Original URL: http://www.theregister.co.uk/2009/09/08/microsoft_sgi_patents_oin/

Troll blockers take Microsoft SGI patents

Open-source defenders jump in

By Gavin Clarke

Posted in Software, 8th September 2009 20:24 GMT

Microsoft has placed a clutch of Silicon Graphics patents in the hands of those trying to defend Linux and open-source against trolls.

The Open Invention Network (OIN) has taken ownership of 22 patents covering operating systems, desktop, and browsers applications, after they were bought from Microsoft by middleman Allied Security Trust (AST).

Microsoft is understood to have approached different organizations in an attempt to sell the 22, including companies euphemistically known as non-practicing entities, or patent trolls. Such companies typically hold patents with a view to making money through enforcement.

Fortunately for the Linux and open-source community, AST is an organization that sells patents within a year of taking ownership of them. It also has a relationship with OIN.

OIN buys and releases patents on a royalty free basis to make them non-enforceable by patent trolls. OIN was founded in 1995 and supporters include IBM, Novell, Philips, Red Hat, and Sony.

It's unclear why Microsoft decided to sell this particular batch. The patents cover 3D graphics sold to Microsoft by SGI in 2001. We reported in January 2002, on finding out about the sale, that it represented the "bulk" of SGI's 3D intellectual property assets.

Microsoft told The Reg Tuesday the SGI patents were "deemed to be non-core to our business and non-essential for our IP portfolio."

More recently, The Reg reported patent holders across the industry are offloading their portfolios to re-coup their initial cost of investment as the recession forces them to come up with revenue.

That could be one reason for the decision by Microsoft to offload the SGI haul, especially given that the company has been spinning out and closing down businesses to make money or cut costs.

Microsoft said in a statement: "When an interested buyer for this technology was identified, after discussing it both internally and with the potential buyer, we felt this was the right direction to go in relating to these specific patents."

However, there also exists in the industry a practice of patent holders selling their property to trolls who will then prosecute to suit the strategic goal of the former holder, OIN chief executive Keith Bergelt told The Reg.

The cost to defend a patent action ranges from $3.5m to $5bn, so around 95 per cent of cases are settled rather than completed. But in settling, plaintiffs uphold the trolls' ownership and enforcement claim.

Bergelt was careful not to claim the existence of a smoking gun, but he noted it was odd Microsoft didn't directly approach the OIN - one of the industry's largest buyers of patents - and went through the AST instead.

He said, however, the prospect of the SGI patents being placed in the hands of non-practicing entities was “a threat” that had been averted.

Bergelt said he expects collaboration between OIN and AST to increase given the rise of trolls and the fact so many patents are badly written, which give the trolls room to maneuver.

"OIN and AST collaboration is a healthy sign of collaboration and leveraging of capital between entities seeking to protect the industry from the effects of this poor patent overhand in the industry that serves as feedstock for litigation," Bergelt said. ®