These days, when companies announce a restructuring (or the exploration of "strategic alternatives") with respect to their patent portfolios, it usually means that someone hopes to sell out or to ratchet up monetization. Today, Qualcomm announced a restructuring that is simply a precautionary measure. Qualcomm keeps almost all of its patents in the existing parent company but spins off research and development. Qualcomm forms "a new wholly owned subsidiary, Qualcomm Technologies, Inc. (QTI), which, along with its subsidiaries, will operate substantially all of Qualcomm’s research and development activities, as well as product and services businesses, including its semiconductor business, QCT". This is because "the company expects that QTI and its subsidiaries' product and services businesses will increase their work with open source software in the future and this restructuring will, among other things, help ensure that QTI and its subsidiaries’ activities do not result in the licensing of any of Qualcomm Incorporated's patents, including its 3G and 4G patents".
What does this mean? Qualcomm knows that its patents are the crown jewels of the company and is concerned that it could lose its ability to enforce some of those crown jewels against third parties just because of the patent-related pitfalls involved with open source licensing. This would adversely affect Qualcomm's licensing business and its shareholder value.
Open source licensing is a tricky thing. At first sight, many people are led to believe that such licenses as the GPL, the Apache license or the various BSD-style licenses are straightforward and have no significant downside. But those who contribute to open source projects or redistribute software under open source licenses may indeed restrict their ability to enforce patent rights against others. Open source licenses are primarily copyright licenses, but some contain clauses on patents and even those that don't mention patents at all can be construed to constitute a grant of an implicit patent license. Open source software is free, and for a company like Qualcomm it would be devastasting if some of its patents could be used on a royalty-free and largely or entirely restriction-free basis just by incorporating certain open source code with which Qualcomm is involved (as a contributor and/or redistributor) into third-party products.
BSD-style licenses are very short and usually don't mention patents explicitly. The GPLv2 (the license under which Linux, MySQL and many other open source programs are published, though it's less popular now than it used to be) makes some references to patents but lacks clarity in this area. That's why the GPLv3 was primarily created in order to make up for the GPLv2's patent-related shortcomings, but GPLv3 is ideologically-charged and much less popular. The Apache Software License also makes explicit reference to patents but is more palatable to commercial players than GPLv3. Still, the philosophy behind open source licenses is usually hostile to patents.
For a large organization like Qualcomm, it's very difficult to manage the use of open source licenses on a company-wide basis. If you have an engineer somewhere who isn't aware of the legal issues involved but contributes some code to an open source project, or incorporates open source software into some Qualcomm technology, the impact on Qualcomm's patents could be far-reaching -- and the company might not know it until it sues someone over a patent and suddenly faces a license-related defense. It's impossible to have a lawyer look over every engineer's shoulder all the time. Qualcomm was apparently aware of these risks and opted for a new corporate structure under which it can counter any license-based defense by pointing to the fact that a subsidiary cannot license out its parent company's patents.
The effort of restructuring a company of Qualcomm's size is very significant. The fact that Qualcomm undertook this effort shows how protective its management is of its patents and how profound its concern over the implications of open source licenses must have been.
The organizations behind certain popular open source licenses, such as the Free Software Foundation (GPL) or the Apache Software Foundation, will probably look closely at what Qualcomm is doing and discuss internally whether Qualcomm's restructring is a blueprint for all those who seek to circumvent the patent clauses of open source licenses in a way that runs counter to the spirit of those licenses or, even worse, renders the patent clauses of those licenses ineffectual. There will probably be some lively debate on certain internal (or even public) mailing lists.
And many other companies that make use of and/or contribute to open source software will also think about whether their corporate structure poses a risk to the enforceability of their patent rights.
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