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Comments on draft Patent Policy Framework

From: Joycelyn Maddux <madpete@earthlink.net>
Date: Wed, 10 Oct 2001 12:24:57 -0500
Message-ID: <3BC48469.E903435D@earthlink.net>
To: www-patentpolicy-comment@w3.org
World Wide Web Consortium
Patent Policy Working Group
www-patentpolicy-comment@w3.org

Dear W3C Patent Policy Working Group:

For the following reasons, I oppose the recent Patent Policy Framework
draft, which could allow W3C members to charge royalty fees for
technologies included in web standards.  In particular, I support the
current Royalty-Free ("RF") Licensing Mode stated in Sections 4 and 5.
I partly support Section 7 DISCLOSURE OBLIGATIONS but feel that it
should include additional disclosure obligations.  However, I oppose the
Reasonable and Non-Discriminatory ("RAND") Licensing Mode stated in
Sections 4 and 5.  I also oppose the default licensing mode as RAND
Licensing as stated in Section 8 MEMBER PATENT LICENSING COMMITMENTS.  I
feel that the recent Patent Policy Framework draft should be rewritten
to confirm that RF Licensing is the official policy of W3C, remove all
reference to RAND Licensing, and include additional Disclosure
Obligations for patentees in Section 7.

1.  RF Licensing is working well right now.

RF licensing is the status quo.  As the Patent Policy Working Group
("PPWG") states in Section [4-4] of the Patent Policy 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 established history of RF.

In addition, the PPWG does not list any examples of Non-RF Licensing in
the Patent Policy Framework or FAQ.  Since the PPWG states the RF
Licensing is established and does not list any examples of Non-RF
Licensing, RF Licensing is by implication the status quo for the W3C.

RF licensing has generated no problems so far.  In Section 2 of the
draft Patent Policy Framework ("PPF") the PPWG states

   Web technology has developed over the last decade through an
   unprecedented burst of entrepreneurial energy and global
coooperation.

As stated above, the W3C's current patent policy is RF Licensing.  Since
web technology has developed quite well over the last decade, the W3C's
current patent policy must be working well.  Since the W3C's current
patent policy is RF Licensing, RF Licensing must be working well.  Since
RF Licensing is working well, the W3C should not change its patent
policy.

RF Licensing has not affected the PC industry.  Intel Corporation helped
develop the PCI standard and developed the AGP and licensed them royalty
free.  These 2 standards are now found in every PC being offered today.
Around the same time PCI was introduced, IBM introduced the
Micro-Channel Architecture ("MCA") but only offered it on a closed
proprietary license.  Today, no PC of which I am aware uses MCA.  Intel
is not claiming that it needs to shift PC Architecture Standards to RAND
Licensing to continue development of PC Architecture Standards.  Since
Intel is not claiming a need to shift PC Architecture Standards to RAND
Licensing to continue development of PC Architecture Standards, the W3C
similarly need not shift its patent policy to RAND Licensing to continue
development of Web Standards.  Since the W3C does not need to shift its
patent policy to RAND Licensing to continue development of Web
Standards, the W3C should maintain its policy of RF Licensing.

Another example of RF Licensing not hurting the PC industry is memory
standards.  Rambus is currently offering a proprietary standard, whereas
most memory manufacturers are choosing the open DDR-DRAM standard.  The
DDR-DRAM standard appears to be dominant.  Since the open DDR-DRAM
standard appears to be dominant, open standard RF Licensing would appear
to be superior to proprietary RAND Licensing.

RF Licensing meets the some of the goals of the PPWG and PPF.  In their
answer to question 1 of the RESPONSE TO PUBLIC COMMENTS ON THE W3C
PATENT POLICY FRAMEWORK WORKING DRAFT ("RESPONSE"), the authors state
that one of the goals of the new policy is to avoid Fear, Uncertainty,
and Doubt ("FUD").  If FUD hampers the development of web technology,
then an RF Licensing Policy that generated FUD would have hampered
development of web technology.  As stated above, the W3C's current RF
Licensing Patent Policy has worked well for the past decade.  Since the
W3C's current Patent Policy has worked well for the past decade, it is
already avoiding FUD.  Since the W3C's current RF Licensing Patent
Policy is already avoiding FUD, the W3C's current RF Licensing Patent
Policy is already meeting some of the goals of the PPWG and PPF.  Since
the W3C's current RF Licensing Patent Policy is already meeting some of
the goals of the PPWG and PPF, the W3C should not change it.

