IBM/TurboHercules can be resolved with license; no need for abolition
Posted Sep 30, 2010 13:30 UTC (Thu) by FlorianMueller
In reply to: Meaningful vs. meaningless support from businesses
Parent article: Red Hat Responds to U.S. Patent and Trademark Office Request for Guidance on Bilski
I don't "condemn" Red Hat's business model. What I say is that if their economic model were to be presented to politicians as an argument against software patents, they would look at this as an unsustainable model for the economy at large. Red Hat is free to do what open source licenses and the law allow. But to the extent that Red Hat wants intellectual property laws to be weakened only to accomodate its approach, it doesn't have a compelling case. On the contrary, a majority of politicians would likely conclude that such destruction as outlined by Red Hat's CEO isn't desirable.
TurboHercules isn't a matter of patent policy. It's an antitrust case that's now being investigated by the European Commission, and it has implications for IBM's credibility vis-à-vis open source when comparing IBM's overall claims to support open source and interoperability to its practices in its core business.
TurboHercules didn't go to the EU and ask them to abolish patents, or to force IBM to make patent licenses available free of charge.
Instead, TurboHercules lodged a complaint, saying that IBM acts in violation of antitrust law by tying its mainframe hardware to its proprietary z/OS operating system. That same kind of tying complaint was made by IBM itself in the EU against Microsoft, even twice: in connection with the Media Player, and in connection with Internet Explorer.
TurboHercules never said IBM should give away z/OS for free. Of course IBM has the right to market it as proprietary software. But a company in a dominant market position (in this case, a monopolist, which is the ultimate form of dominance) can be required under antitrust rules to untie components. TurboHercules' original request to IBM (the entire correspondence is documented here) said that IBM should make an offer of commercial terms that IBM could choose as long as it's reasonable. In other words, if IBM did licensing on so-called RAND or FRAND terms, everything would be fine. So IBM wouldn't be expropriated at all. They would be paid for their intellectual property.
IBM not only refused to make an offer but also brought up patent infringement assertions. Instead of acting constructively and cooperatively like, for instance, Microsoft makes its patents available, IBM uses some patents for exclusionary strategic purposes to foreclose competition. If a monopolist uses IP for that purpose, there's also an antitrust dimension. But the key thing here is again that the problem would be solved by IBM making its intellectual property available on FRAND terms. That, again, means they get paid, not expropriated.
Since TurboHercules asked for an offer of reasonable licensing terms, that's what IBM should have offered, and the patent part could have been resolved as part of the overall deal. But IBM wants to foreclose competition. I never said that markets should be monopolized. There should be and must be undistorted competition. The Red Hat issue is not a competition issue but one of business models in connection with patent policy. The TurboHercules case is a competition issue, not a matter of patent policy.
There is also the open source/open standards dimension. IBM claims to support and advance the cause of open source and open standards. It furthermore claims that only royalty-free (RF) access to patents is compatible with FOSS. RF is the most liberal extreme; strategic exclusionary use ("no way, José") as practiced by IBM itself is the other extreme. FRAND is a constructive solution in the middle. If IBM says in the open standards context that FRAND isn't good enough but doesn't even offer FRAND when its own IP is concerned, that doesn't make sense. They should either offer FRAND and demand it from others; or offer RF and demand it from others. They should be consistent.
Finally, it's a fact that TurboHercules made the suggestion that IBM should add to its open source patent pledge any patents it deems relevant. That was a way of pointing out that IBM's open source patent pledge isn't sincere if it doesn't contain the patents that really seem to matter to open source. However, since TurboHercules had stated clearly that IBM should offer reasonable terms, everything would be resolved with IBM granting a license on such terms. So what's needed to solve this problem is a license deal; the abolition of software patents wouldn't be needed.
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