Thursday, December 16, 2004

Microsoft, Autodesk cross-license patent portfolios

Microsoft continues its patent-centric, IBM-like, intellectual property approach with a cross-licensing deal with Autodesk of San Rafael, CA. Although Judge Posner in his recent blog spoke of trade secrets as a viable alternative to patents, note that Microsoft is changing itself FROM a "trade secrets" company TO one that banks on sharing its intellectual property (IP) with others. Patents, not trade secrets, are the coin of the realm in this world. In this, there is not one big "race" with one winner spending huge amounts of money to cross the finish line first, but rather many races with many winners. This model seems to describe some recent activity in the computer world. However, even in pharma, recall that Lipitor was NOT the first drug in its class.

from Joris Evers of IDG:

-->With about 3,600 patents in the U.S., more than 1,000 in Europe and several thousand patents pending, Microsoft is by far a larger patent holder than Autodesk, which holds less than 200 patents in the U.S.

While the cross-licensing pact is the first such deal for Autodesk, Microsoft has several similar agreements in place with SAP AG, Cisco Systems Inc., Siemens AG, Hewlett-Packard Co. and IBM Corp., Kaefer said.

It is also pursuing further agreements as part of a strategy to obtain the rights to technologies that it might use in its products, he said. Negotiations are already under way with about a dozen companies and over the next five years Microsoft hopes to have such deals in place with between 30 and 40 companies.

According to David Kaefer, director of business development at Microsoft: "About 30 or 40 companies end up being very important for us to have cross-license agreements with. If you get agreements, at least in our industry, with the big 30 to 40, you can provide a tremendous amount of development freedom to yourself going forward. Probably about 80 percent of the relevant patents out there are really held by those 30 to 40 companies."

Microsoft's licensing spree marks a tactical change. The company is changing itself from a "trade secrets" company to one that banks on sharing its intellectual property (IP) and benefits from being seen as a more cooperative and open player, Kaefer said. About a year ago, Microsoft announced a new IP licensing policy and the formal licensing of two technologies.<--


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