Microsoft Corp president Brad Smith said that customers should not worry the company will help them develop new products and then set up a competing business.
In a blog post, Smith outlined a policy for what the company calls its Shared Innovation Initiative. It pledges that any patents or design rights that result from a joint work agreement will stay with the customer and not with Microsoft.
“There is growing concern that without an approach that ensures that customers own key patents to their new solutions, tech companies will use the knowledge to enter their customer’s market and compete against them — perhaps even using the IP [intellectual property] that customers helped create,” Smith said in the post.
Automakers, retailers and financial firms are using artificial intelligence, cloud computing and data analytics to develop new products, exposing themselves to the often cutthroat patent battles common to the tech industry. Microsoft is hoping its new policy makes it a more enticing choice than competitors, such as Alphabet Inc and Amazon.com Inc.
“They’re trying to differentiate themselves from companies like Alphabet that do not necessarily have something in writing like this,” said Patrick Moorhead, president at consultancy Moor Insights & Strategy, who was briefed by Microsoft on its new policy.
Some companies might not have any experience with patent rights and licensing, and a clear policy helps eliminate problems down the road, Moorhead said, adding that the alternative is “lawsuits, arguments and things like that.”
Microsoft cited the example of a hospital in South Korea that cocreated a motion-tracking artificial intelligence application that uses sensors to collect data on the movements of a surgeon’s hands during operations to identify possible missteps.
The hospital plans to sell software and a training program to other hospitals — creating a new money maker for the healthcare facility, Microsoft said.
“As collaboration like this between tech companies and its customers increases, so will the questions regarding who owns the patents and resulting intellectual property,” Smith said.
Often, when a tech company helps develop a program for a customer, it retains the rights and the customer just gets a license to use it. Under the new program, the customer becomes the owner of the rights without having to negotiate ownership rights.
Microsoft said it would help the companies navigate the system of applying for patents from the shared work.
While it would not own the patents, it would get a license that is limited to improvements for its platform technologies, such as the Azure cloud service, Office 365 and Windows.
Patent issues are a big concern for non-tech companies, which witnessed years of patent litigation engulf companies like Apple Inc and Samsung Electronics Co.
Last year, Microsoft announced a program called Azure IP Advantage, which it promised would help protect cloud customers who were sued.
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