Nonprofit Innovation Alliance Launches to Promote Access to Technology for Charitable Groups

Participants in Alliance Agree to Cross-License Business Method Patents on Royalty-Free Basis; Initiative Garners Nonprofit Support

Washington, D.C. (February 2, 2005) —

A growing list of leading technology and consulting companies that serve nonprofit organizations today announced launch of the Nonprofit Innovation Alliance (NIA) in a move to promote ongoing access by America's charities to innovative products and services. To foster that objective, alliance members have agreed to cross-license current and future business method patents to each other on a royalty-free basis.

"Participants in the Nonprofit Innovation Alliance support the protection of patent and other intellectual property rights to encourage innovation," said Shabbir Safdar, Chief Technology Officer of Mindshare Interactive Campaigns, LLC. "We also believe that it's important to make that innovation widely available to nonprofit groups so they have the best technology tools and solutions available for running efficient and effective organizations in pursuit of their missions."

Business method patents typically protect a method for engaging in a business transaction using Internet technology--such as Amazon's one-click patent or Priceline's reverse auction patent versus patents that solve particular technical problems. These patents have sparked heated debate about the appropriateness of patent protection for the claimed innovations as well as legal challenges. In Europe, business methods are not patentable. Additionally, many believe that the U.S. Patent and Trademark Office is ill equipped to handle review of the flood of business method patent applications submitted in recent years. Critics say that the patent office is understaffed and lacks both the experience and resources for conducting comprehensive non-patent prior art research, which is critical for quality review of these applications. Alliances like NIA that establish patent pools date back to the mid-1800s, and have helped drive diffusion of innovative technologies and strengthen fledgling industries. This January, IBM announced that it had put 500 patents in an open pool to spur technological innovation. Another industry where patent pools are prevalent is the consumer electronics field (e.g., MPEG and DVD patent pools).

United Way Supports NIA's objective

United Way, one of the largest and most prominent U.S. nonprofit organizations, supports NIA's objective.

"It is not in the best interest of the charitable sector for any one company or group of companies to lock up business processes that help nonprofits operate more efficiently," said Michael Schreiber, Executive Vice President for Enterprise Services, United Way (UW). Schreiber is responsible for all of UW's technology initiatives and infrastructure as well as relationship management activities with UW's corporate partners and all subsidiary corporations, including United eWay. United eWay provides the technology solution for corporate philanthropy, community involvement and organizations wishing to achieve sustained community impact.

"The nonprofit sector is not nearly as efficient as it could and should be in part because advanced technology is not as widely utilized as it is in the for-profit world," said Schreiber. "Business method patents will exacerbate the problem for nonprofits and won't benefit anyone other than the patent holders. Rather than making it easier for all of us to operate, it will hamper the nation's nonprofits working to improve their communities."

Boston University Law Professor: "Great Idea"

Legal scholars also are troubled by business method patents and support the goals of the alliance.

"The Nonprofit Innovation Alliance is a great idea because business method patents are especially prone to abuse and can impede diffusion of technology and cumulative innovation through an industry," said Michael Meurer, Professor of Law, Michaels Faculty Research Scholar, and Director, Institute for Business, Law & Technology, Boston University School of Law, and an expert on intellectual property, regulation and antitrust issues. "This is the case when patent owners can extract monopoly rents discouraging use of technology that supposedly is an 'invention' but does not solve any true technical problem. The patent holder merely is claiming to be the first to engage in a transaction over the Internet in a particular manner."

Professor Meurer added, "Business method patents can cause nonprofits to choose less than optimal technology solutions because of the threat of litigation and can lead to donor dollars being siphoned off in what amounts to a business method patent tax. That's the last thing the nonprofit sector needs."

NIA member organizations provide technology products, services and/or consulting to help nonprofits optimize their use of the Internet for fundraising, advocacy, event management and other mission-critical activities. These firms are committed to fostering robust innovation within their industry so that nonprofit groups have the best possible software, hosted software applications, and/or services solutions available to them. NIA members currently include (listed alphabetically): Beaconfire, CharityWeb, Convio, GetActive, Mindshare Interactive Campaigns, Itero!, Public Interest Data, Inc. and RightClicks.

The alliance welcomes additional members. Nonprofit organizations that develop and provide technology solutions to third-party organizations, such as other nonprofits, also may join. Nonprofits also are encouraged to show their support by working with companies that are committed to the alliance's objective of promoting access to innovative technology. Nonprofits and technology providers interested in getting involved should contact Shabbir Safdar, 202.654.0821, ssafdar@mindshare.net.

About the Nonprofit Innovation Alliance

The Nonprofit Innovation Alliance was established in January 2005 to help foster access to innovative technology for charitable groups so they can effectively utilize the Internet for fundraising, advocacy, event management and other mission-critical activities. Members of the alliance include leading companies that provide technology products, services and/or consulting to nonprofits. Admission is open to all interested technology and service providers. For more information on participating in the alliance, please contact Shabbir Safdar, 202.654.0821, ssafdar@mindshare.net.

Press Contact:
Karoline McLaughlin
Director, Corporate Communications
Convio, Inc.
kmclaughlin@convio.com
512-652-7865