[YBA] i4i vs MS?

[Danny Lieberman]

Geoff

IBM booked(s)  custom software development  as patent and IP revenue.    By
that definition Ness would have about 1BN revenue of revenue from IP but as
we both know - Ness doesn't have any IP....

Buy the book on Amazon.   Re your IBM friend, look up post-hoc error on
Wikipedia

d


On Thu, Aug 13, 2009 at 3:52 PM, geoffrey mendelson <
geoffreymendelson at gmail.com> wrote:

>
> On Aug 13, 2009, at 2:49 PM, Danny Lieberman wrote:
>
>>
>> For example - IBM began listing IP and licensing royalties  in their
>> annual financial reports beginning in 2000 - about $1.5billion +/- per year.
>>  The majority of the $1.5BN is value of IP sold off by IBM including IP held
>> by divisions they sold off as well as custom-development revenue.  The
>> actual amount of revenue from their patent licensing program is far less -
>> about $125M gross the cost of IBM's several hundred patent lawyers.
>>
>
>
> I just spoke to a former IBM employee who explained it to me. Since the
> time of Lincoln, the US has a law where you can project the value of a
> patent to the US government and if you dedicate it to the public, you can
> get a tax write off of half of the value.
>
> So let's say you patent a way of improving performance of file systems. You
> dedicate the patent to the public (people of the US) with a projected value
> to the US government of 100 million dollars over the 15 year remaining life
> of the patent. You end up with 50 million back (I assume in taxes you did
> not have to pay).
>
> The question is what is the true value of that patent, both in prospective
> licensing fees, derivative works, improvement in systems that would not
> otherwise use it (BSD, Linux, Windows) and so on. Since there is usually
> inflation and you have to claim current value dollars, the end result looks
> like a big write-off, but if you had collected license fees it might have
> been much more. For example, what if  it would have gotten you a $1 for
> every computer sold over the next 15 years, worldwide?
>
> It's not a myth, and it's easy to show how much they made for it, but it's
> just speculation as to how much revenue they decided to forgo by doing so.
>
> Let's use a bad example. Microsoft patented the FAT file system. They
> wanted to charge a $.25 license fee for each use. If they had done so when
> other people first started to use it, they may have been able to. (that's
> another discussion). So let's assume they did. Now project that over the
> next 21- years the US government bought 1 billion computers that would have
> had to pay the royalty. So they claimed the cost of patent to the US
> government was $250M.
>
> They could have gotten $125M in a lump sum by dedicating the patent to the
> public domain. Or they could have taken their chances and collected
> royalties on the computers.  So while Shachar calls the patent silly, I see
> it as a goldmine which was poorly managed.
>
> Technicaly the FAT (and it's derivative's) support in Linux is a violation
> of the GPL. It was patented before it was placed in the code, by a third
> party, without a patent license or dedication of the patent to the public.
> The fact that Microsoft did not persue infringment does not change the
> reality of it.
>
> Remember that patents do not need to be enforeced to stay valid. All you
> have to do is pay your annual fees. It is perfectly legal to let someone
> infringe upon a patent and then sue them after they have enough value or
> revenue to make it worth it.
>
>
> Geoff.
>
> --
> geoffrey mendelson N3OWJ/4X1GM
> Jerusalem Israel geoffreymendelson at gmail.com
>
>
>
>
>
>


-- 
Danny Lieberman
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