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Last modified: June 15, 2006
Patents and Open Standards

"It was never the object of patent laws to grant a monopoly for every trifling device, every shadow of a shade of an idea, which would naturally and spontaneously occur to any skilled mechanic or operator in the ordinary progress of manufactures. Such an indiscriminate creation of exclusive privileges tends rather to obstruct than to stimulate invention. It creates a class of speculative schemers who make it their business to watch the advancing wave of improvement, and gather its foam in the form of patented monopolies, which enable them to lay a heavy tax on the industry of the country, without contributing anything to the real advancement of the arts. It embarrasses the honest pursuit of business with fears and apprehensions of unknown liability lawsuits and vexatious accounting for profits made in good faith."     —   U.S. Supreme Court, Atlantic Works vs. Brady, 1882

"[Through the U.S. Patent Office] Any idiot can get a patent for something that should never be granted a patent." —   Irving Wladawsky-Berger, IBM Vice President of Technology and Strategy (InfoWorld 2005-03-07)

Contents

Introduction: Patent Nonproliferation and Disarmament

Disclaimer: Most content in this document was written in 2001 and early 2002, when broad consensus had been growing about the "astonishing stupidity" of the U.S. patent system and the consequent need for deep reform. Some progress had been made as of 2003 Q4, after which this became a not-actively-maintained document. Any judgments, analysis, or opinions offered (may) belong to the principal author or to other authors whose publications are cited; they may not be assumed to represent opinions held by OASIS management or by any website sponsor. See some parallel references in "XML and Digital Rights Management (DRM)."

This document is about patents and IP licensing terms in the arena of open standards designed for the Internet. By "standards" we mean the de facto and de jure standards and specifications governing protocols and (meta-)markup languages that have come to provide a technological foundation for the Internet — standards which (until now) can be freely implemented without fear that someone will decide to begin levying license fees for their usage (e.g., TCP/IP, HTTP, FTP, TELNET, HTML, XML, P3P, CSS, XSL, SVG). By "open" we do not refer simply to standards produced within a democratic, accessible, and meaningfully "open" standards process; we refer to standards that can be implemented without asking for someone's permission or signing a license agreement which demands royalty payments or places the licensee under onerous obligations. We mean "open" in the sense of implementable within an open source framework, free of legal encumbrance. We mean "open standards" especially in the sense of Internet protocols and (meta-)markup languages that do not represent, nor have the potential to become, private tollbooths on the Internet highways.

A great many issues in this discussion are unsettled, as revealed by testimony presented on April 18, 2002 in the sessions "Intellectual Property Strategies in Standards Activities" and "Licensing Terms in Standards Activities" as part of the US FTC/DOJ Hearings on "Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy." What would constitute a core, foundational technology in the Internet infrastructure as opposed to 'non-core'? How can we adjust to rapid, unforeseen changes in the marketplace such that technologies are appropriately recharacterized within the matrix of evolving foundational Internet standards? How can we arrive at a formula for defining a "non-discriminatory" yet "fair" license fee in a global environment where wealth is unevenly distributed and the ability to pay so vastly different within different countries? How can we ensure R&D investment in new technologies if royalty-revenue incentives are reduced by the public expectation of legally unencumbered core technologies? How can we ensure healthy competition by smaller/younger companies in the face of increasing patent assertions against standards? How can the open source development communities continue to thrive in a context where critical patented technologies cannot be absorbed into the open source framework? Can bureaucratic/administrative meltdown be avoided if the number of patented technologies continues to rise at the current rate?

Concern for the unimpeded openness of the Internet -- which allows democratized risk-free opportunity for experimentation, innovation, creativity, and competition -- is given birth in a larger legal context of patent proliferation and legislative attempts to control the use of hitherto neutral computing technologies. In the opinion of some authorities, the expanding protectionist trends observable today create a "potentially dangerous situation" that threatens the promise of the Internet's future.

Companies involved in standards activities may promise RAND (purportedly "reasonable and non-discriminatory") license terms for their patented technologies required in the implementation of the emerging standard, but their employees are sometimes prevented from discussing licensing details. The unknown economic effects of licensing terms which are to be revealed only after a patent-encumbered standard is approved present a difficulty for participants who do not hold essential patents. Worse, revelation of patent claims (aka 'patent hold-up' or 'patent ambush') upon the standard may come late, by intention or clerical inadvertence. Even in cases where no submarine patents are involved (as in the FTC's case against Rambus), there may be large disagreement among parties as to what constitutes "reasonable" terms versus extraction of exorbitant royalties from a monopoly position. Submarine pricing policy for previously 'acknowledged' technology can be just as devastating as a torpedo from a surprise patent revelation. Recognizing that technology subject to patent protection which ends up in a final standard "can enhance the quality of the standard and thereby promote both competition and innovation in affected new markets," policy-makers are concerned that "it can also enable the patent holder to obtain and exercise market power and to act opportunistically against its rivals." Most agree that standards work itself is an inappropriate locus for competition, but royalty-bearing patents interjected into the standards process represent competition and are distinctly hostile to cooperation. Beyond merely stifling competition in the appropriate arena, patents in the Internet standards environment may actually harm the industry.

Accordingly, most resources referenced in this document favor mechanisms to reduce legal encumbrances upon open standards stemming from patents, copyrights, license agreements, and license fees. The sources advocate policies for "patent nonproliferation and disarmament" in order to ensure the continued openness of the Internet. The overwhelming public sentiment, especially within the Open Source community, seems to favor the elimination of legal encumbrances upon standards that are critical to an open Internet technology infrastructure. With some exceptions, there is growing sentiment that Internet standards should be developed under an expectation of royalty-free terms of use. For good reasons, some technoloy leaders believe the health of the Internet critically depends upon this foundation. Thus Daniel J. Weitzner (W3C Technology and Society Domain Leader) testified before the United States Department of Justice and United States Federal Trade Commission that "... the Web itself has been possible only in the context of open, royalty-free (RF) standards." Surely some kind of worldwide network would exist today even if patents (monopolies) had been held and license fees extracted for every metered bit travelling in packets under TCP/IP (HTTP, FTP, TELNET, SMTP; SGML, XML, HTML) but many believe that the Internet as we have come to experience it requires royalty-free and license-free terms of access/usage.

According to this view, monopolistic control of Internet standards through patents should be severely restricted, or prohibited entirely as a matter of policy. The potential for adverse control by public sector (government) and private sector (commercial entities) power brokers should be resisted; the opportunity for commercial exploitation of the standards process itself should closely guarded -- so that the process of standards creation is not contorted, subverted, and otherwise compromised by the private goals of individuals or companies seeking to incorporate their patented ideas into public standards. Standards bodies should make it difficult for companies or mini-cartels to hijack resources and process to legitimize their proprietary technology solutions as "standards," using a public institution to subsidize a private commercial agenda and thus serve as a marketing arm. The implementation of open standards should not be impeded by negative incentives arising from the legal requirement to "apply for someone's permission" for use of a standard; nor should development be subjected to the bureaucracy of claims and counter-claims to royalty fees owed various companies for their portion of the intellectual property in a public standard. While some software patents may be legitimate (e.g., processor chip logic?), many believe policies should be established to eliminate their negative effects in the sphere of open standards designed for the Internet.

Of course, patents do legitimately exist in the realm of standards activities under current law. Under a policy of the USPTO that is now coming under fierce attack, (under-researched) unsustainable patents are increasing at an alarming rate, swelling the patent portfolios of large companies dedicated to stockpiling their arsenals of (they say) "defensive patents." But possession of a weapon enforces no obligation upon the owner to use it in every possible circumstance. Standards organizations like W3C, ISO, IETF, and OASIS would be well within their right to ask for voluntary, selective non-enforcement of patents under the jurisdiction of their member companies for standards that provide basic, ubiquitous services and building blocks. A growing public sentiment would ask that these SDOs enact policies which require signs to be posted at the entrance of rooms where working groups and technical committees will convene: No smoking. Check your patents at the door.

