The US has one of the most robust software industries in the world, contributing greatly to a massively-growing global digital economy. The tech industry represents 22.5% of the world’s economy and is valued at $5 trillion dollars, with a major piece of this pie coming from North America. The success of American technological innovations, naturally, has significant financial consequences.
This growing industry is bolstered greatly by the adaptation and integration of software innovations. In the modern market, such innovation often takes the form of open source software and programs. With the rise of open source, legal complexities also take center stage. Can software be patented? If so, is it possible to obtain open source software patents?
Patent law and the accompanying legal strategies surrounding intellectual property have adjusted to the rise of open source technology. As it stands, open source developers now have a variety of legal tools in the toolbox, with the newfound ability to patent open source software and adjust licenses to fit the specifics of their innovation.
TL;DR
With the rise of open source software, legal strategies for protecting OSS must grow in tandem. From patents to licenses, there are different approaches available to OSS developers and programmers, each with different advantages and disadvantages. We explore those strategies today, and discuss whether or not you can patent open source software. If you have any further questions, you can reach out to Outlier and schedule a free consultation call.
Open Source IP Protection: A Case Study
MongoDB was first established under the name 10gen, a platform as a service provider based on open-source components utilizing cloud architecture. After a couple years of trial and error and some blood, sweat, and tears, the team of three developers - Merriman, Horowitz, and Ryan - officially released the MongoDB we know today. An open source, NoSQL database management program, MongoDB was faster and more efficient than their competitors. They could handle copious amounts of unstructured data, offered the freedom of using multiple data types, and was a marked improvement from the rigidity of other database services on the market.
It was innovative, quick, and efficient. A consumer’s dream. MongoDB started to feel the success too, opening international offices in different corners of the globe. They were, and still are, making the world’s leading NoSQL database. In essence, MongoDB is extraordinarily and globally popular.
Not only is it innovative and successful, but MongoDB has been open-source since its official rollout in the late 2000s. Anyone could view or use the source code, adjusting it, molding it to his or her own purposes. That’s the entire point of open-source software and programs: to be used, improved upon, repurposed.
Startups and individual programmers saw this, but so did Silicon Valley giants. Amazon Web Services, a subsidiary of Amazon.com, was one of the giants who saw the merit in MangoDB. So much so that they began using it and offering it to consumers - for a price. AWS made it closed-source, proprietary. Essentially, Amazon recreated the functionality of MongoDB and marketed it as their own, under the name Amazon DocumentDB. They even profited from a significant market share that accompanied the introduction of the MongoDB copycat program.
At the time, this was all entirely legal. After all, MangoDB wasn’t technically a protected open source program.
Naturally, MongoDB objected to the implementation of their technology in this way. They wanted to keep their program open-source, accessible to their consumers and professionals in the field. So, like many companies have done before and will do again, MongoDB sought legal recourse, this time in the form of a server side public license (SSPL). The SSPL, introduced by MongoDB in 2018, stipulates that any third-party service that incorporates MongoDB’s open-source code in their own software must release their source code as well.
The SSPL was a much needed additional protection. It protected MongoDB from large cloud vendors who sought to capture all the value and contribute little to the conversation. It prevented other Silicon Valley giants from having their cake and eating it too.
The Rise Of Open Source And Patent Protection
The ethos of this scenario is relatable to any industry professional working to create new technologies. It is the Age of Information and software developers feel the heat, the pressure to innovate and generate and develop. Because of this, there is a culture forming around the use of open-source software.
More and more, programmers and developments are not aiming to reinvent the wheel. They are making it smarter, faster, more effective. They are making the wheel better through their contributions.
Imagine that you have developed an open source software and, even better, you have won air-tight patent protection for that software. At the heart and soul of your software, however, is open-source code. By virtue of this approach, other developers are able to copy, merge, publish, distribute, sublicense and sell copies of your software. You have patent protection, however, and assume that your open-source code is protected by default.
