IBM TAKES ANOTHER HUGE STEP IN PATENT LICENSING: In addition to its participation in the OSDL project (where IBM donated 500 patents "free of charge"), IBM has announced a new licensing program called "Ventures in Collaboration," that will allow startups and other companies to work with IBM investors for access to the technology behind the patents. Unlike the OSDL project, IBM now claims to be offering over 40,000 patents for licensing.
While the program is affiliated with IBM, it will be administered by various venture capital groups. The program offers two types of cross licensing agreements:
- Start-ups with annual revenues under $10 million will receive a standard, three-year cross-licensing contract for $25,000
- Companies with more than $10 million in annual revenues that are in the process of bringing their products to market receive a custom, five-year cross-licensing contract and pay 1 percent in royalties. There is no revenue cap on a company's eligibility.
This is part of ongoing efforts by IBM to strengthen its relationship with young companies in the hope that its software and hardware will be used in a start-up's emerging products. The relationship also provides IBM with a glimpse of emerging technology trends.
Also, by using VC middlemen, IBM spends less time making direct investments in start-ups as a strategic partner and instead invests in funds run by VC's.