During August, Talkstandards.com hosted an open forum focused towards a number of issues related to the tension between traditional software development business models, FRAND and RAND IPR licensing requirements and the open source community. The event was structured such that two featured articles were posted by Talkstandards regular Stacy Baird (Managing Director of Citrus Co.) and James Bryce Clark (from OASIS). In response to these featured articles, a series of expert contributors were invited to post introductory remarks, upon which the event discussion took place. These articles are summarized below. Please follow the links to access the articles in full.
Patents and Open Source Are Not Always Like Water and Oil:
“Patents have long served to enable innovation while assuring the complete disclosure of inventions and a reasonable return to inventors”. While RAND (Reasonable And Non-Discriminatory) licensing requirements, which provide equal and fair access to IP for use in both open and closed standards, has significant support from governments and industry, there exist some within the OSS (Open Source Software) community who wish to abolish RAND licensing all together. In the first of two featured articles, Stacy Baird outlined both the motivations and consequences of this desire.
The OSS Roadmap to a Minefield of Patents:
“Standards bodies are a microcosm of the marketplace: alternative ideas compete for inclusion in a draft” with organizations offering a wide range of approaches towards IPR technology, ranging from allowing to disallowing its inclusion or alternatively falling somewhere in between. In the second featured article, OASIS’s James Bryce Clark reported that “demands for royalties are becoming rarer” particularly during the recent boom in internet technology such as cloud computing which increasingly depends upon interoperability and transparency, in contrast to traditionally closed telecommunications networks.
FOSS (Business), Standards, and Intellectual Property Rights:
There is ongoing discussion covering how FOSS can be used in scalable business and what business models support using FOSS. For instance: “how one makes money when one gives the product away for free”. Stephen Walli argued that the nature of any tension between FOSS and standards is in their relationship and concluded that a well-run FOSS project should have the same level of IPR policy considerations in place as an SDO.
Betwixt and Between: Open source software and RAND standards development patent policies:
Regarding the tension between OSS and RAND, George T Willingmyre posed the questions: “What is the problem? Is this actually a “problem” or a matter of differing goals?” and “what is the lesson?” Arguing that rather than being a conflict between the Open Source definition and RAND, the tension instead comes from certain patent licensing restrictions which are included in some Open Source licenses and RAND. He concluded that the world’s policy makers should take heed when contemplating any decisions regarding Open Source policy affecting standard setting.
The Intersection of Royalty-generating Standards and OSS:
“All open source licenses are not created equal – hard line licenses, like the GPL, place more restrictions on users and thus create tensions with RAND/FRAND that don’t otherwise exist”, argued Daniel Garcia-Schwartz and Anne Layne-Farrar in their co-authored response to the featured articles. Counter to OSS ideals of “Information wants to be free”, the more restrictive the OSS license, regarding IPR inclusion, the less that information flow is possible. These licenses not only limit the pool of information from where OSS reliant firms can draw, but also delay standard implementation due to uncertainty.
Shaping the Debate – Are Some of the Tensions Created by “RAND-OSS” or by “RAND-GPL”?:
Many open source advocates reinforce the belief that RAND is incompatible with open source licenses with phases tending towards too strongly a worded, argued Jay Kesan. But the patent grant in an OSS license does not necessarily result in a royalty-free grant of all patents the distributor holds that read on a certain code, which is important to for maintaining a vibrant ICT sector.
An Open Source Approach to Policymaking?:
As global competition and the convergence of new technologies continues to increases, issues related to standards and standard development is “becoming a growing focus of policymakers who are struggling to keep up with the pace of change”. Helen Disney commented upon the discussion between proponents of open and proprietary-based standards and some of the misconceptions regarding the obstruction of innovation. She argued policymakers should neither “idolize nor demonize” business models based upon either OSS, RAND, etc and should take a more collaborative approach towards the most open, competitive ICT marketplace possible.
Open Standards and Open source – Maturity and beyond:
In many regards Open Source is maturing, claimed Ajit Jaokar citing the recent Talkstandards debate, which focused upon the evaluation a specific Open source licensing options rather than simply the OSS/IPR dichotomy, as part of a continued evolution of the discussion regarding Open Standards and Open Source. Arguing that “Open source licenses are not incompatible with IPR” and that the “Demands for royalties are increasingly depending on the domain” he outlined a series of implications stemming from this maturity.
Standing at the Intersection of RAND and OSS:
While on the surface it may seem a simple debate between RAND and “Open Source” regarding patent royalties, claimed Steve Mutkoski, “neither RAND nor OSS are singular or uniform concepts capable of such a simple comparison”. Outlined a number of ways in which the dozens of OSS licenses currently in use uniquely treat the inclusion of patents, Mukoski described the situation as a “complex legal discussion”.
Standards and Open Source Software:
“Is there an inherent tension between the FRAND … and the imperatives of Open Source software development? In one word, no” argued Timothy Simcoe. Nothing prevents a firm contributing technology to an open standard under a FRAND licensing agreement for free, via a non-assertion covenant or setting the maximum royalty rate to zero during ex-ante disclosure. Simcoe cites the potential holdup possibility as the key priority for policy consideration, in particular the improvement of IP policy (greater transparency, reduced vagueness such as “reasonable” royalty rates, etc).
