Thursday, December 15, 2005

IBM offers 3 year patent license for $25K, with conditions

A company with annual revenue of less than $10 million can pay $25,000 to license from IBM’s entire patent portfolio for three years, provided the company lists among its investors one of IBM’s VC partner firms - Walden International, Accel Partners, 3i, Darby Overseas Investments, and around 100 others.

IBM’s Venture Capital Group takes an unusual approach to venture investing. Instead of investing cash directly in start-ups, the company partners with select venture capital firms and offers their portfolio companies advice, guidance, and access to customers.

Coincidentally, $25,000 was the figure to license the transistor patents from Bell/AT&T about fifty years ago.

Deborah Magid, director of strategic alliances with IBM’s Venture Capital Group:
"We felt that a lot of the IT practices are really something of an obstacle to start-ups, especially when companies are in the formative state. We thought this was one place that [intellectual property] should be more open than it is today." The deal comes with no strings attached. Start-ups that participate in the patent program are not obliged to develop products with the patents, although they could create products that compete with IBM if they so chose.


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