Against the backdrop of a common claim that companies are forced to continue to collect and maintain large patent arsenals for defensive purposes, the current [2002-04-25] W3C Patent Policy Working Group Royalty-Free Patent Policy presents the "reciprocal royalty-free license" arrangement. Under these 'Royalty-Free Licensing Requirements' the RF license may not be "conditioned on payment of royalties, fees or other consideration" but may be "conditioned on a grant of a reciprocal RF license to all Essential Claims owned or controlled by the licensee; a reciprocal license may be required to be available to all, and a reciprocal license may itself be conditioned on a further reciprocal license from all." See references in W3C Publishes Royalty-Free Patent Policy Working Draft." Reciprocal RF licensing represents one means of recognizing intellectual property while eliminating the threat of (e.g. RAND) royalty fees which could dramatically alter the balance of power in favor of companies holding vast patent portfolios.

The W3C notion of 'reciprocal RF license' is illustrated (approximately, at least) in Sun Microsystems' Intellectual Property Rights Declaration pertaining to the W3C Pipeline Note:

"Sun Microsystems, Inc. ('Sun') will offer Royalty-Free Licenses to any Essential Claims owned or controlled by Sun necessary to implement the XML Pipeline Control Language ('Pipeline') Note or any W3C Recommendation-track or Recommendation-level specification based on Pipeline. One precondition of any such license granted to a party ('licensee') shall be the licensee's agreement to grant reciprocal royalty-free licenses to any Essential Claims owned or controlled by the licensee to Sun and other companies necessary to implement the Pipeline Note or any W3C Recommendation-track or Recommendation-level specification based on Pipeline..."

Paraphrase: "With respect to any battle on this field, we lay down our weapons of patentry; we will not use them against anyone else on the field who similarly lays down their weapons. Here is our signed declaration."

A similar kind of solution aimed at neutralizing software patents might involve "joint buying scenarios" which sidestep antitrust and adhere to FTC/DOJ "Antitrust Guidelines for Collaborations Among Competitors," where it is allowed that "agreements jointly to purchase necessary inputs... do not raise antitrust concerns and indeed may be procompetitive." HP's Scott Peterson has argued that this "may often be the most efficient if not the only practical way of avoiding patent holdup or ambush problems and should be considered presumptively procompetitive on that ground." Yet another solution may be the creation of "public domain" reciprocal-license patent pools to which companies voluntarily contribute large number of patents, including patents embodying essential claims relevant to standards implementation; companies refusing to contribute (some reasonable proportion of) relevant patents the public pool would be placed at economic or political disadvantage. The goal in each case would be to free open standards from legal encumbrances and economic disincentives. Ample room is available for differing outlooks, however; some believe for example "patents are allowable in standards and specifications where the scope of licensing is not punitive."

Solutions to the growing "patent problem" will require creativity (new business models) as well as models of leadership in which standards bodies, individual companies, and courageous individuals can blaze a new trail. Arguably, charting these new paths will require that technology leaders take the high road in terms of focus upon the long-term global Good -- as opposed to a singular short-term mandate to maximize corporate profits. Arguably, leadership will require the courage to pronounce ichabod upon familiar institutions which have become so compromised that they no longer support their original constitutional purpose.

Why RAND is Not Appropriate for Internet Open Standards

Companies desiring to collect revenue from patent royalties frequently make statements of the following kind, designed apparently to put their competitors and the paying public at ease: "We are willing to grant licenses for this technology to all under reasonable and non-discriminatory terms and conditions." By what means are we supposed to be comforted by such a promise? The notion that RAND ("reasonable and non-discriminatory") terms and conditions protect the public needs to be debunked. RAND puts the patent owner in control of a government-backed monopoly. RAND offers no certain protection against license fees that constitute oppressive global taxation, and it may be judged highly discriminatory. Hence one writer's characterization of RAND as an expanded acronym: "half of 'RAND' is deceptive and the other half is prejudiced."

The English word "reasonable" sounds assuring, and "non-discriminatory" rings with political correctness. But RAND licensing terms pose a potential threat to the health of an open, accessible Internet; this verdict has been reached by IP experts and by common persons having common sense, revealed in several thousand emails sent to the W3C public comment mailing list. The 2002-02 draft Patent Policy Working Group Royalty-Free Patent Policy from the W3C Patent Policy Working Group exposes the threat of RAND and seeks to implement an alternative royalty-free (RF) policy framework. The argument for RAND as "reasonable and non-discriminatory" is flawed at many levels. For example:

  • A royalty fee reasonable for one wealthy US software company may not be reasonable for a software development project in a third-world country, or for public hospitals, museums, and elementary schools. A royalty fee paid directly by an end user (based upon metered usage of the Internet) may be reasonable for a CEO living in the California Silicon Valley, but quite unreasonable for a student in a poor region of Eastern Europe or Africa -- who can barely afford to be connected to the Internet at all. Note that the MPEG LA proposal already establishes per-minute use fees for MPEG-4 video data.
  • Reasonable defies formulation of an operational definition which can serve to guarantee to multiple parties that the fair interests of all will be served -- once the details of a future licensing agreement are worked out. Thus Sun's Carl Cargill writes: "The lack of a clear, equitable, and easily understood definition for the term RAND is one of the major sticking points in ICT [Information and Communications Technologies] industry. Small companies and individuals fear gouging by big companies; large companies fear diminution of their IPR portfolios..." (Failed Evolution page 4, note #8). Clarity and non-ambiguity are not so problematic as "equitable," which depends largely upon one's perspective and situation in life, including ability to pay. The W3C's description of "Reasonable and Non-Discriminatory (RAND) License" in the 2001-08-10 Patent Policy Frequently Asked Questions (FAQs) document does not hint at a method or metric for "reasonable."
  • A price judged reasonable as a royalty fee for one single patent considered in isolation may become quite unreasonable when taken in aggregate (e.g., when added to 25 or 125 other "reasonable" fees for companion patented technologies), or when embedded into the very foundation/core (and still developing) layered Internet architecture.
  • As James Clark, Richard Stallman, and many W3C's readers have argued, RAND is discriminatory. In particular, it discriminates against open source software and core principles of the open source philosophy. As Jim Bell writes, of RAND in the W3C context: "RAND ignores the importance of open source. Open source is one of the most powerful, creative forces in computing today, and W3C patent policy should facilitate it rather than blocking it via RAND royalty fees."
  • RAND also discriminates against anyone not economically empowered to pay the same royalty fee as can be paid by a wealthy, powerful software company (Microsoft, IBM) or media conglomerate (AOL Time Warner). A patent license agreement with a $15,000 initial fee disproportionately impacts and thus discriminates against small companies having a relatively small or insignificant market share.
  • Uniform ('non-discriminatory') rates thus discriminate potentially against some of the highest values of an open and fair society, which recognizes the differential ability to pay (levels in tax structures, variable subscription rates, scaled consortium dues, medicare) and recognizes the benefit of a design policy that makes some resources both free and freely accessible to all (public libraries, parks). According this social principle, the Internet "information commons" needs to be free especially for the benefit of those unable to pay -- not taxed under RAND terms antithetical to this core value.

Beyond these problems bound up in RAND's claims to being inherently "reasonable and non-discriminatory," RAND principles made operative in a standards setting create additional difficulties, vis-à-vis a royalty-free arrangement. Some have been identified previously. A brief [2001] publication by Jim Bell in connection with W3C operations lists these other concerns as follows:

  • RAND can distort the standards selection process: a Working Group not fully informed about the details of RAND licenses (which are not required or allowed to be revealed in advance) may be "forced to choose between two approaches, one free and one expensive, without knowing which is which."
  • RAND allows users to be ambushed and exploited: since RAND "allows the price for essential patent rights to be set after their use is mandated by a W3C standard, users cannot predict their costs until too late and can find themselves at the mercy of a patent holder."
  • RAND's scope of applicability [in the W3C setting] is inadequately defined because of the 'imprecise and moving boundary for Web infrastructure': "Even advocates of RAND licensing concede that Web infrastructure standards should be royalty free, and that RAND licensing at W3C should be applicable only to standards above the infrastructure level; but no one has been able to draw the dividing line separating the levels. In any case, such a dividing line would be steadily rising over time -- as formerly optional capabilities become standard parts of the infrastructure... With RAND licensing, this natural evolution could create royalty-bearing infrastructure standards, a prospect universally agreed to be unacceptable."
  • Managing RAND licensing terms is burdensome [to W3C and its Members]: "One of the greatest challenges to W3C is being able to move at a pace commensurate with its role in the industry and with the reasonable expectations of the broader community. Issues connected with RAND licensing at W3C undeniably have already proven themselves to be an immense source of [complexity], delay, and wasted effort."

