CROSS-LICENSING: A GAME FOR TWO?


The Register reports today that Autodesk and Microsoft have signed a cross-licensing agreement that will give each company broader access to the other's patent portfolio. Terms of the deal, which is reported to have taken six months to hammer out, were kept under wraps. The deal expands the scope of their co-operation into new areas including data management, digital effects, digital rights management, computer-aided design and location-based services. Brad Smith, general counsel for Microsoft, said the deal was good for customers of both companies because it expanded each company's reach on what he called "commercially reasonable terms". He added:

"Intellectual property licensing is a cornerstone of today's software industry and is essential for the development of comprehensive technology solutions".

Brad Smith: cross-licensing "good for customers of both companies"

This agreement is part of a larger effort from Microsoft to extend its intellectual property portfolio. The company has several other cross-licensing deals already signed, including agreements with Cisco, SAP and Siemens. According to CNet, it is currently in talks with more than ten other companies, and wants to sign a many as 30 more deals over the next five years.

The IPKat is cagey about cross-licensing agreements in the high-tech sector, after watching how the major players in the telecoms field have indulged in a degree of cross-licensing that makes it effectively impossible for new players to enter the market if they don't have their own portfolio of patents to throw into the pool. Merpel asks:

"don't the authorities that regulate competition have something to say on deals like this?"
More cross-licensing deals here, here, here and here
Patent pools here and here
CROSS-LICENSING: A GAME FOR TWO? CROSS-LICENSING: A GAME FOR TWO? Reviewed by Jeremy on Thursday, December 16, 2004 Rating: 5

6 comments:

  1. I fail to understand your position.

    If someone wants to enter some market, it might be "effectively impossible" to do so because everything one can possibly do in that market is covered by 1001 patents.

    However, a contract between third parties about cross-licensing has no effect whatsoever on the position of the new player. The patents stop or don't stop him regardless of if they stop some competitor who has a cross-license deal.

    Cross-licenses are not the reason for patent thickets. They only make it possible to live with the consequences, at least for the big players.

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  3. quote:

    "Cross-licenses are not the reason for patent thickets. They only make it possible to live with the consequences, at least for the big players."

    But that is exactly the whole trick; patents is about blocking others, making it impossible for starters while making it all possible for "yourself" and "friends" ("yourself"as in being a big company)
    In Dutch there is a ryme: "ikke, ikke, ikke en de rest kan stikke"
    It says "me, me, me and the rest may choke"

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