Many developers and startup companies have tread similar waters, patenting their software but leaving their open-source code out in the metaphorical wild, waiting for the competitors to come in and claim its successes for their own gain.
Failing to adequately protect open-source software through proper legal channels can have serious repercussions. So much so that If history repeats itself, you may stand to worry about another company taking your open-source code and closing it, profiting from it, capitalizing on your fair share of the market value.
It is undeniable: the open source market is a billion dollar industry that is steadily growing. With growth comes opportunity, and startups and individual developers are taking notice. Crafting a program or software using open-source code carries with it inherent risk, however, and the law is adjusting to fit the new parameters of open-source intellectual property.
Open Source Software And Your Intellectual Property Strategy
Open source software (OSS) uses source code that anyone can inspect, modify, or enhance. This is quite different from proprietary software, which is neither free nor open to public modification.
Undeniably, the tech industry is highly competitive. A rapidly evolving market, there are new technologies being developed and integrated faster than any other sector. Moreover, it is becoming increasingly difficult to draw lines around products, especially with the rise of OSS and adaptation of others’ code into new programs and softwares. The increasing prevalence of this technology begs the question: how can I best protect my open source software?
The utilization of OSS is becoming more and more common, with nearly all major United States companies and governmental institutions favoring open-source instead of traditional, commercial softwares. To this point, a research report published by Optaros states that 87% of the 512 surveyed companies use open source software. Moreover, every company earning more than $50 million in annual revenue uses open-source. These numbers are substantial, indicating both the prevalence and upward trajectory of such software in the tech industry.
It has not always been like this; before the Silicon Valley giants began opening the code in their software, and allowing for startup adaptation and modification, intellectual property protection was built-in. Preventing the distribution and re-sale of their code was already factored in, by essence of their software’s architecture.
Inventors of OSS have options regarding how to best protect their software or program. Largely, these protections boil down to open source patents and open source licenses, each working to safeguard open source using different approaches.
What Is An Open Source Software License?
When discussing open source software protection, it is prudent to mention licenses and licensing standards. Open source licenses are legal, contractually binding documents that specify the terms and conditions of a software. OSS licenses stipulate that the software can be used in commercial applications, albeit under specific conditions which are designated within the license.
There are hundreds of open source licenses currently in use, all with varying complexities and requirements. Of course, some OSS licenses are more popular than others, for example:
In the OSS world, the Open Source Initiative governs the licensing process. New licenses are crafted to comply with the Open Source Initiative’s standards, with a major emphasis on software freedom and compelling rationale. After a license is successfully approved by the Open Source Initiative’s license review process, it will be granted certification.
Some open source code is freely available to be copied, modified, or repurposed for use in applications. Other open source code, however, is commercial and holds a monetary place in the industry. For our purposes, we will be focusing on the latter.
For commercial open source code, companies obtain licenses specific to their goals and IP protection strategies. It should be noted that there are many, many documented open source licenses, each built around different frameworks. As such, the terms and obligations surrounding each specific OSS vary greatly.
Thus, they can be difficult to manage.
Licenses protect open source software, of course, but the safeguards offered by licensing are not nearly as comprehensive as patent protection. Licenses are diverse and ever-changing with the shifting market and Silicon Valley culture. Variation aside, there are two major categories that OSS licenses fall into: copyleft and permissive. These two categories are highly nuanced and complex, but let us talk about the basics for now.
What Is A Copyleft OSS License?
Like political spectrums or spatial directions, copyleft and copyright are two sides of the same coin. Generally speaking, copyleft licenses require that any subsequent, derivative software must be released under the same license as the original OSS.
For instance, a developer may create a novel OSS and utilize a copyleft license. If a new developer comes along and modifies the original OSS source code, that new developer must release their modified OSS source code under the same copyleft license. Essentially, the modified OSS must be equally as “open” as the original software, legally speaking.
Practically, copyleft OSS licenses are used to keep a software or program open and accessible, explicitly protecting OSS against proprietary use.
What Is A Permissive OSS License?
