IBM, Microsoft patents pose dangers
While the technologies that form the foundation of that toll booth have yet to be officially recognized as standards by an independent standards body, the collective strength of IBM and Microsoft could be enough to render Internet standards consortia powerless to stop them.
The potential for the two giants to erect a toll booth is tied to the likelihood that Web services protocols such as SOAP, WSDL, and UDDI--and the related ones to which the two companies hold patents or other intellectual property rights--will one day be as important as the standard protocols (such as TCP/IP and HTTP) on which the Internet is based today. Web services and the protocols that make them possible are destined to play a major role in most if not all electronic commerce as well as other Internet traffic.
If the protocols do become standards, either by virtue of an independent standards organization's imprimatur or by attaining a de facto status, IBM and Microsoft--or any other company that maintains the intellectual property rights to them--could legally impose royalties on that traffic. In fact, any protocols that become a part of the core Internet infrastructure without having been made available on a royalty-free basis could guarantee the owners of the intellectual property the right to place a tax on the Internet traffic that depends on those protocols.
That tax could show up in both direct and indirect ways. Web sites that use non-royalty-free protocols--to which IBM and Microsoft claim intellectual property rights--could be subject to per-use or annual licensing fees. Competitors to IBM and Microsoft could be forced to pay royalties before they are allowed to sell tools and products for developing those sites. These vendors, in turn, might decide to pass on their additional costs to customers, or they might decide not to develop and sell their products--thereby reducing the number of competing alternatives. In the least likely scenario, users of Internet applications that depend on the protocols could be asked to pay based on metered use of those protocols. Currently, no plausible or globally scalable mechanism exists for doing so.
No standard policy
For the most part, standards-setting for the Internet and Web has taken place within the working groups of two organizations: the Internet Engineering Task Force (IETF) and the World Wide Web Consortium (W3C). Until recently, neither organization had maintained a policy requiring vendors to make the intellectual property (IP) they contribute to the standards setting process available on a royalty-free basis. According to W3C Patent Policy Working Group Chairman Danny Weitzner, "Despite the lack of a policy, there has always been an understanding amongst the various contributors that the Internet and the Web wouldn't be possible or scalable unless their contributions were available to everyone on a royalty-free basis."
But that gentleman's agreement has been tested several times over the years and it could end up being tested again by Microsoft and IBM. According to documents on the W3C's Web site, IBM and Microsoft not only own intellectual property within specific Web services protocols, but also have no intentions of relinquishing their IP rights to those protocols should they become standards. The documents indicate that the two companies are currently maintaining their rights to pursue a reasonable and non-discriminatory (RAND) licensing framework as opposed to a royalty-free-based framework. The RAND framework is widely acknowledged as the one that keeps a vendor's options open in terms of being able to charge content developers and Internet users a royalty for usage of relevant intellectual property.Against the backdrop of the W3C's emerging plan to adopt a primarily royalty-free-based patent policy, the royalty-free vs. RAND controversy reached full boil last October when Hewlett-Packard withdrew its support as a sponsor of IBM and Microsoft's W3C WSDL submission on the basis that WSDL might not be royalty-free. According to a statement by HP's director of standards and industry initiatives and W3C advisory committee representative Jim Bell, "HP resigned as a co-submitter of the otherwise excellent Web Services Description Language (WSDL) proposal to W3C solely because other authors refused to let that proposal be royalty free."
According to the W3C's Weitzner, "the Internet community, which includes developers and users, has voiced their opposition and the W3C is responding with a policy that enforces a royalty-free framework in all situations with few exceptions, and Web services isn't one of them."
While that policy is still in draft form, certain W3C documents are beginning to indicate the organization's adoption of that position. For example, the W3C's XML Protocol Working Group Charter contains the following text in its intellectual property section: "Any intellectual property essential to implement specifications produced by this Activity must be at least available for licensing on a royalty-free basis."
In its coverage of the controversy, Linux Today's version of Bell's statement includes a statement from W3C director Tim Berners-Lee declaring Web services protocols like WSDL to be common infrastructure protocols to which the royalty-free licensing framework should apply.
IBM: patent defense
IBM and Microsoft, however, appear to be digging in their heels with respect to the contributions they have been making to the standards process. In a document filed with the W3C, IBM opposed the move to a royalty-free-only framework partially on the basis that companies must be allowed to maintain their patents in order to defend themselves against potential patent infringement suits by other companies.
Nevertheless, the mounting pressure over the WSDL protocol apparently worked. When asked if IBM planned to make its contributions to the various Web services protocols available on a royalty-free-basis, IBM's Director for eBusiness Standards Strategy Bob Sutor said, "The one I can respond to is WSDL itself. That is a royalty-free working group and we are the editor of that spec. I would like to leave it at that." To no avail, several attempts were made to get official comment from Microsoft as to whether the company would make all of its contributions available on a royalty-free basis.
