W3C home > Mailing lists > Public > www-patentpolicy-comment@w3.org > November 2001

Further Comments on the W3C's proposed Patent Policy

From: Daniel E. Maddux <dpaladin@hal-pc.org>
Date: Tue, 06 Nov 2001 10:22:48 -0600
Message-ID: <3BE80E57.8A729AF7@hal-pc.org>
To: www-patentpolicy-comment@w3.org
On October 29, 2001, the W3C Patent Policy Working Group ("PPWG") posted
a summary of their October 15-17,2001, face-to-face meeting (see
http://www.w3.org/2001/10/ppwg-cupertino-ftf-summary.html).  On November
02, 2001, Daniel Weitzner posted his answers to SLASHDOT readers
questions about the PPWG's proposed Patent Policy (see
http://slashdot.org/interviews/01/11/02/129216.shtml).  I feel that
these 2 items dodged some of the issues behind RAND Licensing, so I am
submitting these comments to address these issues.

A. The Patent Policy Working Group is pro-patent

First off, I think the proposed Patent Policy Framework ("PPF") and the
Summary of the October 15-17 Meeting are pro-patent.  Both the proposed
PPF and the Summary discuss the problem of patents reading on draft
Specifications of W3C Working Groups ("WG").  They discuss possible
solutions as licensing the patents or designing around the patents.
Neither document discusses filing a Reexamination Request or Declaratory
Judgment action to invalidate the patent.  Note that licensing and
designing around patents are pro-patent solutions; they assume the
patent is valid and allow the patent owner to continue licensing the
patent.  However, invalidating a patent is anti-patent; the patent owner
is not only deprived of the patent but also of the opportunity to
license the patent.  The fact that the PPWG omitted listing anti-patent
solutions from the proposed PPF and the Summary indicate that these
documents are pro-patent.

The cost of invalidating a patent versus licensing the patent may be an
issue.  An ex parte Reexamination Request currently has a filing fee of
US$2,520.00 (see the United States Patent and Trademark Office website
at http://www.uspto.gov/web/offices/ac/qs/ope/1999/fee20011001.htm and
look under Miscellaneous Patent Fees).  Inter partes Reexamination would
be more expensive, US$8,800.00.  Attorney fees for filing a
Reexamination Request would be roughly comparable to negotiating a RAND
License or obtaining an Infringement Opinion for designing around the
patent.  In addition, the W3C or others can petition the Commissioner of
Patents and Trademarks to reexamine a patent on his/her own initiative,
which would reduce the cost of reexamining the patent to 0.  Attorney
fees for pursuing a Declaratory Judgment action to invalidate a patent
would definitely be more expensive, provided the case went to trial.
However, a patent owner may choose to settle and RF license the patent
rather than face the uncertainty of a trial and jury verdict.
Furthermore, filing a Declaratory Judgment action would have a deterrent
effect on future patent owners not to unreasonably withhold licensing a
patent that reads on a W3C standard.  Since the attorney fees for filing
a Reexamination Request are roughly comparable to licensing or designing
around a patent, and filing Declaratory Judgment actions to invalidate a
patent have a deterrent effect on patent owners who refuse to RF license
their patents, the cost of invalidating a patent versus licensing a
patent may be an issue but does not rule out these options.

The fact that the proposed PPF and the Summary did not consider
anti-patent solutions, like filing a Reexamination Request or
Declaratory Judgment action, indicates that these documents are
pro-patent.  Granted, cost is an issue in dealing with patents.
However, an ex parte Reexamination Request is not that expensive.
Further, filing a Declaratory Judgment action does have a deterrent
effect on recalcitrant patent owners.  Even without factoring in the
cost of anti-patent solutions, the PPWG should have mentioned
anti-patent solutions just for completeness.  The fact that the PPWG did
not mention anti-patent solutions in these documents indicates that
these documents are pro-patent.

The laudatory statements about other nations being pro-software patents
in the proposed PPF and the Patent Policy Frequently Asked Questions
("PP-FAQ") further indicate that the PPWG is pro-patent.  Both the
proposed PPF (see "2.1 Larger Role of Patents on the Web Landscape" at
http://www.w3.org/TR/2001/WD-patent-policy-20010816) and the PP-FAQ (see
"[2-3] Patents" at http://www.w3.org/2001/08/16/16-PP-FAQ) make
laudatory statements about various countries having pro-software patent
laws or policies which may allow software patents.  However, neither of
these documents cite any statutes or case law.  The proposed PPF lists 3
attorneys (that I recognize) as participating in drafting the proposed
PPF: Mark DeLuca (with the law firm of Washburn Kurtz Mackiewicz &
Norris LLP), Barry Rein (with Pennie & Edmonds, a nationally renowned IP
law firm), and Daniel Weitzner.  Mark DeLuca also helped author the
PP-FAQ.  So, 3 attorneys drafted the proposed PPF and could not cite 1
statute or case that shows that nations other than the United States
issue software patents?  Mr. DeLuca, who also helped draft the PP-FAQ,
cannot cite a single statute or case that demonstrated that Australia,
China, Japan, Korea, Malaysia, New Zealand, Singapore, or Thailand issue
software patents?  The World Intellectual Property Organization ("WIPO")
maintains a database of the Intellectual Property Laws of several
nations, including the nations listed above.  The PPWG has allegedly
been working on the proposed PPF for several months.  And yet, they are
curiously unable to access WIPO's database to cite the patent statutes
of various nations?  The fact that the PPWG made several laudatory
statements about various nations recognizing software patents, without
citing the relevant statutes or case law supporting these laudatory
statements, indicates that the PPWG is pro-patent.

I invite the PPWG to cite the relevant statutes and case law supporting
their statements.  I hope to start checking the laws of the nations
mentioned above shortly.

B. The Patent Policy Working Group is pro-RAND Licensing

The W3C currently has a de facto Patent Policy of Royalty-Free ("RF")
only Licensing.  The PPWG stated in [4-4] of the PP-FAQ

"NOTE: The W3C is not presently aware of any non-free patent that is
essential to any existing W3C recommendation.

Accordingly, there is an existing history of RF."

(see "[4-4] How is the licensing mode selected?" at
http://www.w3.org/2001/08/16-PP-FAQ).  Well, if it waddles like a duck
and flies like a duck and quacks like a duck, then it must be a duck.
Similarly, if the W3C cannot cite any W3C recommendation burdened with a
non-RF licensed patent and the W3C has a history of RF licensing of
patents, then the W3C must in fact have a patent policy of RF-only
licensing.  In other words, the W3C has a de facto patent policy of
RF-only licensing.

The proposed Patent Policy is a de facto RAND Licensing policy.  The
PPWG claims that the proposed PPF is a mix of RF and RAND Licensing.
However, in practice W3C Members will always choose RAND Licensing over
RF Licensing.  W3C Members are predominantly for-profit corporations (as
opposed to non-profit, or charitable, corporations.  See the W3C website
for a list of W3C Members at
http://www.w3.org/Consortium/Members/List).  For-profit corporations are
created to make money.  Since for-profit corporations are created to
make money, they choose activities that will make money for the
corporation over activities that will not make money for the
corporation.  RAND Licensing will make money for patent owners; RF
Licensing will not make money for patent owners.  Since for-profit
corporations choose activities that will make money over activities that
will not make money, for-profit corporations will always choose RAND
Licensing over RF Licensing.  Since for-profit corporations will always
choose RAND Licensing over RF Licensing and the W3C Members are
predominantly for-profit corporations, every Working Group will always
choose RAND Licensing.  Since every Working Group will always choose
RAND Licensing, the proposed PPF will, practically speaking, always
result in RAND Licensing of patents essential to a W3C recommendation.
Since the proposed PPF will, practically speaking, always result in RAND
Licensing of patents essential to a W3C recommendation, the proposed PPF
is in fact a RAND Licensing patent policy.  In other words, the proposed
PPF is a de facto RAND Licensing policy.