[Note: As noted below, 'RAND' indeed can approximate 'RF' if the royalty fee is declared to be zero, eternally and irrevocably; in such case, why insist on RAND license at all, as it probably implies bureaucratic overhead? The issue is control: RAND license typically puts the patent holder in a position to set a tariff and collect a toll. If someone says in a contract negotiation "Give me control, but I don't worry, I don't intend to actually use it" -- they should probably not be believed.]

Why RAND is Appropriate for Internet Open Standards

[New section under development 2002-08-15. This section should present the point of view that RAND license/royalty is a good idea, applicable to open standards designed for the Internet. These arguments should be considered in counterpoint to arguments presented in the previous section: "Why RAND is Not Appropriate for Internet Open Standards." The readership is invited to send email nominating arguments and/or URLs germane to this section; equally, the readership is invited to send comments/suggestions pertaining to any section of this document.]

Initial thoughts:

  • RAND licensing terms may be unavoidable or preferable to the alternative in situations where 'IPR encumbrance' is part of the current technology scene. That is, accepting RAND license terms for technology in a developing standard may be preferable to (1) waiting until some new UN-encumbered technology is available, or (2) an end-run to 'work around' an existing encumbered technology by avoiding key steps in an algorithm. In one of the draft documents produced by a member of the IETF IPR Working Group ("Guidelines for Working Groups on Intellectual Property Issues") it is stated: "It will always be better for the Internet to develop standards based on technology which can be used without concern about selective or costly licensing. However, increasingly, choosing an unencumbered technology over an encumbered alternative may produce a significantly weaker Internet. Sometimes there simply isn't any unencumbered technology in an area."

  • RAND may be acceptable if the royalty fee is guaranteed to be zero, for eternity [possibly "with reciprocity"] accompanied by terms which bind the patent holder to a permanent, unconditional, irrevocable grant of freedom under the license. RAND license at zero cost can thus approximate "RF + reciprocity," although there may be significant legal differences. See the IBM statement on ebXML, for example, which says [2002-06-07] that the RF license will be "free for all time" -- "Patents are granted and remain enforceable until they are either abandoned or until 20 years from the original application date". In such a case, the legal encumbrance is apparently reduced to a bureaucratic detail amounting to application for a license (with submission of a signed form) and waiting [an unspecified period of time] for a reply. An infinite number of fatal (pre-)conditions, qualifications, restrictions, and limitations could be incorporated into a license agreement, of course, which would render the notion of "RAND, zero cost license" a poor substitute for RF, or render it utterly useless. For example, a company might agree to RAND zero cost terms for patents pertaining to the implementation of a standard, version 1.0, knowing full well that complete functionality will not be delivered until version 2.0 of the specification is released. Or a company might specify license pre-condictions such as (e.g.,) "by accepting this license agreement you legally certify that your implementation of the patented/to-be-licensed technology for which you request license is fully conformant with the specification XXXX according the judgment of YYYYY (corporate entity) against the conformance standard ZZZZ, as may be amended from time to time..."

  • RAND or RANDZ are important instruments in negotiations between companies seeking to clarify their mutual obligations with respect to patented technologies in zero-royalty-fee implementation environment. Companies need the freedom to craft language specific to particular patents in particular implementation contexts in order to clarify limitations and qualifications upon a zero-fee declaration. It is unreasonable to expect that a single boilerplate license applicable to all companies could adequately protect legitimate concerns for fairness (e.g., terms for reciprocity). A RAND license framework may be the best solution.

  • While an SSO or single company may strongly support RF specifications in a majority of "open Internet" situations, it is unreasonable to believe that we know enough about the future of computing to write a universal RF-only patent policy into stone. Standards consortia and corporations are better served by maintaining a policy of flexibility. Note: The model articulated by IBM is exemplary in this connection, as the company considers royalty issues for standards-related patents on a case-by-case basis; this policy is not incompatible with the (often) recognized need to declare a disposition in the early stages of a standard's development. See below, "IBM Proposes a Patent Commons for Royalty-Free Open Source Software Development."

  • RAND licensing with royalty fees should be considered positive in some situations where the revenue generated can be used to financially support other software R&D governed by RF expectations. It is common, under such a policy, for large companies having significant software patent royalty revenue (IBM reportedly has 2 billion annual; see 2002 data) to contribute substantial portions of its development to Open Source software initiatives and otherwise to license its experimental software for free (e.g., IBM alphaWorks and Eclipse).

A Way Forward

For Individual Companies

1. Hewlett-Packard. Hewlett-Packard Company has provided an exemplary model of leadership that other companies are free to emulate. See the published statements of Jim Bell on RF in the W3C context, and comments of Scott K. Peterson in his 2002-04-18 testimony to the US DOJ/FTC. Note that HP has a considerable commercial stake in software patents: according to a statement from Bruce Perens (unverified), "... IBM is said to hold 10% of software patents, and HP is one of the largest patent holders in general." The statements of Jim Bell and Scott Peterson should be read in this light.

  • [October 2001] "HP Supports Royalty Free Standards for Web Infrastructure." Compiled by Bruce Perens (bruce_perens@hp.com). With a statement by Jim Bell (W3C Advisory Committee Representative, Director of Standards and Industry Initiatives, Hewlett-Packard Company), responding on behalf of Hewlett-Packard to the W3C Patent Policy Framework draft 16-August-2001. "HP has been a leader in the advocacy of royalty free infrastructure standards for the Web... We have backed up our words with actions. For example, HP resigned as a co-submitter of the otherwise excellent Web Services Description Language (WSDL) proposal to W3C solely because other authors refused to let that proposal be royalty free. There are sharp differences among companies on patent licensing for standards... Hewlett-Packard's position is that the fundamental standards for the Web should be royalty free." [cache]

  • [April 18, 2002] "The W3C Needs to Be Royalty Free." By Jim Bell (Hewlett-Packard). In ZDNet Tech Update (April 12, 2002). "Currently a fiery debate is raging concerning whether standards from the World Wide Web Consortium (W3C) should be royalty free or whether some might require patent royalties. The latter approach, referred to as RAND (Reasonable And Non-Discriminatory), is supported by companies such as IBM. Other companies, such as Hewlett-Packard, feel passionately that free, open, technically excellent standards have been the foundation for the Web's success in the past, and that they will be equally fundamental in the future. In particular, we feel that the ability to use W3C standards without charge will be essential to their quick acceptance and to their universal acceptance. Why do we have such a strong preference for royalty-free licensing over RAND licensing for W3C standards? Patent policies for standards organizations may rationally vary based on organizations' specific circumstances and technologies, but in the case of W3C, we view the RAND licensing alternative as fundamentally flawed for reasons including the following: [...] For Hewlett-Packard and many others, including the vast majority of the more than two thousand people who have written to W3C to share their views, the conclusion is clear: To enable the Web to extend its meteoric growth in capabilities, acceptance and beneficial impact, W3C standards must remain royalty free now and in the future." Note: This story originally ran on CNET's News.com on October 12, 2001; it was republished on April 12, 2002 as "historical context" for an April 2002 discussion about legally encumbered standards in the WWW and Web Services arena, including a report of an IBM patent on ebXML-related specifications. See also "HP's Proposal for W3C Standards," posted to the W3C mailing list October 13, 2001.