Official documents on the W3C's site support Sutor's assertion. According to the home page of the W3C's Web Services Description Working Group, neither IBM nor Microsoft are asserting their intellectual property claims over WSDL. The same can also be said for SOAP 1.2, which falls under the jurisdiction of the royalty-free charter of the W3C's XML Protocol Working Group. Additionally, HP's status as a co-submitter of WSDL has been restored.
However, the same cannot be said for many of the other Web services protocols that actually make SOAP and WSDL useful. For example, IBM and Microsoft have yet to release their intellectual property rights to two SOAP extensions: one extension encrypts and applies digital signatures to SOAP messages, another attaches documents to the messages. According to the current W3C document for SOAP's attachment specification, both IBM and Microsoft are keeping their RAND options open. Declarations from both companies go so far as to say that they will apply the RAND-licensing framework even if the contribution is adopted as a standard. The declarations on the corresponding document for digital signatures are virtually the same.However, the W3C's activities around those extensions may have just become a moot point. This past Thursday, Microsoft and IBM appeared to exercise those options when they and VeriSign announced another Web services specification called WS-Security. In addition to tackling the thorny problem of how to resolve dissimilar security policies between entities exchanging SOAP messages, WS-Security appears to overlap the W3C activity around digital signatures. According to the press release from the three companies, WS-Security will also "provide standard mechanisms to exchange secure, signed messages in a Web services environment."
According to Microsoft and IBM officials, the tools for implementing the specifications will be available from both companies. When asked if the code for deploying the new spec would be open-sourced, IBM's Sutor said, "The first step before open-sourcing it is to put out an implementation of WS Security on our Alphaworks Web site where it can be downloaded as a part of Web Services Toolkit." However, before downloading that toolkit, users must agree to IBM's "Alphaworks Evaluation and End User License Agreement." This agreement makes clear that the toolkit may be used for evaluation purposes only and that it cannot be used in a "normal business production environment."
Depending on whether Microsoft and IBM decide to make the specification available on a royalty-free-basis, those looking to make use of it may have no choice but to turn to IBM and Microsoft to secure Web services, since no W3C standard currently exists. Also, in absence of any royalty-free declarations from the two companies, competitors such as Sun, BEA, and Oracle may end up having to pay royalties should they wish to deploy products or services that support the spec.
Such a move may be a continuation of what some Microsoft and IBM competitors see as a response to the W3C's stiffening position on patents and their role with respect to Web standards. Another move was Microsoft and IBM's creation of the Web Services Interoperability Organization (WS-I). Originally, the WS-I stimulated a controversy surrounding Sun's omission from its board. Although Sun's stature in the land grab for Web services recognition may have been compromised by the dubious conditions under which the WS-I was formed, some wonder whether IBM and Microsoft may have had their sights set on something bigger than Sun. Were they attempting an end run around the W3C's royalty-free policy, taking control of the standards setting process, and putting themselves in a position to erect toll booths over the Internet?To accomplish that, IBM and Microsoft would need to shove aside the W3C and turn their intellectual property into de facto standards. The imprimatur of something that portends to be a standards body--like the governing body of the WS-I or UDDI (also formed by IBM and Microsoft)--could help that along. By themselves, neither company is powerful enough to execute such a power play. But taken together, not much can stop them.
According to IBM's Sutor and Microsoft's .Net Platforms Strategy group director Neil Charney, both of whom led the WS-I's formation, the WS-I is strictly to guarantee the interoperability of Web services, not creating standards. "That work," according to Charney, "needs to take place in the working groups of the standards-setting bodies of the W3C." The co-chairperson of WS-I's board of directors, Norbert Mikula, agreed, saying "the intent of the WS-I is not to produce specifications. The intent is to promote clear definitions for how standard specifications should be applied so as to eliminate any potential problems with interoperability across platforms, languages, and applications." Mikula added "those definitions would be freely available."
To RAND or not to RAND
But according to a copy of the WS-I's IP release obtained by ZDNet, the WS-I will indeed be producing specifications, contrary to what Mikula says. The organization will allow the members who contributed to those specs to charge royalties through a RAND-based licensing framework. The document clearly defines a specification as "a technical description of the protocols for the exchange of messages" or "the technical description of the steps required to implement existing standards alone or in combination with Specifications or existing standards in such a way as to promote interoperability."
After reviewing the IP release agreement with ZDNet, Mikula offered clarification of his earlier point, saying that "I believe that is correct, that the IPR that will be licensed on a RAND basis." Mikula added, "this does not mean that the specifications are in a locker. They are freely available to look at. But if you decide to adopt them, the IP will be licensed on a RAND basis."
Documentation of UDDI.org's specifications similarly includes RAND-based language that makes it possible for owners of intellectual property to charge royalties to those who implement or use UDDI: "If the Licensors own any patents or patent applications which may be required for implementing and using the specifications contained in the document in products that comply with the specifications, upon written request, a non-exclusive license under such patents shall be granted on reasonable and non-discriminatory terms."
While Web services is still in its infancy, IBM and Microsoft are looking to the future. Competitors, collaborators, and customers of the two giants will be looking to see if their future includes paying a toll or getting a free pass to use the protocols underlying the next-generation Internet.