Furthermore, the current economic recession will ensure that RAND
Licensing is the W3C's de facto patent policy.  Currently, the economies
of most nations are in recession.  Since most nations' economies are in
recession, most for-profit corporations are having difficulty making
money.  Since most for-profit corporations are having difficulty making
money, they are looking for new sources of revenue.  Since RAND
Licensing of patents covering W3C recommendations represents a new
source of revenue for for-profit corporations, they will always choose
RAND Licensing over RF Licensing of their patents.  Since for-profit
corporations will always choose RAND Licensing over RF Licensing of
their patents, the current economic recession ensures that RAND
Licensing will be the W3C's de facto patent policy.

The PPWG is misrepresenting the W3C's current patent policy of RF-only
licensing as not existing by refusing to name it.  The PPWG consistently
refuses to name the W3C's current patent policy of RF-only licensing.
The PPWG states that it is not aware of any W3C recommendations
encumbered with non-RF licensed patents and that the W3C has a history
of RF licensing, but stops short of naming these acts a patent policy.
By refusing to name these acts a patent policy, the PPWG misrepresents
the W3C's current patent policy as not existing.

The PPWG is misrepresenting the W3C's current patent policy to sell the
public on RAND Licensing.  The PPWG misrepresents the W3C's current
patent policy as not existing.  By misrepresenting the W3C's current
patent policy as not existing, the PPWG presents the choice of RF-only
versus RAND Licensing as being hypothetical; neither choice is
preferable.  However, if the PPWG explains to the public that the W3C
currently has a de facto patent policy of RF-only licensing, then the
public correctly perceives that choosing RF-only licensing is
preferable.  After all, most people feel the internet is working fine
right now, and if it ain't broke, don't fix it.  In other words, if
RF-only Licensing has worked well for the W3C so far, then the W3C
should retain its patent policy of RF-only Licensing.  By
misrepresenting the W3C's current patent policy as not existing, the
PPWG prejudices the public in favor of RAND Licensing.  By prejudicing
the public in favor of RAND Licensing, the PPWG is trying to sell the
public on changing the W3C's patent policy to RAND Licensing.

The PPWG is pro-RAND Licensing.  By misrepresenting the W3C's current
patent policy as not existing, the PPWG is trying to sell the public on
changing the W3C's current patent policy of RF-only Licensing to RAND
Licensing.  The fact that the PPWG is trying to sell the public on
changing the W3C's current patent policy of RF-only Licensing to RAND
Licensing indicates that the PPWG is pro-RAND Licensing.

C. The proposed Patent Policy Framework recognizes 3 types of Patent
Licensing

The PPWG states in the Summary and elsewhere that the proposed PPF
allows for 2 types of patent licensing: RF and RAND Licensing.  However,
section 8 of the proposed PPF contradicts this statement.  Section 8
states

"As a condition of Membership in W3C, each Member agrees to license all
Essential Claims [of a patent or patents] needed to implement W3C
Recommendations on RAND terms (per section 4(e)), *unless* the Member
has disclosed specific patents believed to include Essential Claims and
has declared that these Essential Claims *are not available on RAND
terms* (per section 8.1)."

(The next paragraph applies this obligation to invited experts.  Section
8.1 states the procedure for opting out of RAND Licensing.)  Note that
the PPWG could have stated

"... unless the Member has disclosed specific patents believed to
include Essential Claims and has declared that these Essential Claims
are available on RF terms..."

.  Since the PPWG could have and did not state the Member's licensing
commitment as explicitly requiring a Member to choose RAND or RF
Licensing, the PPWG clearly means that a Member may choose to opt out of
both RF and RAND Licensing.  Since the PPWG clearly means that a Member
may choose to opt out of both RF and RAND Licensing, the PPWG is
recognizing a third type of patent licensing: non-RF and non-RAND
Licensing.  The fact that Section 8 of the proposed PPF is phrased as
listed in the PPF indicates that the PPF recognizes 3 types of patent
licensing: RF, RAND, and non-RF/RAND opt-out.

Section 8 does not imply a choice between RAND and RF Licensing.  Some
hardy souls may claim that the wording of Section 8 of the proposed PPF
implies that opting out means RF Licensing.  I disagree.  If the PPWG
really meant RF Licensing, then they would have written Section 8 to
explicitly state RF Licensing, as I rewrote it above.  Note that
Microsoft had 3 representatives on the PPWG that drafted the proposed
PPF.  Anyone who reads the settlement agreements between the U.S
Department of Justice and Microsoft will clearly see that Microsoft is
no slouch at wording documents.  Likewise with IBM and the other
multi-national corporations represented in the PPWG.  These companies do
not *accidentally* misword documents.  These companies are paying
attorneys US$250/hour (more like US$1000/hour) to make sure that
documents like the proposed PPF state exactly what the corporation wants
the documents to state.  Since companies are paying attorneys like Mark
DeLuca to draft the proposed PPF to state what the corporations want,
the proposed PPF including Section 8 is worded exactly as Microsoft and
IBM and the other corporations wanted.  Since the proposed PPF including
Section 8 is worded exactly as Microsoft and IBM and the other
corporations wanted, the PPWG's failure to explicitly state RF Licensing
in the opt-out language of Section 8 is not an accident; the PPWG
intended what they wrote.  And what they intended was to create a
non-RF/RAND Licensing opt-out option.  Since the PPWG intended to create
a non-RF/RAND Licensing opt-out, Section 8 does not imply a choice
between RF and RAND Licensing.

D. Parsing the PPWG Face-to-Face Meeting Summary

Having made some general statements about the Summary, I will now
analyze the Summary in more detail.

ATTENDEES

The ATTENDEES section lists the Members of the W3C PPWG who attended the
October 15-17, 2001, meeting.  Curiously, IBM had 3 representatives at
this meeting: David Singer, George Tacticos, and Chuck Adams.  Out of
these 3, only Chuck Adams participated in drafting the proposed Patent
Policy Framework (see "11. Acknowledgements" at
http://www.w3.org/TR/2001/WD-patent-policy-20010816).  The reason IBM's
behavior is curious is that THE REGISTER posted an news article claiming
that IBM was spearheading the push for the W3C to adopt RAND Licensing
(see "IBM risks billion dollar Linux strategy with W3C RAND demands" at
http://www.theregister.co.uk/content/6/22052/html and "Berners Lee: WWW
royalties considered harmful" at
http://www.theregister.co.uk/content/6/22561.html).  Furthermore, a
search of the United States Patent and Trademark Office's Patent
Database using the query "an/ibm and spec/voice and all years" reveals
that IBM has 37 patents dealing with voice (see
http://patft.uspto.gov).  According to the Voice Browser Patent
Statements, IBM has 1 patent pending, which may be essential to the
VoiceXML 2.0 Standard, and which it plans to license only on RAND terms
(see http://www.w3.org/2001/09/voice-disclosures.html).  So, IBM has at
least 1 patent which may read on the VoiceXML 2.0 Standard, it has 38
patents covering voice, it is spearheading the push for the W3C to adopt
RAND Licensing, it increases its representation at this face-to-face
meeting, and the resulting Summary of this meeting is pro-RAND
Licensing.  Probably just a coincidence :-)

On the brighter side, the meeting did include Tim Berners Lee and Eben
Moglen, representing the views of the Open-Source Community.

SUMMARY OF MAIN ISSUES DISCUSSED

This section begins the pro-RAND Licensing FUD.  Specifically, the
wording of issues 2 and 3.  The PPWG phrases issue 2 as

"2. Should the W3C adopt a policy of producing only[sic] Royalty-Free
(RF) Recommendations or is a mix of RF and Reasonable [and]
Non-discriminatory (RAND) terms, as proposed in the Last Call Draft the
correct approach?"

