FORMAL OBJECTION

 

 

The draft Patent Policy Framework includes an onerous membership-wide RAND (reasonable and non-discriminatory) licensing commitment that unreasonably burdens a significant portion of the W3C Membership that participate in only a subset of the W3C’s working groups.  Under the current draft, a member is required to offer a license on all W3C Recommendations whether or not the member had any involvement in the development of those Recommendations.  We propose an alternative arrangement in which working group participants would be required to offer a RAND license only for those Recommendations produced by a working group in which the member participated. The disclosure requirements under Section 3.2 would still pertain to the W3C Membership as a whole. 

This proposed alternative is a more fair approach that matches the burden, cost and risk associated with the licensing commitment to the level of participation of the member.  A participant in a working group typically has knowledge of the Recommendation and the technology area involved and is therefore in a better position to do a patent search.  A participant in a working group also has an opportunity to contribute to and otherwise influence the direction and content of the Recommendation, while a non-working group member does not receive such benefits.  Accordingly, it is unfair to impose the same licensing commitment on both non-working group members and working group members alike, since they are clearly not similarly situated. 

The inequity under the current draft Patent Policy Framework is compounded by the fact that W3C has roughly 40+ working groups.  These working groups are involved in diverse technology areas and new working groups are formed on an on-going basis.  It is unfair to require a company who has had no involvement in the development or adoption of a Recommendation in a particular technology area -- and may never even implement the Recommendation -- to license its patent portfolio based merely on the fact it has involvement in some other technology area within W3C.  

Below is a summary of the reasons for adopting a working group participation licensing commitment, rather than a membership-wide licensing commitment:

•     it is unfair to require a licensing commitment from non-working group members:  they were not involved in the development of the Recommendation; they lack the knowledge to perform patent searches; and they probably have no interest in implementing the Recommendation; 

 

•   a membership-wide licensing commitment is overly broad, because even if a member does not participate in the development of a Recommendation and never implements that Recommendation, the member still incurs a licensing obligation with respect to that Recommendation;

 

•   a membership-wide licensing commitment is unreasonably burdensome because it requires members to search or license their patents with respect to technology that they may not be involved in;

 

•     the membership-wide licensing commitment is a trap for the unwary;

 

•     the membership-wide licensing commitment disadvantages W3C members with respect to non-W3C members who have no duty to search or license their patents;

 

•     the membership-wide licensing commitment may act as a barrier to W3C membership; and

 

•     a licensing commitment based on working group participation rather than W3C membership is a more balanced, equitable, and practical approach because companies incur the obligation to search and license their patents in proportion to their level of involvement in the adoption process.

Each of these reasons is explained in further detail below.  This is an important issue and we appreciate you taking the time to read, consider and comment on this alternative proposal. 

 

1)The membership-wide licensing commitment is unfair

It is unfair to require a licensing commitment from non-working group members because they were not involved in the development of the Recommendation and as such they are not familiar with the Recommendation.  A company may need to expend significant resources to gain knowledge of a Recommendation in which it is otherwise uninterested merely for purposes of performing a resource intensive patent search.  It is unfair to require such a significant expenditure of resources from a company that has not received any benefit from participation in the working group and that may not even implement the Recommendation in any event.  The alternative proposed here equitably matches the costs, risks and burden associated with the licensing commitment to a member’s level of participation in W3C

 

2)  The membership-wide licensing commitment is overly broad

 

A membership-wide licensing commitment is overly broad, because even if a member does not participate in the development of a Recommendation and never implements that Recommendation, the member still incurs a licensing obligation with respect to that Recommendation.  The situation could arise where a company (“company A”) chooses to participate in a few W3C working groups, but does not have the resources or interest to participate in the other working groups.  Subsequently, company A is sued by another company (company B).  Company B may be a W3C Member with a non-essential patent claim or it may be a non-W3C member.  Company A has a patent which it could use to defend itself against company B and perhaps negotiate a patent cross-licensing arrangement.  However, company A’s patent claims are Essential Claims with regard to the infringing Recommendation that company B has implemented.  Those patent claims are completely unrelated to any Recommendation produced by a working group in which company A was involved and company A has not even implemented that Recommendation itself.  The result is that company B, who may not even be a W3C member, is licensed to company A’s patent and company A is not able to use its patent defensively merely because it participated in an unrelated working group.

 

3)  The membership-wide licensing commitment is unreasonably burdensome

The membership-wide licensing commitment is unreasonably burdensome for those companies that participate in only a subset of the W3C’s working groups.  These companies may not have a patent portfolio-wide RAND licensing model and/or may want to preserve their right to use their patents defensively.  Reviewing a patent portfolio to compare it to a Recommendation to determine whether to opt-out any patents is a significant undertaking. 