  • [April 18, 2002] "Patents and Standard-Setting Processes." Statement of Scott K. Peterson (Hewlett-Packard Company) for FTC/DOJ Hearings on Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy. April 18, 2002. 13 pages. "My focus is on standards that enable interoperability among both competing and complementary products employing new technologies, presenting some challenges beyond those involved in more traditional safety or related kinds of standards... If a party promoting use of its patented technology for incorporation in a proposed standard states it is willing to offer a license on terms that are 'reasonable and nondiscriminatory' (but terms that are not otherwise specified), consideration of the impact of the patent on the proposed standard often ends at that point -- indeed some participants insist any further or more specific discussion about it would invite antitrust trouble. But all potentially affected parties have a legitimate interest in knowing before a standard decision is made what the economic effects will be of accepting a patent into the standard. Nonetheless, when suggesting that licensing terms be considered, we have encountered the objection that doing so could invite antitrust challenge. Indeed, some standards organizations expressly prohibit consideration of license terms in their rules. These objections are unfounded. To the contrary, disclosures of the sort we have suggested would be procompetitive by foreclosing opportunistic hold-up situations that are all too easy to arise when a patent holder's view of 'reasonable' license terms remains secret until after a standard has been adopted. To be more specific, consider a circumstance where a consortium is developing what is expected to be a critically important standard that defines the infrastructure for a whole array of next-generation products that all consortium members and other parties as well need to develop to remain in the affected market space. One consortium member promotes specifications based on technology that it has patented and the patent is appropriately disclosed during the process. Other consortium members see technical benefits to those specifications but also recognize alternative approaches that would entail countervailing benefits as well as avoiding any need for users to obtain patent licenses. The patent holder's proposal might be considered the 'best technical solution' but that does not necessarily make it the 'best solution' when the overriding objective is a standard that ensures a level playing field and robust competition in the new market that the standard is designed to foster. A standard that enables one user to extract exorbitant royalties from all other users could, in this light, be the 'best technical solution' but not by a long shot the 'best solution' either for the industry generally or from the broader standpoint of the public interest... In short, the sort of 'joint negotiation' or joint consideration of license terms during a standard-setting process that I have described in my example should be unassailable under the governing antitrust rule of reason. Indeed, as I have already suggested, it may often be the most efficient if not the only practical way of avoiding patent holdup or ambush problems and should be considered presumptively procompetitive on that ground. Limitations on the scope of or other safeguards attaching to this activity can be fashioned to obviate concern over any countervailing anticompetitive risk. The bottom line, in my view, is that it is desirable and in the public interest that standard-setting groups be not only permitted but encouraged to experiment with various mechanisms for consideration of specific license terms before decisions on the content of a standard are engraved in stone..." [cache]

2. Apple Computer. In October 2001, Apple Computer published a response to the draft W3C Patent Policy Framework. The statement articulated a principled dedication of Apple Computer to "royalty-free" standards in the W3C context. Excerpts:

After careful consideration of the draft patent policy, Apple believes that it is essential to continued interoperability and development of the Web that fundamental W3C standards be available on a royalty-free basis. In line with the W3C's mission to 'lead the Web to its full potential,' Apple supports a W3C patent policy with an immutable commitment to royalty-free licensing for fundamental Web standards. Apple offers this statement in support of its position.

The promise of the Web is a common framework for exchange of information, with open access for a diverse pool of developers and users. Realization of this promise demands a licensing model that is likewise open and unencumbered by private rights. We believe that W3C membership should involve not only collaboration to develop standards, but also collaboration to ensure that those standards are, in fact, open and available to diverse users without charge.

... Apple believes that W3C should promulgate only royalty-free standards, but should permit individual members to identify and exclude specific patents that they are not willing to license on a royalty-free basis... In order to proliferate royalty-free Web standards, a member's obligation to license essential patents could be conditioned on the grant of a reciprocal royalty-free license by any practitioner.

While the current [August 2001] draft patent policy does state a 'preference' for royalty-free standards, the ready availability of a RAND option presents too easy an alternative for owners of intellectual property who may seek to use the standardization process to control access to fundamental Web standards. A mandatory royalty-free requirement for all adopted standards will avoid this result.

References:

3. Sun Microsystems.

Update 2006: Sun Microsystems has been a leading pioneer and advocate of the "Non-Assertion Covenant" as an instrument for removing barriers to standards development and adoption: the non-assertion covenant can operate independent of an SSO's patent policy. It embodies "proactive promises [coming from Sun] about not enforcing patents against developers" using current and future related specifications... it means that developers of standards-based technology can be assured that Sun will not impose on them any licensing terms, conditions or fees for the use of any patents held by Sun relating to that technology... dvelopers need not do anything active in order to get this assurance; they merely need to refrain from attempting to enforce their own (or others') patents against any other developers... Examples:

[Vintage 2001/2002 text:] Sun came under fire for its handling of a (most people said "dubious") patent relating to XPointer, but this was resolved favorably with W3C. We may hope that the following statements from Simon Phipps, Simon Nicholson, Bill Smith, and Jonathan Schwartz of Sun are quoted accurately and that their declarations represent an abiding public commitment from Sun Microsystems.

  • [Excerpted from Steve Gillmor's InfoWorld article "Out of Order": "... We want to be a founding member [of the Web Services Interoperability Organization ] so that we can fix the bug in WS-I, which has been built in by its founders about preserving the royalty control of future standards on the Internet.' Sun's position, Phipps says, is that the infrastructure of the Internet should be royalty free'..."
  • [Excerpted from David Berlind's article 2002-04-11] "... W3C's D. Weitzner also acknowledges that, in addition to HP, Apple and Sun are wholeheartedly behind the royalty-free movement too. According to Sun's Manager of XML Industry Initiatives Simon Nicholson, 'Anyone should be able to use the specifications that define the Internet infrastructure without charge. We believe the best route to ensuring this is that such specs be licensed under royalty free terms.' Sun backed that position up when it relinquished a set of IP rights it had -- a move that cleared the way for the royalty-free use of the W3C standard for Xlink'..."
  • [Excerpted from Wylie Wong's article "Sun Switches Gears On Encryption," 2002-06-27] "... Sun had been devising its own rival Web services security specification, but the royalty-free licensing of WS-Security specifications allayed Sun's concerns... said Bill Smith, Sun's director of Liberty Alliance technology: 'Web infrastructure on a royalty-free basis is an important thing as well... We've made no secret of our views on the need to do things on an open and royalty-free basis'..." See the full context for details.
  • [Excerpted from Paul Festa's ZDNet article "Standards Stalled Over Royalty Disputes": "... Sun has also emerged as a major proponent of unpaid standards, convening a royalty-free standards group called the Liberty Alliance Project to develop online authentication services. In addition, the company held out for royalty-free provisions before joining a high-profile Web security group last month. 'We do not believe in taxing people for use of those standards,' Jonathan Schwartz, Sun's software chief, said..."
  • "Sun Patent Non-Assertion Covenant for OpenDocument Offers Model for Open Standards."
  • Sun Microsystems and the Patent Commons

4. O'Reilly & Associates. Dale Dougherty, as the Publisher of the O'Reilly Network, published a statement on behalf of O'Reilly & Associates in October, 2001. Note that this statement written against the W3C Patent Policy Framework (W3C Working Draft 16-August-2001) pre-dates the first draft of the W3C Patent Policy Working Group Royalty-Free Patent Policy (W3C Working Draft 26-February-2002). It opposes the then-proposed RAND terms for Web standards.

  • [October 11, 2001] "O'Reilly Opposes W3C Patent Policy." By Dale Dougherty (Publisher of the O'Reilly Network; Director of O'Reilly Research). ['The following message was submitted to the W3C in response to its request for comment on its proposed Patent Policy Framework.'] "We believe that the Web's success depends on fully open standards that can be implemented without restrictions by open source developers as well as commercial developers, large and small. Therefore, we oppose RAND licensing as an option for W3C working groups that are developing standards. W3C work should be done exclusively on a Royalty-Free basis, as it has up until now. That is the only way the W3C can ensure that a Web standard truly serves the public good. We oppose RAND because requiring developers to pay is discriminatory... The W3C's responsibility to the entire world of web users must come before its obligations to its members. We would like to see Tim Berners-Lee affirm his commitment to completely open standards and use his position as the Director of the W3C as well as the inventor of the Web to defend the Web against academic, governmental or commercial efforts to impose new restrictions. At the very least, the W3C should not be endorsing such restrictions, as the patent policy framework clearly does. W3C policy should seek to remove obstacles to openness rather than accommodate members who come bearing patent portfolios..."

4. Honorable Mention. While not qualifying as global statements of principled opposition to RAND (royalty-tolerant) licensing of patented software in the Internet standards arena, the following constitute encouraging actions and statements. Representative and by no means exhaustive.

RSA Security. Announcement 2002-04-29: "RSA Security Grants Royalty-Free Use of Patents to Vendors Implementing SAML-Based Solutions. License of Patents Aims to Speed Implementations, Interoperability and Adoption of SAML-Based Applications and Products."

Companies characterized as declaring a "Royalty free" position with respect to the W3C Voice Browser Patent Statements: BeVocal, Hewlett-Packard, Intel, Snowshore Networks, and Sun Microsystems. See "W3C Voice Browser Working Group Issues VoiceXML Last Call Working Draft" and [2002-10] "Progress in the VoiceXML Intellectual Property Licensing Debacle" [IBM and Nokia now support RF terms].

For Standards Bodies

Internet Engineering Task Force (IETF)

In July 2002, the IETF chartered an Intellectual Property Rights Working Group.