Since the W3C's current Patent Policy is RF Licensing and it is working
well and meeting the goals of the PPWG and PPF, the W3C Patent Policy
Working Group should not change the current RF licensing policy.
Further, since the W3C's current Patent Policy is RF Licensing and it is
working well and meeting the goals of the PPWG and PPF, I support
Sections 4 and 5 of the PPF draft that implement RF Licensing Policy and
Procedures.

2.    The Disclosure Obligations of Section 7 require modification

I support Section 7 of the PPF draft to the extent that the PPF requires
W3C Members to disclose patents affecting a Working Group's ("WG")
proposals or standards or protocols or recommendations or other work.  I
agree that requiring Members to disclose patents relevant to the WG will
reduce FUD.  However, I feel that the current draft PPF does not require
enough disclosure to prevent "submarine" patents, such as the recent
Rambus SDRAM patents.  For the following reasons, I feel that the PPF
should be modified to include these additional requirements:

  (i) Patentees should be required to disclose claims relevant to the
WG(Sub-Section 7.1 (1.))

  (ii) Patentees should be required to search their Patent Portfolios as
part of their disclosure obligation (Sub-Section 7.2)

  (iii) Patentees should be required to disclose their Licensing Mode at
the time of disclosure of essential patent claims (Sub-Section 7.3)

  (iv) W3C Members and Invited Experts should be prohibited from filing
 patents applications on standards, protocols, recommendations, or
 other work of any WG that is under consideration (Section 8)
.

  (i) Patentees should be required to disclose claims relevant to the WG
(Sub-Section 7.1 (1.))

By allowing Patentees to avoid disclosing patent claims relevant to the
WG, the W3C is giving these Patentees an opportunity to negotiate a
better license for their patents than if they were required to disclose
relevant patent claims.  By  giving these Patentees an opportunity to
negotiate a better license for their patents than if they were required
to disclose relevant patent claims, the W3C is increasing the FUD in a
WG's proceedings. By increasing the FUD in a WG's proceedings, the W3C
is defeating the stated purpose of the PPF; namely, to reduce FUD in the
WGs future work (see Goal 2 in answer to Question 1 of RESPONSE).  Since
allowing Patentees to avoid disclosing patent claims relevant to the WG
defeats the stated purpose of the PPF, Sub-Section 7.1 should be
rewritten to require Patentees to disclose claims relevant to the WG.

  (ii) Patentees should be required to search their Patent Portfolios as
part of their disclosure obligation (Sub-Section 7.2)

Patentees should be required to search their Patent Portfolios as part
of their disclosure obligation.  Two members of the PPWG, IBM and
Microsoft, happen to own the 2 largest portfolios of software patents in
the United States, and probably the world (see SOFTWARE PATENTS by
Gregory A. Stobbs, Second Edition, July 15, 2000, Aspen Publishers, Inc.
ISBN: 0735514992. If I recall correctly, Chapters 11 and 12 contain this
information.).  Since the owners of the 2 largest portfolios of software
patents happen to be W3C Members and PPWG Members, I they have an
additional obligation in making patent disclosures.  Since they have an
additional obligation in making patent disclosures, they should be
required to search their patent portfolios as part of their disclosure
obligation.  Since IBM and Microsoft are being required to search their
patent portfolios, other Members should be required to search their
patent portfolios as well.  Since the Members should be required to
search their patent portfolios as part of their disclosure obligations,
Sub-Section 7.2 should be rewritten to require Members to search their
patent portfolios as part of their disclosure requirement.