It is reasonable to expect such a significant effort from a working group member.  Working group members are presumably familiar with the working group’s Recommendation and have perhaps contributed to or otherwise influenced the contents and/or direction of the Recommendation.  However, it is unreasonable to expect a company that is not participating in a working group and, thus, does not have the knowledge and other benefits associated with participation to expend that amount of effort and resources.   There are roughly 40+ working groups in W3C and new working groups are being formed on an on-going basis.   Some working group produce a Recommendation with hundreds of pages of technical information.  That means there are possibly thousands of pages to review!  How can a company be expected to monitor such a volume of information?  This huge burden might serve as a barrier for membership for some companies that do not have the resources to conduct such reviews, but are unwilling to blindly compromise their patent portfolios.  A licensing commitment based on working group participation, rather than W3C Membership, matches a member’s associated burden, cost and risk to the level of participation of the member.

 

4)  The membership-wide licensing commitment is a trap for the unwary

Under the current licensing commitment, a member who does not review every W3C Recommendation and who does not analyze its patent portfolio with respect to each Recommendation, risks that by default the company is granting licenses to patents in which it might otherwise want to preserve its rights, e.g. proprietary technology, defensive use.  Alternatively, a member might try to monitor the Recommendations at a high level to determine which Recommendations might pertain to technology areas covered by their patent portfolios.  However, without reviewing each and every Recommendation carefully, the member does not know with any degree of certainty whether it has agreed to offer licenses with respect to a Recommendation.  The membership-wide licensing commitment could be used to gain access to another member’s patents by including the technology in an obscure Recommendation and hoping that the member doesn’t notice.  Accordingly, the membership-wide licensing commitment is a mechanism for gamesmanship and trap for the unwary.

 

5)  The membership-wide licensing commitment disadvantages W3C members with respect to non-W3C members

 

The membership-wide licensing commitment disadvantages W3C members with respect to non-W3C members.  Under the current draft Patent Policy Framework, a non-W3C member can use W3C Recommendations without any obligation to search or license their patent portfolios, unless reciprocal licenses are required.  However, a W3C Member—who may have made valuable contributions to a particular working group – will be required to search and/or license its Essential Claims for all W3C Recommendations in spite of the fact that the company may have only taken advantage of the working groups that defined a subset of those Recommendations.  Like a non-W3C member, a W3C member not participating in a working group does not derive the benefits it would otherwise derive from participation, but the W3C member incurs this additional burden, cost and risk  Why do we want to disadvantage W3C members relative to non-W3C members?

A licensing commitment based on working group participation would match the cost, risks and burden to a member’s level of participation and would not unfairly disadvantage W3C members relative to non-W3C members.  If a member were to later implement a Recommendation in which the member did not participate, that member would be subject to any associated reciprocity licensing requirements to the same degree as the other implementers of the Recommendation.

 

6)  The membership-wide licensing commitment may act as a barrier to W3C membership

 

The membership-wide licensing commitment presents significant patent portfolio risks and unreasonable resource burdens, since review of every W3C Recommendation for patent implications may entail a multitude of patent searches.  Companies that participate in only a subset of the working groups may weigh these heavy burdens and risks against the benefits of W3C membership.  Do we really want to set up such high barriers to W3C membership?  Many companies are accustomed to RAND licensing arrangements based on working group participation and, thus, may find the alternative proposed here to be less of a barrier to joining W3C.  An approach based on working group participation, wherein the costs, risks and burdens of the licensing commitments of a member are commensurate with the member’s level of participation, is likely to be less of a barrier to W3C membership.

 

7)  A licensing commitment based on working group participation rather than W3C membership is a more balanced, equitable, and practical approach

 

The W3C membership is diverse with companies of various sizes, resources and licensing models.  Certainly, compromises will be necessary from members in order to produce a patent policy that balances the varied concerns of its members.  It would be unfortunate, though, to have a patent policy as is currently drafted which unreasonably disadvantages a significant portion of the W3C membership, namely those companies that participate in only a subset of the working groups and that do not have a patent licensing model that permits blanket licensing for any and all patents in the portfolio. 

The proposed alternative equitably balances patent issues with the burdens and risks of a licensing/specific opt-out approach.  Under this proposed alternative, companies incur the obligation to search and license their patents in proportion to their level of involvement in the adoption process.  It is those participating companies who are in a position to influence the Recommendation and thus it is fair for those companies to assume the burdens and risks of the licensing commitment.  At the same time, companies that are not participating in a working group are not disadvantaged and burdened.  Such a licensing commitment based on working group participation is less likely to serve as a barrier for W3C membership.