Defining “Open Standards”: A Comparison of Policy and Practice

1. Defining “Open Standards”: A Comparison of Policy and Practice Steve Mutkoski Senior Standards Strategist

2. Initial observations • Governments have spent considerable time trying to articulate what they like about standards • Sometimes articulated as a debate about “Open” vs. Closed or Proprietary standards, lots of discussion about what might or might not be an “Open Standard” • Key Questions • How do these policy debates line up against what the standards community is doing? • More importantly, what underlying objectives do governments seek to address via these policy tools? • Do/can these policy tool achieve such objectives? Overview

3. Section I: The definitional debate • Review prior literature, including West, Krechmer, etc. • Culled list of five “attributes” which are common • Section II: Three recent policies: UK, India and EU • Use attributes as common frame of reference • Section III: Comparing Policy with Practice • Focus on one attribute (IPR licensing) • Illustrates disconnect between Policy and Practice • Section IV: • Raises challenging questions about what governments are trying to achieve Flow of Paper

4. Prior Research • Ken Krechmer- 10 criteria for an “Open Standard” • Per Andersen- 9 criteria • Joel West- 4 criteria: (1) access or participation “permeability” (2) nature of decision-making process (3) specification rights and (4) IP Rights access • Analysis • Starting point: West’s criteria largely condense and combine various of Krechmer’s elements • Discarded elements related to “market success” of standard and interoperability of implementations • Attributes are not binary but instead exist on a spectrum Section I

5. “Permeability” of the SSO creating the specification to stakeholders: which is related to whether there are any membership limitations, such as only companies may join or only invited parties may join, as well as membership requirements such as fees that might effectively limit who can become a member. • “Transparency” of process, due process and related decision-making and governance concepts at the SSO creating the specification and maintaining it over time: which is related to whether the governance process is well documented, to what extent it embodies some traditional notions of fairness and the specific mechanisms that it has in place for reaching decisions, such as simple majority, super majority or consensus. • “Structural attributes” of the organization creating and maintaining the specification: which is related to issues such as whether the entity operates on a nonprofit vs. for profit basis • Limitations or restrictions on accessibility to the specification: which is related to whether there are any per copy fees that need to be paid to access a copy of the specification • Licensing terms for patent claims that are essential for implementing the specification: which is related to whether a royalty must be paid (and other terms must be agreed to) for access to essential patent claims Section I: Five Attributes

6. “Permeability” attribute • Interplay between membership fees, specification fees and business models • Decision-making and Governance attribute • Majority, supermajority, veto power? • IPR attribute • What does “Royalty Free” mean? • How does this attribute map against real world SSO practice? • Highlights a key gap between policy maker aspirations and real world practice Section I: Complexity of Attributes

7. What does “Royalty Free” mean in this context? • Any standard where there is affirmative proof that nobody will seek a royalty? • Any standards created in SSO where SSO IPR policy disallows inclusion of any royalty in licensing terms? • Any standards but those where there is affirmative proof someone is seeking a royalty? • Other possible meanings? • Important considerations • Which of these are measurable? • How do these various possible definitions map onto the standards that we (and governments use today)? • What are the forward looking impacts of these definitions? “Royalty Free”

8. Proof of Ability to Implement w/out Royalty Payment What SSO IPR Policy Allows or Disallows Proof of Existence of Royalty Test 1: “any standard except those where it can affirmatively be shown that a participant in the standards setting process has sought or expressed an intention to collect a royalty in connection with its essential patents.” Test 3: “a standard where it can affirmatively be shown that no implementer has been charged a royalty to implement” Test 2: “a standard created at an SSO which has an IPR Policy that requires all participants to make any essential patent claims available on a royalty free basis”

9. India “Policy on Open Standards in eGovernance” (Nov 2010) • [1] The specification is “available with or without a nominal fee”; [2] “Patent claims necessary to implement the Identified Standard shall be made available on a Royalty-Free basis”; [3] “Standard shall be adopted and maintained by a not-for-profit organization, wherein all stakeholders can opt to participate in a transparent, collaborative and consensual manner”; [4] “Standard shall be recursively open as far as possible”; [5] “Standard shall have technology-neutral specification”; [6] “Standard shall be capable of localization support” • European Interoperability Framework version 2 (Dec 2010) • [1] “All stakeholders have the same possibility of contributing to the development of the specification and public review is part of the decision-making process”; [2] “The specification is available for everybody to study”; [3] “Intellectual property rights related to the specification are licensed on FRAND terms or on a royalty-free basis in a way that allows implementation in both proprietary and open source software” • Procurement Policy Note on Open Standards (Jan 2011) • [1] “result from and are maintained through an open, independent process”; [2] “are approved by a recognised specification or standardisationorganisation, for example W3C or ISO or equivalent.”; [3] “are thoroughly documented and publicly available at zero or low cost”; [4] “have intellectual property made irrevocably available on a royalty free basis”; [5] “as a whole can be implemented and shared under different development approaches and on a number of platforms” Section II: 3 Current Policies

10. Comparison of Policies against Attributes

11. Key question: “how do standards from a particular SSO stack up against the openness attributes in general and the three government policies more specifically?” • Focus: IPR attribute • Majority of SSO IPR Policies allow Reasonable Royalty • ISO/IEC Patent Policy: (i) agree to license essential claims on RAND terms “free of charge” (ii) agree to license them on RAND terms with a royalty or (iii) state that it will not license in accordance with first two options • Which standards meet the Royalty Free requirement? • W3C and certain OASIS standards Section III: Overlay with SSO Ecosystem

12. Policies Compared with SSO Practice

13. National Government Standards Requirements by IPR Status Source: Database of 35 National Standards Lists (on file with author)

14. Key Questions • How do these policy debates line up against what the standards community is doing? • More importantly, what underlying objectives do governments seek to address via these policy tools? • Do/can these policy tool achieve such objectives? Part VI- Conclusions