RFCs were published for Intellectual Property Rights in IETF Technology, IETF Rights in Contributions, and Guidelines for Working Groups on Intellectual Property Issues. See references below.

Description of Working Group [2002-07-26]: "The IETF and the Internet have greatly benefited from the free exchange of ideas and technology. For many years the IETF normal behavior was to standardize only unencumbered technology. While the 'Tao' of the IETF is still strongly oriented toward unencumbered technology, we can and do make use of technology that has various encumbrances. One of the goals of RFC2026 'The Internet Standards Process -- Revision 3' was to make it easier for the IETF to make use of encumbered technology when it made sense to do so. The IETF IPR policy, as embedded in RFC 2026 section 10, has proven fairly successful. At the same time, a perceived lack of textual clarity on some issues have made necessary the publication of clarifications such as the 'note well' statement issued in every registration package, the I-D boilerplate rules, and a huge number of discussions on specific IPR-related issues. This working group is chartered with updating and clarifying section 10 of BCP 9, RFC 2026, which deals with intellectual property rights, including, but not necessarily limited to, patent rights and copyrights."

Update 2003-05: As of November 2003, the mailing list was still quite active, and many issues were still under debate. Despite the attempts of some members to effect reform, little progress had been made toward the creation of a framework for reconciling RAND licensing terms with goals of open source projects.

References:

Earlier references:

  • "Intellectual Property Rights in IETF Technology." By Scott Bradner (Harvard University). IETF Network Working Group, Internet-Draft. Reference: 'draft-ietf-ipr-technology-rights-04.txt'. "The IETF policies about intellectual property rights (IPR), such as patent rights, relative to technologies developed in the IETF are designed to ensure that IETF working groups and participants have as much information about any IPR constraints on a technical proposal as possible. The policies are also intended to benefit the Internet community and the public at large, while respecting the legitimate rights of IPR holders. This memo details the IETF policies concerning IPR related to technology worked on within the IETF. It also describes the objectives that the policies are designed to meet. This memo updates RFC 2026..."
  • "Guidelines for Working Groups on Intellectual Property Issues." By Scott Brim (Cisco Systems, Inc). IETF IPR Working Group. Internet-Draft. Reference: 'draft-ietf-ipr-wg-guidelines-02'. March 1, 2003, expires August 30, 2003. 18 pages. "This memo lays out a conceptual framework and rules of thumb for working groups dealing with IPR issues. The goal is to achieve a balance between the needs of IPR claimants and the implementers of the Internet which is appropriate to current times. As part of trying to distill out principles for dealing with IPR in IETF working groups, it provides case studies of treatments of IPR issues that have already been worked out. In other words, it documents the running code of the IETF process. The memo is for working groups that are trying to decide what to do about IPR-protected technology contributions." [cache]
  • "IETF Rights in Submissions." By Scott Bradner (Harvard University). IETF Network Working Group, Internet-Draft. Reference: 'draft-ietf-ipr-submission-rights-02.txt'. March 2003. 14 pages. "The IETF policies about rights in submissions to the IETF are designed to ensure that IETF contributions can be made available to the IETF and Internet communities while permitting the authors to retain as many rights in the document as possible. This memo details the IETF policies on rights in submissions to the IETF. It also describes the objectives that the policies are designed to meet." [cache]

Earlier References:

  • "Intellectual Property Rights in IETF Technology." By Scott Bradner (Harvard University). IETF Network Working Group, Internet-Draft. Reference: 'draft-ietf-ipr-technology-rights-02.txt'. March 2003. 14 pages. "The IETF policies about intellectual property rights (IPR), such as patent rights, claimed relative to technologies developed in the IETF are designed to ensure that IETF working groups and participants have as complete information about any IPR constraints on a technical proposal as possible. The policies are also intended to benefit the Internet community and the public at large, while respecting the legitimate rights of IPR holders. This memo details the IETF policies concerning IPR related to technology worked on within the IETF. It also describes the objectives that the policies are designed to meet." [cache]
  • "IETF Rights in Submissions." Reference: 'draft-ietf-ipr-submission-rights-01.txt'. February 2003. See following reference. [cache]
  • IETF Rights in Submissions. By Scott Bradner (Harvard University). IETF Network Working Group, Internet-Draft. Reference: 'draft-ietf-ipr-submission-rights-00.txt'. October 2002. "The IETF policies about rights in submissions to the IETF is designed to ensure that IETF contributions can be made available to the IETF and Internet communities while permitting the authors to retain as many rights in the document as possible. This memo details the IETF policies on rights in submissions to the IETF. It also describes the objectives that the policies are designed to meet." [cache, source was removed]
  • "Intellectual Property Rights in IETF Technology." Edited by Scott Bradner (Harvard University). IETF Network Working Group, Internet-Draft. October 2002. Reference: 'draft-ietf-ipr-technology-rights-00.txt'. "The IETF policies about intellectual property rights (IPR), such as patent rights, claimed relative to technologies developed in the IETF are designed to ensure that IETF working groups and participants have as complete information about any IPR constraints on a technical proposal as possible. The policies are also intended to benefit the Internet community and the public at large, while respecting the legitimate rights of IPR holders. This memo details the IETF policies concerning IPR related to technology worked on within the IETF. It also describes the objectives that the policies are designed to meet." [cache]
  • "Considerations for Intellectual Property Rights in IETF Standards." By Maximilian Riegel. IETF IPR Working Group, Internet-Draft. Reference: 'draft-riegel-ipr-practices-01.txt'. July 22, 2002, expires January 20, 2003. [cache]
  • "Guidelines for Working Groups on Intellectual Property." By Scott Brim (Cisco Systems, Inc). IETF IPR Working Group, Internet-Draft. Reference: 'draft-brim-ipr-wg-guidelines-00'. October 4, 2002, expires April 4, 2003. 14 pages. [cache]

Java Community Process

The Java Community Process (JCP) is "an open organization of international Java developers and licensees whose charter is to develop and revise Java technology specifications, reference implementations, and technology compatibility kits. Both Java technology and the JCP were originally created by Sun Microsystems, however, the JCP has evolved from the informal process that Sun used beginning in 1995, to a formalized process overseen by representatives from many organizations across the Java community." On October 29, 2002 the "JCP Program Management Office (PMO) today launched a new iteration of the program, JCP 2.5. The new agreement and governing rules give more freedom and equal standing to all Java community participants enabling them to implement compatible Java specifications under a license of their own choosing including open source licenses. The Java Specification Participation Agreement (JSPA) requires all Java specifications to allow for development and distribution of compatible independent implementations, make specification products available separately and offer Technology Compatibility Kits (TCK) free of charge to qualified non-profits, educational organizations and individuals. The JCP 2.5 process document focuses on the implementation of the new agreement and on the continued availability of Java APIs as part of or independent of platform specifications..."

Open Application Group, Inc (OAGI)

The Open Applications Group is "a non-profit consortium focusing on best practices and process based XML content for eBusiness and Application Integration. It is the largest publisher of XML based content for business software interoperability in the world. Open Applications Group, Inc. members have over 6 years of extensive experience in building this industry consensus based framework for business software application interoperability and have developed a repeatable process for quickly developing high quality business content and XML representations of that content."

Excerpts from the OAGI IPR policy 9/30/2002. See the full document for context.

The Open Applications Group owns the copyright of any document written by OAGI. It is the goal of the OAGI to maintain the ability for OAGI members and non-members to use OAGI materials on a royalty free basis.

OAGI materials includes the OAGIS specification, the XML Schemas, OAMAS Downloads, presentations, white papers, or any other published document ('OAGI Materials').

OAGI commits that, in the development of any standard or guideline, they will make every reasonable attempt to ensure that no patented, patentable, or copyrighted elements are included in OAGI materials. OAGI requires that Members, observers or any other interested parties exercise reasonable efforts in bringing to its attention any copyrights, patents or patent applications, or other proprietary rights which may cover technology that may be required to use or implement any proposed standard or guideline.

Copyright. The participant grants Open Application Group Inc a non-exclusive, perpetual, irrevocable royalty-free license under the participant's copyright rights in the contribution to reproduce, distribute, perform, display and create derivative works of the contribution, solely for the purpose of creating, implementing and promoting Open Application Group Inc's e-business process specifications. Open Application Group Inc may sublicense its rights as necessary to advance this purpose.

