Before the United States Department of Justice and United States Federal Trade Commission

Joint Hearings on Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy: Standards and Intellectual Property: Licensing Terms

Testimony of Daniel J. Weitzner
Technology and Society Domain Leader
World Wide Web Consortium

18 April 2002
Washington, DC USA

Introduction & Overview

My name is Daniel J. Weitzner. I want to extend my thanks to the Justice Department Antitrust Division and the Federal Trade Commission for holding these hearings. I am the head of the World Wide Web Consortium's (W3C) Technology and Society activities, responsible for development of technology standards that enable the Web to address social, legal, and public policy concerns. W3C, an international organization made up of nearly 500 members from industry, academe, users organizations and public policy experts, is responsible for setting the core technical standards for the World Wide Web. W3C was founded in 1994 by Tim Berners-Lee, inventor of the Web, who serves as the Director of the Consortium. In addition to my work at W3C, I also hold a research appointment at MIT's Laboratory for Computer Science, teach Internet public policy at MIT, and am a member of the Internet Corporation for Assigned Names and Numbers (ICANN) Protocol Supporting Organization Protocol Council.

W3C has been actively engaged in developing responses to challenges raised by patents in the context of Web standards over the last four years, so we are particularly pleased to see your agencies' exploration of these matters. My goal is to contribute to the factual basis of your inquiry into antitrust, intellectual property and technical standards by providing an overview of the experience that the World Wide Web community has had with patents over the last four years. This testimony will highlight three main points:

First, the Web itself has been possible only in the context of open, royalty-free (RF) standards.
Second, the "reasonable, non-discriminatory terms" (RAND) licensing model common in many traditional standards bodies is unlikely to be accepted in the Web environment.
Third, W3C is working hard to develop a Royalty-Free patent policy that encourages the continued evolution of the Web as a universal information space, while respecting our Member's legitimate intellectual property rights.

Patent policy considerations for any technical standards effort must be grounded in an understanding of the goals of the underlying technology, as well as the unique characteristics of the environment in which the standards will be used. So I will begin by describing the fundamental technical and licensing characteristics of the Web to date.

I. General characteristics of the Web: A universal information space

The World Wide Web was designed to be an easy-to-use, universally accessible open platform for publishing and accessing information, enabling linking and distribution of documents amongst computers, regardless of operating system, all around the world. While the Web does not yet reach every single person in the world, it has enabled an unprecedented exchange of knowledge, information, goods and services around the world. Of critical importance to the rise of electronic commerce as a new marketplace, Web technology allows a wide variety of new systems and technologies to be built on top of the basic architecture of the Web, thus enabling continual innovation in the design of Web-based applications and services. Two key attributes of Web standards are responsible for the ubiquity and flexibility of the Web: 1) simple, extensible design, and 2) open, unencumbered standards.

Much has been written about the aspects of Web technical architecture which have lead to its ubiquity and universality. For the purposes of this discussion, it will suffice to note that in contrast to the hypertext systems which existed before the Web, the core technology of the World Wide Web is quite simple, thus enabling widespread deployment of the Web on a wide variety of hardware and software platforms. Earlier hypertext systems (for example, Xanadu) often had far more sophisticated design that anticipated many of the problems (broken links, need for long-term archiving, difficulty managing intellectual property rights, etc.), but none achieved the wide deployment of the Web. Indeed, the architects of the Internet believed that a simple design, based on standards that are technically easy to implement, would be a critical part of helping the Web to grow to be a truly world-wide phenomenon. Ease of implementation is vital for both Web software developers as well as those who simply seek to publish information on the Web.

In the history of the Web, low legal and financial barriers to use of Web standards have been as important as ease of deployment from a technical perspective. W3C Recommendations are often implemented in a large number of individual software environments. Indeed, the Web standards design process depends on the implementation experience of a large number of developers to assure that each component of the Web is well designed and satisfies the needs of the increasing diverse communities of Web users. Gathering early implementation experience from a wide range of developers is particularly important for security-related standards. This broad experience helps assure that security standards are subject to rigorous testing before being finalized. Open source implementations have played an essential role in the evolution and broad access to Web technology. Among the most popular versions of Web server software, Apache, is produced on an open source licensing basis. In addition to Apache, many of our new standards are implemented early with open source code, enabling large numbers of developers, commercial and non-commercial, to incorporate new Web features into software they are writing without having to develop those features from scratch. Finally, the diversity of content represented by the over 2 billion Web pages is only possible because the creators of each of those pages is able to use key web standards such as HTML (hypertext Markup Language) and CSS (style sheets) without paying a royalty.

II. History of patents at W3C

Web technology has developed over the last decade through an unprecedented burst of entrepreneurial energy and global cooperation. Both the competitive forces which have lead to innovative technology, and the cooperative spirit which has produced global interoperability standards at an extremely rapid pace have occurred, until very recently, in a market environment without any significant patent licensing requirements.

The second decade of the Web has already demonstrated that patents will be a factor in the ongoing development of the World Wide Web infrastructure. A variety of factors suggest that the Web will be increasingly affected by the patent process. The following factors are significant:

Convergence: The Web had its origins in the personal computer software industry, where patents had seldom been a factor in development dynamics. However, as the Web comes into contact with the telecommunications, broadcast media and consumer electronics industries, there is pressure to change the traditional role patents have played in Web standards.
Rise in patent issuance: Patent offices, led by the U.S. PTO, are issuing patents, especially in the software sector, at record rates.
Experience of Internet-related standards bodies: A number of standards bodies including W3C and IETF, as well as consortia such as the WAP Forum, have encountered potential barriers to acceptance of standards because of licensing requirements perceived as onerous.
Popularity of Business Method patents: Beginning with the State Street decision in the United States and continuing through high-profile litigation between Amazon.com and Barnesandnoble.com, business method patents have become an increasingly significant factor in the ecommerce marketplace.

