One reason why an patent exception for all Free Software does not work is that if you can fully use patents under a non-protecting Free Software license like MIT/X it can also be used in proprietary applications. To use the patent in proprietary software: Only put the implementation of the algorithm under MIT/X and keep the rest proprietary following the license terms.
So what does mean for IBM? Either they just gave up their 500 patents completely because of the MIT/X trick; or they actually mean pure Free Software solutions, effectively limiting the use to strong licenses like the GNU GPL.
Because it does not make sense to write down terms when you want to completely give up the patents, IBM certainly means only a fraction of Free Software licenses can be used as before when using their patents, any Lesser GNU GPL code cannot be linked into proprietary applications anymore without getting a target for ligitation.
There is even another posion hidden in IBM's patents for Free Software and this is the freedom to learn and use the knowledge in other applications. Okay, that is true for all patents, but usually you do not have the freedom to work with the code and know some might think it is okay.
Conclusion: This might be more than just a smoke screen from the known friend of software patents IBM.
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