The Defensive Patent License (DPL) is a new legal mechanism to protect innovators by creating a patent network that is committed to defense and "de-weaponizing" patents. It draws from the theories and values of F/OSS licensing to create obligations that "travel with the patent"--preventing troll from taking over open technologies and pulling them out of the public domain.

1. The Defensive Patent License
JENNIFER M. URBAN
JASON M. SCHULTZ
BERKELEY LAW
2013 O’Reilly Open Source Conference
Portland, Oregon
July 24, 2013

2. PROBLEM
Innovation in the shadow of software patents*
Especially for Open Innovation Communities
FOSS
Open Hardware
Mixed- or Sole-Strategy Companies
Also a problem for non-OIC tech companies
*Overbreadth and other quality problems with software patents

3. POSSIBLE SOLUTION:
DEFENSIVE PATENTING
“If you can’t beat ‘em…”
(Or, “If we’re getting patents anyway…”)
Seek patents to deter offensive lawsuits, not for
licensing or exclusion purposes
In theory, only asserted in response to litigation
In patent-heavy industries with well-resourced competitors,
often leads to cross-licensing détente
Requires some level of overlapping technology
Dealing with software patents, specifically: “your broad,
vague patents can be matched by mine”

4. THREE POTENTIAL USES
FOR DEFENSIVE
PATENTING
Patent threats between competitors
Patent threats from bullies
Patent threats from trolls

5. COMPETITOR
THREATS
Patent threats between competitors can prove costly
High information costs to avoid inadvertent infringement
• Too many patents, too many claims, valuation problems
• Fear of willfulness discourages patent mapping
High damages
High costs of injunctive relief
• Less after eBay v. MercExchange
High cost of litigating

6. HOW DP HELPS
Defensive patenting ! cross-licensed portfolios
• Addresses information costs
• Limits threats of injunctive relief
• Limits litigation costs
Creates greater certainty and predictability for innovation
cycles, market segmentation, and risk profiling which leads
to greater investment, R&D, and increased consumer welfare

7. WHAT ABOUT
BULLIES?
Patent threats by Patent Bullies (Goliath v. David)
• Verzion, AT&T and Sprint v. Vonage (VOIP)
• Apple v. HTC (smartphone touch screen)
• Microsoft v. Linux (operating system features)
• Blackboard v. Desire2Learn (educational CMS)
Defensive patenting could help reduce threats and costs but
for several reasons has been underutilized

8. WHY DON’T OSS PROJECTS
PATENT DEFENSIVELY?
You all know best: more reasons, please! But these are a few
from our work with a variety of open innovators:
Current model requires concentrated costs and benefits
• Legal, information/search, transaction costs to build portfolio and
fight back against threats
• Start-ups and F/OSS projects generally lack these resources; but
see OIN (Oracle, IBM, NEC, Novell, Philips, Red Hat, and Sony)
(Understandable) Cultural and political opposition to software
patents
• Used by bad actors: anti-competitive, bullying, trolling
• Inappropriate SM: patenting math, laws of nature
• Recent lawsuits not building confidence in the patent system…
(Understandable) Mistrust of “defensive” commitments and
longevity

9. THE DPL
Distributed network of defensive patents
Distributed license structure similar to FOSS/CC
Licensor offers [entire] patent portfolio under DPL
• Automatic NE, RF, perpetual, worldwide licenses to all comers
who also commit to offering their portfolios under the DPL
• Irrevocable unless (1) licensee sues DPL user non-defensively or
(2) stops offering own patents under DPL
DPL users may continue to license or litigate against parties
outside the network (those not using the DPL)
DPL users may stop offering DPL with appropriate notice
• We are currently considering six months as appropriate
• Previously issued licenses to other DPL users remain in effect after
a party leaves
• But see Hayes/Schulman “sticky”/”non-sticky” idea
• Leaving users’ DPLs may be revoked at each licensor’s discretion
DPL obligations “travel with the patent”

10. HOW IT WORKS:
EXAMPLE OF THE DPL OVER TIME

11. DPL OVER TIME

12. DPL OVER TIME

13. DPL OVER TIME

14. DPL OVER TIME

15. DPL OVER TIME

16. HOW THE DPL COULD HELP
Distributes both costs and benefits
via network effects
• Costs of patenting are distributed to those
who can afford them or already need to
patent; possible pro bono help
• All users benefit from each commitment to
defense
• Eliminates info, injunction, litigation costs w/
in network
• Costs of cross-licensing are low, as with
FOSS and CC licenses
Uses high legal, information, and
transaction costs of patent strategy to
encourage growth of network
• High info costs & risks vs. commitment to
defense and associated certainty may
incent new firms to join network, increasing
its value
Provides legally binding commitment
to defense: multi-lateral disarmament
• Licensees can stop worrying about
particular patents coming back to haunt
them, even if ownership changes
Promotes “Safer Patenting”
Supports Open Innovation
Community cultural and political
norms
• IP used to promote freedom to innovate,
access to knowledge, and protection from
legal constraint
• Like instrumentalist approaches of FOSS
and CC in using copyright
Technology Neutral
Can be done , entirely through
private choice
• No changes in examination, PSM,
claiming needed
• But can work along with these solutions
Co-exists peacefully with other
solutions

17. WHAT ABOUT
TROLLS?
Defensive patenting generally ineffective because trolls do
not make, use, sell, or offer for sale, so you can’t assert a
patent against them
But a true, permanently defensive patent has little value to
trolls: safer patenting!
http://www.flickr.com/
photos/thomwatson/
The Fremont Troll

18. WHAT ABOUT PATENT
QUALITY?
Patents are the best prior art: DPL can help build it out
DPL users should also support other ideas for increasing patent
quality and clarity (Menell, Lemley, Chin, others)
Encouraging networked defensive patenting is indeed a second-
best solution
Can absolutely work in connection with other ideas for
reconsidering PSM, tweaking examination, etc
WHAT ABOUT PATENTABLE
SUBJECT MATTER AND
CLAIMING?

19. CONCERNS
Need overall patent system reform
Patentable subject matter
Patent overbreadth and vagueness
Technical and Practical Concerns: Most Addressed; Some a Matter of
Strategic Choice
• Network has to hit a size threshold for some benefits to kick in
• Weak incentives to patent and/or join
• Adds to patent thicket
• No requirement of mutual defense
• Too much to ask for whole portfolio [could be by standard or
technology
• Too hard to leave
• Too easy to leave
• Antitrust concerns, especially in EU
• Gaming the system/free riding/bankruptcy

20. NEXT STEPS
Presently really “kicking the tires”
Terms
Language
Gathering adopters
• Presently discussing terms and language with interested OS
projects, start-ups, medium-portfolio companies
Launch planned for end of 2013

21. THANKS!
Jennifer: jurban@law.berkeley.edu
Jason** SchultzJ@exchange.law.nyu.edu
**contact for comments and sign-on discussions
--------------------------------------------------------------------------------
GitHub:
https://github.com/defensivepatent/model-defensive-patent
Paper:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2040945
Op-ed:
http://www.wired.com/opinion/2013/02/nuclear-deterrence-for-patents-
lets-create-a-network-of-defensive-patents/
David Hayes and Eric Schulman response:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2054314