  (iii) Patentees should be required to disclose their Licensing Mode at
the time of disclosure of essential patent claims (Sub-Section 7.3)

Patentees should be required to disclose their Licensing Mode at the
time of disclosure of essential patent claims.  Sub-Section 7.1 does not
require Members to disclose licensing terms for essential patent claims
at the time of disclosure.  By not requiring Members to disclose their
Licensing Mode for essential claims at the time of disclosure, the W3C
allows these Patentees manipulate the WG drafting process by threatening
not to license the essential claims under a particular license unless
the Patentee obtains favorable treatment in the recommendation.  By
allowing these Patentees manipulate the WG drafting process, the W3C is
increasing the FUD in a WG's proceedings. By increasing the FUD in a
WG's proceedings, the W3C is defeating the stated purpose of the PPF;
namely, to reduce FUD in the WGs future work (see Goal 2 in answer to
Question 1 of RESPONSE).  Since allowing Patentees to avoid disclosing
their Licensing Mode for essential claims at the time of disclosure
defeats the stated purpose of the PPF, Sub-Section 7.1 of the PPF should
be rewritten to require Patentees to disclose their Licensing Mode at
the time of disclosure.

  (iv) W3C Members and Invited Experts should be prohibited from filing
 patents applications on standards, protocols, recommendations, or
 other work of any WG that is under consideration (Section 8)

W3C Members and Invited Experts should be prohibited from filing patents
applications on standards, protocols, recommendations, or other work of
any WG that is under consideration.  For example, Rambus, Inc., filed
patents on the SDRAM standard while JEDEC was debating the SDRAM
standard (see the following webpages for additional information:

http://news.cnet.com/news/0-1003-202-4773837.html
http://www.siliconstrategies.com/printableArticle?doc_id=OEG20001115S0062

wysiwyg://41/http://slashdot.org/article.pl?sid=00/08/29/172222&mode=thread

http://www.electronicnews.com/news/6333-47NewsDetail.asp
wysiwyg://61/http://slashdot.org/article.pl?sid=01/05/09/1955204&mode=thread

).  These patents were modified to cover all aspects of the SDRAM
standard as they were debated.  Rambus is now suing 3 memory
manufacturers, the U.S. corporation MICRON, the German corporation
INFINEON, and the Korean corporation HYNIX (I believe).  Rambus has
already extracted licensing fees from most of the Japanese SDRAM memory
manufacturers.  W3C's PPF should be drafted to prevent this chain of
events from recurring.  To prevent a W3C Member from duplicating Rambus'
acts, the PPF should prohibit W3C Members and affiliates from filing
patent applications on, or from amending currently filed patent
applications to include any part of, recommendations being considered.
By rewriting Section 8 of the PPF to prohibit W3C Members and affiliates
from filing patent applications on, or from amending currently filed
patent applications to include any part of, recommendations being
considered, the W3C will prevent "submarine" patents like the Rambus
SDRAM patents from encumbering Recommendations.  Thus, to prevent
"submarine" patents like the Rambus SDRAM patents from encumbering
Recommendations, the W3C should rewrite Section 8 of the PPF to prohibit
Members and affiliates and Invited Experts from filing patent
applications on, or from amending currently filed patent applications to
include any part of, recommendations being considered.

3. I oppose RAND Licensing as listed in Sections 4 and 5

I oppose RAND Licensing as listed in Sections 4 and 5 of the PPF.  I
oppose RAND Licensing for the following reasons:

  (i)  RAND Licensing defeats the goals of the PPF
  (ii)  RAND Licensing grants Patentees greater rights than they possess

.

  (i)  RAND Licensing defeats the goals of the PPF

First, Section 8 of the PPF explicitly contradicts the W3C's preference
for RF Licensing.  Section 8 states

 As a condition of Membership in W3C, each Member agrees to license
 all Essential Claims needed to implement W3C Recommendations on
 RAND terms...

Since Section 8 obligates Members to license on RAND, not RF, terms,
Section 8 contradicts Section 1's preference for RF Licensing.  Since
Section 8 of the PPF obligates Members to license their patents on RAND,
not RF, terms, RAND Licesning defeats the W3C's preference for RF
Licensing.  Since Section 8 defeats the W3C's preference for RF
Licensing, it should be rewritten to specify RF Licensing as the default
Licensing Mode.

