Patent Commons, Thickets, and Open Source Software Entry by Start-Up Firms

Abstract

We examine whether the introduction of a patent commons, a special type of royalty free patent pool available to the open source software (OSS) community influences new OSS product entry by start-up software firms. In particular, we analyze the impact of The Commons--established by the Open Source Development Labs and IBM in 2005. We find that increases in the size of The Commons related to a software market increase the rate of entry in the market by start-ups using a new product based on an OSS license. The marginal impact of The Commons on OSS entry is increasing in the cumulativeness of innovation in the market and the extent to which patent ownership in the market is concentrated.