First, as I stated above, the W3C currently has a de facto Patent Policy
of RF-only Licensing.  So the PPWG have misrepresented the W3C's current
patent policy as not being RF-only.  After all, why does the W3C need to
adopt an RF-only Licensing policy if that is already the W3C's policy.
By phrasing the issue in the future tense, "Should the W3C *adopt* a
policy of producing only Royalty-Free (RF) Recommendations...", the PPWG
creates the false impression that the W3C's current patent policy is not
RF-only Licensing.  The correct phrasing of this clause should be

Should the W3C *retain* its policy of producing only RF
recommendations...

Second, the PPWG subtly implies that RAND Licensing is the correct
approach.  The PPWG could have phrased issue 2 as

Is RF-only licensing the correct approach, or is a mix of RF and RAND
licensing?

Notice that placing the phrase "the correct approach" next to "RF-only
licensing" suggests that RF-only licensing is the correct approach.
Placing the phrase "the correct approach" next to both "RF-only
licensing" and RAND licensing" suggests no preference.  However, placing
the phrase "the correct approach" next to only "RAND licensing" suggests
that RAND licensing is the correct approach.  As you may have noticed,
the PPWG placed the phrase "the correct approach" next to only "RAND
licensing".  By placing the phrase "the correct approach" next to only
"RAND licensing", the PPWG suggests that RAND licensing is the correct
approach.

Third and finally, issue 2 is about RF versus RAND licensing.  The PPWG
writes about a mix of RF and RAND licensing.  However, as I explained
above RAND licensing will wipe out RF licensing. Since RAND licensing
will wipe out RF licensing, the issue here is really about RF versus
RAND licensing, not RF versus a mix of RF and RAND licensing.  So, issue
2 should really be phrased as follows

2. Should the W3C retain its current patent policy of producing only RF
licensed Recommendations, or should it abandon its current patent policy
of RF-only licensing and adopt a patent policy of RAND Licensed
Recommnedations?

The fact that the PPWG phrased issue 2 as listed in the Summary and not
as I list above indicates their pro-RAND bias.  The fact that the
Summary phrases issue 2 as listed and not as I list above indicates that
it is a pro-RAND document.

The PPWG phrases issue 3 to produce more FUD about RF Licensing.  The
PPWG states issue 3 as

"3. What would a RF-only Recommendation track look like, without making
any assumptions about whether a separate RAND track also exists."

As I stated above, the W3C's current patent policy is RF-only
Licensing.  So the answer to the PPWG's question is that a RF-only
Recommendation track would look exactly like the W3C's current
Recommendation track.  By stating the matter hypothetically (i.e., "What
would a RF-only Recommendation track look like...", as if the PPWG had
never seen a RF-only Recommendation track before), the PPWG misleads the
public into thinking that the W3C's current patent policy is not RF
Licensing.  By misleading the public into thinking that the W3C's
current patent policy is not RF Licensing, the PPWG misrepresents the
issue to the public as being a choice between RF versus RAND Licensing
instead of a choice between retaining a RF-only Licensing patent policy
or abandoning RF-only Licensing for RAND Licensing.  By misrepresenting
the issue to the public as being a choice between RF versus RAND
Licensing instead of a choice between retaining a RF-only Licensing
patent policy versus abandoning RF-only Licensing for RAND Licensing,
the PPWG prejudices the public towards RAND Licensing.

1. GENERAL REACTIONS TO MEMBER AND PUBLIC COMMENTS

The PPWG's observations contain some FUD about the Open-Source Community
and patent licensing.  Specifically, Observations 2, 3, 4, and 6 contain
FUD.

* Observation 2

The PPWG states in Observation 2

"The characterization of the policy as a RAND policy reflects a
misunderstanding about the fact that the Last Call document proposed a
mix of RAND and RF requirements."

The PPWG is slyly dodging the real issue here.  True, the Last Call
document does propose a mix of RF and RAND requirements.  However, as I
stated above in Point B, RAND Licensing will wipe out RF Licensing in
the W3C.  Since RAND Licensing will wipe out RF Licensing, the proposed
PPF is a de facto RAND policy.  Furthermore, Section 8 of the proposed
PPF states that the default Licensing policy of the W3C will be RAND
Licensing

"As a condition of Membership in W3C, each Member agrees to license all
Essential Claims [of a patent or patents] needed to implement W3C
Recommendations on RAND terms (per section 4(e)), unless... [the Member
opts out]"

So the fact that the default licensing policy of the proposed PPF is
RAND Licensing, combined with the fact that RAND Licensing will wipe out
RF Licensing, indicates that the proposed PPF is in fact a RAND policy.
And the fact that the Last Call document will in fact result in a W3C
RAND Licensing policy is the real issue.  And Open-Source developers
correctly understand that this is the real issue.  However, the PPWG
slyly dodges the real issue of the Last Call document producing a de
facto RAND policy by talking about how the Last Call document *proposes*
a mix of RF and RAND Licensing.  So in Observation 2, the PPWG dodges
the real issue of the fact that the Last Call document will result in a
de facto W3C RAND Licensing policy by talking about what the Last Call
document proposes.  However, since the Open-Source Community correctly
understands that the Last Call document will in fact result in a W3C
RAND Licensing policy is the real issue, the PPWG's second Observation
is not correct.

The PPWG goes on to state in Observation 2 that

"...many commentors assumed incorrectly that W3C Recommendations come
with a guarantee of royalty-free implementation today."

Again, the PPWG slyly dodges the real issue.  As I stated in Point B
above, the W3C's current patent policy is de facto RF-only Licensing
(See "[4-4] How is the licensing mode selected?" at
http://www.w3.org/2001/08/16-PP-FAQ, which I quote:

"NOTE: The W3C is not presently aware of any non-free patent that is
essential to any existing W3C recommendations."

).  Since the W3C's current patent policy is de facto RF-only Licensing,
the commentors are correct in stating that the W3C's current patent
policy is RF-only Licensing.  However, the PPWG dodges this issue by
talking about a guarantee of royalty-free implementation.  Well, the
last time I checked, W3C Recommendations did not come with a guarantee
of anything: not a guarantee of merchantability, nor a guarantee of
fitness for a particular purpose, nor even a guarantee of world peace.
So, by talking about what W3C Recommendations guarantee, the PPWG dodges
the real issue of whether or not W3C Recommendations are currently
implemented royalty-free.  Once again, Open-Source developers correctly
understand the real issue, so the PPWG dodges the real issue to
misrepresent the issue and introduce FUD about RF-only Licensing.

The PPWG lists more FUD in the last sentence of Observation 2.  The PPWG
states

"We believe that the policy as proposed would strengthen the RF status
of new W3C Recommendations produced in RF mode."

Again, the PPWG is playing fast and loose with the truth here.  This
statement could in theory be true *if* any W3C Recommendations are
produced in RF mode under the proposed PPF.  However, as I stated in
Point B above, RAND Licensing will wipe out RF Licensing.  Thus, in
fact, no W3C Recommendations will be produced in RF mode.  Since no W3C
Recommendations will be produced under the proposed PPF in RF mode, the
PPWG's statement is a empty promise.  So, the PPWG is dodging the real
issue of whether or not *any* W3C Recommendations will be RF Licensed
under the proposed PPF by talking about how the RF status will be
strengthened.

The PPWG's statement here raises some interesting questions.  The PPWG
claims that the proposed PPF would strengthen the RF status of new W3C
Recommendations.  How exactly will the proposed PPF strengthen the RF
status of new W3C Recommendations?  Why does the RF status of W3C
Recommendations need to be strengthened?  What real-world benefit will
occur from strengthening the RF status of new W3C Recommendations?  How
does strengthening the RF status of new W3C Recommendations benefit the
Web or the public?

* Observation 3

The PPWG is partly correct and partly engaging in some FUD in
Observation 3.  The PPWG states in Observation 3

"More education and explanation is needed by way of background to the
framework.  Some comments indicated a misunderstanding of patents..."

These statements are correct.  I humbly suggest that the PPWG start the
education process by citing the patent laws of all the nations listed in
the Patent Policy FAQ that support the proposition that these nations
issue software patents :-)  Seriously, I think educating the public
about patents would be a good thing.  I also agree that some commentors
do not understand patent law.  So, the PPWG has correctly stated the
issue here.

