Panel: Standards Aid Innovation, But Only If Open29/01/2010 by Kaitlin Mara, Intellectual Property Watch 3 CommentsShare this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)IP-Watch is a non-profit independent news service, and subscribing to our service helps support our goals of bringing more transparency to global IP and innovation policies. To access all of our content, please subscribe now. You also have the opportunity to offer additional support to your subscription, or to donate.Standards are vitally important to innovation but in order for them to serve their purpose effectively, they must be open, said a panel at the World Intellectual Property Organization this week. The basic principle is that innovation requires competition, competition is facilitated by interoperability, and interoperability is facilitated by open standards, said Thomas Vinje of non-profit association European Committee for Interoperable Systems.Both patents and standards are intended to achieve the same goals of encouraging innovation, said Vinje.But they function in opposite ways, said Karsten Gerloff, president of the Free Software Foundation Europe. Patents, he said, are for “private exclusive use” whereas standards are for “public collective use” and are more beneficial the more widely they are implemented.And the “interplay between them is problematic,” especially in the software arena, Vinje said.When there is a conflict between two interests that encourage innovation, said Gerloff later, then it “needs to be settled in favour of the public interest. Interoperability prevails.”They were speaking at a 26 January side event to the World Intellectual Property Organization Standing Committee on the Law of Patents, meeting from 25-29 January.Preventing Abuse“We have globalisation of the rights of IP but don’t have much globalisation in terms of ways to deal with abuse,” said James Love, director of Knowledge Ecology International, which organised the event.Part of the reason there is not that much being done on the open standards issue is that “standards are a rich man’s game, adopted in the rich world for rich people,” said Vinje. And “even within the rich world, they are regarded as these arcane, complicated things that very few people deal with.”This is where the international community could be of use, speakers at the event suggested.This is more than just a commercial issue, though there is money at stake, said Vinje. “It’s very much a public policy issue, particularly in developing countries.” For example, he said he had just returned from Nicaragua where he was “amazed how many people have mobile phones.” But “those who bring that technology to the world needs to have their demands limited and in countries like Nicaragua prices [kept] as low as they can appropriately be.”Love presented a proposal for managing disclosure of patents related to standards, which was contained in Article 6.2 of a draft Access to Knowledge Treaty from 2005.WIPO should create a mechanism for eliminating the fraud in the system, Love said. The mechanism suggested by the A2K Treaty involves a global, open Standards Development Organization with criteria for the disclosure of patent claims relevant to standards – with the stipulation that any member of the organisation that fails to disclose will be prevented from enforcing that IP on the standard [Correction: the ban on enforcement of non-disclosed patents applies to any patent owner, not just members of the standards organisation]. The full text of the relevant part of the treaty is available here [pdf].The European Commission requires telecommunications companies to let networks talk to each other, Gerloff said, so, “Why not require the same for software?” Once it reaches a certain level of market penetration, it must disclose enough of its interface to allow other programs to interact with it, he said.Defining Open StandardsFor a standard to be open, said Vinje, it must be adopted through a transparent process, enable all implementations of the standard to interoperate, be platform-independent and vendor-neutral, and have all of its essential patents available either royalty-free or with so-called ‘FRAND’ licensing terms. FRAND stands for “fair, reasonable and non-discriminatory.”The standardisation of the Microsoft document format OOXML failed on several of the requirements for the creation of an open standard, Vinje said, including having a non-transparent process and not allowing interoperability of different implementations (IPW, Information and Communications Technology, 29 February 2008).Patent holders gain market power if a standard uses their intellectual property, and there is a risk this power could be abused, he said. For example, if a participant in a standard-setting organisation fails to disclose a patent or application, a standard cannot be designed around their technology. The right holder could then make high royalty demands for licences.There is also the danger of “patent trolls,” Vinje added, who do not disclose the existence of a patent until after a standard is set, at which point they “jump out of the forest and sue those who have implemented the standard.”There are particular considerations for standards and free software, said Gerloff. With proprietary software, developers pay a royalty to the patent holder, sell software to recipients, and use this money to help pay patent holders. But with free software, the recipients have the freedom to continue passing along the software. So the original developers have no way of knowing how many copies have been distributed. This means certain kinds of licences, such those with running royalties (paid on basis of the number of software products sold), are inappropriate for free software.Love also raised the concern that the secretive, still under negotiation Anti-Counterfeiting Trade Agreement (ACTA) will contain provisions with implications for standards, and the IP system as a whole. Specifically, the World Trade Organization Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement Article 44, which allows for exceptions in injunctions, would be negated if leaked drafts of ACTA, which seem to eliminate these exceptions, are accepted.Share this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)RelatedKaitlin Mara may be reached at firstname.lastname@example.org."Panel: Standards Aid Innovation, But Only If Open" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.