If an above defined contribution is incorporated into a published final Open Application Group Inc specification, then the participant agrees that it will grant to any third party implementing such specification, on royalty-free and otherwise reasonable and non-discriminatory terms, a non-exclusive, non-transferable, world-wide license under any Necessary Claim that reads on such contribution to make, have made, import, sell and offer to sell those portions of specification-compliant products that implement the contribution. License terms may include but are not limited to:

  • (i) conditioning the license on a grant of a reciprocal royalty free license to all Necessary Claims owned or controlled by the licensee
  • (ii) revocation of the license should a suit for patent infringement be brought by licensee against the licensor
  • (iii) a requirement that an implementer manifests an intent to accept the terms of the royalty-free license as offered by the licensor within a reasonable period of time

Participant IP other than the above defined contributions. If an individual participant in Open Application Group Inc becomes aware that the member on whose behalf the individual participant is acting owns or controls intellectual property that would, in the opinion of the individual participant, necessarily be infringed in the course of implementing or using a Open Application Group Inc published or draft specification, for a working group that this individual participant is not a part of, (excluding intellectual property that has been contributed in accordance with this Policy) then the individual participant or the member must alert the Open Application Group Inc President to this fact...

Mechanism for accepting royalty-bearing IP. It is not the intention of the OAGI to pursue technology requiring the payment of a royalty. If such a need should arise, the OAGI President will make a recommendation to the OAGI Policy Board.

References:

Open Geospatial Consortium (OGC)

Note: The Open GIS Consortium changed its name to the Open Geospatial Consortium in September 2004; references to 'OpenGIS' are retained below.

On June 09, 2003 the Open GIS Consortium announced the adoption of a revised IPR policy which requires all contributors to license technology on a royalty-free basis. OGC is an international industry consortium of 257 companies, government agencies, and universities participating in a consensus process to develop publicly available geo-processing specifications based upon XML. The OGC's revised IPR policy "takes into account the significant patent policy work undertaken at the W3C, which has emerged as the consortium leader in establishing a pragmatic way to successfully develop royalty-free Web Standards in the current patent environment. The result reflects agreement with the basic goal to preserve a free and open standards-based information infrastructure. At the same time, the new IPR policy respects the patent rights of member organizations and the value their patents represent." OGC members support the IPR policy "because there is a belief that OpenGIS specifications must be royalty free and unencumbered by patents, and therefore freely available to any party -- buyer, commercial developer, government agency, or open source developer -- that wants to implement OpenGIS Specifications in their enterprise." The OGC's revised IPR policy will take effect on July 05, 2003.

References:

Organization for the Advancement of Structured Information Standards (OASIS)

[This entry under revision as a news story for the 2005 Revised OASIS IPR Policy is being written, to be published on the Cover Pages.]

The first IPR Policy adopted by OASIS in early 2000 was essentially a copy of licensing terms in the then-current IETF RFC 2026.

On February 7, 2005 OASIS announced the publication of a new IPR Policy (approved by the Board on January 20, 2005) and new IPR Transition Policy, both to become effective 15-April-2005. These documents were said to "represent almost three years" of revision effort by the OASIS Board. This revised IPR policy makes provision for OASIS Technical Committees to operate in one of three IPR Modes: Reasonable and Non-Discriminatory (RAND) IPR Mode, Royalty-Free (RF) on RAND Terms IPR Mode, RF on Limited Terms IPR Mode. Individual TCs select the IPR Mode they wish, and individual TC members who join a TC as a (directly) active participant agree to license any relevant essential claims under the terms of the TC's IPR Mode. Individuals who wish to participate only indirectly (as Observers) but not vote are not subject to the disclosure, contribution, and participation obligations of that TC, as are the voting Members of the TC; disclosure and licensing obligations are binding only upon companies or individuals who directly participate in a given TC.

The licensing terms described in the three IPR Modes represent just the baseline obligations under which a patent holder is required to grant a license to some party that makes a request for a license; a patent holder may make private arrangements with any other party (e.g., through a cross-licensing or patent pool agreement); "alternative terms may be substituted, if agreed to by both the patent holder and the implementer."

Note: OASIS specifications and Standards produced by TCs operating under one of the "RF" IPR Modes are not guaranteed to be "royalty free." Why not? (1) OASIS members who choose not join a particular TC, or who elect to join/participate only indirectly as Observers, may indeed have patents (perhaps disclosed, perhaps undisclosed) that read on the "RF" TC's specifications. (2) An "RF" IPR Mode TC may have transitioned to "RF" from the older ("Legacy") OASIS RAND IPR Policy, and have specifications which are legally uncumbered under IPR declarations made earlier. (3) A TC operating in an "RF" mode is not obligated to produce only royalty-free specifications, as the terms only bind the TC Members to license their own patented technology under RF terms. In other words, one must read the fine print to know whether specifications and standards associated with an "RF" IPR Mode TC are actually royalty free.

Royalty-free" licensing is not of itself adequate for (most) open source implementation environments if the patent license, to be granted upon request, contains other terms incompatible with open source (development, licensing, distribution) models. For example, an OASIS Intellectual Property Rights (IPR) Policy of 2005-04-15, applicable to some OASIS Technical Committees, provides IPR Modes for "Royalty-Free (RF) on RAND Terms" and "RF on Limited Terms." Both IPR Modes provide that an Obligated Party (patent owner) may require negotiation of an explicit executable license, with non-sublicensable patent license terms, and the license "may include reasonable, customary terms relating to operation or maintenance of the license relationship." Such license terms may or may not be acceptable to open source software developers.

OASIS says it elected to support RAND licensing for OASIS Standards as well as RF licensing (RF on RAND Terms, RF on Limited Terms) for the following reasons: (1) "The OASIS IPR Policy seeks to create the greatest possible incentive for patent holders to participate productively in an open standards process, responsibly disclose their interests, and make available, without prejudice, licenses for any essential claims they may have" [FAQ document]; (2) "To completely eliminate RAND as an option [...] would deny those OASIS members who choose to work under those terms their current rights." [OASIS-OSS memo]

References:

UN/CEFACT

[June 2006] According to documents prepared for the UN/CEFACT Twelfth Session (22-24 May 20069, Salle XI, Palais des Nations, Geneva), Agenda Item 12: Organizational Matters, the UN Office of Legal Affairs (UN OLA) approved an Intellectual Property Rights Policy in May 2006 which requires "all Participants in a UN/CEFACT Forum Group to waive their rights to enforce any of their intellectual property ('IPR') that would be necessary to implement or use a Specification developed in [a] Forum Group ('Essential IPR')."

  • UN/CEFACT Open Development Process (TRADE/R.650/Rev.4/Add.1). 17 May 2006. 13 pages. "The UN/CEFACT Open Development Process is open for anyone to provide comments at certain stages in the process. The resulting Standards and Recommendations must be open as well. That means: free of any constraints or restrictions associated with intellectual property rights (IPR)... Anyone should be able to produce a complete implementation of the specifications described by the UN/CEFACT Standards or advocated by the UN Recommendations without IPR related cost or red tape..." [cache]
  • Executive Summary of the UN/CEFACT Intellectual Property Rights Policy (ECE/TRADE/CEFACT/2006/11/Add.1). 17 May 2006. Twelfth session, Geneva, 22-24 May 2006. 3 pages. "The UN/CEFACT IPR Policy ('Policy') is designed to promote the goal of enabling the implementation of UN/CEFACT Specifications without the burden of fees or restrictions. The Policy promotes this goal by requiring all Participants in a UN/CEFACT Forum Group to waive their rights to enforce any of their intellectual property ('IPR') that would be necessary to implement or use a Specification developed in that Forum Group ('Essential IPR')..." [cache]
  • UN/CEFACT Intellectual Property Rights Policy (ECE/TRADE/CEFACT/2006/11). 17 May 2006. With presentation by the UN/CEFACT Bureau. "Subject to Section 3(b), as a condition of participating in UN/CEFACT, each Participant agrees to waive its rights to enforce its Essential IPR against any party implementing a Specification from any Forum Group of which Participant was a member or made a Contribution. The Participant's waiver of its rights to enforce Essential IPR against any party implementing the Specification extends only to the actual implementation of the Specification..." [cache IPR Policy, cache Presentation]

[June 23, 2005] UN/CEFACT document 'TRADE/CEFACT/2005/MISC.7' was published June 23, 2005 as "Decisions Made at the 11th UN/CEFACT Plenary Session Held at the Palais Des Nations 22 and 23 June 2005." Item 6, UN/CEFACT Intellectual Property Rights, Decision 05-12: "The principles of the Intellectual Property Rights Policy were approved as laid down in document TRADE/CEFACT/2005/MISC.3. The Special Contact Group, in cooperation with the Bureau, was requested to prepare a document that the secretariat can clear with the UN Office of Legal Affairs. The IPR policy should be approved in an intersessional approval process by the end of 2005. The Delegations of Canada and Sweden reserved the right to submit comments later and they were requested to do so within three weeks after the Plenary to expedite the finalization process..."

