W3C strives for royalty-free patent policy

Joint Hearings on Competition and Intellectual Property Law and Policy inthe Knowledge-Based Economy: Standards and Intellectual Property: LicensingTerms

Testimony of Daniel J. Weitzner
Technology and Society DomainLeader
World Wide Web Consortium

18 April 2002
Washington, DC USA

Introduction & Overview

My name is Daniel J. Weitzner. I want to extend my thanks to the JusticeDepartment Antitrust Division and the Federal Trade Commission for holdingthese hearings. I am the head of the World Wide Web Consortium's (W3C)Technology and Society activities, responsible for development of technologystandards that enable the Web to address social, legal, and public policyconcerns. W3C, an international organization made up of nearly 500 membersfrom industry, academe, users organizations and public policy experts, isresponsible for setting the core technical standards for the World Wide Web.W3C was founded in 1994 by Tim Berners-Lee, inventor of the Web, who servesas the Director of the Consortium. In addition to my work at W3C, I also holda research appointment at MIT's Laboratory for Computer Science, teachInternet public policy at MIT, and am a member of the Internet Corporationfor Assigned Names and Numbers (ICANN) Protocol Supporting OrganizationProtocol Council.

W3C has been actively engaged in developing responses to challenges raisedby patents in the context of Web standards over the last four years, so weare particularly pleased to see your agencies' exploration of these matters.My goal is to contribute to the factual basis of your inquiry into antitrust,intellectual property and technical standards by providing an overview of theexperience that the World Wide Web community has had with patents over thelast four years. This testimony will highlight three main points:

• First, the Web itself has been possible only in the context of open, royalty-free (RF) standards.
• Second, the "reasonable, non-discriminatory terms" (RAND) licensing model common in many traditional standards bodies is unlikely to be accepted in the Web environment.
• Third, W3C is working hard to develop a Royalty-Free patent policy that encourages the continued evolution of the Web as a universal information space, while respecting our Member's legitimate intellectual property rights.

Patent policy considerations for any technical standards effort must begrounded in an understanding of the goals of the underlying technology, aswell as the unique characteristics of the environment in which the standardswill be used. So I will begin by describing the fundamental technical andlicensing characteristics of the Web to date.

I. General characteristics of the Web: A universal information space

The World Wide Web was designed to be an easy-to-use, universallyaccessible open platform for publishing and accessing information, enablinglinking and distribution of documents amongst computers, regardless ofoperating system, all around the world. While the Web does not yet reachevery single person in the world, it has enabled an unprecedented exchange ofknowledge, information, goods and services around the world. Of criticalimportance to the rise of electronic commerce as a new marketplace, Webtechnology allows a wide variety of new systems and technologies to be builton top of the basic architecture of the Web, thus enabling continualinnovation in the design of Web-based applications and services. Two keyattributes of Web standards are responsible for the ubiquity and flexibilityof the Web: 1) simple, extensible design, and 2) open, unencumberedstandards.

Much has been writtenabout the aspects of Web technical architecture which have lead to itsubiquity and universality. For the purposes of this discussion, it willsuffice to note that in contrast to the hypertext systems which existedbefore the Web, the core technology of the World Wide Web is quite simple,thus enabling widespread deployment of the Web on a wide variety of hardwareand software platforms. Earlier hypertext systems (for example, Xanadu) often had far more sophisticated designthat anticipated many of the problems (broken links, need for long-termarchiving, difficulty managing intellectual property rights, etc.), but noneachieved the wide deployment of the Web. Indeed, the architects of theInternet believed that a simple design, based on standards that aretechnically easy to implement, would be a critical part of helping the Web togrow to be a truly world-wide phenomenon. Ease of implementation is vital forboth Web software developers as well as those who simply seek to publishinformation on the Web.

