How The GPL Defangs Patent Trolls

from the mutual-defense dept

Thu, Jun 19th 2008 1:37pm — Timothy Lee

Last week, Red Hat settled an abusive patent lawsuit brought by a company called FireStar software. Way back in 2006, I discussed the patent in question, which covers some rather broad and obvious software concepts. It looks like Red Hat has settled the lawsuit in a way that extends patent protection to the entire free software community.

Why would a patent troll agree to this? Don Marti explains how the GPL strengthened Red Hat's bargaining position. In a normal patent licensing negotiation, the patent troll would demand a per-user license fee that would be passed along to the vendor's customers. But the GPL specifically prohibits Red Hat from doing this; if Red Hat agreed to pay per-user royalties, it would be in violation of the GPL and would lose the right to distribute the software at all. That put Red Hat in a strong negotiating position because Firestar knew Red Hat wasn't bluffing. In Don Marti's apt metaphor, a patent troll suing a free software company is like "robbing a store where the safe is on a time lock" -- the victim couldn't give him the goods if he wanted to. As a result, FireStar's only option was to grant Red Hat a patent license that covered not only Red Hat but everyone in the free software community whose products are derived from Red Hat's. Obviously, that greatly reduces FireStar's potential patent trolling profits, because it can't shake down all of Red Hat's competitors. This gives patent trolls a powerful incentive to focus on shaking down proprietary software companies, and leave free software vendors alone.

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Filed Under: gpl, patent trolls, patents
Companies: redhat

14 Comments

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Kiba, 19 Jun 2008 @ 3:08pm

GPL is the most brilliant hack ever!
What an awesome competitive advantage that the free software community and free software vendors have!

Time and time again, the GPL demonstrate its brilliance as well its economic benefits.
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Anonymous Coward, 19 Jun 2008 @ 3:22pm

So I'm confused... Red Hat has andor produced software that another company has a patent on, but because Red Hat is "free" it can't charge customers a licensing fee. Now does that mean Red Hat has to pay more to cover those licenses that cannot be passed on to their customers, or does FireStar no longer have the right to charge for per-user fees? And, if that were the case couldn't they demand whatever price they wanted, as Red Hat wouldn't be allowed to distribute without the license from the patent holder?
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Brooks, 19 Jun 2008 @ 3:45pm

What?
This gives patent trolls a powerful incentive to focus on shaking down proprietary software companies, and leave free software vendors alone.
I was in agreement with the article up until that. Where, exactly, is the incentive to leave free software vendors alone? Sure, it may be that there is less money to be made by going after the free software community, but as long as Red Hat's settlement was for more than FireStar's investment in securing the settlement, there's plenty incentive to go after free software companies. What, is the theory that patent trolls will think "well, I could make $1m by going after Red Hat, but that would be all I could get from the free software community, so I will leave them along and go after Microsoft"? That makes no sense at all.
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- Tim Lee, 19 Jun 2008 @ 9:09pm
  
  Re: What?
  Patent litigation costs money and creates risks that the target of the litigation will invest resources getting the patent invalidated.
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some old guy, 19 Jun 2008 @ 4:16pm

hrmm
Sadly, I don't follow the conclusions you have there either. Anytime one party in arbitration loses an option, they lose bargaining power. At the same time, the other party gains bargaining power. There's really no exception to that.
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zcat, 19 Jun 2008 @ 5:14pm

Patent trolls could be our best defense?
Scenario #1; patent troll tries to shake down on open-source vendor, entire community responds by finding prior art and having patent overturned, or in the worst case coming to an agreement that protects all of the OSS community from the patent. Everybody loses, nobody is happy.

Scenario #2; patent troll grants a free licence to all software under an ISO-recognised licence, then proceeds to attack only non-free software vendors such as Microsoft or Adobe. That's where the real money is anyhow. They've practically joined the Open Patent Alliance as far as OSS is concerned. They're no threat to us, we're no threat to them. Everyone is happy except Microsoft and Adobe. Win, win, win!

Sounds like a good plan to me.
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- Brooks, 19 Jun 2008 @ 5:54pm
  
  Re: Patent trolls could be our best defense?
  Scenario #3, also known as What Actually Happened in the Real World Out There: patent troll tries to shake down an open source vendor, collects settlement.
  
  Good fantasies you've got there, but they're not applicable to this situation.
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  - ehrichweiss, 19 Jun 2008 @ 6:17pm
    
    Re: Re: Patent trolls could be our best defense?
    If they collect from a single vendor, they don't get to then try to collect from any others though. So, those weren't "fantasies", but maybe they would qualify as a simplification. However a few lawsuits of this type and the trolls will get the message that it's more bother than it's worth.
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- John Wilson, 20 Jun 2008 @ 11:37am
  
  Re: Patent trolls could be our best defense?
  Scenario #2; patent troll grants a free licence to all software under an ISO-recognised licence, then proceeds to attack only non-free software vendors such as Microsoft or Adobe. That's where the real money is anyhow.
  
  After the OOXML debacle you actually trust ISO to administer anything as complex as licensing? ;-)
  
  Thank God, ISO has nothing whatever to do with FLOSS licenses. They're administered by FSF and OSI and for scenario #2 to work I'd nominate OSI, who probably don't want a thing to do with it.
  
  Anyway, the patent troll settled for very little, is basically barred from going after the Linux/BSD communities for which we should all be thankful.
  
  Hopefully, lesson learned.
  
  Now, if just SCO could, FINALLY, learn the same lesson. (Fat chance, I know!)
  
  ttfn
  
  John
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Little Techdirt Lemming Punk, 19 Jun 2008 @ 5:30pm

Summary
1) troll sues over patent on "Hello World"
2) troll realizes they do not have a leg to stand upon
3) troll settles for small handout
4) everyone laughs
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Dohn Joe, 19 Jun 2008 @ 7:51pm

Ha ha ha ha ha
Obviously a lot of the posters above don't understand the GPL or Copyright+Patent law. This article made me LMAO - because it's so true!!
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angry dude, 19 Jun 2008 @ 9:16pm

Idiot punk
What a bunch of usual horseshit from techdirt punk

BTW, what RMS proposed for GPL version 3 is totally insane
No wonder Linus doesn't want to have anything in common with those software punks from FSF
Linus is a practical guy after all
He understands that "creators matter"
And Red Hat is just riding its fortune on the backs of zillions of unpaid software coolies around the world
(and a strong helping hand from IBM)

Have a good sleep lemmings
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- ehrichweiss, 20 Jun 2008 @ 7:01am
  
  Re: Idiot punk
  So what is it that separates you from the crazy down the street that yells angrily at an empty can of soda on the sidewalk?
  
  Or even better, why does you post have nothing to do with anything other than a good read as to what symptoms a paranoid schizophrenic might exhibit? Damn lying squirrels!!
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  - Anonymous Coward, 20 Jun 2008 @ 9:10pm
    
    Re: Re: Idiot punk
    ehrichweiss,
    
    That was FUNNY !
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