However, the PPWG goes on to engage in some FUD in the remainder of
Observation 3.  The PPWG continues

"...Some comments indicated a misunderstanding... of how patents
covering standards will affect implementations compliant with the
standard."

Open-Source developers understand exactly how patents covering standards
will affect implementations compliant with the standard: the patents
will allow the patent owner to exclude Open-Source developers from
developing implementations compliant with the standard.  Alternatively,
patent owners may charge an exorbitant royalty that Open-Source
developers lack the funds to pay and thus preclude Open-Source
implementations compliant with the standard.  Unisys Corporation, a W3C
Member, gave Open-Source developers an education on how patents affect
implementing image file formats when Unisys twice (in 1995 and again in
Summer 2000) enforced its patent on the LZW Compression Algorithm (The
LZW Compression Algorithm is used to generate GIF Image Files.).  The
first time Unisys enforced its patent, CompuServe or Prodigy (I forget
which company) settled with Unisys, allowing Open-Source developers to
continue using GIF Files.  The second time Unisys enforced its patent,
Open-Source developers switched from GIF Files to using PNG Files.
Since Unisys has twice given Open-Source developers an education on how
patents affect implementation of GIF Files, Open-Source developers
understand very well how patents covering W3C standards will affect
implementations compliant with such a patent-encumbered standard.  Since
Open-Source developers understand very well how patents covering W3C
standards will affect implementations compliant with such a
patent-encumbered standard, the PPWG is not correct in stating that
Open-Source developes misunderstand how patents covering standards will
affect implementations compliant with the standard.

Furthermore, the PPWG is dodging the real issue by talking about patents
covering the standards; the real issue is RF versus RAND Licensing.
Even if a patent covers a W3C standard, the patent owners can always RF
License the patent.  What makes the patent dangerous is if the patent
owners insist upon licensing the patent for royalties.  And whether or
not a patent owner agrees to RF license its patent is the real issue.
By discussing the issue of patents covering a W3C standard, the PPWG
dodges the real issue of whether or not a patent owner agrees to RF
license its patent.  By dodging the real issue of whether or not a
patent owner agrees to RF license its patent, the PPWG misrepresents the
issue here.  So the PPWG needs to explain very clearly, without dodging
the issues, how RAND Licensing of patents covering a W3C standard will
affect Open-Source developers' ability to develop Open-Source
implementations ocompliant with the standard.

* Observation 4

Observation 4 is basically correct, except for the phrase

"The developer community... felt betrayed by *what they believe* to be a
sudden shift in policy."

As I stated above in Point B, the W3C's current patent policy is in fact
RF-only Licensing.  Also, the proposed Patent Policy Framework will in
fact result in a W3C patent policy of RAND-only Licensing of new W3C
Recommendations.  Since the current W3C policy is RF-only Licensing and
the proposed PPF is RAND-only Licensing, the proposed PPF is in fact a
sudden shift in policy.  Since the proposed PPF is in fact a sudden
shift in policy, the proposed PPF's sudden shift in policy is a matter
of fact, not belief.  Since the proposed PPF's sudden shift in policy is
a matter of fact, not belief, the PPWG should have stated

The developer community... felt betrayed by the proposed PPF's sudden
shift in patent policy.

The PPWG phrased Observation 4 as listed in the Summary to once again
misrepresent the W3C's current patent policy as not being RF-only
Licensing.  By misrepresenting the W3C's current patent policy as not
being RF-only Licensing, the PPWG makes the developer community's
position seem subjective (i.e., they *felt* betrayed) as opposed to the
reality that the developer community's position is objective (i.e., the
PPWG is betraying the developer community by trying to shift the W3C's
patent policy from RF to RAND Licensing).

* Observation 5

Observation 5 is correct.  The PPWG has correctly stated the issue here.

* Observation 6

Observation 6 is more RAND Licensing FUD.  The PPWG starts out

"Whatever policy W3C chooses,..."

As I stated above in Point B, the PPWG has misrepresented the W3C's
current patent policy as not existing to sell the public on RAND
Licensing.  The W3C currently has a patent policy of RF-only Licensing.
However, by phrasing the issue as future tense (i.e., "Whatever policy
W3C *chooses*,..."), the PPWG creates the false impression that the W3C
currently does not have a patent policy.  After all, why does the W3C
need to choose a policy if they already have a policy?  By
misrepresenting the W3C's patent policy as not existing, the PPWG
creates the false impression that no preference exists between RF and
RAND Licensing.  By creating the false impression that no preference
exists between RF and RAND Licensing, the PPWG prejudices the public
towards RAND Licensing.

The PPWG goes on to condescend to the developer community.  The PPWG
continues in issue 6

"...more effort must be put into educating the developer community about
the complexity of patent licensing issues."

I am patent attorney, so I understand patent licensing issues just
fine.  I have been reading some of the comments submitted to the PPWG
mailing list and to public forums like SLASHDOT (http://slashdot.org),
and I am satisfied that the commentors understand the issue here.  The
commentors correctly understand that the PPWG is proposing to change the
W3C's current patent policy from RF-only Licensing to RAND Licensing;
that RAND Licensing in other Standards Bodies like The X Consortium, The
Open Group, and others has resulted in Open-Source developers being
unable to develop implementations compliant with the Standards of these
bodies; and that if the W3C adopts RAND Licensing as proposed in the
Last Call document, W3C Members/patent owners will use RAND Licensing to
exclude Open-Source developers from developing implementations compliant
with new W3C standards.  RF versus RAND Licensing is not complex; either
a patent owner is charging a royalty for its patent or a patent owner is
not charging a royalty for its patent.  The real complexities of patent
licensing, like No-Contest Clauses, Geographic or Field of Use
Restrictions, individual versus joint licensing of patents, joint
enforcement of patents, etc., are not relevant to whether or not the W3C
adopts RAND Licensing (At least the PPWG has not stated that these
issues are relevant to adopting a patent policy of RAND Licensing.  I
invite the PPWG to clarify this issue.).  Since the complexity of patent
licensing issues is not relevant to whether or not the W3C adopts RAND
Licensing, the PPWG is dodging the issue by talking about the complexity
of patent licensing.

The PPWG should have stated observation 6 as follows

Whether or not the W3C decides to retain its current patent policy of
RF-only Licensing, more effort must be put into educating the developer
community about how RAND Licensing will affect Open-Source
implementations compliant with potential W3C standards encumbered with
RAND Licensed patents.

2. RF OR RAND OR MIXTURE

The points stated in favor of RF Licensing are correct, but omitted some
arguments that the PPWG should have made.  Specifically,

* RAND Licensing will lead to more submarine patents

The proposed Patent Policy Framework encourages Member/Patent Owners not
to disclose their patents reading on W3C proposed Recommendations.
Section 7 of the proposed PPF does not require the Member/Patent Owner
to conduct a search of its patent portfolio, nor does a Member have to
disclose any of its patents reading on a W3C proposed Recommendation.
Technically, Section 7.2 requires a Member/Patent Owner to disclose
patents reading on the Recommendation when the Working Group accepts a
patent owner's contribution to a Recommendation.  However, neither
Section 7 nor any other section of the PPF contain any penalty
provisions.  Since the PPF contains no penalty provisions for violating
the disclosure obligations, a Member can, in practice, violate the
disclosure obligation with impunity.  Since the proposed PPF imposes no
obligation on Members to search its own patent portfolio and, in
practice, Members can violate the disclosure obligation with impunity,
the proposed PPF encourages Member/Patent Owners not to disclose their
patents reading on proposed W3C Recommendations.

