Regulatory caution on technology standards and intellectual property rights is increasingly necessary, as technology – and the need for interoperability between platforms – dominates the market economy as well as global communications, said a panel on patents and standards Monday.

One way to address this might be through a government procurement agreement to include open standards, they said.

“Both patents and standards are instruments from the toolbox of innovation policy, but they are different instruments,” said Georg Greve of the Free Software Foundation Europe. “Patents,” he said, “are intended for private, personal use [while] standards are intended for public use.”

“They are diametrically opposed in practice… maximising one instrument invalidates the other,” he added.

A side event organised by Knowledge Ecology International (KEI) in conjunction with the World Intellectual Property Organization Standing Committee on the Law of Patents, meeting from 23 to 27 March, the event explored in depth the issue of patents and standards, and in particular what could go wrong if they are misapplied. The issue of patents and standards is on the agenda of this week’s WIPO meeting, as members discuss a secretariat document on the topic.

“Conflicts between patents and standards occur when the implementation of a technical standard calls for the use of technology covered by one or more patents,” said Ahmed Abel Latif of the International Centre for Trade and Sustainable Development (ICTSD). “In such situations, the potential of anticompetitive practices, exclusion of competitors and high licensing costs increases.”

IP-protected standards can cause particular problems for developing countries for several reasons, Latif said. The technical and financial capacity needed to keep up with evolving international standards – particularly in information and communications technology and electronics – is often lacking in poorer nations. Searches required to determine what patents exist on a particular standard are expensive and difficult.

A good patent research can cost about €100,000, said Greve – prohibitively high for quite a few small and medium sized enterprises.

The process for obtaining licences for technology needed to meet international standards can also be burdensome, he added, and all these issues together can serve “to secure the advantages of existing global trade players.”

There is the added issue, said Greve, that standards are written by people and therefore are subject to copyright law. There is a precedent for the author to be able to transfer such rights to a standards body itself, though for patents that kind of precedent does not yet exist.

If these issues are not addressed, said An Baisheng of the South Centre, then a number of adverse effects result: unfair competition, exorbitant royalties, consumer struggles with things like mobile telephones and access to the internet, and even national security problems – if military information structures are based on proprietary technology.

Also, there is concern about patent “trolls” who wait for standards to be deployed before revealing their rights over some technology essential for the standard, said Greve.

“There’s a whole industry of people whose main product is lawsuits,” said James Love, director of KEI, adding “this has been a drag on innovation, and on productivity.”

These issues are particularly problematic with software, he added, as patents on data formats create special issues of interoperability (the value added to data is created by the user, but if it is locked up then access to that value is limited), and any interoperability problems on free software immediately makes it “un-free.”

“Standards need to be understood as an innovation enabler, and a basis for innovation,” said Greve.

One way this could be done, said Love, is through government procurement.

Governments, Love added, have the power to set norms. “If there was an agreement among major purchasers that they must have open standards in some area” of technology, then “they could potentially influence decisions of private parties,” he said.

Government procurement could preference open or interoperable standards, said Latif. Binding obligations to disclose all relevant IP information on standards, as well as the involvement of competition authorities in work on standards to ensure anti-competitive practices are not used, could also help.

Ultimately, said Greve, increasing the transparency of the system is useful.

Baishing suggested building in standards-related flexibilities into the World Trade Organization Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, similar to those given for public health, as interoperability is an issue of public interest.

Love named TRIPS Articles 31(k) – which frees member states from the need to get authorisation from a rights holder who has engaged in anti-competitive practices – and 44.2 – which covers injunctions – as possible places where such flexibilities already exist.

The WIPO document on patents and standards, said Baisheng, is a “good description, with no conclusions, no solutions.” Member states must provide those.