ACTION-985: relevant terminology for section 5.

ACTION-985.

The action is "assess whether there is any relevant terminology we can quote in 
respect of last para of Section 5".

I have reviewed the general understanding of the terms, and how they appear in W3C,
IETF, 3GPP, OMA, EU, GNU documents. People uninterested in the longish survey details
can jump to conclusions at the end.


GENERAL.

The Wikipedia contains a nice summary of the issue.
http://en.wikipedia.org/wiki/Fair,_Reasonable_and_Non_Discriminatory_terms
which is most often framed in terms of access to IPR.

    "In licensing, Fair, Reasonable and Non Discriminatory terms (FRAND) refers to
    the obligation that is often required by Standards Setting Organizations (SSOs) 
    for members which participate in the standard setting process.
    [...]
    While there are no legal precedents to spell out specifically what the actual 
    terms mean, it can be interpreted from the testimony of people like Professor 
    Mark Lemley from Stanford University, in front of the United States Senate 
    Committee on the Judiciary that the individual terms are defined as follows:

    Fair relates mainly to the underlying licensing terms. Drawing from anti-trust /
    competition law; fair terms means terms which are not anticompetitive and that 
    would not be considered unlawful if imposed by a dominant firm in their relative 
    market. Examples of terms that would breach this commitment are; requiring 
    licensees to buy licenses for products that they do not want in order to get a 
    license for the products they do want (bundling), requiring licensees to license
    their own IP to the licensor for free (free grant backs) and including 
    restrictive conditions on licensees’ dealings with competitors (mandatory 
    exclusivity).

    Reasonable refers mainly to the licensing rates. A reasonable licensing rate is 
    a rate charged on licenses which would not be result in an unreasonable aggregate
    rate if all licensees charged a similar rate. Clearly aggregate rates that would
    significantly increase the cost to the industry and make the industry 
    uncompetitive are unreasonable. It is worth noting that a licensor which has 
    several different licensing packages might be tempted to have both reasonable and
    unreasonable packages. However having a reasonable “bundled” rate does not excuse
    having unreasonable licensing rates for smaller unbundled packages. All licensing
    rates must be reasonable.

    Non-Discriminatory relates to both the terms and the rates included in licensing
    agreements. As the name suggests this commitment requires that licensors treat 
    each individual licensee in a similar manner. This does not mean that the rates 
    and payment terms can’t change dependent on the volume and creditworthiness of 
    the licensee. However it does mean that the underlying licensing condition 
    included in a licensing agreement must be the same regardless of the licensee. 
    This obligation is included in order to maintain a level playing field with 
    respect to existing competitors, and to ensure the potential new entrants are 
    free to enter the market on the same basis."



W3C

The W3C attempted to set its original IPR policy on such a concept in
http://www.w3.org/TR/2001/WD-patent-policy-20010816 as a form of licensing:

    "(e) RAND License

    RAND stands for "reasonable and non-discriminatory" terms. A "RAND License" shall
    mean a license that:
         shall be available to all implementers worldwide, whether or not they are 
         W3C Members;
         shall extend to all Essential Claims owned or controlled by the licensor and
         its Affiliates (except as described in section 8.2 concerning licenses 
         relating to Contributions);
         may be limited to implementations of the Recommendation, and to what is 
         required by the Recommendation;
         may be conditioned on a grant of a reciprocal RAND License to all Essential
         Claims owned or controlled by the licensee and its Affiliates. For example,
         a reciprocal license may be required to be available to all, and a 
         reciprocal license may itself be conditioned on a further reciprocal license
         from all (including, in the case of a license to a Contribution, the 
         original licensee).
         may be conditioned on payment of reasonable, non-discriminatory royalties or
         fees;
         may not impose any further conditions or restrictions on the use of any 
         technology, intellectual property rights, or other restrictions on behavior
         of the licensee, but may include reasonable, customary terms relating to 
         operation or maintenance of the license relationship such as the following:
         audit (when relevant to fees), choice of law, and dispute resolution."

This approach generated a wave of protest from the developers' community (the mailing
list archives keep trace of the furore), which led the W3C to eliminate this mode of
licensing for royalty-free access to IPR. The latest version of the document is 
http://www.w3.org/Consortium/Patent-Policy-20040205. 

    "5. W3C Royalty-Free (RF) Licensing Requirements
    [...]
    1. shall be available to all, worldwide, whether or not they are W3C Members;
    2. shall extend to all Essential Claims owned or controlled by the licensor;
    3. may be limited to implementations of the Recommendation, and to what is 
       required by the Recommendation;
    4. may be conditioned on a grant of a reciprocal RF license (as defined in this
       policy) to all Essential Claims owned or controlled by the licensee. A 
       reciprocal license may be required to be available to all, and a reciprocal
       license may itself be conditioned on a further reciprocal license from all.
    5. may not be conditioned on payment of royalties, fees or other consideration;
    6. may be suspended with respect to any licensee when licensor is sued by 
       licensee for infringement of claims essential to implement any W3C 
       Recommendation;
    7. may not impose any further conditions or restrictions on the use of any 
       technology, intellectual property rights, or other restrictions on behavior 
       of the licensee, but may include reasonable, customary terms relating to 
       operation or maintenance of the license relationship such as the following: 
       choice of law and dispute resolution;
    8. shall not be considered accepted by an implementer who manifests an intent 
       not to accept the terms of the W3C Royalty-Free license as offered by the 
       licensor."

The points appearing relevant to the CTG are no. 1, 5, 7, 8.