A potential patent licensee is willing to pay a higher royalty after
implementing a patented standard than before implementing a patented
standard.  Once a company starts manufacturing products or developing
software based on a patent-encumbered standard, the company must now
generate revenues to recover the money invested in gearing up to
manufacture products or hiring programmers to develop the software.  A
patent allows a patent owner to enjoin a company from making or selling
products based upon the patent.  Since a patent allows a patent owner to
enjoin a company from making or selling products based upon the patent,
a patent owner can enjoin/stop a company from making or selling products
or software that uses the patent owner's patent.  Since a patent owner
can enjoin/stop a company from making or selling products or software
that uses the patent owner's patent, a patent owner can prevent a
company from recovering its investment in manufacturing products or
developing software based upon the patent.  By preventing a company from
recovering its investment in manufacturing products or developing
software based upon the patent, a patent owner can cause a company to
lose money.   However, a company which has not started manufacturing
products or developing software based upon a patent has not invested any
money and therefore will not lose money by refusing to license the
patent.  Since a company which has not started manufacturing products or
developing software based upon a patent will not lose money by refusing
to license the patent, whereas a company which has started manufacturing
products or developing software based upon a patent will lose money by
refusing to license the patent, a company which has already started
manufacturing products or developing software will pay a higher royalty
on a patent encumbering a standard than a company which has not started
manufacturing products or developing software.

RAND Licensing encourages W3C Members not to disclose their patents
encumbering a W3C standard/recommendation.  Since a patent owner can
extract a higher royalty from a company that has already started
manufacturing products or developing software based on a patent
encumbering a standard than a company which has not started manufaturing
products or developing software, patent owners prefer to wait until
companies start manufacturing products or developing software based on
their patents encumbering a standard.  Since patent owners prefer to
wait until companies start manufacturing products or developing software
based on their patents encumbering a standard, W3C Members/Patent Owners
will prefer not to disclose their patents covering a W3C
standard/recommendation.  Furthermore, since the proposed PPF contains
no penalty provisions, W3C Members face no punishment for violating
their disclosure obligations and concealing their patents which cover a
W3C standard/recommendation.  Since W3C Members face no punishment for
violating their disclosure obligations and concealing their patents
which cover a W3C standard/recommendation, and concealing their patents
allows patent owners to charge a higher royalty for their patents, RAND
Licensing encourages W3C Members/Patent Owners to conceal their patents
rather than disclosing them.

In contrast, RF Licensing encourages W3C Members/Patent Owners to
disclose their patents covering a W3C standard/recommendation.  Since RF
Licensing prevents patent owners from charging a royalty for their
patents, patent owners have no incentive to conceal their patents.
Since patent owners have no incentive to conceal their patents under RF
Licensing, RF Licensing encourages W3C Members/Patent Owners to disclose
their patents.  Furthermore, since patent owners cannot charge a royalty
under a RF License, they have no incentive to wait before disclosing
their patents.  Since patent owners have no incentive to wait before
disclosing their patents under RF Licensing, RF Licensing encourages
patent owners to disclose their patents before the W3C adopts a
Recommendation or standard.

* RAND Licensing will lead to Antitrust scrutiny and increased costs

As I stated above in Point B, the W3C's current patent policy is RF-only
Licensing.  Supposing that the W3C does decide to adopt RAND Licensing,
the W3C would face heightened antitrust scutiny from the United States
and the European Union.  The W3C would have to be much more careful in
developing new Recommendations; in fact, each Working Group would have
to hire antitrust and/or patent attorneys to review and ensure that any
Recommendation encumbered with RAND Licensed patents satisfies the
antitrust laws of the United States and the European Union.  Hiring
antitrust and/or patent attorneys to review W3C Recommendation
encumbered with RAND Licensed patents for compliance with US/EU
Antitrust Laws will increase the time and cost of developing W3C
Recommendations.  Since RAND Licensing increases the risk that each WG
may provoke a United States or European Union antitrust
investigation/prosecution, RAND Licensing will increase the time and
cost to the W3C of developing each Recommendation encumbered with a RAND
Licensed patent.

In contrast, RF-only Licensing does not risk increased government
scrutiny of antitrust violations.  Since RAND Licensing increases the
risk that each WG may provoke a United States or European Union
antitrust investigation/prosecution, while RF Licensing does not, RF
Licensing provides the W3C with better protection against government
investigations/prosecutions for antitrust violations.

For a cursory review of US Antitrust case law on Standard-Setting
Organizations, please see the following cases

ADDAMAX, 888 F.Supp. 274 (D.Mass. 1995)
NORTHWEST WHOLESALE STATIONERS, 472 U.S. 284 (1985)
ALLIED TUBE V. INDIAN HEAD, 486 U.S. 492 (1988)
ASME V. HYDROLEVEL, 456 U.S. 556 (1982)
IN RE DELL COMPUTER (FTC 1995)
RAMBUS V. INFINEON (2001)

* RAND Licensing may lead to bloated W3C Recommendations

Finally, RAND Licensing may lead to bloated W3C Recommendations.  Since
a patent owner will profit from RAND Licensing its patents which read on
a W3C Recommendation, every patent owner developing a W3C Recommendation
will fight to get its patents included in the Recommendation.  Since
every patent owner developing a W3C Recommendation will fight to get its
patents included in the Recommendation, Working Groups may end up
incorporating the patented technology of every Member of the Working
Group.  Since Working Groups may end up incorporating the patented
technology of every Member of the Working Group, the Recommendation may
contain unnecessary features.  Since the Recommendation may contain
unnecessary features, W3C Recommendations will be bloated.

In contrast to RAND Licensing, a patent owner does not receive
royalties/profits from RF Licensing its patents which read on a W3C
Recommendation.  Since a patent owner does not receive royalties/profits
from RF Licensing its patents which read on a W3C Recommendation, a
patent owner may not fight as hard to get its patent included in a W3C
Recommendation.  Since a patent owner may not fight as hard to get its
patent included in a W3C Recommendation, Working Groups will not end up
incorporating the patented technology.  Since Working Groups will not
end up incorporating the patented technology, Recommendations will not
contain unnecessary features.  Since Recommendations will not contain
unnecessary features, Recommendations developed under RF Licensing will
not be bloated.

   Points in favor of RAND Licensing:

* Point 1

The points in favor of RAND Licensing contain a lot of FUD.  Again, as I
stated in Point B, RAND Licensing will wipe out RF Licensing.  So,
although the PPWG talks about a mix of RAND and RF Licensing, in fact
they actually mean RAND-only Licensing.  Starting with the first Point,
the PPWG states

"Disallowing technologies which may only be available for a fee (RAND
terms) would deny the Web access to the best technology available."

However, the PPWG fails to state any examples of when the W3C or the Web
were denied access to the best available technology (Also, the PPWG
assumes here that the best available technology is proprietary.  Allow
me to provide some examples of Proprietary versus Open Technology:

  PROPRIETARY   |   OPEN
  -------------------------------|------------
  Rambus RDRAM   |   DDR-DRAM
  Micro-Channel Architecture |   PCI, AGP

).  Furthermore, the PPWG fails to explain why disallowing technologies
only available on RAND terms has not harmed the development of the Web
for the past 8 years (or thereabouts).  Also, the PPWG fails to explain
why the Web now needs access to the best available technologies.
Finally, the PPWG fails to explain exactly how RAND Licensing will solve
this problem.  After all, a patent owner unwilling to license its
patents on RF terms may also be unwilling to license its patents on RAND
terms (i.e., the patent owner may hold out for Non-Reasonable and
Discriminatory Licensing :-).  Since the PPWG fails to answer these
questions about how disallowing RAND Licensing harms the Web and how
RAND Licensing will solve this problem, the PPWG is raising a Straw Man
argument against RF Licensing.

The next sentence in Point 1 is incomplete and implicitly pro-patent.
The PPWG states

"Therefore, the RAND avenue should be left open to assure freedom of
action."

The PPWG's statement is incomplete because it does not state *whose*
freedom of action will be assured.  However, given the pro-patent
pro-RAND licensing bias of the PPWG, I suggest that the PPWG is
referring to *W3C Member/Patent Owners'* freedom of action.  I further
suggest that in this statement the PPWG really means

Therefore, the RAND avenue should be left open to assure *patent
owners'* freedom of action.

