[Ecommerce] IBM, Microsoft patent web standards

[James Love]

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            IBM, Microsoft plot Net takeover (Enterprise ENTE)

            April 11, 2002 9:47pm

            IBM and Microsoft have been quietly busy behind the scenes
for the last two years building a toll booth that could position the
two companies to collect royalties on most if not all Internet traffic.

            While the technologies that form the foundation of that toll
booth have yet to be officially recognized as standards by an
independent standards body, the collective strength of IBM and Microsoft
could be enough to render Internet standards consortia powerless to stop
them.

            The potential for the two giants to erect a toll booth is
tied to the likelihood that Web services protocols such as SOAP, WSDL,
and UDDI--and the related ones to which the two companies hold
patents--will one day be as important as the standard protocols (such as
TCP/IP and HTTP) on which the Internet is based today. Web services and
the protocols that make them possible are destined to play a major role
in most if not all electronic commerce as well as other Internet
traffic.

            If the protocols do become standards, either by virtue of an
independent standards organization's imprimatur or by attaining a de
facto status, IBM and Microsoft--or any other company that maintains the
intellectual property rights to them--could legally impose royalties on
that traffic. In fact, any protocols that become a part of the core
Internet infrastructure without having been made available on a
royalty-free basis could guarantee their patent holders the right to
place a tax on the Internet traffic that depends on those protocols.

            No standard policy

            For the most part, standards-setting for the Internet and
Web has taken place within the working groups of two organizations: the
Internet Engineering Task Force (IETF) and the World Wide Web Consortium
(W3C). Until recently, neither organization had maintained a policy
requiring vendors to make the intellectual property (IP) they contribute
to the standards setting process available on a royalty-free basis.
According to W3C Patent Policy Working Group Chairman Danny Weitzner,
"Despite the lack of a policy, there has always been an understanding
amongst the various contributors that the Internet and the Web wouldn't
be possible or scalable unless their contributions were available to
everyone on a royalty-free basis."

            But that gentleman's agreement has been tested several times
over the years and it could end up being tested again by Microsoft and
IBM. According to documents on the W3C's Web site, IBM and Microsoft not
only hold patents to specific Web services protocols, but also have no
intentions of relinquishing their IP rights to those protocols should
they become standards. The documents indicate that two companies are
currently maintaining their rights to pursue a reasonable and
non-discriminatory (RAND) licensing framework as opposed to a
royalty-free-based framework. The RAND framework is widely acknowledged
as the one that keeps a vendor's options open in terms of being able to
charge content developers and Internet users a royalty for usage of
relevant intellectual property.

            Page 2: HP withdraws support

            Against the backdrop of the W3C's emerging plan to adopt a
primarily royalty-free-based patent policy, the royalty-free vs. RAND
controversy reached full boil last October when Hewlett-Packard withdrew
its support as a sponsor of IBM and Microsoft's W3C WSDL submission on
the basis that WSDL might not be royalty-free. According to a statement
by HP's director of standards and industry initiatives and W3C advisory
committee representative Jim Bell, "HP resigned as a co-submitter of the
otherwise excellent Web Services Description Language (WSDL) proposal to
W3C solely because other authors refused to let that proposal be royalty
free."

            According to the W3C's Weitzner, "the Internet community,
which includes developers and users, has voiced their opposition and the
W3C is responding with a policy that enforces a royalty-free framework
in all situations with few exceptions, and Web services isn't one of
them."

            While that policy is still in draft form, certain W3C
documents are beginning to indicate the organization's adoption of that
position. For example, the W3C's XML Protocol Working Group Charter
contains the following text in its intellectual property section: "Any
intellectual property essential to implement specifications produced by
this Activity must be at least available for licensing on a royalty-free
basis."

            In it's coverage of the controversy, Linux Today's version
of Bell's statement includes a statement from W3C director Tim
Berners-Lee declaring Web services protocols like WSDL to be common
infrastructure protocols to which the royalty-free licensing framework
should apply.

            Weitzner also acknowledges that, in addition to HP, Apple
and Sun are wholeheartedly behind the royalty-free movement too.
According to Sun's Manager of XML Industry Initiatives Simon Nicholson,
"Anyone should be able to use the specifications that define the
Internet infrastructure without charge. We believe the best route to
ensuring this is that such specs be licensed under royalty free terms."
Sun backed that position up when it relinquished a set of IP rights it
had--a move that cleared the way for the royalty-free use of the W3C
standard for Xlink.

            IBM: patent defense

            IBM and Microsoft, however, appear to be digging in their
heels with respect to the contributions they have been making to the
standards process. In a document filed with the W3C, IBM opposed the
move to a royalty-free-only framework partially on the basis that
companies must be allowed to maintain their patents in order to defend
themselves against potential patent infringement suits by other
companies.

            Nevertheless, the mounting pressure over the WSDL protocol
apparently worked. When asked if IBM planned to make its contributions
to the various Web services protocols available on a royalty-free-basis,
IBM's Director for eBusiness Standards Strategy Bob Sutor said, "The one
I can respond to is WSDL itself. That is a royalty-free working group
and we are the editor of that spec. I would like to leave it at that."
To no avail, several attempts were made to get official comment from
Microsoft on the issue of royalty-free standards.

