Participation In Open Invention Network Drives Innovation And Shared Value

S – cloud hosting, built for champions: sign up and receive $10 in hosting credit immediately!
Listen to this article

The proliferation of open source has been nothing short of spectacular. The last 20 years have seen the invention of smartphones, the development and rise of social media and nearly ubiquitous cloud computing. If not for open source, its likely these developments, among others, would not have come to fruition nearly so quickly, or possibly at all.

Technology sharing is not new. For years, various industries have given rise to patent pools. Patent pools are licensing agreements between two or more patent owners to license one or more of their patents to one another. In their history, patent pools have been correlated with complex technologies that require complementary patents, driving innovation among its participants. However, participation was restricted to companies that cross-licensed their patents.

The need to protect and foster the open source community, and its innovation engine, required a new way of thinking. The open source patent pool, managed by Open Invention Network (OIN), has two very distinct differences with previous patent pools. First, the patents being cross-licensed would address building block technologies for various open source projects. Second, any company willing to sign the license agreement would have access, regardless of their patent ownership status, to the patents covered in the pool. This meant that previous table stakes, ownership of important patents, were no longer a consideration for membership.

These fundamental changes in patent pool strategy have encouraged participation from companies large and small. At last count, almost 3,900 companies have joined the Open Invention Network. In the past 15 years, open source has flourished. The question many outsiders have asked is whether there has been any ROI for OIN’s participants beyond the growth and proliferation of open source.

According to a study published in February of 2023, by Elsevier, professors at Yonsei University and the University of Southern California have set out to do just that. Titled, “Effect of an open patent pool strategy on technology innovation in terms of creating shared value,” the study analyzes the effects of an open patent pool strategy on technological performance in terms of creating shared value (CSV).

Professors Deuksin Kwon, Ha Young Lee, Joon Hyung Cho, So Young Sohn performed a panel regression to compare the technological performance of participating companies in the Open Invention Network to those of non-OIN firms using their patent data. Their results demonstrate that the leading groups in the open source patent pool (OPP) achieved innovation by having more patent applications, forward citations and collaborative activities than non-participants.

“By stark contrast, we hypothesized that OIN-participating firms with a CSV strategy would perform better in terms of innovation as a result of a specific characteristic of the OIN, namely, open patenting. Noteworthily, firms participating in general patent pools may suffer from a reduction in incentives for R&D and innovation for individual firms due to the increased entry and competition in the market (Arora and Gambardella, 2010); however, this problem of the decline in incentives for innovation may be less prevalent in the context of the OPP because the members recognize the true value of creating shared values that can be highly beneficial for both the industry and the firms and, hence, strive to continually innovate as an effective means for CSV. Moreover, using the Linux knowledge network, as measured by patent citations and co-patenting, we analyzed whether the purpose of the OIN—based on social values such as joint growth with other firms and innovation in the Linux industry using open patenting—promotes active knowledge sharing and collaboration. Here, we confirmed the position of OIN firms as providers and receivers of knowledge within the network.”

Open Invention Network participants appear to play a more significant role in promoting “knowledge spillovers” than non-participants. According to their findings the positive effects of an open patent pool strategy on innovation, by empirically measuring the technological performance of creating shared value strategies, is significant.

If your company is examining the benefits of joining an open patent pool, it appears there is a measurable ROI in terms of receiving knowledge spillover.