Compared to copyleft OSS licenses, permissive licenses have fewer obligations and are a bit easier to comply with. They do not have the same code-sharing stipulations as copyleft licenses, and therefore necessitate a lesser degree of “openness.”
Permissive licenses do not safeguard against proprietary use. They grant developers the freedom to modify and redistribute the original OSS, expressly allowing for proprietarization. This is highly contrary to copyleft licenses, which do not permit proprietary use under any circumstance.
Can Open Source Software Be Patented?
Licenses aside, let us now foray into the world of open source software patents. A common question that both individual OSS developers and tech startups pose is: can software be patented?
It may seem contradictory, but the world’s top open-source contributors are also the world’s top patent holders. Consider Microsoft circa their ascent to tech dominance, when they were colloquially known as a staunch anti-open source company. The company was held up in court for years over patents, in lawsuits brought by organizations like the Open Invention Network, which was created to counterbalance anti-competitive tech giants.
As Microsoft began to warm up to the world of cloud-based computing and OSS, they suddenly became the world’s foremost open-source contributor. Interestingly, they also hold a robust patent portfolio, consistently ranking in the top 10 companies in patents issued per year.
How can a company be a leading OSS innovator while simultaneously holding nearly 60,000 United States and international patents?
It is because they have figured out the industry secret: patents can protect the functionalities and underlying technologies that power OSS, and tech companies can use their protected intellectual property to their advantage. Open source patent law combines the traditional, overarching protection granted by patents with the more malleable safeguards of open source licenses.
A patent is a legally enforceable protection awarded to the inventor of a novel and useful tool, product, or technology. Patents represent a well-armed defense against exploitation of the patented material or approach. They stipulate that an invention cannot be commercially made, used, distributed, or sold by others without the owner’s explicit consent.
Patents are powerful. Yet many startups see patent protection as a barrier to entry, primarily due to financial concerns or time crunches.
Why Utilize Open Source Software Patents?
If patents are difficult to acquire, why are so many companies opting to go through the process? There are a variety of reasons why major tech companies and startups alike both utilize open source patents. For tech companies, the “patent dilemma” rests entirely on the individual company’s unique legal and financial strategy. These strategies vary greatly, depending on the goals and ethos of the business.
Large or small, startup or well-established, the verdict is undeniable: tech companies are seeking patents for their open source software. But, why?
Defending Free Software From Aggressive Market Competitors
Aggressive competitors in the market are constantly looking to optimize their growth. Sometimes, they accomplish this by capitalizing on free software, especially if that software has merit and utility in the industry. Especially if that software is free.
Free and open source systems and softwares are relatively common; just look at Linux and descendants of Berkeley Software Distribution. Many times, free software is a stepping stone into commercially-viable products. Other times, it is simply for the love of free and open internet and computing.
In the case of free open source software, patent protection prevents aggressive market competitors from picking up your code and using it for their own software, giving you none of the credit.
Blocking Closed-Source Appropriations
We touched on this earlier, referring to the MongoDB and Amazon issue. MongoDB created an open-source program and AWS repurposed it for their own closed-source commercial gain. This is not an isolated incident, however, and market competitors see value in vulnerable open source code.
Open source patents are highly beneficial to the creators of open source software and programs, because they undeniably and fully protect it from closed-source appropriation. Patents prevent companies from taking freely-available code and implementing it into proprietary software for financial gain, MongoDB-AWS style.
Increasing The Value Of Your Business
We explore this topic in greater detail within our resource: Advantages And Disadvantages Of Patents. In essence, patents have statistically significant advantages, such as:
Greater amounts of venture capital: Tech startups that patent their technology early on tend to receive higher total funding, therefore leading to greater long-term success and longevity. Additionally, studies indicate that there is a correlation between the amount of patents and the amount of venture capital secured. On average, tech startups receive $530,000 more in funding per additional patent. This is a major financial advantage.
Greater employment and sales growth: Startups that receive the most venture funding tend to find the most success and growth. Due to this, holding patents often results in greater employee growth and retention, in addition to higher levels of sales.