IETF

The concept appears in several documents of the IETF related to the disclosure of
IPR during the elaboration of a standard, most importantly:

RFC3669, 02.2004 - Guidelines for Working Groups on Intellectual Property Issues
RFC3979, 03.2005 - Intellectual Property Rights in IETF Technology

RFC3669 is a list of recommendations to IETF members on how to deal with assertions
of IPR from corporations. It indicates that:

   "Words such as "reasonable", "fair", and "non-discriminatory" have no
   objective legal or financial definition.  The actual licensing terms
   can vary tremendously.  Also, IPR claimants have occasionally
   asserted that there were already sufficient licenses for a particular
   technology to meet "reasonable" multisource and competitiveness
   requirements and, hence, that refusing to grant any licenses to new
   applicants was both fair and non-discriminatory.  The best way to
   find out what an IPR claimant really means by those terms is to ask,
   explicitly."

RFC3979 is the document regulating the disclosure process. It states the following:

   "4.1.  No Determination of Reasonable and Non-discriminatory Terms

   The IESG will not make any explicit determination that the assurance
   of reasonable and non-discriminatory terms or any other terms for the
   use of an Implementing Technology has been fulfilled in practice.  It
   will instead apply the normal requirements for the advancement of
   Internet Standards."



3GPP

Third Generation Partnership Project Agreement for 3GPP2 (01.1999) discusses the
disclosure of IPR and their licensing:

    "3.1 Undertakings of Organizational Partners.
    The Organizational Partners shall undertake to:
    [...]
    encourage their respective members to declare their willingness to grant 
    licences on fair, reasonable terms and conditions on a non discriminatory 
    basis, and consistent with their IPR Policy;"

The terms are supposed to be understood and are not further defined.



OMA

The Open Mobile Alliance also provides for disclosure of IPR and granting of licenses
under FRAND conditions (Open Mobile Alliance IPR Procedural Guidelines For OMA 
Members, 02.2004):

    "Upon disclosure of an Essential IPR, the Open Mobile Alliance shall ask the 
    relevant Member to give a declaration that it will license such Essential IPR
    in accordance with the Application Form (i.e. on fair, reasonable and 
    non-discriminatory terms)."

The terms are supposed to be understood and are not further defined.



EU

In its R&D programmes, the EU sets a series of conditions for partners in a project
to access "foreground" and "background" technology. The Guide to Intellectual 
Property Rules for FP7 projects (ftp://ftp.cordis.europa.eu/pub/fp7/docs/ipr_en.pdf)
states: 

    "8.8. Conditions for access rights: Royalty-free or fair and reasonable 
     conditions
    [...]
    Fair and reasonable conditions means appropriate conditions including possible
    financial terms (market conditions or other) taking into account the specific 
    circumstances of the request for access, for example the actual or potential 
    value of the foreground or background concerned and/or the scope, duration or 
    other characteristics of the use envisaged (see Article 2.3 RfP ; Article II.1.6
    of ECGA)."

Precise definitions of the conditions are typically left to so-called consortium 
agreements.



GNU

The Free Software Foundation considers IPR that gets embodied in software in its page
http://www.gnu.org/Confusing%20Words%20and%20Phrases%20that%20are%20Worth%20Avoiding%20-%20GNU%20Project%20-%20Free%20Software%20Foundation%20(FSF).htm

    "RAND (reasonable and non-discriminatory)

    Standards bodies that promulgate patent-restricted standards that prohibit free
    software typically have a policy of obtaining patent licenses that require a 
    fixed fee per copy of a conforming program. They often refer to such licenses
    by the term 'RAND,' which stands for 'reasonable and non-discriminatory..'

    That term white-washes a class of patent licenses that are normally neither
    reasonable nor non-discriminatory.
    [...]
    We suggest the term 'uniform fee only,' or 'UFO' for short, as a replacement. 
    It is accurate because the only condition in these licenses is a uniform royalty
    fee."



CONCLUDING REMARKS

a) The inclusion of a requirement for access to technology under fair, reasonable and
non-discriminatory conditions is a standard element appearing in practically every
normative effort;
b) The absence of such clauses implies that unfair, unreasonable (i.e. exhorbitant)
or discriminatory practices may be acceptable.
c) No standardization organization endeavours to inspect each participant's terms to
check them for fairness, reasonableness or non-discriminatory aspects; the principle
of good faith prevails.
d) Although no precise definition of the wording can be fixed, there is a general
understanding of their meaning, which is shaped by the context, the technology, the
standardization activity, past practices and the participants involved. In case of 
serious conflicts, courts or arbitration organizations must settle the question.

>From this perspective, I propose to lift the standard terminology and some text from
the W3C IPR policy document to include in section 5 as follows:

"Such access is granted under fair, reasonable and non-discriminatory conditions. In
particular:
1. it is available to all, worldwide, whether or not they are W3C Members;
2. it does not impose any further conditions or restrictions on the use of any 
technology, intellectual property rights, or other restrictions on behaviour of the
tester, but may include reasonable, customary terms relating to operation or 
maintenance of the relationship between tester and proxy operator such as the 
following: choice of law and dispute resolution, confidentiality of parameters to 
access the interface, disclaimer of liability."

This should be sufficient to address my personal concerns:
a) that access to the interface is conditional on registration to an expensive or
constraining partnership programme;
b) that utilization of the interface is granted only if the results of testing are
published only with the permission of the proxy operator;
c) that the proxy operator wants some kind of priority or advantage with respect to
the applications tested through the interface.

I understand that a blanket imposition of entirely free access to such testing 
interfaces may put off some operators (though I am sure several will provide such
free facilities). On the other hand, "reasonable" conditions might become quickly 
quite expensive for small and medium sized enterprises that must test and re-test 
the suitability of transformation proxies in a multitude of operator networks. In 
the absence of a free access to such interfaces, the presence of an official mailing
list is all the more essential to gather and disseminate the results of testing with
various proxies (see my other message)...



E.Casais

Received on Thursday, 18 June 2009 17:55:38 UTC