Re:       HP’s Proposal for W3C Standards



I.                    HP’s Position on the Proposed W3C Patent Policy Framework


Hewlett-Packard Company opposes the adoption of the proposed W3C Patent Policy Framework in its current form and recommends that it be replaced by a policy with the goal of producing W3C standards that are all royalty free.


Free, open, technically excellent standards have been the foundation for the Web’s success in the past, and HP believes that they will be equally fundamental in the future.  In particular, we feel that the ability to use W3C Recommendations (standards) without charge will be essential to their quick acceptance and to their universal acceptance.


Over two thousand comments from both W3C members and the public concerning the current patent policy proposal show a clear consensus that the time is ripe for the W3C to take a firm position that its goal is royalty free standards.


We commend the excellence of the legal work in the proposed Patent Policy, and thank its authors for the significant effort that document represents.  We believe that this document can provide the base document for a far better policy.


The authors of the proposed Patent Policy hold widely varying viewpoints on key issues, and their draft represents a compromise.  Dictionaries give several definitions of “compromise”.  One is “a settlement of issues in which each side makes concessions”.  Another is “a concession to something detrimental”.   In our view, the proposed Patent Policy fits both definitions.


From our perspective the major flaw in the Patent Policy proposal flows from the lack of an adequately definitive guiding principle.  The authors therefore stretched to accommodate too wide a range of viewpoints, including undesirable as well as desirable licensing alternatives.


Our proposed prescription follows directly from the diagnosis: the first step in drafting a W3C Patent Policy document should be for the W3C community  to reach agreement on the patent policy’s guiding principle.


II.                 HP’s Alternative Proposal for a W3C Patent Policy Framework


We respectfully request that the discussion of the disposition of the current draft Patent Policy by the W3C Advisory Committee and Team include consideration of the following proposition:


                                   W3C Royalty Free Standards Policy


1.      In light of W3C’s mission to lead the Web to its full potential,

the W3C will only endorse Recommendations which it believes

can be used free of royalties and free of other harmful licensing



2.   The W3C Patent Policy Working Group is hereby directed to

modify its draft policy to be consistent with this principle.



III.               Why not also allow “Reasonable and Non-Discriminatory” (RAND) licensing?


Our proposal that W3C standards be royalty free intentionally excludes the possibility of standards based on “Reasonable and Non-Discriminatory” (RAND) patent licensing. 


Proponents of RAND licensing frequently offer the specious argument that RAND licensing removes the influence of financial and legal considerations so that standards decisions can be made on a purely technical basis.  The truth is quite different.  RAND licensing does not remove the influence of financial and legal considerations, but amplifies that influence by delaying it.  After the technical work of a standard is done, the lawyers and accountants can radically alter the meaning and effect of the standard since they get the last word.  In actuality, it is royalty free licensing not RAND licensing that minimizes the role of financial and legal considerations and maximizes the role of technical merit.


More specifically, in the case of W3C we view the RAND licensing alternative in the draft proposal as fundamentally flawed for reasons including the following:


1.      RAND distorts the standards selection process


Do you personally or does your company make selection decisions involving costs without taking price tags into account?  Of course not, and neither should W3C Working Groups.  The RAND approach can force a Working Group to choose between two approaches, one free and one expensive, without knowing which is which. 


2.      RAND allows users to be ambushed and exploited


RAND allows the price for essential patent rights to be set after their use is mandated by a W3C Recommendation.  Users cannot predict their costs until too late, and can find themselves at the mercy of a patent holder.


3.      RAND ignores the importance of Open Source


Open Source is one of the most powerful creative forces in computing today, and W3C patent policy should facilitate it rather than blocking it via RAND royalty fees.  Incidentally, the phrasing in our alternative proposal, “free of royalties and free of other harmful licensing restrictions” is aimed directly at encouraging open source developers among others.  We also feel that the Patent Policy Working Group should be expanded to include a representative of the Open Source community.


4.      RAND’s scope of applicability at W3C is undefinable or non-existent


Even advocates of RAND licensing concede that web infrastructure standards should be royalty free, and that RAND licensing at W3C should be applicable only to standards above the infrastructure level.  But no one has been able to draw the dividing line separating the levels.  And, in any case, such a dividing line would be steadily rising over time as formerly optional capabilities become standard parts of the infrastructure.  With RAND licensing, this natural evolution could create royalty bearing infrastructure standards, a prospect universally agreed to be unacceptable.  In fact, the imprecise and moving boundary for web infrastructure raises the question:  are all W3C standards at least potentially part of the fundamental web infrastructure and therefore most appropriately royalty free?


5.      RAND is burdensome to W3C and its Members


One of the greatest challenges to W3C is being able to move at a pace commensurate with its role in the industry and with the reasonable expectations of the broader community.  Issues connected with RAND licensing at W3C undeniably have already proven themselves to be an immense source of delay and wasted effort.  From arguments about “licensing mode” at the time of Working Group charter formation to arguments about the terms “reasonable” and “non-discriminatory” long after a standard is completed, offering the option of RAND licensing adds little value to W3C Recommendations but adds much complexity, cost, and delay. 



IV.              Would a royalty free policy for W3C standards harm innovative companies and destroy their intellectual property rights?


Some companies will see HP’s proposal for royalty free W3C standards as harmful to those who have invested in research and unfair to those who own intellectual property.  As one of the world’s largest investors in research innovation and one of the world’s largest owners of intellectual property, our viewpoint is different.  Our philosophy is that the direct financial return on investment in research should come from building or licensing differentiating features of products rather than from attempting to levy a royalty tax on the fundamental standards needed for interoperability. 


Of course other companies have the right to their own philosophies.  A royalty free policy for W3C would still leave those companies wide latitude in how they choose to utilize their intellectual property.  They can voluntarily choose on a case by case basis whether they want W3C to adopt a standard requiring licensing of a patent owned by them.  Though royalty free, such a license would be for the minimal rights necessary to implement the standard, and only for that limited purpose.  Adoption of the standard might well lead to other direct and indirect revenue opportunities for the patent owner.  Of course the patent owner also has the option of attempting to create a royalty bearing standard outside of W3C.  But the key point is that W3C’s adoption of a royalty free patent policy would not preclude a W3C Member from pursuing its own preferred patent policy.


HP sees a royalty free W3C patent policy as fully consistent with innovation and with intellectual property rights.



V.                 Summary


In summary, Hewlett-Packard respectfully requests that the W3C community give serious consideration to our proposal:  Now is the time for W3C to declare boldly that to lead the Web to its full potential, W3C will do everything in its power to insure that the use of W3C standards remains free both now and in the future.





Jim Bell

W3C Advisory Committee Representative


Director of Standards and Industry Initiatives

Hewlett-Packard Company