RAND Licensing defeats the W3C's preference for RF Licensing.  Section 1
of the PPF states the W3C's preference for a RF Licensing Patent
Policy.  Corporations comprising W3C Members are predominantly
for-profit corporations.  For-profit corporations are created to make
money.  For-profit corporations make money by selling or licensing
products and services.  Stockholders of for-profit corporations pressure
management of for-profit corporations to constantly increase revenues.
Since stockholders of for-profit corporations pressure management of
for-profit corporations to constantly increase revenue, management of
for-profit corporations always prefer licensing which generates revenue
for their corporation to licensing which does not generate revenue for
their corporation.  RAND Licensing will generate revenue for Member
corporations.  RF Licensing will not generate revenue for Member
corporations.  Since RAND Licensing generates revenue for corporations
while RF Licensing does not, managment of Member corporations will
always prefer RAND Licensing to RF Licensing. Since Member corporations
will always prefer RAND Licensing to RF Licensing, RAND Licensing will
defeat the W3C's preference for RF Licensing.


Further, the current economic recession will encourage Member
corporations to choose RAND Licensing over RF Licensing.  The United
States economy, along with the economies of Europe and most
industrialized nations is currently in recession.  As a result of this
economic recession, Member corporations are having difficulty increasing
revenues to please their stockholders.  Since the economies of most
nations are in recession, Member corporations are under increasing
pressure from stockholders to find new sources of revenue.  Since
management of Member corporations are under increasing pressure from
stockholders to find new sources of revenue, Member corporations have an
additional incentive to prefer RAND Licensing to RF Licensing.  Since
Member corporations now have an additional incentive to prefer RAND
Licensing to RF Licensing, they will choose RAND Licensing over RF
Licensing.

RAND Licensing defeats the W3C's goal of avoiding FUD.  In their
RESPONSE, the authors state that one of the goals of the new policy is
to avoid FUD.  However, Section 8 states that Member corporations are
not obligated to disclose the licensing mode of their submission until
their submission is accepted as a Contribution.  Since Members are not
required to disclose the licensing mode of their submission until their
submission is accepted as a Contribution, the WG cannot be certain that
their draft Recommendation will meet the licensing requirements of their
WG Charter.  Since the WG cannot be certain that their draft
Recommendation will meet the licensing requirements of their WG Charter,
RAND Licensing renders the WG's work uncertain.  Since RAND Licensing
renders the WG's work uncertain, RAND Licensing increases FUD.  Since
RAND Licensing increases FUD, RAND Licensing defeats the new PPF's goal
of avoiding FUD.

Since RAND Licensing defeats the W3C's goals of preferring RF Licensing
and of avoiding FUD, I oppose RAND Licensing.

      (ii) RAND Licensing grants Patentees greater rights than they
possess

First, I object to many statements in Section 2 of the draft PPF,
especially Sub-Section 2.1.  Sub-Section 2.1 states:

       The second decade of the Web has already demonstrated that
patents will be a factor in the ongoing development of the World Wide
Web infrastructure.

By omission, the authors imply that patents were not a factor in the
ongoing development of the World Wide Web infrastructure during the
first decade.  However, patents did affect the Web during the first
decade of its development.  Around 1995, and again in 2000, Unisys
Corporation enforced its patent on the LZW compression algorithm ("LZW
Patent").  The LZW Patent is the basis of the GIF image file format.
The first time Unisys enforced its patent, they forced CompuServe (I
believe) to pay a lump sum royalty.  The second time Unisys enforced its
patent (in 2000), many persons and companies stopped using GIF files and
switched to the RF Licensed PNG image file format.  The fact the Unisys
had a patent which they enforced during the first decade of the Web's
development indicates that patents already affect the Web's
development.  Secondly, the fact that people and companies switched to
an alternative file format (PNG) indicates that the W3C can work
successfully work around patents.  Since patents have already affected
the Web during its first decade of development and the Web has
successfully worked around such patents, the PPWG's statement is not
correct.  Since the PPWG's statement is not correct, the PPF should be
rewritten to delete this statement.

