Managing the business risks of open innovation

Focus on the factors that could redefine intellectual-property competition in your industry.

Source: McKinsey Quarterly
Authors: Oliver Alexy and Markus Reitzig

Several years ago, something interesting happened in the infrastructure software sector: IBM and a number of other companies pledged some of their own patents to the public to create IP-free zones in parts of the value chain. They did so when a 2004 report showed that Linux, the open-source operating system that had emerged as a viable, low-cost alternative to established operating systems, such as Microsoft Windows and Unix, was inadvertently infringing on more than 250 patents.  1 By voluntarily pledging not to enforce hundreds of IBM’s own patents so long as users of the IP were pursuing only open-source purposes, the company led the creation of an alliance of patent holders dependent on (and willing to defend) open-source software against lawsuits.2 One result: IBM substantially increased the share of its new products based on Linux. Read more >

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