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The patent grant applied to any use of the software including in proprietary software. It's not much of a permissive license if you can't actually use it permissively due to patents. OIN is based around Linux specifically which is a lot different and even somewhat harmful.
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Apache 2 is really nice since it's basically the MIT or 3-clause BSD license but explicitly dealing with patents, trademarks and contributions. Software patents are bad enough that it's in the interest of companies like Google with a huge amount of them to fight against them.
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