Furthermore, since patents have already affected the Web during its
first decade of development and the Web has successfully worked around
such patents, the W3C can continue to successfully work around patents
during the second decade of the Web's development.  Since the W3C can
continue to successfully work around patents during the second decade of
the Web's development, the W3C does not need to adopt RAND Licensing.
Since the W3C does not need to adopt RAND Licensing, the W3C should
maintain its current patent policy of RF Licensing.

I object to the PPWG's statements in Sub-Section 2.1 regarding the rise
in patent issuance as misleading. Sub-Section 2.1 states at point 2:

  Patent offices, led by the U.S. PTO, are issuing patents, especially
in the software sector, at record rates.

While the U.S. PTO is issuing patents (including software patents) at
record rates, these patents are not necessarily valid.  The U.S. PTO has
been issuing patents at record rates during the past decade because
Congress and the Department of Commerce, under heavy lobbying from
industry, pressured the U.S. PTO to speed up examination of patent
applications.  By speeding up examination of patent applications, the
U.S. PTO, through its Patent Examiners, have not had time to adequately
examine these patents.  Since the U.S. PTO has not had time to
adequately examine these patent applications, their validity is
questionable until tested in litigation.  Since very few of these
software patents issued in the last decade have been tested in
litigation, they remain of questionable validity.  Thus, although the
number of patents issued in the last decade has risen, the number of
valid patents issued in the last decade has not necessarily risen.
Since the number of valid software patents issued in the last decade has
not necessarily risen, the authors statement regarding the rise in
issuance of patents is misleading.  Since the PPWG's statement regarding
the rise in issuance of patents is misleading, the PPWG should delete
the statement from the PPF.

The PPWG's statement regarding a rise in issuance of software patents in
jurisdictions other than the United States is also misleading.  The
European Union has declared a moratorium on software patents until
November 2001 (see
http://www.european-patent-office.org/news/pressrel/2000_11_29_e.htm).
Furthermore, the Japanese Patent Office is not necessarily open to
software patents, as they recently notified Amazon.com that they were
rejecting Amazon.com's "1-click" patent application (see

    http://www.idg.net/ic_536369_1773_1-3921.html
    http://slashdot.org/articles/01/05/15/1335252.html

).  Many other jurisdictions do not recognize software patents.  So, the
fact that many jurisdictions do not recognize software patents and that
the Japanese and European Patent Offices are lukewarm on software
patents indicates that Patent Offices besides the U.S. PTO are not in
fact issuing more software patents.  Since Patent Offices besides the
U.S. PTO are not in fact issuing more, or any, software patents, the
PPWG's statement regarding the rise in issuance of software patents in
jurisdictions other than the United States is misleading.  Since the
PPWG's statement regarding the rise in issuance of software patents in
jurisdictions other than the United States is misleading, the PPWG
should delete this statement from the PPF.

The PPWG's statement regarding a rise in issuance of software patents is
irrelevant to its patent policy.  The fact that more software patents
are being issued is irrelevant to the development of the Web.  More
patents are being issued on computer hardware; shall we change our
licensing practices on computer hardware because more patents are being
issued on computer hardware (see the above discussion on PCI/AGP versus
MCA in Point 1).  The amount of software patents issued is not relevant
to whether the W3C should allow RAND Licensing.  Since the amount of
software patents issued is not relevant to whether the W3C should allow
RAND Licensing, the PPWG's statement regarding a rise in issuance of
software patents is irrelevant to its patent policy.  Since the PPWG's
statement regarding a rise in issuance of software patents is irrelevant
to its patent policy, the PPWG should delete this statement from the
PPF.

The PPWG's statement regarding the popularity of Business Method Patents
is also misleading.  The authors state:

    ...business method patents have become [an] increasingly significant
factor in the ecommerce marketplace.

