Owning ideas

By: Scott Bradner

Patents can be good things. People involved in standards organizations can find these words hard to say. All too often patents are seen as inhibitors of innovation since they can be used to severely restrict efforts to standardize new technology. There have been horror stories of companies using "submarine patents" to hoodwink a standards organization into supporting a particular technology only to have the company announce the magical appearance of a patent that will need to be licensed to implement the standard. In one particularly egregious case in the US a company was forced by the Federal Trade Commission to surrender the rights to enforce a patent that had not been disclosed during the process of developing a standard.

In general patents are becoming an increasingly difficult issue for standards organizations and the IETF is no exception. Any standardization of patented technology is seen by their competitors as giving an unfair advantage to a patent holder. But sometimes there is no apparent work-around that can avoid the patent so, if the technology described in the standard is important enough to the standards organization, it must proceed with developing the standard in spite of the patent.

Another problem occurs when someone claims that a patent of theirs, or worse a patent they have applied for, covers a standards work in progress. In almost all cases the development work on the standard is delayed and in some cases derailed. This is the case even if the claim proves to be false. False or exaggerated claims of the applicability of pending patents can easily become a denial of service attack on the standards process itself and could be used to manipulate a standards process.

Most standards bodies do have a requirement that the holder of a patent which legitimately impacts the ability of a developer to implement a standard be required to agree to license use of the patent at "fair and reasonable terms". But the reasonableness and fairness of licensing terms can be very much in the eye of the beholder, this is a case where one size definitely does not fit all. In these cases there is pressure on the standards body to evaluate the licensing terms for that technology and the process of which can become very contentious since the technical people who attend standards meetings are generally not the best people to evaluate the fairness of licensing terms. The IETF requests a statement that fair and reasonable terms will be available but does not require one nor does the IETF require that the terms be made public. The IETF used to require both of these but those requirements proved to be unworkable and have been dropped from the current version of the standards process document.

A worse problem occurs when the owner of the patent has not been involved in the development of the standard and announces sometime later the existence of the patent. This can sometimes happen years later. When this does happen the standards organization can quickly find itself in the untenable position of supporting a standard which may now require the licensing of technology which has unfair or exorbitant license requirements, or the owner of the patent may feel that they are better off not offering licensing at all. Some standards bodies have been discussing ways to withdraw standards where these issues come up but few have reached any definite process procedures to deal with the situation.

In an effort to avoid the patent issues some people involved in standards organizations have suggested that no standards be approved which involve patented technology. Unfortunately this strategy only deals with a subset of the problem since the patent holder can easily have no knowledge of the standards activity or not be involved in it. The fact of the patent may not be known until long after the standard has been approved. Some particularly naive people have suggested that companies involved in a standards organization agree that once a standard has been approved all patent rights to any required technology would be required to be relinquished, at least in regards to implementing the standard. There is little chance that many companies would agree to such a blanket requirement, and clearly companies uninvolved in the process would not be required to relinquish their rights since they were not part of the standards organization and had not agreed in advance.

The new version of the IETF standards process addresses the problem of standards which may be impacted by patents by employing the already existing IETF 3 stage standards track. All IETF standards are first published as Proposed Standards, then where there are multiple interoperable implementations of software to implement the Proposed Standard it can be considered for advancement to Draft Standard status. A Draft Standard can be considered for advancement to Internet Standard status when the Draft Standard has shown significant marketplace acceptance. The IETF standards process assumes that technologies which have patents that must be licensed will have been shown to have reasonably fair licensing terms if they can demonstrate the multiple implementations required for Draft Standard status or the marketplace acceptance required for Internet Standard status. Any significant unreasonableness would have likely prevented the technology from meeting these requirements.

A related problem is one of disclosure. The IETF's rules say that people involved in a standards process should disclose any pending or actual patents which impact the standard under consideration. Clearly there are cases where such disclosure can run counter to company rules. In this case the individual must absent themselves from all discussion on the proposed technology.

A problem that a number of standards bodies have already experienced is people purposefully not disclosing the IPR issues of some technology in the hope that a standard will be adopted which will require the licensing of their technology thus ensuring a captive audience. This is known as a "submarine patent". Some standards organizations attempt to deal with the situation by requiring that participants agree in writing to disclose IPR information or to withdraw from all discussions on the proposal. This has proven to be an incomplete answer since someone else at the same company can, with out the participant's knowledge, apply for the patent. This is also a problem when the standards organization, like the IETF, does not have a fixed membership.

On the whole patents can confuse the standards process but the positive effects of ensuring that inventors continue to have strong incentives to keep inventing generally outweigh the problems they create.