Proponents of open source software are a creative bunch. Their flexible, open and collaborative way of working has certainly led to innovation not only in software development but also in the way that we now view many aspects of public policy.

On the positive side, the understanding of open source principles and ways of working has motivated us all to be more transparent, more open to creative partnerships and to place a premium on innovation as a public good.

Yet while it is perfectly fair to argue that open source does lead to greater innovation in software, it is not fair to say that open source is the only way in which innovation takes place in this field.

In fact, there is a great likelihood that those innovations in software that require substantial time and resources to reach the market, would still depend on good “old-fashioned” proprietary models, a.k.a intellectual property rights (IPRs).

Simply put, IPRs allow innovators to recoup the rewards of taking risks and often investing vast sums of money in creating products and services that would never come to market without the associated R&D efforts that were put behind them. Attempting to circumvent that process – even for the most laudable of reasons such as increasing interoperability – starts to weaken and undermine the IP system which has grown up precisely to protect this important principle.

Nonetheless, a heated debate exists between proponents of open and proprietary-based standards. In this debate, “open” is often equated with “free” and “proprietary” is seen as being synonymous with so-called “closed” efforts. One argument is that because open source efforts allow anyone to access standards at no cost, they promote more competition and better innovation than proprietary-based efforts. Furthermore, because IPR-based standards offer access at a price, they are sometimes considered to be barriers to competition and innovation, and as such, closed standards. Crucially, a distinction is not always made between proprietary standards that are not publicly accessible and those that are accessible for a fee.

In fact, proprietary-based and “closed” standards (i.e. not publicly accessible) are not necessarily synonymous. Neither are open standards and those that are free. Rather, many standards involving IPRs are publicly accessible at a reasonable, transparent and non-discriminatory price – hence, they are open. Many patent pools, like MPEG LA and the Open Patent Alliance for the field of WiMAX technology (4G wireless technology) are a good example of this. And many standards typically considered to be open (i.e. which do not involve conventional licensing structures) are still based on an IP model of some form.

For instance, “defensive patent pools” work similarly to SDOs in that they aggregate a set of standards for public use with the intent that users can implement the standards without facing litigation; however, in the case of “defensive patent pools” member companies pay an annual fee to access all the standards. In the case of RPX, members can access over 1,000 standards for a fee that is considerably less than purchasing each individual license, but the IPR regime of the rights owners is still protected. Google’s Android technology is not IPR-free either. It is available to users under an Apache License, under which copyright is still preserved and while vendors may access the technology for free, they can add proprietary extensions without making them open to the open source community. Thus, a variety of hybrid models have come to exist.

With global competition and the convergence of new technologies only set to increase in the 21st century, the issue of standards and standard development is becoming a growing focus of policymakers who are struggling to keep up with the pace of change. Indeed, policymakers may even benefit from taking a more collaborative approach to forming policy in this area, allowing for more direct inputs online from a wider range of stakeholders in order to reach a consensus on what works.

However, ultimately public policy should neither idolise nor demonise a particular business model – be it based on IPRs or on open source – but should instead allow for the most open, competitive ICT marketplace possible. For those who truly believe in creativity, open collaboration and fair competition, let us try to set the rules of the game in a way that does not exclude either proprietary or open efforts and let human ingenuity solve the rest.

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