Patents increase the value of a company by instilling a certain level of trust in funders. The 2008 Berkeley Patent Survey supports this in their report, stating that 67% of investors say that patents are an important consideration when making investment decisions. The financial advantage that accompanies patent OSS is undeniable and compelling, and is a major reason why some of the most successful companies opt for open source patents.
Protecting Application Programming Interfaces (APIs)
An API is a software intermediary that allows different programs to communicate. It sets forth a set of functions and/or protocols that control how one application interacts with another. Relying on copyright alone can lead to a fair amount of uncertainty, primarily because copyright protections are weak in this realm of programming.
This can be seen in practice between Google and Oracle, over the Java SE API. Google copied over 11,000 lines of Oracle’s Java SE API, and the Supreme Court of the United States held that it was lawful and fair use of the code under copyright.
Patents protect the underlying functionality of a program, and are therefore much more useful in protecting an API’s processes.
OSS Patents Vs. Licenses
It can be easy to get caught up in the technicalities, but it is necessary to consider the legal ramifications of how you chose to best protect your open source software. OSS is, de facto, intellectual property and creators of such software are advised to adopt a protection strategy. Regarding OSS and open source programs, much of this strategy is built upon the foundation of licenses and patents.
While open source licenses tend to be narrow and generally weak, OSS patents are incredibly strong. They grant exclusive rights to the owner of the open source software or patent, preventing unlawful application of the OSS.
Open source patents prohibit others from making, using, or selling the invented software or program. To be granted a patent, the OSS must be novel and have utility in the industry. In other words, it must be entirely new, never before discussed in any patent or publication, and it must be implementable within society.
In establishing an intellectual property strategy for your OSS, there are some key takeaways to consider when it comes to patents:
OSS developers must explicitly state the process that the patent protects. Patent applications demand a high level of transparency, and software developers must be ready to define their OSS.
Patents do not protect the open source code. Rather, they protect the program’s functional aspects.
Open source licenses, in contrast, govern future use of OSS. They stipulate precisely how others may modify, distribute, and utilize the software in other applications. Depending on the language, OSS licenses often grant others the ability to use software for their own purposes. Which, at face value, is contradictory to the terms of a patent. Open source patents exclude, while OSS licenses allow for use.
Many open source intellectual protection strategies implement both patents and licenses simultaneously. These two legal approaches seem entirely contradictory, though. So, how do these two co-exist?
OSS Patents And Licenses: Are These Mutually Exclusive?
Of course not, but it is complicated. Open source licenses, particularly the GPL, do not prohibit inventors from pursuing patent protection. The presence of licenses can shift the way that patent protection works, however, and place restrictions on the application of the patent. This is clear when looking at the language of the GPL:
“Finally, any free program is threatened constantly by software patents. We wish to avoid the danger that redistributors of a free program will individually obtain patent licenses, in effect making the program proprietary. To prevent this, we have made it clear that any patent must be licensed for everyone’s free use or not licensed at all.”
A large part of patent protection is excluding others from utilizing an invention, but as we can see from the language of the GPL, a patent holder cannot assert their rights against users and modifiers of the GPL-protected software.
This can have benefits, though, and many inventors opt for simultaneous patent and license protection as their IP strategy of choice. There are a few reasons why a developer or startup may venture down this avenue:
The ability to license the patents to others for revenue
The ability to assert patent rights against redistributors who do not abide by the GPL license
The ability to distribute a non-GPL version of the software
By nature, patent protection is much stronger and more comprehensive than license or copyright protection. Oftentimes, OSS developers or startups utilize patent protection as a defensive weapon against competitors in the market.
The primary takeaway here is that open source patents and licenses can, and do, work together to create highly-effective intellectual property strategies. The difficult part is navigating the legality of software IP and the various moving parts of open source software protection.
How Can An Open Source Patent Attorney Help?
If patents, licenses, and copyright are the ingredients, IP attorneys are the chefs. Legal professionals know how to combine all the different flavors together into something that works.