The term "open innovation" can imply a number of things, but "open source" is not necessarily one of them. "Open innovation" also refers to intellectual property licensing.

InformationWeek reports on comments by Berkeley professor Henry Chesbrough who recently spoke about the licensing of Microsoft Research division R&D. In what professor Chesbrough calls "open innovation" patents facillitate the dissemination and exchange of technological advancement between players in the innovation system.

Microsoft spends about $7 billion annually on research and development, and maintains one of the computer industry's largest basic research labs. But it can't commercialize everything it creates. The IP Ventures program is an example of a trend toward "open innovation," in which companies exchange or license intellectual property to draw external ideas and talent into their orbit.