After all, if the PPWG really meant the *W3C's* freedom of action, then
they would have stated that.  Phrasing the sentence as I do above
clarifies that the PPWG is concerned about W3C Member/Patent Owners'
interests, not the W3C's or the Web's or the public's.  And the public
and Open-Source Community are not sympathetic to patent owners'
interests, which is why, I submit, the PPWG stated this sentence as it
appears in the Summary.

* Point 2

The PPWG engages in more anti-RF Licensing FUD in Point 2.  The PPWG
starts

"If W3C adopts an RF-only model,... "

As I stated above in Point B, the W3C's current patent policy is RF-only
Licensing.  By phrasing this point hypothetically (i.e., "*If* W3C
adopts an RF-only model,..."), the PPWG misrepresents the W3C's current
patent policy as not being RF-only Licensing.  By misrepresenting the
W3C's current patent policy as not being RF-only Licensing, the PPWG is
engaging in anti-RF Licensing FUD.

The PPWG does go on to state a valid point:

"If W3C adopts an RF-only model, then many important Web technology
standards may end up being developed at other standard bodies or
industry consortia."

This statement is correct.  As Daniel Weitzner pointed out in his
SLASHDOT interview,

"Finally, you can have as many standards organizations as you like and
there will still be patents out there."

(See "W3C's RAND Point Man Responds" at
http://slashdot.org/interviews/01/11/02/129216.shtml).  I think Mr.
Weitzner states the real issue here.  Regardless of whether the
Open-Source Community or the Corporate Member Patent Owners leave W3C,
the Open-Source will still have to deal with patents.  Since I think
this issue is a legitimate point, I think the Open-Source Community
needs to address this issue.

* Point 3

The PPWG returns to anti-RF Licensing FUD with Point 3.  The PPWG states

"A Royalty-free only policy will result in an increase in the amount of
time Working Groups will devote to specification development efforts
that will end up being abandoned or redone.  Once an essential patent is
identified which is not available royalty free, the Working Group must
determine if it can proceed, if it must engineer around the patent
and/or if it must abandon its efforts.  If and when a patent with
essential claims is identified and licenses to such claims are not
available Royalty free, the Recommendation may need, depending on the
details of the patent policy adopted, to be withdrawn if the W3C has a
Royalty-free only policy."

First, the W3C has already faced the issue of non-RF Licensed patents
and successfully developed a W3C Recommendation (See the Answer to
Question 2 in "Response to Public Comments on the W3C Patent Policy
Framework Working Draft" at http://www.w3.org/2001/10/patent-response,
dealing with the P3P Standard).  Since the W3C has already faced and
successfully resolved the issue of non-RF Licensed patents, it can do so
again in the future.  Since the W3C can continue to successfully resolve
non-RF Licensed patents in developing Recommendations, the PPWG is
raising a Straw Man argument here.

Furthermore, the PPWG does not explain how RAND Licensing will resolve
the problem of non-RF Licensed patents.  Just because a patent owner is
not willing to RF License its patent does not mean that it will RAND
License its patent.  After all, if a patent owner is greedy enough to
refuse to RF License a patent, then it may hold out for better licensing
terms than RAND Licensing.  Since the PPWG does not explain how it can
know that a patent owner will be satisfied with mere RAND Licensing when
it can ask for better licensing terms, the PPWG does not establish that
RAND Licensing will solve the problem of non-RF Licensed patents.

Second, the PPWG fails to mention the delays that RAND Licensing will
cause.  RAND Licensing allows Members/Patent Owners to make money from
their patents covering W3C Recomendations.  Since RAND Licensing allows
Members/Patent Owners to make money from their patents covering W3C
Recomendations, Members/Patent Owners will now start fighting to ensure
that their patents read on the W3C Recommendation.  The Members'
fighting will delay the development of W3C Standards compared with RF
Licensing.  Since the Members' fighting will delay the development of
W3C Standards compared with RF Licensing, RAND Licensing will produce
new delays which the PPWG fails to mention.

In addition, the patent prosecution practices of most corporations will
aggravate the W3C Recommendation process.  Currently, most corporations
file Continuation Applications on patent applications that are about to
issue.  After competitors and/or the market starts using and copying the
corporation's patented product, the corporation writes claims that read
on the competitors' products, adds these claims to the Continuation
Application, and then prosecutes the Application to issuance.  The
corporation then sues its competitors based on the original and the
Continuation Application.  Thus, the Continuation Application is a
submarine patent.  If the W3C adopts RAND Licensing, then Members/Patent
Owners will use Continuation Applications to draft claims that read on
the W3C Recommendation, prosecute the Continuation Application to
issuance, then demand licensing fees for the Continuation patent, even
after obtaining RAND Licensing royalties for the original patent.  In
fact, as I stated earlier, the Member/Patent Owner may be able to extort
royalties above RAND terms after a W3C Standard is adopted by
threatening to enjoin parties from developing or using implementations
compliant with the Standard.  Since the current patent prosecution
practices of most corporations will allow them to obtain additional
royalties on submarine patents from all RAND Licensed W3C
Recommendations, RAND Licensing will actually delay and/or aggravate the
W3C Recommendation process.

Third, the PPWG fails to mention that the W3C, along with the
Open-Source Community, can also develop prior art to file a
Reexamination Request or Declaratory Judgment action to invalidate the
patents of recalcitrant patent owners.  As I stated above in Point A,
the PPWG is pro-patent.  Here the PPWG demonstrates their pro-patent
bias by omitting to discuss the option of invalidating the patents of
patent owners who refuse to RF License their patents.  By omitting to
discuss the option of invalidating the patents of patent owners who
refuse to RF License their patents, the PPWG creates the false
impression that the W3C's only options are licensing or designing around
a patent that reads on a proposed W3C Recommendation.  In other words,
more pro-RAND Licensing FUD.

To summarize, Point 3 is wrong because

* the W3C has already faced and successfully resolved the issue of
Non-RF Licensed Patents
* RAND Licensing will create additional delays that RF Licensing does
not
* the PPWG fails to explain how RAND Licensing will solve the problem of
Non-RF Licensed Patents when RF Licensing fails, and finally
* the PPWG fails to explore the option of invalidating a Non-RF Licensed
Patent.

* Point 4

Finally, the PPWG states their exact position in Point 4.  The PPWG
states

"Little has changed since the Last Call draft issued.  We should revise
the Last Call draft in response to comments received, but not make any
fundamental change in the policy."

Well here is the PPWG's position in a nutshell; the Member/Patent Owners
have decided that they want RAND Licensing and they are just going
through the motions until they force RAND Licensing onto the W3C.
Notice the PPWG's first statement in Point 4:

"Little has changed since the Last Call draft issued."

Since the Last Call draft issued, over 1,000 persons submitted comments
opposing RAND Licensing and supporting the W3C's current patent policy
of RF-only Licensing (See the PPWG Mailing Archives at
http://lists.w3.org/Archives/Public/www-patentpolicy-comment).  By
stating that "Little has changed since the Last Call draft issued.", the
PPWG Member/Patent Owners imply that the Open-Source Community's
preference for the W3C's current patent policy of RF-only Licensing and
opposition to the W3C adopting a patent policy of RAND Licensing counts
for nothing.  By implying that the Open-Source Community's preference
for RF-only Licensing and opposition to RAND Licensing counts for
nothing, the PPWG Member/Patent Owners demonstrate their pro-patent,
pro-RAND Licensing position.  In other words, the PPWG Member/Patent
Owners walked into the Last Call draft pushing RAND Licensing and,
despite the Open-Source Community's opposition, remain committed to
imposing a RAND Licensing patent policy on the W3C.

The second sentence of Point 4 confirms that the PPWG Member/Patent
Owners remain committed to imposing RAND licensing on the W3C.  The PPWG
states

We should revise the Last Call draft in response to comments received,
*but not make any fundamental change in the policy*.

