MS views on Last Call Patent Policy Draft

Microsoft would like to offer its views on the latest proposal for a W3C
patent policy as described in the last call document [1].  It has come
to our attention that there has been a lot of speculation regarding our
position concerning the recent decision within the Patent Policy working
group (PPWG) to propose a Royalty Free (RF)-only policy. Because much of
this speculation is not accurate and actually clouds the issues we are
most concerned with, we would like to clarify our position for those who
are interested.

First we would like to commend the W3C for pursuing the incredibly
difficult challenge of defining a patent policy to cover the development
and licensing of Web-based standards.  There is no surprise that there
is a wide array of opinions on a large number of issues that need to be
addressed as part of this exercise.  The fact that the current proposal
treats all participants (except invited experts and perhaps W3C staff)
and licensees the same is especially noteworthy given that the
interested parties employ different business models and use web
technologies in very different manners.

Microsoft has been a significant supporter and contributor of
Recommendations and industry standards developed at the W3C.  In doing
so Microsoft has consistently brought substantial contributions to the
W3C on a royalty free basis both to encourage consensus-based
collaboration around interoperability standards and to help promote wide
adoption of these standards within the industry (XML-Data (a key input
paper for XML Schema), SOAP & WSDL to name a few).  Many of these
standards have been core to the web foundation on which many of
Microsoft's products depend. As such we have viewed the W3C as one of
the premier forums for developing such important standards.  Microsoft's
ability to charge royalties for implementations of key W3C standards has
not been and is not a significant consideration for us in the debate
over whether or not the W3C should have a RF-only policy. We are
concerned that that adoption of the current RF-only policy will severely
limit the effectiveness of the W3C in continuing to be a good forum to
develop web-based standards that will achieve widespread adoption in
terms of cost and time.

We have found that standards are only successful if our customers'
requirements are being met through their active participation in the
standards setting activity.  It so happens that many of our customers
are enterprises outside of the core IT sector such as consumer
electronics companies and telecommunications companies.  Many of these
enterprises have long established patent portfolio departments that
derive revenue commensurate with some of their significant business
units.  We have heard from many of these customers who are also W3C
members that they will not participate in standards development
activities if it means that they will have to agree to license their
patents on a RF-only basis.

"Who needs them?" is the inferred response that some web developers and
IT companies have given to the threat of these enterprises pulling out
of the W3C and web standards development.  We think these enterprises
are an important part of the process for the following reasons.

  1. As large consumers of web-based technologies they have a
     significant role in setting the requirements for web-based
     standards.

  2. Those companies with large patent portfolios and active licensing
     programs may own patents that cover W3C standards whether or not
     they have participated in the development of the standard.  If
     they have not participated, they will not have any obligation to
     license at all or to disclose early, let alone license RF.  This
     could lead to very serious patent blocking problems instead of 
     reducing them. 

  3. Other standards setting organizations base their standards on W3C
     Recommendations by making mandatory references to the inclusion
     of W3C Recommendations.  If the licensing regime covering the W3C
     Recommendations is unacceptable to members of the other standards
     setting organizations then they will not be incorporated,
     diminishing the possibility of widespread adoption and their
     usefulness overall.

"Why do these companies want to set up a toll booth on the web?" has
been asked by others.  While Microsoft can't answer that question for
any other company, we can share some observations.
----------------------------------------------------------------------
  1. There is no toll both on the web today, although there has been
     no policy in place preventing companies from doing so in the
     past. 

  2. There is a tendency to look at the royalty issue in black and
     white terms. For example, many people understand how a patent
     royalty of a few cents per DVD can be applied to DVD sales, but
     have more difficulty understanding how one could apply a similar
     patent royalty to html. Perhaps broadening how one views the use
     of royalties and in the case of this example, envisaging a
     reasonable one-time lump sum applied to browsers would be more
     palatable than a fee each time a user clicked on an html link.
     The point being that even if a rare situation arose in which a
     patent royalty was going to be charged, it does not mean that a
     toll booth is going to be built on the Web.

  3. Because most standards setting organizations' policies (as well
     as competition law, fraud and similar legal principles in the US
     and Europe) place some burden on participants who own patents to
     disclose those patents in a timely manner, these patents are
     generally disclosed early on and prospective implementers can
     determine whether acceptable license terms will be offered for
     the use of those patents.  

If the RF policy is likely to have these negative results, how is it
that the PPWG's Last Call proposal includes only a RF option for W3C
Recommendations? First it is worth noting that the submitted proposal is
based on a very slim majority vote.  Secondly, the W3C is focused much
more on the web development community being able to create web
technology than it is on the users of the web.  While most web
developers and users alike would prefer RF standards it is not clear
that everyone arrives at this preference for the same reasons.  The
software development community has a number of groups with special
interests and it is apparent that some of these special interest groups
have viewed the W3C patent policy as means for achieving objectives that
do not relate to the efficient and useful development of standards at
the W3C.  For example, on the day that the PPWG released its public
summary of the meeting announcing a RF-only policy, Software in the
Public Interest's spokesperson Bruce Perens issued a commentary on ZDNET
[2] stating:

  The W3C's decision will resolve only a single battle in a much
  Broader war. A similar royalty-free policy must now be enacted by
  the Internet Engineering Task Force (IETF) and many other
  organizations. Some standards bodies may decide to buck the trend
  and act as playgrounds for large patent holders. 

