Microsoft States its Position on the W3C Patent Policy

["Seth Johnson" <seth.johnson@realmeasures.dyndns.org>]

(Forwarded from W3C Patent Policy Public Comments list)

Date: Thu, 16 Jan 2003 10:07:01 -0800
From: "David Turner" <dturner@microsoft.com>
To: <www-patentpolicy-comment@w3.org>
Subject: MS views on Last Call Patent Policy Draft


Microsoft would like to offer its views on the latest proposal for a W3C
patent policy as described in the last call document [1].  It has come
to our attention that there has been a lot of speculation regarding our
position concerning the recent decision within the Patent Policy working
group (PPWG) to propose a Royalty Free (RF)-only policy. Because much of
this speculation is not accurate and actually clouds the issues we are
most concerned with, we would like to clarify our position for those who
are interested.

First we would like to commend the W3C for pursuing the incredibly 
difficult challenge of defining a patent policy to cover the 
development and licensing of Web-based standards.  There is no surprise 
that there is a wide array of opinions on a large number of issues that 
need to be addressed as part of this exercise.  The fact that the 
current proposal treats all participants (except invited experts and 
perhaps W3C staff) and licensees the same is especially noteworthy 
given that the interested parties employ different business models and 
use web technologies in very different manners.

Microsoft has been a significant supporter and contributor of 
Recommendations and industry standards developed at the W3C.  In doing 
so Microsoft has consistently brought substantial contributions to the 
W3C on a royalty free basis both to encourage consensus-based 
collaboration around interoperability standards and to help promote 
wide adoption of these standards within the industry (XML-Data (a key 
input paper for XML Schema), SOAP & WSDL to name a few).  Many of these 
standards have been core to the web foundation on which many of 
Microsoft's products depend. As such we have viewed the W3C as one of 
the premier forums for developing such important standards.  
Microsoft's ability to charge royalties for implementations of key W3C 
standards has not been and is not a significant consideration for us in 
the debate over whether or not the W3C should have a RF-only policy. We 
are concerned that that adoption of the current RF-only policy will 
severely limit the effectiveness of the W3C in continuing to be a good 
forum to develop web-based standards that will achieve widespread 
adoption in terms of cost and time.

We have found that standards are only successful if our customers' 
requirements are being met through their active participation in the 
standards setting activity.  It so happens that many of our customers 
are enterprises outside of the core IT sector such as consumer 
electronics companies and telecommunications companies.  Many of these 
enterprises have long established patent portfolio departments that 
derive revenue commensurate with some of their significant business 
units.  We have heard from many of these customers who are also W3C 
members that they will not participate in standards development 
activities if it means that they will have to agree to license their 
patents on a RF-only basis.

"Who needs them?" is the inferred response that some web developers and 
IT companies have given to the threat of these enterprises pulling out 
of the W3C and web standards development.  We think these enterprises 
are an important part of the process for the following reasons.

  1. As large consumers of web-based technologies they have a 
significant role in setting the requirements for web-based standards.

  2. Those companies with large patent portfolios and active licensing 
programs may own patents that cover W3C standards whether or not they 
have participated in the development of the standard.  If they have not 
participated, they will not have any obligation to license at all or to 
disclose early, let alone license RF.  This could lead to very serious 
patent blocking problems instead of reducing them. 

  3. Other standards setting organizations base their standards on W3C 
Recommendations by making mandatory references to the inclusion of W3C 
Recommendations.  If the licensing regime covering the W3C 
Recommendations is unacceptable to members of the other standards 
setting organizations then they will not be incorporated, diminishing 
the possibility of widespread adoption and their usefulness overall.

"Why do these companies want to set up a toll booth on the web?" has 
been asked by others.  While Microsoft can't answer that question for 
any other company, we can share some observations.
----------------------------------------------------------------------
  1. There is no toll both on the web today, although there has been no 
policy in place preventing companies from doing so in the past. 

  2. There is a tendency to look at the royalty issue in black and 
white terms. For example, many people understand how a patent royalty 
of a few cents per DVD can be applied to DVD sales, but have more 
difficulty understanding how one could apply a similar patent royalty 
to html. Perhaps broadening how one views the use of royalties and in 
the case of this example, envisaging a reasonable one-time lump sum 
applied to browsers would be more palatable than a fee each time a user 
clicked on an html link.
     The point being that even if a rare situation arose in which a 
patent royalty was going to be charged, it does not mean that a toll 
booth is going to be built on the Web.

  3. Because most standards setting organizations' policies (as well as 
competition law, fraud and similar legal principles in the US and 
Europe) place some burden on participants who own patents to disclose 
those patents in a timely manner, these patents are generally disclosed 
early on and prospective implementers can determine whether acceptable 
license terms will be offered for the use of those patents.  

If the RF policy is likely to have these negative results, how is it 
that the PPWG's Last Call proposal includes only a RF option for W3C 
Recommendations? First it is worth noting that the submitted proposal 
is based on a very slim majority vote.  Secondly, the W3C is focused 
much more on the web development community being able to create web 
technology than it is on the users of the web.  While most web 
developers and users alike would prefer RF standards it is not clear 
that everyone arrives at this preference for the same reasons.  The 
software development community has a number of groups with special 
interests and it is apparent that some of these special interest groups 
have viewed the W3C patent policy as means for achieving objectives 
that do not relate to the efficient and useful development of standards 
at the W3C.  For example, on the day that the PPWG released its public 
summary of the meeting announcing a RF-only policy, Software in the 
Public Interest's spokesperson Bruce Perens issued a commentary on 
ZDNET [2] stating:

  The W3C's decision will resolve only a single battle in a much 
Broader war. A similar royalty-free policy must now be enacted by the 
Internet Engineering Task Force (IETF) and many other organizations. 
Some standards bodies may decide to buck the trend and act as 
playgrounds for large patent holders. 