            Official documents on the W3C's site support Sutor's
assertion. According to the home page of the W3C's Web Services
Description Working Group, neither IBM nor Microsoft are asserting their
intellectual property claims over WSDL. The same can also be said for
SOAP 1.2, which falls under the jurisdiction of the royalty-free charter
of the W3C's XML Protocol Working Group.

            However, the same cannot be said for many of the other Web
services protocols that actually make SOAP and WSDL useful. For example,
IBM and Microsoft have yet to release their intellectual property rights
to two SOAP extensions: one extension encrypts and applies digital
signatures to SOAP messages, another attaches documents to the messages.
According to the current W3C document for SOAP's attachment
specification, both IBM and Microsoft are keeping their RAND options
open. Declarations from both companies go so far as to say that they
will apply the RAND-licensing framework even if the contribution is
adopted as a standard. The declarations on the corresponding document
for digital signatures are virtually the same.

            Page 3: Exercising their options

            However, the W3C's activities around those extensions may
have just become a moot point. This past Thursday, Microsoft and IBM
appeared to exercise those options when they and VeriSign announced
another Web services specification called WS-Security. In addition to
tackling the thorny problem of how to resolve dissimilar security
policies between entities exchanging SOAP messages, WS-Security appears
to overlap the W3C activity around digital signatures. According to the
press release from the three companies, WS-Security will also "provide
standard mechanisms to exchange secure, signed messages in a Web
services environment."

            According to Microsoft and IBM officials, the tools for
implementing the specifications will be available from both companies.
When asked if the code for deploying the new spec would be open-sourced,
IBM's Sutor said, "The first step before open-sourcing it is to put out
an implementation of WS Security on our Alphaworks Web site where it can
be downloaded as a part of Web Services Toolkit." However, before
downloading that toolkit, users must agree to IBM's "Alphaworks
Evaluation and End User License Agreement." This agreement makes clear
that the toolkit may be used for evaluation purposes only and that it
cannot be used in a "normal business production environment."

            Depending on whether Microsoft and IBM decide to make the
specification available on a royalty-free-basis, those looking to make
use of it may have no choice but to turn to IBM and Microsoft to secure
Web services, since no W3C standard currently exists. Also, in absence
of any royalty-free declarations from the two companies, competitors
such as Sun, BEA, and Oracle may end up having to pay royalties should
they wish to deploy products or services that support the spec.

            Such a move may be a continuation of what some Microsoft and
IBM competitors see as a response to the W3C's stiffening position on
patents and their role with respect to Web standards. Another move was
Microsoft and IBM's creation of the Web Services Interoperability
Organization (WS-I). Originally, the WS-I stimulated a controversy
surrounding Sun's omission from its board. Although Sun's stature in the
land grab for Web services recognition may have been compromised by the
dubious conditions under which the WS-I was formed, some wonder whether
IBM and Microsoft may have had their sights set on something bigger than
Sun. Were they attempting an end run around the W3C's royalty-free
policy, taking control of the standards setting process, and putting
themselves in a position to erect toll booths over the Internet?

            Page 4: Unstoppable duo

            To accomplish that, IBM and Microsoft would need to shove
aside the W3C and turn their intellectual property into de facto
standards. The imprimatur of something that portends to be a standards
body--like the governing body of the WS-I or UDDI (also formed by IBM
and Microsoft)--could help that along. By themselves, neither company is
powerful enough to execute such a power play. But taken together, not
much can stop them.

            According to IBM's Sutor and Microsoft's .Net Platforms
Strategy group director Neil Charney, both of whom led the WS-I's
formation, the WS-I is strictly to guarantee the interoperability of Web
services, not creating standards. "That work," according to Charney,
"needs to take place in the working groups of the standards-setting
bodies of the W3C." The co-chairperson of WS-I's board of directors,
Norbert Mikula, agreed, saying "the intent of the WS-I is not to produce
specifications. The intent is to promote clear definitions for how
standard specifications should be applied so as to eliminate any
potential problems with interoperability across platforms, languages,
and applications." Mikula added "those definitions would be freely
available."

            To RAND or not to RAND

            But according to a copy of the WS-I's IP release obtained by
ZDNet, the WS-I will not limit itself to producing specifications. The
organization will allow the members who contributed to those specs to
charge royalties through a RAND-based licensing framework. The document
clearly defines a specification as "a technical description of the
protocols for the exchange of messages" or "the technical description of
the steps required to implement existing standards alone or in
combination with Specifications or existing standards in such a way as
to promote interoperability."

            After reviewing the IP release agreement with ZDNet, Mikula
offered clarification of his earlier point, saying that "I believe that
is correct, that the IPR that will be licensed on a RAND basis." Mikula
added, "this does not mean that the specifications are in a locker. They
are freely available to look at. But if you decide to adopt them, the IP
will be licensed on a RAND basis."

            Documentation of UDDI.org's specifications similarly
includes RAND-based language that makes it possible for patent holders
to charge royalties to those who implement or use UDDI: "If the
Licensors own any patents or patent applications which may be required
for implementing and using the specifications contained in the document
in products that comply with the specifications, upon written request, a
non-exclusive license under such patents shall be granted on reasonable
and non-discriminatory terms."