In the history of the Web, low legal and financial barriers to use of Webstandards have been as important as ease of deployment from a technicalperspective. W3C Recommendations are often implemented in a large number ofindividual software environments. Indeed, the Web standards design processdepends on the implementation experience of a large number of developers toassure that each component of the Web is well designed and satisfies theneeds of the increasing diverse communities of Web users. Gathering earlyimplementation experience from a wide range of developers is particularlyimportant for security-related standards. This broad experience helps assurethat security standards are subject to rigorous testing before beingfinalized. Open source implementations have played an essential role in theevolution and broad access to Web technology. Among the most popular versionsof Web server software, Apache, isproduced on an open source licensing basis. In addition to Apache, many ofour new standards are implemented early with open source code, enabling largenumbers of developers, commercial and non-commercial, to incorporate new Webfeatures into software they are writing without having to develop thosefeatures from scratch. Finally, the diversity of content represented by theover 2 billion Web pages is only possible because the creators of each ofthose pages is able to use key web standards such as HTML (hypertext MarkupLanguage) and CSS (style sheets) without paying a royalty.

II. History of patents at W3C

Web technology has developed over the last decade through an unprecedentedburst of entrepreneurial energy and global cooperation. Both thecompetitive forces which have lead to innovative technology, and thecooperative spirit which has produced global interoperabilitystandards at an extremely rapid pace have occurred, until very recently, in amarket environment without any significant patent licensing requirements.

The second decade of the Web has already demonstrated that patents will bea factor in the ongoing development of the World Wide Web infrastructure. Avariety of factors suggest that the Web will be increasingly affected by thepatent process. The following factors are significant:

1. Convergence: The Web had its origins in the personal computer software industry, where patents had seldom been a factor in development dynamics. However, as the Web comes into contact with the telecommunications, broadcast media and consumer electronics industries, there is pressure to change the traditional role patents have played in Web standards.
2. Rise in patent issuance: Patent offices, led by the U.S. PTO, are issuing patents, especially in the software sector, at record rates.
3. Experience of Internet-related standards bodies: A number of standards bodies including W3C and IETF, as well as consortia such as the WAP Forum, have encountered potential barriers to acceptance of standards because of licensing requirements perceived as onerous.
4. Popularity of Business Method patents: Beginning with the State Street decision in the United States and continuing through high-profile litigation between Amazon.com and Barnesandnoble.com, business method patents have become an increasingly significant factor in the ecommerce marketplace.

All of the core Recommendations issued by W3C to date have beenimplementable on a Royalty-Free basis. In the first four years of W3C'shistory, no serious issues regarding patents had been raised at all. Allenergy was concentrated on developing technical specifications. In the lastfew years several patents issued by the United States Patent and TrademarkOffice have stalled, or at least delayed, W3C technical work.

• P3P and the Intermind Patent : A patent (US Patent #5862325) claiming rights related to metadata control structures between clients and servers which, according to Intermind, covered implementations of W3C's Platform for Privacy Preferences (P3P) standard. Intermind, at the time a W3C Member and participant in the P3P working groups, offered a "licensing program that will be compatible with the growth of standards for communications object technology," but did not make the precise terms public. Gradually, it became clear that the demand that implementers pay royalties was chilling the development of the technical specification, and rendering deployment of P3P-compliant technologies unlikely. After unsuccessful efforts to come to some agreement with the patent holder, another approach to removing this barrier was necessary. W3C commissioned an analysis of the Intermind patents to assess both the likelihood that compliance with P3P would require infringement of the patents and also to evaluate the validity of claims. The analysis conducted by Barry Rein of Pennie & Edmonds, and made available to both W3C Members and the public, established a reasonable basis for believing that implementers could comply with P3P without infringing the patent. Today, P3P is a W3C Recommendation and widely implemented across the Web.
• Microsoft Style Sheet Patent: During the development of W3C's style sheet specifications, Microsoft announced that it had been issued a patent (US Patent #5860073) which might cover W3C's Cascading Style Sheet (CSS) Recommendations. Microsoft was a participant in various W3C style sheet activities and quickly offered royalty-free licenses to W3C members in order to assure that implementation of this standard would proceed.
• Sun XLink Patent : A patent (US Patent #5659729) on technologies relevant to the XLink specification was disclosed by Sun during the process of developing the XLink specification. Though there was not a clear model for Royalty-Free licensing in W3C, Sun worked to develop a license that would enable Royalty-Free implementation of this standard.