[June 09, 2005] The UN/CEFACT Special Contact Group for Intellectual Property Rights Policy (IPR SCG) has produced a number of working drafts for an IPR Policy that's now [2005-06] looking very much like the W3C Patent Policy. A 2005-05-28 note from the IPR SCG summarizes the policy goals and strategy: "The draft UN/CEFACT IPR Policy ('Policy') is designed to promote the goal of enabling the implementation of UN/CEFACT Specifications without the burden of fees or restrictions. The Policy promotes this goal by requiring all participants in a UN/CEFACT Forum Group to waive their rights to enforce any of their intellectual property ('IPR') that would be necessary to implement a final technical specification developed in that Forum Group ('Essential IPR')."

A 2002-10-30 posting from Klaus-Dieter Naujok references a document containing the "Provisonal UN/CEFACT Intellectual Property Policy." Status: "The CSG reviewed the draft version 1.2 of the IPR policy which had been recommended to it by one of the Legal Rapporteurs, Mr David Marsh, and his colleagues. The CSG unanimously approved the document and adopted it as their policy. Therefore, this becomes the provisional policy of UN/CEFACT. The next steps will be to forward the document to the Heads of Delegation with the request for an intersessional approval. In the meantime, the provisional policy will be distributed as widely as possible through all channels available to UN/CEFACT including its website, list servers and the FCT." Please see the full context for the definitions of "Participant," "Contribution," and other key terms. From Section 4, 'Use of Contributions':

Copyright. The Participant grants UN/CEFACT a non-exclusive, perpetual, irrevocable royalty-free license under the Participant's copyright rights in the Contribution to reproduce, distribute, perform, display and create derivative works of the Contribution, solely for the purpose of creating, implementing, and promoting Specifications. UN/CEFACT may sublicense these rights to implementers of Specifications, or otherwise, as necessary to advance this purpose.

Patents. A Participant agrees that it will grant to any third party implementing a published final Specification that incorporates a Contribution from such Participant, on royalty-free and otherwise reasonable and nondiscriminatory terms, a non-exclusive, non-transferable, world-wide license under any Necessary Claim that reads on such Contribution to use, make, have made, import, sell and offer to sell, lease, and otherwise distribute and dispose of those portions of Specification-compliant products that implement such Contribution. License terms may include but are not limited to: (1) conditioning the license on a grant of a reciprocal royalty-free license to all Necessary Claims owned or controlled by the licensee and/or its Affiliates that would necessarily be infringed by implementation of the applicable Specification; (2) revocation of the license should a suit for patent infringement be brought by licensee against the licensor; (3) a requirement that an implementer manifests an intent to accept the terms of the royalty-free license as offered by the licensor within a reasonable period of time; and (4) a prohibition on sublicensing.

References:

World Wide Web Consortium (W3C)

W3C Patent Policy. Edited by Daniel J. Weitzner (W3C/MIT). 5-February -004. Version URL: http://www.w3.org/Consortium/Patent-Policy-20040205/. Latest version URL: http://www.w3.org/Consortium/Patent-Policy/. Previous version URL: http://www.w3.org/Consortium/Patent-Policy-20030520.html. "In order to promote the widest adoption of Web standards, W3C seeks to issue Recommendations that can be implemented on a Royalty-Free (RF) basis. Subject to the conditions of this policy, W3C will not approve a Recommendation if it is aware that Essential Claims exist which are not available on Royalty-Free terms. To this end, Working Group charters will include a reference to this policy and a requirement that specifications produced by the Working Group will be implementable on an RF basis, to the best ability of the Working Group and the Consortium." See also the news item explaining W3C's publication of a "new version of the Process Document to align with the Patent Policy, which was approved in May 2003. Among the changes are clarifications for Technical Architecture Group (TAG) and Advisory Board participation, and for the definitions of "consensus" and "First Public Working Draft." W3C has adopted a transition procedure as part of implementing the patent policy." See "World Wide Web Consortium Process Document," 5-February-2004: "The W3C Process Document describes the organizational structure of the W3C and the processes related to the responsibilities and functions they exercise to enable W3C to accomplish its mission. This document does not describe the internal workings of the Team or W3C's public communication mechanisms."

[May 20, 2003]   W3C Approves Patent Policy Supporting Development of Royalty-Free Web Standards.    Congratulations to the W3C Patent Policy Working Group, W3C Membership, and W3C leadership for the landmark achievement represented by final approval of the W3C Patent Policy. The policy governs the handling of patents in the process of producing Web standards; its goal is to assure "that Recommendations produced under this policy can be implemented on a Royalty-Free (RF) basis. Subject to the conditions of the policy, W3C will not approve a Recommendation if it is aware that Essential Claims exist which are not available on Royalty-Free terms. To this end, Working Group charters will include a reference to this policy and a requirement that specifications produced by the Working Group will be implementable on an RF basis, to the best ability of the Working Group and the Consortium. The policy also requires patent disclosure by W3C Members when they are aware of patents that may be essential to the implementation of W3C Recommendations." A published statement from W3C Director Tim Berners-Lee notes that the W3C Patent Policy "coincides almost exactly with the tenth anniversary of CERN's decision to provide unencumbered access to the basic Web protocols and software developed there, even before the creation of W3C... The Patent Policy represents what may be the most thorough effort to date in defining a basic patent policy for standard-setting [and] sets the benchmark for the pragmatic way to successfully develop royalty-free Web Standards in the current patent environment." The W3C Patent Policy Working Group (PPWG) "is part of the W3C Technology and Society Domain; its mission is to advise W3C on the means to address the growing challenge that patent claims pose to the development of open standards for the Web."

[March 19, 2003]   W3C Releases Proposed Royalty-Free Patent Policy for Review.    The W3C has issued Patent Policy Working Group Royalty-Free Patent Policy as a W3C Proposed Policy and invites public comment through 30-April-2003. "The W3C Director's decision on the final policy, which takes into account the full range of feedback, is expected in May 2003." The W3C Royalty-Free Patent Policy "governs the handling of patents in the process of producing Web standards. The goal of this policy is to assure that Recommendations produced under this policy can be implemented on a Royalty-Free (RF) basis. The Patent Policy Working Group (PPWG) is part of the W3C Technology and Society Domain; its mission is to advise W3C on the means to address the growing challenge that patent claims pose to the development of open standards for the Web." Paraphrasing the key terms of the Proposed Policy: those participating in the development of a W3C Recommendation must agree to license essential claims (viz., patents that block interoperability) on a royalty-free (RF) basis. WG participants may exclude specifically identified patent claims from the Royalty-Free commitment; these exclusions are required shortly after publication of the first public Working Draft, reducing the likelihood that surprise patents will jeopardize collective Working Group efforts. Patent disclosures regarding essential patents are required from W3C Members and requested of anyone else. Patent claims not available with terms consistent with the W3C Patent Policy will be handled by a dispute resolution process.

W3C is one of several standards bodies currently [2002] examining its patent policies with respect to published standards. The Worldwide Web Consortium has established a Patent Policy Working Group, which has released several working draft documents, including a Patent Policy Working Group Royalty-Free Patent Policy (W3C Working Draft 14-November-2002). See also the 2002-02-26 Patent Policy Working Group Royalty-Free Patent Policy, superseding the W3C Patent Policy Framework working draft of August 16, 2001. The story is still unfolding [2002-07], but the draft Royalty-Free patent policy documents address "a large number of issues raised by comments from W3C Members and the general public." According to the statement of 'Licensing Goals for W3C Recommendations' articulated in the 14-November-2002 working draft: "In order to promote the widest adoption of Web standards, W3C seeks to issue Recommendations that can be implemented on a Royalty-Free (RF) basis. Under this policy, W3C will not approve a Recommendation if it is aware that Essential Claims exist which are not available on Royalty-Free terms. To this end, Working Group charters will include W3C RF licensing requirements that specifications produced by the Working Group will be implementable on an RF basis, to the best ability of the Working Group and the Consortium."