In other words, the PPWG Member/Patent Owners will answer the
Open-Source Community's comments opposing RAND Licensing to appease the
Open-Source Community, but continue pushing their RAND Licensing agenda
just as before.  So, the PPWG Member/Patent Owners finally put their
cards on the table; they are pushing RAND Licensing no matter what the
Open-Source Community does, and the comments opposing RAND Licensing do
not change the PPWG Member/Patent Owners' position.

3. EXPLORATION OF RF-ONLY RECOMMENDATION TRACK

The PPWG misrepresents the W3C's current patent policy of RF-only
Licensing as not existing in Issue 3.  The PPWG starts out

"In order to discuss policy alternatives to the Last Call draft, the WG
discussed *possible* designs of a RF-only track for W3C.  Given the
number of commentors (both Members and non-Members) who called for a RF
policy at W3C, the WG felt it worthwhile to explore what such a policy
*would look like*.  ..."

As I stated in Point B above, the W3C currently has a patent policy of
RF-only Licensing.  Since the W3C currently has a patent policy of
RF-only Licensing, the PPWG knows exactly what such a policy would look
like; it would look like the W3C's present patent policy.  However, by
phrasing Issue 3 in the future tense (i.e., "...*possible* designs of a
RF-only track..."), the PPWG creates the false impression that it has no
idea how a RF-only Licensing policy would work.  By creating the false
impression that it has no idea how a RF-only Licensing policy would
work, the PPWG misrepresents the W3C's current patent policy of RF-only
Licensing.

The PPWG misrepresents the W3C's current patent policy as not being
RF-only Licensing to prejudice the public against RF-only Licensing and
towards RAND Licensing.  By creating the false impression that it has no
idea how a RF-only Licensing policy would work, the PPWG creates the
false impression that retaining the W3C's current patent policy would
somehow change the way the W3C develops Web Standards. By creating the
false impression that retaining the W3C's current patent policy would
somehow change the way the W3C develops Web Standards, the PPWG once
again tries to prejudice the public against RF Licensing and towards
RAND Licensing.

The main issues that the PPWG lists in Issue 3 are Red Herrings, phony
issues to obscure the real issue.  The real issue is:

Why, after 8+ years of successfully developing Web standards, should the
W3C change its current Patent Policy of RF-only Licensing?

As I stated above in Point B, the W3C currently has a de facto Patent
Policy of RF-only Licensing.  Since the W3C currently has a patent
policy of RF-only Licensing, all of the PPWG's questions listed in the
main issues are already answered.  For completeness, I will walk through
these questions.

   1. Licensing Obligation

   LICENSING OBLIGATION:

"Who will be bound to offer essential patent claims on a RF basis: all
W3C Members or just the participants in the Working Group that produced
the Recommendation?"

ANSWER: The patent owners who are currently bound to offer essential
patent claims on a RF basis should continue to be bound to offer
essential patent claims on a RF basis.

However, since Since Section 8 of the proposed Patent Policy Framework
obligates all W3C Members to RAND License their essential patent claims
(unless they opt out), I submit that all W3C Members should be obligated
to offer essential patent claims on a RF basis.  Furthermore, since the
W3C patent policy affects all Members, all Members should be obligated
to offer essential patent claims on a RF basis as a matter of policy.

  OPT OUT:

"Should those bound to an RF license commitment be allowed to make
exceptions or 'opt-outs' to that commitment by mentioning certain patent
that are not available for RF Licensing?"

ANSWER:  The W3C's current policy should remain in effect.  In other
words, however the W3C has decided this issue in the past should
continue to be the correct approach.

As a policy matter, those bound to an RF license commitment should not
be allowed to make 'opt-outs' to that commitment.

"What happens if WG participant A contributes technology patented by
participant B without B's consent?"

ANSWER:  This issue is another Red Herring or phony issue.  Since B is a
W3C Member, B is already obligated to RF License its patents covering
any W3C Recommendation.  Since B is already obligated to RF License its
patents covering any W3C Recommendation, A is not really contributing
B's patent technology against B's consent.  Since A is not really
contributing B's patent technology against B's consent, nothing happens;
the WG issues their Recommendation and life goes on.   In any case, the
issue shoud be resolved against B for being too lazy to police its
patent portfolio :-)

As a sidenote, I am curious as to how this situation would arise.  If A
and B are both participating in the same WG, then B should know what
patents are reading on the draft recomemendation.  Furthermore, patents
are public documents.  So if A has access to the fact that it is
contributing B's patented technology, don't the other WG participants
also have this knowledge?

"With an opt-out could a WG member sabotage the work of the group at the
last minute (possibly after years of work) by announcing that it holds a
patent which is essential but not available on a RF basis?"

ANSWER: Yes, exactly right, which is why the W3C should retain its
current patent policy of RF-only Licensing.  Of course, the WG could
work with the Open-Source Community to develop prior art and file a
Reexamination Request or Declaratory Judgment action and invalidate the
patent.

"On[sic] the other hand, is it fair to require that WG participants make
RF commitments before they even know what technology will be included in
the final specification?"

ANSWER:  Since the W3C has always had a patent policy of RF-only
Licensing, and after 8+ years no one has complained that it is unfair,
why would it now be unfair to continue this policy?  In other words,
yes: it is fair to require that WG participants make RF commitments
before they even know what technology will be included in the final
specification.

  DEFENSIVE USE:

"Should it be possible to withdraw a license offered under this policy
if that licensee later sues the licensor for patent infringement on
another technology?"

ANSWER: No, RF-only Licensing requires that a licensor accept that they
may be sued by ungrateful licensees.

I agree that this question is a legitimate issue and sounds very much
like the INTERGRAPH versus INTEL case a couple of years ago.  I think
the PPWG should debate this issue and resolve it 1 way or another.

  2. Disclosure obligations

"Should all Members be obliged to disclose patents of which they are
aware?"

ANSWER:  This question could be a Red Herring or phony issue.  Since all
W3C Members are obliged to RF License all of their patents reading on a
W3C Standard, the existence or non-existence of a patent is irrelevant.
Regardless of when the patent is disclosed, the patent owner will be
obliged to RF License the patent.  Now the interesting issue is whether
or not all Members should be obliged to disclose patents belonging to
Non-Members/Non-Invited Experts of which the Member is aware.  And my
answer to that question is ...

Yes.  Since most corporations/patent owners pursue submarine patents,
Members should be required to disclose all known patents to prevent a
Non-Member/Non-Invited Expert patent owner from blocking development of
a W3C Standard by refusing to license its patent.

"If a Member makes a commitment to license patents essential to a
particular specification on RF terms, must that Member still disclose
patents held?"

ANSWER: This question is a Red Herring or phony issue.  Since a RF-only
Licensing policy obligates a Member to RF License its patents, it does
not matter when the Member discloses the patent; the patent will be RF
Licensed anyway.  The only way this question makes sense is if the W3C
has adopted RAND Licensing, and the Member can opt to license other
patents held under a RAND License.  However, since this question deals
with issues that arise under a RF-only Licensing policy, such a scenario
will not happen.  Since this scenario will not happen under a RF-only
Licensing Patent Policy, this question is a phony issue.

 3. Decision-making

"What happens when W3C becomes aware of essential patent claims that are
not available on an RF basis?"

ANSWER:  The W3C has already confronted this issue and successfully
resolved it (See the Answer to Question 2 in "Response to Public
Comments on the W3C Patent Policy Framework Working Draft" at
http://www.w3.org/2001/10/patent-response, dealing with the P3P
Standard).

I agree that this question is a legitimate issue.  Sinec this issue is
legitimate, the PPWG should debate and resolve this issue.  However, I
would point out that this question applies equally to RAND Licensing;
after all, if a patent owner is not willing to license on RF terms, it
may not be willing to license on RAND terms either.

