Tag: Patent pool

It is very exciting to see the “Open Video” movement taking off and finding voice with the upcoming Open Video Conference.

This well-earned “open breakthrough” has been a long time coming.  After all, open standards, and particularly royalty-free standards, are the very foundation of the Open Internet as we know it, and Internet leaders are vocal that open and royalty free standards are essential to its future.

But where are the open standards for open video?  Why don’t we already have them?

Hint:  business guru W. Edwards Deming once said: “If you control an industry’s standards, you control that industry lock, stock, and ledger”.

This bitter pill of insight points to the first thing you should know about open video and open standards:

1) Open Video is Collateral Damage
of the Digital TV Standards Wars

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It’s not hard to figure out that if you could quietly bake your patents into a standard and then name your price after the standard becomes widely deployed, you could make a lot of money and wield a lot of control.

Great work if you can get it, and that’s pretty much the story of a set of international video and digital TV standards that got going in the 1990s, with MPEG the poster child of modern patent-pooled standards.

Of course this is a tale of big bucks.  Think $26 to $40 per TV, billions of dollars in royalties on billions of devices, vendor shoot-outs, litigation, dueling industry groups, back-room deals, claims of abuse, and consumer groups pushing for public disclosure of confidential patent licensing practices hidden behind claims they are “reasonable and nondiscriminatory”  — “RAND” in standards-speak.

So it is hardly surprising that RAND licensing practices and such developed through the DTV experience have done little to nothing to contribute royalty-free video technologies or standards now needed for broadband deployments, which today are essentially captured by proprietary solutions.

2) Standards Aren’t Just a “Techy Topic”
— They’re a Policy Problem

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In fact, scratch almost any network policy issue and you’re likely to find a standards issue lurking inside.  Indeed, America’s broadband plan needs a standards policy.

Turns out country after country has a national “standards strategy”.

UK, France, Germany, Canada, and Korea to name a few.  Some closely tie international standards advantage to IPR & patents, as in Japan (“Intellectual Property Strategy Headquarters decided the International Standardization Comprehensive Strategy, with the aim of enhancing the international competitiveness of Japanese industries and contributing to setting global rules”) and China (“[the] Trade Barrier Treaty [TBT] can be used under the mask of standardization, patents and intellectual-property rights to obtain most world trade advantages.”).

And those that don’t, like Taiwan, have vendors crying foul.

Even in the U.S., a prescient 1992 Congressional report warned:

“The United States has been fortunate to have a pluralistic, industry-led standards setting process that has served us well in the past. Whether it will continue to do so in the future in the face of bruising international economic competition is uncertain.”

So if you think standards are for geeks and not wonks, think again.  As a Toyo University professor recently put the blunt zen to it:

“Standardization activities are political negotiations and not a forum for assessing which technologies excel over others.”

3) Open Source Doesn’t Solve
the Open Standards Problem

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I don’t actually know anyone who is really confused or bent out shape about the difference between “open source” and “open standard” or believes that one is a good substitute for the other.  They are of course different things (one’s a license, one’s a specification, and so on).

But if you are inclined to dig in to this, check here or search the Web for “open source v. open standards’ and you’ll find numerous nice explanations.

4) Don’t Confuse Patent Reform with
Patent Licensing (They’re Different)

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Another potential source of confusion is the distinction between patent reform — various proposals to make it more difficult to get a patent, to assure that patents are of appropriate quality, to tighten definitions of obviousness and so forth — and patent licensing — the rules and practices of patent pool licensing, disclosure, and IPR (Intellectual Property Rights) policies of standards groups.

Patents have been around for centuries, and so have patent pools, but the regulatory and policy linkages between the two are less than it might seem.  In fact, for a long time patent pools were rare and highly frowned upon by regulators (they weren’t even mentioned in the 1992 Congressional report on standards).  Then in the late 1990s many would trace the beginning of  the “modern” patent pool era to the U.S. Department of Justice’s authorization of the MPEG patent pool.

Pools and patents serve very different policy needs, raise different policy concerns, and by and large are even regulated by different entities.

So unless you are counting on a major scaling back of the patent system that somehow just makes patent issues go away (and few people are), it makes more sense to find a way, as many have, to achieve business model results.

5) “RAND” Isn’t

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So what does the term “reasonable and nondiscriminatory” actually mean?

In theory it’s the commitment to fair licensing required of patent holders in standards groups that — unlike the W3C which defines HTML — are open to patents.

But in reality, since price isn’t set until after the standard comes out (sometimes years later), RAND ends up meaning whatever the patent holders want it to mean.

Studies of RAND licensing typically conclude:

“few SSOs [standard-setting organizations] define the term ‘reasonable and nondiscriminatory’ or have mechanisms to resolve disputes about its interpretation”

So Richard Stallman said it well:

“half of “RAND” is deceptive and the other half is prejudiced”

Still, sincere efforts have been made to give the term “reasonable and nondiscriminatory” a meaning  in standards IPR policies. For example the American Bar Association’s Standards Development Patent Policy Manual is a good source.  But good luck if you hope to wade through lawyerly weighing of “multiple factors” to get any particular practice declared unreasonable or discriminatory.

6) Don’t Fall For FUD — There Is a Solution

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Finally, it seems there is a never-ending version of Fear, Uncertainty and Doubt that goes something like “you can never really be sure that someone might have a patent so there is no way to ever be sure a standard is truly royalty free”.

To be blunt — this is nonsense, and don’t believe it.  Not only are there thousands of royalty-free standards in the world, and although the number of patent disclosures started to accelerate in the 1990s, the vast majority of standards have no particular IPR or patent issues to speak of.

And even in areas of particular patent thickets and patent controversies, standards organizations with a determined and specific royalty-free policy and process (Khronos and Web3D are a couple of examples) have successfully established their royalty-free credentials.  Sure it takes diligence, a “Freedom-to-Operate” analytical approach, proactive patent reading, time and determination.  Dirac is already making good progress down this path.

So get going Open Video-ers — let’s get some truly open, truly royalty-free standards initiatives going!

References

“The Internet is fundamentally based on the existence of open, non-proprietary standards” Vint Cerf, “the father of the Internet” cited in The Importance of Open Standards in Interoperability, OFE Onepage Brief No.1 (31.10.08.) Available at http://www.openforumeurope.org/library/onepage-briefs/ofe-open-standards-onepage-2008.pdf.

“It was the standardisation around HTML that allowed the web to take off. It was not only the fact that it is standard but the fact that it is open and royalty-free. If HTML had not been free, if it had been proprietary technology, then there would have been the business of actually selling HTML and the competing JTML, LTML, MTML products.”

Tim Berners-Lee, quoted in Standards and the Future of the Internet, Declaration 25th February 2008, at http://www.openforumeurope.org/press-room/press-releases/standards-and-the-future-of-the-internet/