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October 24, 2005

IBM's Patent Leverage

"IBM is pledging royalty-free access to its patent portfolio for the development and implementation of selected open healthcare and education software standards built around web services, electronic forms and open document formats." There's stifling fine print to that, but the public relations song and business model backing it are solid.

IBM's thrust is to sell more services in the healthcare and education market sectors by encouraging an ecosystem of open standards interoperability. By granting patent grace, IBM removes a small barrier to development. Of course, many other companies have relevant patents, so any software development remains a patented minefield. But IBM's advertising statement is that it has both interest and expertise in these areas, and has a vested interest in growing those sectors.

IBM is attempting to provide some lubrication for underdeveloped IT segments. Education lacks funding, and, viewed holistically, healthcare is an IT shambles. The social goals are noble, and the long-term profit potential considerable.

According to IBM:

"In the healthcare industry, access to IBM's patents has the potential to spur worldwide development of standardized electronic health-record networks, fostering the widespread adoption of health information technology. Such technology will support the protection, privacy and security of health information through open, interoperable technologies."

"In Education, open access to IBM's patented technology can improve the effectiveness and productivity of the education process and of the management of school districts and institutions. Standards-based applications could provide students in remote areas, including those in emerging geographies, access to teachers, lesson repositories and information resources currently beyond their reach and regardless of time zones."

To the extent that development occurs that otherwise would not, everyone wins.

No doubt IBM has done valuations on the royalty-free patents, keeping higher value patents in its licensing vest.

At best, IBM is blazing a trail of societal awareness coupled to a long-term vision of growing business. At worst, IBM is touting some savvy advertising around its patent prowess. Either way, a smart move.

Posted by Patent Hawk at October 24, 2005 9:53 PM | Patents In Business