After considerable effort on the part of W3C Members and staff, each ofthese situations were, indeed, resolved in a way that enabled widespreadadoption of the standards in question. However, the general trends cited, andthe specific situations in which patent claims have been potential or actualroadblocks to standardization have made it clear that the W3C must have aclear and effective patent policy to ensure that the Web continues to developas an open, universal information platform.

III. W3C Patent Policy Development process

Responding to increasing concerns about patents, W3C created the PatentPolicy Working Group (PPWG) in July 1999 to forge a patentpolicy that will

• address the growing challenge of patent claims around Web technologies,
• foster an environment within W3C where technical decisions can be made unencumbered by patent claims.

Whether patents and claims related to W3C technologies are in fact validor not, the risk of costly, time-consuming litigation and possiblelimitations on use by the right holders, is sufficient to suffocate much ofthe dynamic development activity that has been driving the Web industry. Avariety of factors already discussed suggest that the Web will beincreasingly affected by the patent process, and so W3C created the PatentPolicy Working Group to create a clear and effective policy.

The Patent Policy Working Group's firstproposal suggested a two-track approach to patent policy at W3C, allowingboth RAND and RF licensing modes. According to the proposal, each time a newWorking Group is formed to develop a standard, a choice would be made aboutwhether the standard should be developed to be implementable on aroyalty-free or RAND basis.

Response to that draft was dramatic, both from W3C Members and the public.Support from W3C Members was mixed, and reviewers sent all manner of detailedcomments. Public reaction to the draft was almost uniformly negative,primarily because the framework would allow W3C to include in itsRecommendations technology known to be patent-encumbered, and thatimplementors might therefore have to pay a license fee to implement a W3CRecommendation. The strongest reaction came from various communities of opensource developers who declared, (in several thousand emails sent to the W3Cpublic comment mailing list) that a RAND approach would cause open sourcedevelopers to stop using W3C web standards, impel some to form alternate Webstandards, thus balkanizing the Web, and overall constituted a take-over ofthe Web by large corporate interests.

W3C responded to input from W3C Members and the public by adding invitedexperts to the Patent Policy Working Group to represent the Open Sourcecommunity, creating a task force within the Patent Policy Working Group toexamine how to accommodate the Open Source community, and creating a public home page for the PPWG,publishing public meeting records, and committing to additional public draftsof the framework before the policy was finalized.

Based on inputfrom a meeting the W3C Members, the Patent Policy Working Group recentlyissued a draftroyalty free policy. The main features of this policy are:

1. RF licensing goals for W3C Recommendations
2. RF licensing obligations that Working Group participants will undertake as a condition of Working Group membership, along with means of excluding specific patents from those obligations
3. the definition of a Royalty-Free license
4. disclosure rules for W3C Members
5. an exception handling process for situations in which the Royalty-Free status of a specification comes under question.

The group developing this policy still have some issues left to resolve,but expect to circulate a final proposal for comment by the public and formalreview by W3C Members in the coming months.

IV. Conclusion

W3C, it's Members, and many in the independent software developercommunity around the world who have contributed to the growth of the Web,have spent the last year in active discussion about the proper relationshipbetween patents and Web standards. Our debate is not yet concluded, but wehave learned together quite a bit about how important the tacit royalty-freelicensing environment of the Web to-date has been for the development ofextraordinary economic and social value that has been generated by the WorldWide Web. Our commitment is to find an approach the insures the Web's growthinto the future as a vibrant engine of technical innovation, economicproductivity and social growth. Above all, we will find a solution thatprovides for the continued universality of the Web as an information medium,and avoids uses of intellectual property rights that could lead tobalkanization of the Web. We welcome your consideration of these issues andlook forward to working with your agencies in future.