seen lately. Of course, some are better than others, but it’s fair to say that there’s an option for everyone.

The Defensive Patent License: Defensive patenting—acquiring patents to deter future litigation—is not a new idea. In fact, companies have been doing that for some time. Unfortunately, the practice has encouraged companies to seek patents for anything and everything, which—thanks to an overburdened Patent Office—has resulted in a generation of overbroad patents that, if the company folds, often end up in the hands of a patent troll.

The idea behind not-yet-operational Defensive Patent License (“DPL”) takes the good from defensive patenting (attempts to stem litigation) and removes the bad (the risk that patents obtained defensively will be used downstream by a troll). The license would work like this:

• Patent holders must offer anyone who requests a nonexclusive, royalty-free license to its patents dedicated to the DPL.
• In exchange, the licensee must also dedicate its patents to the DPL and offer the same license to anyone in the community.
• The licenses remain in effect throughout the patent's life, even if it is later sold.
• As part of the license, the DPL members agree to not use their patents offensively against any other member; in fact, doing so will void the license it has to use the other patents in the DPL.

The DPL borrows heavily from the ethos surrounding the free and open source software community, honoring the important freedoms to operate and innovate openly. As such, it is those communities who will most likely use, and benefit from, the DPL.

The DPL represents an important answer to the fundamental problems with the patent system, but it’s not for everyone. For example, the DPL contemplates that a company will dedicate its entire patent portfolio to the license to avoid the problem of members only contributing their “junk” patents and holding on to their “crown jewels.” For various reasons, some companies may not be in a position to do that.

Luckily, the DPL is not the only self-help tool out there.

Twitter’s Innovator’s Patent Agreement: Earlier this year, Twitter announced its Innovator’s Patent Agreement (“IPA”), an important tool for companies looking to do right by their engineers. The IPA, currently up on GitHub for comments, is simple: if you assign your patent to Twitter, Twitter promises it won’t use that patent to sue anyone, except for defensive purposes.

Because the IPA doesn’t give any third party a license to the patents, it does not go quite as far as the DPL. Also, a party who adopts the IPA can chose to do so on a patent-by-patent basis. Importantly, however, the terms of the IPA will run with the patent, no matter to whom it gets sold. This means that if a patent ends up in the hands of a troll, that troll will be prohibited from using it offensively.

Open Source Licenses: The GNU General Public License (“GPL”), the most widely-used free software license, covers both copyright and patent rights. Its terms allow developers to use covered software for free, so long as those developers dedicate, free-of-charge, any changes or improvements to the public, also under GPL terms. The GPL is often cited as a crucial element in the successful rise of Linux.

Other open source licenses, such as BSD licenses, the Apache License, and the Mozilla Public License, for example, cover various types of open source software. These licenses, each in its own way, ensure that important developments in open source software remain open. They do this job well, but unfortunately are limited to the software they specifically cover.

Private Companies: Private, for-profit companies also provide various ways to navigate the patent system. For example, RPX allows companies to buy into its large patent portfolio, which it promises to never use offensively against its customers. Moreover, RPX constantly grows its portfolio to cover its members’ particular needs.

Article One Partners offers a different service, providing a platform for the award of cash prizes to those who provide prior art that may be used to invalidate patents. Article One’s clients request research, which third parties provide. The third party who provides the highest quality research wins a $5,000 reward, and may form a relationship to further work with the Article One client. (Peer to Patent is Article One’s important non-profit analog.) This type of service streamlines the process of invalidating bad patents, something we’ve long supported.

This list is just the tip of the iceberg; other non-profit and for-profit organizations provide tools to help navigate a patent system gone awry, and we look forward to more joining the fray. None of these solutions is perfect, but each offers inventors of different sizes different ways to focus on innovating, and not fighting wasteful patent battles. The real solution is systemic: if software patents are here to stay, then the time to create a system that works for them is long overdue. EFF is working hard to make that happen. In the meantime, we encourage innovators to adopt one of these solutions that works best for them.