[A2k] IP-Watch: Panel: Standards Aid Innovation, But Only If Open

[Thiru Balasubramaniam]

http://www.ip-watch.org/weblog/2010/01/29/panel-standards-aid-innovation-bu=
t-only-if-open/

29 January 2010
Panel: Standards Aid Innovation, But Only If Open
By Kaitlin Mara @ 6:26 pm

Standards are vitally important to innovation but in order for them to
serve their purpose effectively, they must be open, said a panel at
the World Intellectual Property Organization this week.

The basic principle is that innovation requires competition,
competition is facilitated by interoperability, and interoperability
is facilitated by open standards, said Thomas Vinje of non-profit
association European Committee for Interoperable Systems.

Both patents and standards are intended to achieve the same goals of
encouraging innovation, said Vinje.

But they function in opposite ways, said Karsten Gerloff, president of
the Free Software Foundation Europe. Patents, he said, are for
=93private exclusive use=94 whereas standards are for =93public collective
use=94 and are more beneficial the more widely they are implemented.

And the =93interplay between them is problematic,=94 especially in the
software arena, Vinje said.

When there is a conflict between two interests that encourage
innovation, said Gerloff later, then it =93needs to be settled in favour
of the public interest. Interoperability prevails.=94

They were speaking at a 26 January side event to the World
Intellectual Property Organization Standing Committee on the Law of
Patents, meeting from 25-29 January.

Preventing Abuse

=94We have globalisation of the rights of IP but don=92t have much
globalisation in terms of ways to deal with abuse,=94 said James Love,
director of Knowledge Ecology International, which organised the event.

Part of the reason there is not that much being done on the open
standards issue is that =93standards are a rich man=92s game, adopted in
the rich world for rich people,=94 said Vinje. And =93even within the rich
world, they are regarded as these arcane, complicated things that very
few people deal with.=94

This is where the international community could be of use, speakers at
the event suggested.

This is more than just a commercial issue, though there is money at
stake, said Vinje. =93It=92s very much a public policy issue, particularly
in developing countries.=94 For example, he said he had just returned
from Nicaragua where he was =93amazed how many people have mobile
phones.=94 But =93those who bring that technology to the world needs to
have their demands limited and in countries like Nicaragua prices
[kept] as low as they can appropriately be.=94

Love presented a proposal for managing disclosure of patents related
to standards, which was contained in Article 6.2 of a draft Access to
Knowledge Treaty from 2005.

WIPO should create a mechanism for eliminating the fraud in the
system, Love said. The mechanism suggested by the A2K Treaty involves
a global, open Standards Development Organization with criteria for
the disclosure of patent claims relevant to standards - with the
stipulation that any member of the organisation that fails to disclose
will be prevented from enforcing that IP on the standard. The full
text of the relevant part of the treaty is available here [pdf].

The European Commission requires telecommunications companies to let
networks talk to each other, Gerloff said, so, =93Why not require the
same for software?=94 Once it reaches a certain level of market
penetration, it must disclose enough of its interface to allow other
programs to interact with it, he said.

Defining Open Standards

For a standard to be open, said Vinje, it must be adopted through a
transparent process, enable all implementations of the standard to
interoperate, be platform-independent and vendor-neutral, and have all
of its essential patents available either royalty-free or with so-
called =91FRAND=92 licensing terms. FRAND stands for =93fair, reasonable an=
d
non-discriminatory.=94

The standardisation of the Microsoft document format OOXML failed on
several of the requirements for the creation of an open standard,
Vinje said, including having a non-transparent process and not
allowing interoperability of different implementations (IPW,
Information and Communications Technology, 29 February 2008).

Patent holders gain market power if a standard uses their intellectual
property, and there is a risk this power could be abused, he said. For
example, if a participant in a standard-setting organisation fails to
disclose a patent or application, a standard cannot be designed around
their technology. The right holder could then make high royalty
demands for licences.

There is also the danger of =93patent trolls,=94 Vinje added, who do not
disclose the existence of a patent until after a standard is set, at
which point they =93jump out of the forest and sue those who have
implemented the standard.=94

There are particular considerations for standards and free software,
said Gerloff. With proprietary software, developers pay a royalty to
the patent holder, sell software to recipients, and use this money to
help pay patent holders. But with free software, the recipients have
the freedom to continue passing along the software. So the original
developers have no way of knowing how many copies have been
distributed. This means certain kinds of licences, such those with
running royalties (paid on basis of the number of software products
sold), are inappropriate for free software.

Love also raised the concern that the secretive, still under
negotiation Anti-Counterfeiting Trade Agreement (ACTA) will contain
provisions with implications for standards, and the IP system as a
whole. Specifically, the World Trade Organization Trade-Related
Aspects of Intellectual Property Rights (TRIPS) Agreement Article 44,
which allows for exceptions in injunctions, would be negated if leaked
drafts of ACTA, which seem to eliminate these exceptions, are accepted.

Kaitlin Mara may be reached at kmara@ip-watch.ch.

------------------------------------------------------------


Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997