Business method patents are a factor only in the United States.  Most
jurisdictions do not allow or even recognize business method patents
(see above discussion on Amazon.com and the Japanese Patent Office.
Furthermore, I note that the Patent Policy FAQ omits the Patent Office
practices of Canada, Latin America, and Taiwan, all significant
industrialized countries.).  Since most jurisdictions do not allow or
even recognize business method patents, the PPWG's statement that
business method patents are popular is misleading.  Since the PPWG's
statement that business method patents are popular is misleading, the
PPWG should delete this statement from the PPF.

The validity of business method patents is also questionable.  The U.S.
PTO must grant a patent application unless a Patent Examiner can find
prior art which anticipates or renders obvious the invention embodied in
the patent application.  Due to time and financial restraints, Patent
Examiners mainly rely on issued patents as prior art for rejecting
patent applications.  Prior to the State Street decision, the U.S. PTO
had issued practically no patents on business methods.  When
corporations started applying for business method patents in the wake of
the State Street decision, the U.S. PTO had no issued patents to reject
these applications.  Since the U.S. PTO had no issued patents to reject
these applications, Patent Examiners were required to issue these patent
applications as patents.  However, the fact that these business method
patents issued does not mean they are valid. Since Patent Examiners only
considered issued patents when examining these business method patent
applications, prior art may exist and be introduced at trial during a
patent infringement lawsuit which will invalidate these patents.  Since
prior art may exist and be introduced at trial during a patent
infringement lawsuit which will invalidate these patents, the validity
of these business method patents is questionable.

The PPWG's questionable statements in Section 2 obscure the fact that
RAND Licensing will grant Patentees more rights than they currently
possess.  Most software patents are issued in the United States.  The
jurisdiction of the United States extends only to its territorial
borders.  However, the W3C sets standards for the entire planet.  Since
the W3C sets standards for the entire planet, RAND Licensing will allow
Patentees to obtain royalties from nations which do not allow or even
recognize software patents.  Since RAND Licensing will allow Patentees
to obtain royalties from nations which do not allow or even recognize
software patents, RAND Licensing allows Patentees to obtain royalties in
nations where they normally would not.  Since RAND Licensing allows
Patentees to obtain royalties in nations where they normally would not,
RAND Licensing grant Patentees more rights than they currently possess.

4.  Miscellaneous Objections

    (i)  Sub-Section 2.2

The first 3 consensus points (interoperability, disclosure, and public
access) of Sub-Section 2.2 support RF Licensing.  I object to the
flexibility point as being unnecessary.

    (ii)  Section 3 SUMMARY

I object to the first sentence as misleading.  The first sentence of
Section 3 states:

  In order to bring about a higher level of certainty to patent
licensing terms...

I feel that this sentence is misleading because it does not define what
is uncertain about the W3C's current patent licensing terms.
Furthermore, it suggests that the current patent licensing terms are
somehow uncertain.

  (iii)     Section 4 DEFINITIONS

Sub-part (a) defines "Essential Claims".  However, the definition does
not explain who determines a non-infringing alternative or how a
non-infringing alternative is determined.  I submit that either the WG
as a whole or an independent third party should determine these issues.
In no event should the Patentee be allowed to determine these issues,
due to the clear conflict of interest.


CONCLUSION

I support the inclusion of Royalty-Free Licensing and the Patent
Disclosure Requirements in the draft Patent Policy Framework.  I oppose
the inclusion of RAND Licensing in the proposed Patent Policy
Framework.  I believe that Royalty-Free Licensing is completely adequate
to accomplish the goals of the W3C's Patent Policy and is in the
Internet community's best interests.  I therefore request that the W3C
rewrite the draft Patent Policy Framework to include only Royalty-Free
Licensing of Patents and related Intellectual Property Rights and to add
the above-listed requirements to the Patent Disclosure obligations.


Sincerely yours,

Daniel E. Maddux
4100 Greenbriar Street
Number 342
Houston, Texas  77098
dpaladin@hal-pc.org
Received on Wednesday, 10 October 2001 13:31:55 GMT

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