February 17, 2005 | Read Time: 3 minutes
A group of technology and consulting companies that work with nonprofit organizations has agreed to share any business procedures to which the companies hold exclusive rights.
Members of the new Nonprofit Innovation Alliance have agreed to pool current and future “business-method patents” — which protect ways of doing business, rather than new inventions — and allow all members of the group, as well as all charities, to use them without charging a royalty fee.
One of the best-known examples of a business-method patent is the “1-click” patent issued to Amazon.com in 1999 for the online retailer’s method of allowing shoppers to order items from the site with a single click of the mouse.
Organizers say they formed the alliance out of concern that companies and charities would suffer if the U.S. Patent and Trademark Office started to grant a large number of business-method patents for online techniques used in raising money, conducting advocacy, and organizing volunteers. Such a move could decrease the options charities have when selecting a company to help with such tasks and could increase the cost of the services that are available, says Shabbir J. Safdar, chief technology officer at Mindshare Interactive Campaigns, the Washington company that started the alliance.
Mr. Safdar is quick to note that business-method patents don’t pose an immediate threat — and that he hopes that the new alliance will head off future patent fights.
“The companies in the alliance believe that in serving nonprofits we should compete on features, price, and support — and not on who can slip one by on the patent office,” says Mr. Safdar.
Mr. Safdar says that he does not know how many business-method patents participating companies hold, as the alliance has yet to take an inventory. Members of the alliance include Beaconfire Consulting, CharityWeb, Convio, GetActive, Itero, Mindshare Interactive Campaigns, Public Interest Data, and RightClicks.
Mr. Safdar says that the alliance is not a response to the aggressive approach to intellectual property taken by Kintera, a San Diego company that provides Web-based software for nonprofit organizations (The Chronicle, September 19, 2002). “The problem existed before Kintera, and it will exist after Kintera,” says Mr. Safdar. “Anyone could become a patent predator.”
Asked why Kintera has not joined the alliance, Harry E. Gruber, the company’s chief executive officer, says he does not believe such a partnership would provide much in the way of benefits.
“Cross-licensing is one of many options that any company with a patent would have, but at this point, we haven’t seen that this alliance has any intellectual property that they’re offering to cross-license to anyone,” says Mr. Gruber.
He says the technology his company has developed has spurred other developments and is one of the key reasons the nonprofit technology industry has taken off.
He adds: “Business-method patents, system patents, product patents have all been around since the founding of the country. Most people believe that intellectual property promotes innovation and creativity, and is the fundamental basis for the free world.”
Kintera says that it holds two business-method patents, has received a “notice of allowance” on another one, which the company expects will be formally issued in the first half of this year, and has 14 applications for business-method patents pending.
For more information: Go to http://www.nonprofitinnovation.org.
