IBM, Sony Corp., Philips N.V. and Linux distributors Red Hat Inc. and Novell Inc. announced Thursday that the companies would be forming a new company—Open Invention Network—to share Linux patents without charging for royalties.

OIN’s (Open Invention Network) plan will be to acquire Linux-related patents and share them royalty-free to any organization that agrees not to assert its patents against Linux or its applications.

These companies are doing this because “impediments to collaboration on the Linux operating system seriously jeopardize innovation,” said Jerry Rosenthal, the newly appointed OIN CEO.

Before taking on this challenge, Rosenthal had been the vice president of IBM’s intellectual property and licensing business. He has graduate degrees in both electrical engineering and law.

Earlier this year, IBMs chief Linux strategist, Adam Jollins, had hinted that IBM was considering helping to create an organization like OIN.

“We are interested in innovation, not just in companies and silos, but through collaboration with other partners. Our goal now is to find a way to encourage collaborative connections, beyond specific products, and to determine how the process of innovation works,” said Jollins.

So this move came as no surprise to Stacey Quandt, research director for Aberdeen Group Inc.

“This initiative dovetails with IBMs leadership to create an open-source storage management solution.”

Its not just good for Linux, though. “A patent commons allows IT industry to add value above the operating system,” said Quandt.

Although its not part of the OIN, Hewlett-Packard Co. favors its goals.

“HP is pleased that another organization has joined it to improve legal protection for those developing and deploying open-source and Linux-based technologies,” said Brandy Baxter, an HP spokesperson.

As Baxter pointed out, OIN isnt the first open-source organization to address patent issues.

The OSDL (Open Source Development Labs), a global consortium dedicated to accelerating the adoption of Linux, earlier this year set up a “patent commons project.”

Unlike OIN, though, the OSDL plan isnt to acquire patents.

Instead, its plan is to create a library and database that aggregates open-source-friendly patent pledges made by companies.

This library will also collect other potential IP (intellectual property) legal defenses, such as the indemnification programs offered by open-source friendly vendors.

In addition, the forthcoming GNU GPL (General Public License) 3 will include provisions dealing with patents.

Microsoft, however, is dismissing the OIN as old news.

“Although the OSS element is interesting, I think you will note these IP-based alliances are increasingly common. In some ways this agreement looks a lot like some of the patent funds put together by Intellectual Ventures CEO—and former Microsoft employee—Nathan Myhrvold,” said Katherine Clouse, a spokesperson for Microsoft.

Microsoft may be missing the point, though, according to Allonn E. Levy, a commercial litigator with the San Jose, Calif.-based Hopkins & Carley law firm.

“The idea of cross-licensing certainly isnt new. What is interesting in this project is that through OIN, some very major players appear to be offering an automatic license to any developer that agrees to abide by OINs rules and refrain from enforcing the developers patents against other OIN licensees,” said Levy.

“The approach offered by OIN represents another reduction of the perceived liability risk of utilizing Linux faced by developers and customers,” Levy said.

Looking at the broader picture, “it may also be a signal by three major players in the software and peripherals markets that the promulgation of software patents has reached such a high level that innovation and development of new advanced systems will be hampered if companies do not begin to relax some of their valuable patent rights,” said Levy.

Dan Kusnetzky, IDCs vice president for system software, thinks that if the OIN is successful, the results should be good for Linux.

“Concerns about intellectual property, copyrights and software licensing have shown up for several years as a major inhibitor to the expansion of use of open-source technology in IDCs demand-side research,” said Kusnetzky.

Levy agreed and believes that the OIN might contribute greatly to Linuxs continued growth.

“If properly implemented, and with sufficiently broad participation by patent-holders, this approach may streamline the implementation of Linux in a broad range of applications. The result should be a dramatic increase in development and acceptance of Linux-based applications which could eventually pose a greater threat to industry behemoth Microsoft,” said Levy.

Gordon Haff, senior analyst for Illuminata Inc., pointed out, “This isnt even really an open-source issue, although its received a lot of publicity in that context.”

“Software patents are a mess,” Haff said. “Even if you dont believe in abolishing them entirely, there have been far too many examples of patents being granted even in light of overwhelming evidence of prior art and of dusty old patents on their third owner suddenly being used for a form of blackmail.”

“The open-source community has long been concerned by the threat patents pose to the widespread adoption of free and open-source software,” said Stephen M. Fronk, an IP attorney with the San Francisco-based law firm Howard Rice Nemerovski Canady Falk & Rabkin.

“The problem is particularly acute, in the eyes of many in the open-source community, in light of a perception that the U.S. Patent and Trademark Office is asleep at the wheel—i.e., that it frequently wrongly issues patents,” Fronk said.

“There has been much discussion in the open-source community about how best to destroy, or at a minimum diffuse, this threat, and some members have already taken affirmative steps.”

“This action taken by [the companies] is the latest, and certainly strongest, indication that the open-source community will not sit on the sidelines and let use or abuse of patent law undermine the goal of worldwide development and use of Linux,” said Fronk.

“Moreover, it sends a clear signal to opponents of that goal that well-funded technology heavyweights, and not a disorganized band of radical evangelists, will stand in their way. What remains to be seen, of course, is how effective OIN will be at acquiring all the patents necessary to achieve its goal of unfettered use of Linux,” he said.

A version of Companies Join Up to Share Patents for Linux first appeared in eWEEK.