  Those organizations will argue that by allowing patent royalties,
  they will always be able to choose the best algorithm for any job.
  It will then fall to the market to decide which organizations it
  will follow. This battle must also be taken to the various
  governments and treaty organizations that produce bad law permitting
  the patenting of software and business systems, and continue to do
  so.

Mr. Perens could not be any clearer in stating his community's position
on the value of the W3C patent policy - it is the first battle in a
larger war against software patents and commercial software, but has
little to do with the W3C's role in remaining a good place to develop
web standards.

At the same time the Free Software Foundation (FSF), urged software
developers to flood the W3C public comment list with mail stating their
objections to the already RF-only policy.  It turns out that because the
General Public License (GPL) is such a restrictive source code license,
companies using the GPL for their products would not be able to
incorporate W3C implementations that are distributed royalty free but
with legitimate field of use restrictions properly permitted under the
W3C RF patent policy.  Consequently, the FSF's spokesperson Eben Moglen
has urged his followers to request that the W3C license commitment be
changed to an unlimited RF patent license meaning that any patent that
covered a W3C Recommendation would have to be made available to anyone
royalty free for any purpose whatsoever, even purposes that have nothing
to do with the W3C Recommendation and even for uses that might be
contrary to technology endorsed by the W3C.  Mr. Moglen's statement
posted on the FSF website [3] says:

  The Foundation urges all those who care about the right of Free
  Software developers to implement all future web standards to send
  comments to the W3C urging that the policy be amended to prohibit
  the imposition of "field of use" restrictions on patent claims
  contributed to W3C standards.

On the one hand we have Bruce Perens hailing the W3C's RF-only decision
because it represents a victory on the way to eliminating the
enforceability of software patents even though a significant percent of
his constituency is apparently unable to distribute software based on
W3C Recommendations, while his colleague Eben Moglen urges his
constituents to amend the W3C patent policy in a way that would surely
lead to a mass exodus of the W3C's current membership.  Interestingly,
the PPWG did not have a RF-only policy until the voices of these Open
Source and Free Software experts were heard, but their primary interest
in a RF-only policy does not lie with the W3C remaining a good forum for
developing web standards.

While the open source software community, like the commercial software
community, has and continues to contribute to the development of the
Web, in part, by creating and supporting Web standards, these
communities do have different relationships with the W3C.  As you
consider whether or not a RF-only policy is the right patent policy for
the W3C we hope you will not only think about the pros and cons of such
a policy but why some parties are issuing a call to arms to individuals
who may have little engagement with the W3C other than to comment on
this patent policy.  

So what would be a viable alternative to a RF-only IPR Policy? One of
the proposals which was rejected by a narrow vote of the PPWG but which
is included in the Last Call document [4] permitted a Patent Advisory
Group (PAG) to conclude 

  The final Recommendation cannot be implemented under the W3C Core
  licensing model. If PAG determines that specific features not
  available under the W3C Core license are desirable and unavoidable,
  then the PAG may propose: 

  other action is taken to resolve the licensing problem that will
  enable the Recommendation to meet its original goals and the goals
  of the Consortium.

This proposal gave the PAG an opportunity to propose a workable solution
outside the RF-only policy.  In exceptional cases other terms and
conditions might not thwart the adoption of a standard and could be
acceptable to the W3C.  While it is very unlikely that different terms
and conditions would be found acceptable in any but the most exceptional
cases given the strong preference for RF web standards, it may be
sufficient to keep many of the W3C members who are consumers of web
technologies and who have active patent licensing programs enough
insurance to keep them engaged in the work of the W3C.

We urge the W3C and the Advisory Committee to evaluate the precedent
setting RF-only nature of the proposed patent policy in the context of
whether or not it will enable the W3C to remain a good forum for
developing web standards.  If RF only, without reasonable exceptions is
adopted and leads to key consumers of web-based standards, such as
consumer electronics and telecommunications members, going elsewhere,
will the core web standards continue to be developed at the W3C?  Will
those web standards avoid the patents of those enterprises no longer
participating in the W3C process?  Will those standards be used as the
foundation for other standards?  Given these concerns and questions the
W3C should be cautious about adopting this RF-only policy backed by some
vocal parties whose primary interests are unrelated to the W3C's ability
to continue to develop widely adopted web standards.

David Turner
Microsoft Corporation
W3C Patent Policy Working Group member
W3C Advisory Committee representative

[1] http://www.w3.org/TR/2002/WD-patent-policy-20021114/
[2] http://news.com.com/2010-1071-961018.html?tag=lh 
[3] http://www.fsf.org/philosophy/w3c-patent.html 
[4] http://www.w3.org/TR/2002/WD-patent-policy-20021114/#Addendum

Received on Thursday, 16 January 2003 13:07:33 UTC