Author(s)
Anne Layne-Farrar
Source
Working Paper, March 2006
Summary
This paper looks at how to figure out the value of a patent.
Policy Relevance
Open source businesses will have the same problems paying for patents as many other firms.
Main Points
- Open source software lets users change the code to suit their own needs; open source code under the General Public License (GPL) must be distributed free. To make money, open source businesses often sell services, not software.
- The holder of a software patent can charge for use of code that uses the patented technique. Open source software developers worry that software patent holders will ask more than the developers can pay.
- There are five different methods for deciding how much a patent is worth, and many different ways to structure a patent license. This depends on the business needs of the participants.
- The problem of paying license fees is hard, but is not unique to open source ventures. Other firms that sell services instead of goods face the same problems.
