Microsoft Announces Shared Innovation Initiative Encouraging Industry Partners to Patent Collaborative Innovations

On Wednesday, April 4th, the official Microsoft blog published a post written by the company’s president and chief legal officer, Brad Smith, which announced the company’s new Shared Innovation Initiative. The initiative involves a series of principles which the Redmond, WA-based tech giant says should address issues related to intellectual property and technologies which are co-created with Microsoft’s industry customers so as to help those customers grow their business while allowing Microsoft to continue improving its platform products.

“Every company today is becoming in part a software company – we see this every day at Microsoft… As collaboration… between tech companies and their customers increases, so will the questions regarding who owns the patents and resulting intellectual property. There is growing concern that without an approach that ensures customers’ own key patents to their new solutions, tech companies will use the knowledge to enter their customers’ market and compete against them – perhaps even using the IP that customers helped create.”

Microsoft’s Shared Innovation Initiative follows seven guiding principles according to the company’s blog post announcing the new IP policy. One principle, titled “Assuring customer ownership of new patents and design rights,” indicates that while Microsoft will cooperate in the filing of any patent applications which result from collaborative innovation, the company will assign to the customers any right to the patents or industrial design rights which arise from the collaboration. Another principle, “Licensing back to Microsoft,” indicates that Microsoft’s patent filing activities on behalf of its customers will also result in licenses back to Microsoft for those patents and design rights, “but the license will be limited to improving our platform technologies.” Even with the license back to Microsoft, the initiative’s “Portability” principle includes a promise that the company’s customers won’t be encumbered by contractual restrictions which would prevent customers from porting their innovations to other platforms.

While the Shared Innovation Initiative includes the aforementioned aspects which encourage patenting among its customers, Microsoft is also trying to cater to the open source software community. Under “Support for open source,” Microsoft acknowledges that, if collaborative innovation results in the creation of source code, Microsoft will work with those customers to contribute that code to open source projects if customers so choose. Smith’s post notes that more than 40 percent of the virtual machines working on its Azure cloud platform utilize open source code from Linux and that the company is finding that many of its customers are looking to release deliverables under an open source license on the software development platform GitHub.

Microsoft’s announcement of the Shared Innovation Initiative follows more than a year after it launched the Azure IP Advantage program, a subscription service for eligible Azure cloud computing subscribers that provides them with indemnification against patent infringement suits for technologies running on the Azure platform. It also gave those eligible subscribers access to a portfolio of 10,000 cloud-related patent assets held by Microsoft to counter-assert against parties bringing an infringement suit. Last September, IAM reported that Microsoft was expanding its IP Advantage program to Azure subscribers in China. This January, Microsoft also extended this program to cover eligible Azure Stack subscribers; Azure Stack is a hybrid hardware-software cloud service which allows Microsoft customers to run applications in on-premises data centers instead of the public Azure cloud infrastructure.

It’s interesting to view Microsoft’s evolving IP policy, especially the recently announced Shared Innovation Initiative, in light of related policies announced over the past few years by other luminaries in Silicon Valley. In June 2014, Tesla CEO Elon Musk earned accolades for announcing that his company would not pursue patent infringement cases against others who were using those technologies “in good faith.” He further called patents “lottery ticket[s] to a lawsuit” and publicly stated that he’s avoided patents since his first venture, Zip2. As we’ve reported time and time and time and time and time again, that statement has been proven to be categorically false. While Microsoft’s Shared Innovation Initiative does cater to the open source crowd to a certain extent, it’s obvious that the company’s public stance on the IP rights of others springs from a more sober mindset than the Alfred E. Neuman of the U.S. tech world.