All of the core Recommendations issued by W3C to date have been implementable on a Royalty-Free basis. In the first four years of W3C's history, no serious issues regarding patents had been raised at all. All energy was concentrated on developing technical specifications. In the last few years several patents issued by the United States Patent and Trademark Office have stalled, or at least delayed, W3C technical work.

P3P and the Intermind Patent : A patent (US Patent #5862325) claiming rights related to metadata control structures between clients and servers which, according to Intermind, covered implementations of W3C's Platform for Privacy Preferences (P3P) standard. Intermind, at the time a W3C Member and participant in the P3P working groups, offered a "licensing program that will be compatible with the growth of standards for communications object technology," but did not make the precise terms public. Gradually, it became clear that the demand that implementers pay royalties was chilling the development of the technical specification, and rendering deployment of P3P-compliant technologies unlikely. After unsuccessful efforts to come to some agreement with the patent holder, another approach to removing this barrier was necessary. W3C commissioned an analysis of the Intermind patents to assess both the likelihood that compliance with P3P would require infringement of the patents and also to evaluate the validity of claims. The analysis conducted by Barry Rein of Pennie & Edmonds, and made available to both W3C Members and the public, established a reasonable basis for believing that implementers could comply with P3P without infringing the patent. Today, P3P is a W3C Recommendation and widely implemented across the Web.
Microsoft Style Sheet Patent: During the development of W3C's style sheet specifications, Microsoft announced that it had been issued a patent (US Patent #5860073) which might cover W3C's Cascading Style Sheet (CSS) Recommendations. Microsoft was a participant in various W3C style sheet activities and quickly offered royalty-free licenses to W3C members in order to assure that implementation of this standard would proceed.
Sun XLink Patent : A patent (US Patent #5659729) on technologies relevant to the XLink specification was disclosed by Sun during the process of developing the XLink specification. Though there was not a clear model for Royalty-Free licensing in W3C, Sun worked to develop a license that would enable Royalty-Free implementation of this standard.

After considerable effort on the part of W3C Members and staff, each of these situations were, indeed, resolved in a way that enabled widespread adoption of the standards in question. However, the general trends cited, and the specific situations in which patent claims have been potential or actual roadblocks to standardization have made it clear that the W3C must have a clear and effective patent policy to ensure that the Web continues to develop as an open, universal information platform.

III. W3C Patent Policy Development process

Responding to increasing concerns about patents, W3C created the Patent Policy Working Group (PPWG) in July 1999 to forge a patent policy that will

address the growing challenge of patent claims around Web technologies,
foster an environment within W3C where technical decisions can be made unencumbered by patent claims.

Whether patents and claims related to W3C technologies are in fact valid or not, the risk of costly, time-consuming litigation and possible limitations on use by the right holders, is sufficient to suffocate much of the dynamic development activity that has been driving the Web industry. A variety of factors already discussed suggest that the Web will be increasingly affected by the patent process, and so W3C created the Patent Policy Working Group to create a clear and effective policy.

The Patent Policy Working Group's first proposal suggested a two-track approach to patent policy at W3C, allowing both RAND and RF licensing modes. According to the proposal, each time a new Working Group is formed to develop a standard, a choice would be made about whether the standard should be developed to be implementable on a royalty-free or RAND basis.

Response to that draft was dramatic, both from W3C Members and the public. Support from W3C Members was mixed, and reviewers sent all manner of detailed comments. Public reaction to the draft was almost uniformly negative, primarily because the framework would allow W3C to include in its Recommendations technology known to be patent-encumbered, and that implementors might therefore have to pay a license fee to implement a W3C Recommendation. The strongest reaction came from various communities of open source developers who declared, (in several thousand emails sent to the W3C public comment mailing list) that a RAND approach would cause open source developers to stop using W3C web standards, impel some to form alternate Web standards, thus balkanizing the Web, and overall constituted a take-over of the Web by large corporate interests.

W3C responded to input from W3C Members and the public by adding invited experts to the Patent Policy Working Group to represent the Open Source community, creating a task force within the Patent Policy Working Group to examine how to accommodate the Open Source community, and creating a public home page for the PPWG, publishing public meeting records, and committing to additional public drafts of the framework before the policy was finalized.

Based on input from a meeting the W3C Members, the Patent Policy Working Group recently issued a draft royalty free policy. The main features of this policy are:

RF licensing goals for W3C Recommendations
RF licensing obligations that Working Group participants will undertake as a condition of Working Group membership, along with means of excluding specific patents from those obligations
the definition of a Royalty-Free license
disclosure rules for W3C Members
an exception handling process for situations in which the Royalty-Free status of a specification comes under question.

The group developing this policy still have some issues left to resolve, but expect to circulate a final proposal for comment by the public and formal review by W3C Members in the coming months.

IV. Conclusion

W3C, it's Members, and many in the independent software developer community around the world who have contributed to the growth of the Web, have spent the last year in active discussion about the proper relationship between patents and Web standards. Our debate is not yet concluded, but we have learned together quite a bit about how important the tacit royalty-free licensing environment of the Web to-date has been for the development of extraordinary economic and social value that has been generated by the World Wide Web. Our commitment is to find an approach the insures the Web's growth into the future as a vibrant engine of technical innovation, economic productivity and social growth. Above all, we will find a solution that provides for the continued universality of the Web as an information medium, and avoids uses of intellectual property rights that could lead to balkanization of the Web. We welcome your consideration of these issues and look forward to working with your agencies in future.

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