"1. Which of these options should a Patent Advisory Group be able to
recommend:
    * Ignore claim
    * Design around claim
    * Get more information, including legal opinion on validity and/or
infringement
    * Stop the WG"

ANSWER: The Patent Advisory Group ("PAG") should be able to recommend
all of these options.  In addition, I would also include the option of
soliciting prior art from the Open-Source Community and filing a
Reexamination Request or Declaratory Judgment action to invalidate the
patent.

"2. Does the PAG require W3C staffing beyond what is available today?"

ANSWER:  I do not know the how the PAG is staffed today, so I cannot
answer this question.  Perhaps the PPWG could provide additional
information about the PAG staffing...

  4. Warranty:

"What promise, if any, does W3C make regarding possible infringement
liability for a Recommendation developed as 'Royalty-Free'?"

ANSWER:  The same promise/warranty the W3C is currently making: none
(See Observation 2 in Issue 1 of this Summary).

The PPWG closes with more FUD about RF-only Licensing.  The PPWG states

"The WG did not attempt to reach consensus on either *the desirability
of a RF policy*, or on the precise terms suggested."

As I stated above in Point B, the W3C's current patent policy is RF-only
Licensing.  By phrasing the issue in future tense (i.e., "...the
desirability of a RF policy, or on the precise terms suggested."), the
PPWG creates the false impression that the W3C's current patent policy
is not RF-only Licensing.  After all, why does the PPWG need to decide
on the desirability or precise terms of RF Licensing if the W3C already
has a policy of RF Licensing.  By creating the false impression that the
W3C's current patent policy is not RF-only Licensing, the PPWG engages
in more pro-RAND/anti-RF Licensing FUD.

4. DISCUSSION WITH TIM BERNERS-LEE

The PPWG states this issue pretty straightforward.

5. PROCESS OF RESPONDING TO COMMENTS

Again, the PPWG states the issue pretty straightforward.

6. CONCLUSIONS: Process for making final decision on Patent Policy

Once again the PPWG misrepresents the W3C's patent policy as not
existing.  The PPWG states in the first sentence of Issue 6

This meeting reached[sic] two conclusions about the *development of
patent policy* for W3C:..."

As I stated above in Point B, the W3C currently has a patent policy of
RF-only Licensing.  By phrasing the issue in the future tense (i.e.,
"...the development of patent policy for W3C..."), the PPWG creates the
false impression that the W3C does not currently have a patent policy.
After all, why does the PPWG need to *develop* a patent policy for W3C
if W3C already has a patent policy.  By creating the false impression
that the W3C does not currently have a patent policy, the PPWG engages
in more pro-RAND/anti-RF Licensing FUD.

* Conclusion 1

The first Conclusion of Issue 6 demonstrates that the PPWG is biased
towards RAND Licensing.  The PPWG states in the first sentence

"The Patent Policy Working Group now has a variety of tools which can be
assembled to produce a *sound patent policy* for the Consortium."

The PPWG's statement raises several questions.  First, what tools does
the PPWG now have that they did not before?  The PPWG stated in Issue 3
that

"Little has changed since the Last Call draft issued."

Well if little has changed since the Last Call draft issued, then where
did these alleged tools that the PPWG talks about originate?
Furthermore, what is a "sound patent policy"?  As I stated in Point B
above, the W3C's current patent policy is de facto RF-only Licensing.
Since the W3C's current patent policy is de facto RF-only Licensing, how
does the PPWG distinguish the W3C's current patent policy of RF-only
Licensing from a "sound patent policy"?  After all, if the PPWG plans to
produce a "sound patent policy", they imply that the W3C's current
patent policy is not "sound".  By implying that the W3C's current patent
policy of RF-only Licensing is not "sound", the PPWG generates more
pro-RAND/anti-RF Licensing FUD to prejudice the public against RF
Licensing and towards RAND Licensing.

The PPWG demonstrates its pro-RAND Licensing bias in the second sentence
of Conclusion 1.  The PPWG states

"The comments we have received, many of which *reflect beta test
experience with implementing parts of the policy* in W3C WGs, will help
to refine these tools."

The beta testers that the PPWG refers to here are the members of several
Patent Advisory Groups (Synchronized Multimedia (SMIL 2.0), Voice
Browser, and SVG 1.0) See the second paragraph of "11. Acknowledgements
in the PATENT POLICY FRAMEWORK at
http://www.w3.org/TR/2001/WD-patent-policy-20010816).  To be precise,
the members of these PAGs have been beta testing the RAND Licensing
provisions of the proposed PPF (See, for example, "Voice Browser Patent
Statements" at http://www.w3.org/2001/09/voice-disclosures.html).  So
when the PPWG states that the comments of these beta testers will help
to produce a sound patent policy, what the PPWG really means is that the
comments of these beta testers wil help produce a sound *RAND Licensing*
patent policy.  Since the PPWG really means that the comments of these
beta testers wil help produce a sound *RAND Licensing* patent policy,
the PPWG is demonstrating its pro-RAND Licensing bias.

* Conclusion 2

The PPWG stated Conclusion 2 vaguely enough to be acceptable :-)

E. THE BOTTOM LINE: What to do about the proposed Patent Policy
Framework

As I explained above, the proposed PPF and the Summary of the October
15-17, 2001, Face-to-Face Meeting of the PPWG both are pro-patent and
pro-RAND Licensing documents.  The fact that these documents are
pro-patent and pro-RAND Licensing indicates that the PPWG is currently
pro-patent and pro-RAND Licensing.  The PPWG stated that they will
present these issues to the W3C Advisory Committee on November 7th
(tomorrow).  Since the PPWG will not be doing anything until they hear
back from the Advisory Committee, I think we should continue submitting
comments opposing the proposed PPF.  These comments should address the
following points  (NOTE that some of these arguments are fallback
positions in case the PPWG does not remove the RAND Licensing provisions
from the proposed PPF.):

* All RAND Licensing provisions in the proposed PPF must be eliminated.

Be sure to explain why RAND Licensing is bad:

1. Prevents Open-Source Developers from developing software compliant
with the patent encumbered W3C Standard.

2. Triggers Antitrust scrutiny from the United States and European
Union.  This Antitrust scrutiny will require the W3C to retain Antitrust
Attorneys to review all W3C Recommendations to ensure compliance with
US/EU Antitrust laws, thereby increasing the time and cost of developing
W3C Standards.

3. RAND Licensing, especially when combined with the proposed Disclosure
Obligations, encourages Members and Invited Experts to prosecute and
obtain submarine patents covering W3C Recommendations.

* Section 8 of the proposed PPF must be amended to eliminate the
"opt-out" provision allowing Members to choose Non-RF/Non-RAND Licensing
of essential patent claims.  Specifically, all references to opting out
must be replaced with choosing RF Licensing.

* Section 8 of the proposed PPF must be amended to state that RF
Licensing is the default Licensing Mode of the W3C.

* Section 7 must be amended to require Members and Invited Experts to
search thteir patent portfolios as part of their Disclosure Obligations.

* Section 7 must be amended to explicitly require Members and Invited
Experts to disclose the following Intellectual Property that are
relevant to a Working Group's work:

  Patents, both issued and re-issued
  Published Patent Applications
  the existence of Pending Patent Applications, especially Continuation
Applications of issued Patents
.

* Section 7 must include Penalty Provisions punishing Members and
Invited Experts who fail to disclose their patents reading on a W3C
Recommendation by requiring them to consent to RF Licensing such
patents.

* A new section should be added to the proposed PPF authorizing W3C WGs
to solicit prior art from the public and to file Reexmination Requests
and/or Declaratory Judgment actions to invalidate Non-RF Licensed
patents that read on a W3C Recommendation.

If the PPWG refuses to amend the proposed PPF after hearing back from
the Advisory Committee, then I think the Open-Source Community needs to
develop their own Web Standards body and fork the Web Standards
development process.

Daniel E. Maddux
Houston, Texas
Received on Tuesday, 6 November 2001 11:13:50 UTC

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