PART 7 – U.S. Law and Policy Prefers Standards Developed in the Marketplace: the National Technology Transfer and Advancement Act of 1995 and OMB Circular A-119

For this and the next installment, I will focus for the most part on U.S. law and policy as it provides a most clear illustration. In the context of standard setting, there is a substantial early history of the government as the exclusive or predominant standards-setting entity, rooted in its British heritage dating back many hundreds of years.
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Many discussions around the interplay between Open Source Software (OSS) licensing and Reasonable and Non-Discriminatory (RAND) licensing of essential patent claims immediately jump to the question of patent royalties. To the lay person, it might appear a simple debate: patent royalties in RAND regimes are the basis of tension between RAND and “Open Source.” Peering deeper into the issues, however, reveals that neither RAND nor OSS are singular or uniform concepts capable of such a simple comparison as this. Moreover, lost in the complexity of the purely legal analysis are a range of important policy questions (some of which I have tried to set out below).
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This is Part 6 in a series of articles in which contributor Stacy Baird presents and in-depth analysis of the role of governments in standards setting initiatives which is released on a bi-weekly basis. For previous instalments see here: Part 4, Part 5 – Editor

PART 6: The Well Developed Range of Standards, both Proprietary and Open, Reflect a Sophisticated Standards-Setting Ecosystem

Previously I described the several forums and market characteristics that can develop an IT standard: SDOs, patent pools, market driven de facto standards and consortia. As further evidence of the sophistication of the IT standards-setting marketplace, there are numerous and highly differentiated types of standards that can achieve interoperability

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This is Part 4 in a series of articles in which contributor Stacy Baird presents and in-depth analysis of the role of governments in standards setting initiatives which is released on a bi-weekly basis. For previous instalments see here: Part 2, Part 3 – Editor

PART 4: The Least Formal IT Standard Setting: Patent Pools and De Facto Standards
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In November last year (2009), the Standards Administration of China (SAC) issued for public comment their “Proposed Regulations for the Administration of the Formulation and Revision of the Patent-Involving National Standards”. As previously outlined, the proposal drew considerable criticism due in large part to requirement that patents be made available either royalty free of for a nominal fee to be eligible for inclusion in Chinese national standards.

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The history of standards rarely makes the headlines of regular media. One recent exception was the 57th anniversary of the bar code patent (see The Telegraph, Bar code: invention history behind new Google doodle); a technology more known to most of us as UPC or EAN labels on literally every product we buy in grocery stores.

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Recently, Trevor Baylis , who invented the wind-up radio, has written to the business secretary urging him to criminalise the theft of intellectual property.

I have known Trevor Bylis when we both spoke at an event in Ireland a few years ago. Trevor is an interesting character and a good speaker. He has raised the profile for IPR and patents here in the UK for many years now ..But I don’t agree with the idea of criminalising people for patent infringement. 
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Uncertainty about the essentiality of patents stimulates firms to bring weak patents to standards as shown by Dewatripont and Legros (2008). Particular licensing rules, such as “numeric proportionality” can make problems with multiplicity of trivial and non-valuable patents in standards even worse (Layne-Farrar, Padilla and Schmalensee, 2006). These findings suggest that both the rules for inclusion of patents and the regulation of compensation to IPRs incorporated in standards are potentially of great importance.
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