“However, if technology X is patented, P and R can only exist with A’s consent, which distorts competition: everybody is forced to use the inferior Q.”

You’re viewing this situation from the wrong perspective. The fact that technology X is patented encourages others to focus their efforts to design around the technology, leading to creative technological advancements. Moreover, patents give patentees a source of revenue which enables them to expend more time, money, and effort in making further improvements to their invention. Our society greatly benefits from this.
At a surface level, it may seem unfair to prohibit the free use of technology just because it is patented–however, the underlying justification of patent monopoly is that it promotes the progress of useful arts. As Ben said, the problem lies in the quality of the USPTO examination process and the issuance of low-quality or overbroad patents, not the nature of the patent itself. Though the system is not perfect (reform efforts have been ongoing in both Congress and the courts), the justification for patents is well-settled.

“a perpetual, royalty-free licence to everybody in the world to use those patented inventions in any opensource software”

Such an overbroad and mandatory license for all software inventions would obliterate software patents and most definitely discourage innovation. Who do you expect to make advancements in software? How will the inventors be compensated for the fair value of their inventions? Inventors need money to continue their research and experiments, and perhaps some are motivated by the monetary reward. Not only will most inventors be discouraged, smaller or individual inventors, who invent a fairly large percentage of the world’s most important inventions, will be prevented from inventing because they lack the resources. The bottom line is, nowadays, technological advancements cannot be made with brilliant minds alone–sufficient funding and motivation are also needed.

When software simply approximates things that already exist to make them cheaper or easier to access, then nothing new has been invented, or put another way, the invention is obvious.

The same thing applies with many types of things that could be patented in SL. Take a TIVO patent + SL, if you were to try and get a a patent on implementing that TIVO patent in SL, then it should not be allowed because it’s obvious. It should be obvious to anyone familiar with SL that you can do almost anything that exists in software or interactions with others in SL.

The clause is overbroad though. I don’t think it would act on a company unless that company implemented their patented technology in SL, simply logging in would not trigger it. But it would insist that if you implemented patented technology in SL, you’re granting use of that patented technology to users of SL, whether in SL or not.

I agree that the wholesale agreement not to sue someone, would likely be unenforceable.

I’d definitely be concerned if I were IBM — didn’t anyone read the ToS before they dove in?

Am I missing something here?

If anybody has a big hit with anything they patent (and there are dozens of patent applications on virtual world inventions making their way through the system right now) there will be a monster of a lawsuit about this.

As to the question, Linden Lab has a big enough legal team at this point that I have to believe this clause is in there on purpose.

This patent clause seems to go squarely against the stated philosophy of LL that residents should create content and should own the content they create. It also seems to be at odds with todays post, Fumble #2: “The contract says it’s not money, so the law doesn’t apply!” in “Commentary: Top Five Virtual Law Analysis Fumbles”. Patent law is an old and pretty much universal concept, and although it might be technically argued that ppl might agree to give up such rights in a TOS or other contract, there would have to be other tests involved, such as whether the contract was understood and whether value was given for concessions received, again especially in light of the other statements LL makes about creators being the owners of the content they create.

So in “reality” it may not be so easy to say that creators give up patent rights by signing a TOS that contains an easy to overlook, not discussed, hard to understand, obscure clause. Any more than if i sent you a check in the mail and you take it to the bank and deposit it without reading the fine print which says “by cashing this check you agree to gift all your possessions to Mego Ryba”.

Sorry if that came out as accusatory as opposed to documentary. Your application is the only patent application publically discussed using anything related to the Second Life platform. The point was closer to “why patent anything using SL if anyone can use the technology or method patented without paying for a license.” Let’s say that you patent your method. According to the ToS, I already have a license to use your patented invention in SL. The only value to that patent would be if it works on There or if it works on HiPiPiHI. If it only works via LSL, then there’s no point in selling a license to use on SL if there is a free license already. Sure there’s a First to Invent value, but there is no exploitive value in regards to the SL platform.

Of course, that all depends on this provision standing up in court, which is not likely in my opinion.