The Digital Skeptic: Innovators Race to Open Source and Patent 'Safe Space'
NEW YORK ( TheStreet) -- Keith Bergelt says that when it comes to information, greed is not so good.
"We spend millions of dollars a year to buy patents," Bergelt told a very dubious me over the phone a few months back. "And we make them available for free as long as folks agree not to attack each other."
Bergelt is not what you would consider a software do-goodnik.
Rather, he's chief executive of the Durham, N.C.-based Open Invention Network, and as such sits atop what he says is a low-nine-figure intellectual property war chest. OIN gets its cash from the likes of IBM (IBM) , Sony (SNE) and Philips, and Bergelt spend his days working the global intellectual property market, sifting for bits of IP that pose a threat to so-called open-source software -- mostly based on the Linux operating system and principles.
"We look at firms that have more patents than they need," he said, "or ones that are growing or shrinking and want to alter their portfolio."
He then offers to either buy that patent outright or potentially partner with the patent owner by offering a license into the OIN community . Such licensees gain access to shared legal and patent filing support needed to manage the intricacies of protecting intellectual property.
But it all comes with a major caveat: Every licensee signs an iron-clad non-aggression pact with fellow OIN members.
"We offer a safe environment for innovation," Bergelt said. "It is a form of an intellectual land trust."
Get over it, all you wannabe Gordon Gekkos, Carl Icahns or Thomas Mellon Evans out there. Wall Street investors now face a bizarre digital-age mutation: massive, publicly traded enterprises that -- be sure you're seated -- cooperate!
Learning to use the C word
Now that I have used the "c" word in public -- and have not been struck down by lightning -- investors should realize that Bergelt's notion of intellectual property sharing is absolutely nothing new under the business sun.
"It all started about 40 to 50 years ago," Carsten Emde told me over the phone from Germany. He's general manager of the German-based Open Source Automation Development Lab, which is one of OIN's licensees. Emde represents the interests of 42 companies that employ about 100,000 people worldwide and gross up to $100 billion worth of sales.
He explained that the '60s and '70s were when the world's biggest enterprises - that is, IBM, Xerox (XRX) , HP (HPQ) , Ford (F) and GM (GM) -- realized even they could ill afford the costs of developing broad new technologies from scratch.
"R&D became so expensive that firms created a barrier between what was a differentiated product and what was general knowledge," he said. "The differentiated product you invested heavily in protecting. The cost of developing what was general was what you shared with your competitors."