One of the significant changes in the 2002-11-14 and 2002-02-26 WDs (relative to the 16-August-2001 Last Call draft) relates to the W3C's position on RAND licensing. Under the terms of the 2001-08 document, a preference was confirmed for W3C Recommendations that can be implemented on a royalty-free (RF) basis, but allowing, where RF is not possible, "a framework to assure maximum possible openness based on reasonable, non-discriminatory (RAND) licensing terms." In response to public comments, the RAND track has now been dropped. Comments have expressed concern that RAND-encumbered specifications would not be implemented and that RAND would lead to discrimination and fragmentation (e.g., RAND would hurt open source developers, would discriminate against the poor, would stifle innovation and reduce choice, would harm end users as well as developers, universal access and RAND are incompatible; patents and standards are incompatible, etc.). A number of issues remain to be resolved in the W3C patent policy.

From the W3C announcement: "The new Patent Policy Working Draft differs from the previous draft in three significant ways:

  • The RAND track for W3C Working Groups has been removed. There is no process in this policy for developing RAND specifications. However, the Working Group has an open question on options for accommodating RAND technologies in exceptional circumstances.
  • Working Group Participants must now commit to Royalty-Free Licensing.
  • Defensive use of patents is allowed only in the case where a holder of essential claims is sued for patent infringement in the implementation of a W3C Recommendation.

Consistent with the goal of promoting the "widest adoption of Web standards, W3C seeks to issue Recommendations that can be implemented on a Royalty-Free (RF) basis. Under this policy, W3C will not approve a Recommendation if it is aware that Essential Claims exist which are not available on Royalty-Free terms. To this end, RF Working Group charters will include as a requirement that the specification produced by the Working Group will be implementable on an RF basis, to the best ability of the Working Group and the Consortium." [from the WD]

Rationale for decisions in the working draft reflects public input, as documented in "Public Issues for Patent Policy Framework of 20010816". In particular, the public issue #1 (P1) cited concerns for discrimination and fragmentation:

  • RAND will hurt open source developers
  • RAND discriminates against the poor (developers or developing countries)
  • The RAND / RF split will fragment the Web. Some examples were given where encumbered technologies may be worked around: Token ring v. Ethernet, PNG v. GIF, SVG v. Flash, MP3 v. Ogg Vorbis
  • RAND is not in the best interest of the Web
  • RAND will stifle innovation and reduce choice
  • RAND harms end users, not just developers
  • Patents and standards are incompatible
  • Universal access and RAND are incompatible

Excerpts from the text of the testimony of Daniel Weitzner "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":

"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... 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: (1) First, the Web itself has been possible only in the context of open, royalty-free (RF) standards. (2) Second, the 'reasonable, non-discriminatory terms' (RAND) licensing model common in many traditional standards bodies is unlikely to be accepted in the Web environment. (3) 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..."

"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... 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..."

"The strongest reaction [to the W3C Patent Policy Working Group's first proposal] 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..." [emph added]

"W3C [has] 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: (1) RF licensing goals for W3C Recommendations; (2) 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; (3) the definition of a Royalty-Free license; (4) disclosure rules for W3C Members; (5) an exception handling process for situations in which the Royalty-Free status of a specification comes under question..."

References include:

For Business Leaders as Public Servants

Individuals who put their own economic and political interests at risk for the sake of needed social change should be honored -- not as heroes, priests, or High Priests but as leaders. Though some will be recognized publicly, 99% are not, because they serve as the annoying, uncomfortable conscience in their workplaces and communities.

I'm not sure who to list here, but I know it takes individual acts of courage to stand against the status quo when it comes to serve the wrong interests. For now, I list three activists who deserve respect. Activists are easy targets for writers locked into the status quo (paid by beneficiaries of the status quo) who are compelled to discredit new ideas that challenge the ruling mindset: activists can be attacked ad hominem for their elevated rhetorical style and unqualified characterizations; they are easily labeled as extremists, paranoiacs, conspiracy theorists, anarchists, or whatever. Thoughtful people are not influenced by such labels.

1. Lawrence Lessig. Lawrence Lessig (Professor of Law, Stanford Law School) has written a thoughtful commentary in The Future of Ideas: The Fate of The Commons in a Connected World (Random House, 2001). The treatment of patents (pages 205-215) is not central to the book, but illustrates underlying dynamics that are documented fully in the book's 365 pages. Lessig writes on the "future of innovation in a time when commercial and governmental interests are exercising their control over plumbing, software, content, and patent laws to impede competition." He shows how legal and technological changes taking place in the Internet commons are creating a shift which [unchecked] "will destroy the opportunities for creativity and innovation that the Internet originally engendered. The cultural dinosaurs of our recent past are moving to quickly remake cyberspace so that they can better protect their interests against the future. Powerful conglomerates are swiftly using both law and technology to 'tame' the Internet, transforming it from an open forum for ideas into nothing more than cable television on speed. Innovation, once again, will be directed from the top down, increasingly controlled by owners of the networks, holders of the largest patent portfolios, and, most invidiously, hoarders of copyrights." See also the book reviews. Lessig's article "The Problem With Patents" [1999] identifies some critical concerns relative to "IP mania." See also Lessig's arguments from the transcript of an "Internet Society Panel on Business Method Patents," and a shorter report.

2. Bruce Perens. Bruce Perens (co-founder of the Open Source Initiative) has put himself at risk in promoting and defending royalty-free code as a critical component in the Web architecture. Perens has recently designed principles for a Sincere Choice Platform, part of the Global Technology Policy Institute. The first principle of the Sincere Choice Platform is "Open Standards: Intercommunication and file formats should follow standards that are sincerely open for all to implement, without royalty fees or discrimination." See below "Perspective: The Patent Threat to the Web" and "Software Patents vs. Free Software."

3. Richard Stallman. Stallman is a political activist in several arenas, but is famous mostly for his pioneering work on open source licensing and 'copyleft' principles. An extremist by almost any definition, but history is likely to judge him as more important than most who (without any risk) criticize him for his extremism. Richard Stallman "founded the GNU Project in 1984 and is the principal or initial author of GNU Emacs, the GNU C Compiler, the GNU Debugger GDB and parts of other packages. He is the President of the Free Software Foundation (FSF)." See sample articles on patents referenced below: "Stallman: 'Patent licenses discriminate'," and "The Danger of Software Patents."

4. Others. Who else? There are no heroes -- just good people with conviction, clarity of vision, and courage to take the ideal road against the easier road named "Pragmatism." So others, not "activists" but technology experts concerned about an open Internet, might be added to the list. They won't be just now, as I don't welcome an overflowing mailbox full of requests to be removed from the list. Were I to add them as official supporters of the "open Internet" here defined, such names might include: Philippe Aigrain (Head of Sector 'Software Technologies', European Commission DG INFSO/E2 Office N105 3/54); Jim Bell (Hewlett-Packard); Tim Berners-Lee (W3C); Christopher Blizzard (for Mozilla.org); Jonathan Borden, M.D. (Chair, ASTM E31.25 XML Healthcare Schemas); Jon Bosak (Sun Microsystems); Tim Bray (CEO, Antarcti.ca Systems); Steven Champeon (for the Web Standards Project); James Clark (Thai Open Source Software Center); Eduardo Gutentag (Sun Microsystems); Renato Iannella (IPR Systems); Rick Jelliffe (C.T.O. Topologi Pty. Ltd., Sydney, Australia); Mitch Kapor; Chris Lilley (W3C); James Mason (ISO/IEC JTC1/SC34 Chairman); John Nagle (Inventor, Nagle Algorithm); Michael Rose (Center for Tele-Information, Technical University of Denmark); Pamela Samuelson (University of California, Berkeley); Lauren Wood (SoftQuad Software). Informally, one could claim that the published responses of these individuals to the W3C's early draft [RAND] formulation are indeed representative of the overwhelming negative assessment of [RAND] royalty-bearing patents in connection with W3C standards, mutatis mutandis in connection with any standards foundational to the Internet infrastructure. The reader should inspect the email logs and summary of public comments to verify or falsify this claim. Note: It takes some courage to stand up to bad policy, especially if the bad policy is being formulated and enforced by the legal department of the company that employs you. "It takes a lot of courage