If you've seen my blogging previously at tech_ip you know that I'm in favor of something ASCAP-like for digital music. That is, I'd like there to be a central repository into which artists could deposit their digital works and from which anyone would be free to license works for download, streaming, exhibition, etc. One of the reasons I'm pro-Creative Commons is that I think we need much more experimentation in this area. Let a thousand flowers bloom.
Now a longtime reader of mine has pointed me to Alan Cohen's article on law.com about patent pools. This article, which is written with Cohen's usual depth and clarity, focuses primarily on MPEG LA, the patent pool for MPEG-2 technologies.
The concept of a patent pool is pretty much exactly what it sounds like - companies contribute their patents and the pool is licensed as a whole. In this case, MPEG LA licenses add a few bucks to the cost of a DVD player and a few pennies to the cost of a DVD. In return, the entire process of licensing relevant IP and remunerating inventors is vastly simplified. This is, potentially, quite good.
Of course, as Cohen points out, the devil is in the details. Past patent pools have had a checkered history, with some being obvious attempts to circumvent price-fixing laws. IP holders probably make less money by pooling their technological innovations than they would if they could license everything separately. However, from a market standpoint, removing that large an amount of friction (MPEG LA has 650 patents from 24 holders) is likely to be a huge win.
From a consumer perspective it's also likely to be a win, as it means companies will have an easier time making cross-compatible systems and should be able to focus their attention on new innovations instead of on trying to worm their way around some patent they can't manage to close a licensing deal on.
Unfortunately, one of the thorny issues missing from the article is that of royalty-free (RF) or donation of patents. I'm guessing that pool participants would give up their ability to do that, which would be bad for free/open standards and software, but that's not immediately clear.