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Managing the business risks of open innovation

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

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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.

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