  Those organizations will argue that by allowing patent royalties, 
they will always be able to choose the best algorithm for any job. It 
will then fall to the market to decide which organizations it will 
follow. This battle must also be taken to the various governments and 
treaty organizations that produce bad law permitting the patenting of 
software and business systems, and continue to do so.

Mr. Perens could not be any clearer in stating his community's position 
on the value of the W3C patent policy - it is the first battle in a 
larger war against software patents and commercial software, but has 
little to do with the W3C's role in remaining a good place to develop 
web standards.

At the same time the Free Software Foundation (FSF), urged software 
developers to flood the W3C public comment list with mail stating their 
objections to the already RF-only policy.  It turns out that because 
the General Public License (GPL) is such a restrictive source code 
license, companies using the GPL for their products would not be able 
to incorporate W3C implementations that are distributed royalty free 
but with legitimate field of use restrictions properly permitted under 
the W3C RF patent policy.  Consequently, the FSF's spokesperson Eben 
Moglen has urged his followers to request that the W3C license 
commitment be changed to an unlimited RF patent license meaning that 
any patent that covered a W3C Recommendation would have to be made 
available to anyone royalty free for any purpose whatsoever, even 
purposes that have nothing to do with the W3C Recommendation and even 
for uses that might be contrary to technology endorsed by the W3C.  Mr. 
Moglen's statement posted on the FSF website [3] says:

  The Foundation urges all those who care about the right of Free 
Software developers to implement all future web standards to send 
comments to the W3C urging that the policy be amended to prohibit the 
imposition of "field of use" restrictions on patent claims contributed 
to W3C standards.

On the one hand we have Bruce Perens hailing the W3C's RF-only decision 
because it represents a victory on the way to eliminating the 
enforceability of software patents even though a significant percent of 
his constituency is apparently unable to distribute software based on 
W3C Recommendations, while his colleague Eben Moglen urges his 
constituents to amend the W3C patent policy in a way that would surely 
lead to a mass exodus of the W3C's current membership.  Interestingly, 
the PPWG did not have a RF-only policy until the voices of these Open 
Source and Free Software experts were heard, but their primary interest 
in a RF-only policy does not lie with the W3C remaining a good forum 
for developing web standards.

While the open source software community, like the commercial software 
community, has and continues to contribute to the development of the 
Web, in part, by creating and supporting Web standards, these 
communities do have different relationships with the W3C.  As you 
consider whether or not a RF-only policy is the right patent policy for 
the W3C we hope you will not only think about the pros and cons of such 
a policy but why some parties are issuing a call to arms to individuals 
who may have little engagement with the W3C other than to comment on 
this patent policy.  

So what would be a viable alternative to a RF-only IPR Policy? One of 
the proposals which was rejected by a narrow vote of the PPWG but which 
is included in the Last Call document [4] permitted a Patent Advisory 
Group (PAG) to conclude 
  The final Recommendation cannot be implemented under the W3C Core 
licensing model. If PAG determines that specific features not available 
under the W3C Core license are desirable and unavoidable, then the PAG 
may propose: 

  other action is taken to resolve the licensing problem that will 
enable the Recommendation to meet its original goals and the goals of 
the Consortium.

This proposal gave the PAG an opportunity to propose a workable 
solution outside the RF-only policy.  In exceptional cases other terms 
and conditions might not thwart the adoption of a standard and could be 
acceptable to the W3C.  While it is very unlikely that different terms 
and conditions would be found acceptable in any but the most 
exceptional cases given the strong preference for RF web standards, it 
may be sufficient to keep many of the W3C members who are consumers of 
web technologies and who have active patent licensing programs enough 
insurance to keep them engaged in the work of the W3C.

We urge the W3C and the Advisory Committee to evaluate the precedent 
setting RF-only nature of the proposed patent policy in the context of 
whether or not it will enable the W3C to remain a good forum for 
developing web standards.  If RF only, without reasonable exceptions is 
adopted and leads to key consumers of web-based standards, such as 
consumer electronics and telecommunications members, going elsewhere, 
will the core web standards continue to be developed at the W3C?  Will 
those web standards avoid the patents of those enterprises no longer 
participating in the W3C process?  Will those standards be used as the 
foundation for other standards?  Given these concerns and questions the 
W3C should be cautious about adopting this RF-only policy backed by 
some vocal parties whose primary interests are unrelated to the W3C's 
ability to continue to develop widely adopted web standards.

David Turner
Microsoft Corporation
W3C Patent Policy Working Group member
W3C Advisory Committee representative

[1] http://www.w3.org/TR/2002/WD-patent-policy-20021114/
[2] http://news.com.com/2010-1071-961018.html?tag=lh ;
[3] http://www.fsf.org/philosophy/w3c-patent.html ;
[4] http://www.w3.org/TR/2002/WD-patent-policy-20021114/#Addendum