Statement made on 20 Feb 2009


  • Standardization is a market-led activity --yet often has public interest-- and contributes to the efficiency of government
  • Standards are increasingly important to the European economy (numerous reports--references to follow)
  • Software sector has specific needs for interoperability--centered around open standards
  • The Internet itself is based on open standards
  • Need for legal recognition of fora/consortia in EU legislation
  • Achieving as wide as possible availability of open standards


  • Almost all software standards are today created in fora/consortia
    • pressure on the formal system to change
    • pressure on stakeholders (industry/SMEs/govt/consumers/users) to suboptimize/overly prioritise
  • Industry tends to agree on interoperability concerns
  • Industry approaches to interoperability are converging around open standards as THE strategy


  • The Standards landscape could by some be described as chaotic, expensive, and variable--despite its benefits
  • Legal recognition of fora/consortia in EU legislation by revising Directive 98/34/EC cannot happen in this Commission
  • Revision of the Council Decision 87/95 (22 years old) is delaying


  • Revising Directive 98/34/EC on Standardization
  • Revising Council Decision 87/95 on ICT standardization
    • Anoint transparent/professional/global players among fora/consortia as European Standards Organizations (ESOs)
    • Anoint transparent/professional/global open standards from fora/consortia as legal in EU directive parlance
  • Stimulating standards participation through European Software Strategy and post i2010 strategy money
    • Programme for standards participation of European SMEs (travel support, skills, secretariat via Normapme etc.)
  • Loosening up the interpretation of EU rules for referencing standards in current EU and EU27+ practices (public procurement)
    • Legitimize the common practice of referencing fora/consortia open standards
  • Joining-up INFSO concerns with the forthcoming White Paper on the Way Forward in IT Standardization (where DG ENTR is lead)
    • Clearly describe the characteristics of both standards (in the current EU terminology), open standards, and open specifications.

The Commission should in the forthcoming White Paper acknowledge the common practice of referencing fora/consortia among EU Member States, and should note that this is understandable and legitimate considering their interoperability concerns, the evolution of the Internet, and the intention of the current European directives and decisions. Furthermore, the Commission should put in place an accreditation scheme for fora/consortia to become European Standards Organizations and/or recognized in European legislation, if there is such a distinction.

We note some key characteristics of open standards. The Berkman Center for Internet and Society at the Harvard Law School's /Roadmap for Open Ecosystems, /which included government experts from the European Commission, came up with the following :

This ROADMAP considers a standard to be open when it complies with all these elements:
Cannot be controlled by any single person or entity with any vested interests;
Evolution and management in a transparent process open to all interested parties;
Platform independent, vendor neutral and usable for multiple implementations;
Openly published (including availability of specifications and supporting material);
Available royalty free or at minimal cost, with other restrictions (such as field of use and defensive suspension) offered on reasonable and non-discriminatory terms; and
Approved through due process by rough consensus among participants,

In addition, it is essential that open standards be compatible with a variety of licensing and development models, including open source.

Some maintain that European standards by definition are open. We question this assumption, given restrictions on wide dissemination currently inherent in the system of national representation (as opposed to having all stakeholders being represented), and their business model based on selling standards rather than making them freely available.

The above notwithstanding, there are many advantages from de jure or formal standards organizations, and we fully support them. y. But times change and systems must change with them. The current European framework is older than today's software industry. Recognition of the diverse nature of standards setting organizations impacting today's software marketplace is necessary to support a vibrant and growing software sector in Europe.

IPR and Standards: Transparency is the key issue

We believe strongly in the need for greater transparency with regards to incorporation of patented technology owned by SSO participants into standards.

Transparency in this context can be viewed as encompassing the following two aspects:

  1. Identification of patents held by participants of standards setting organizations (SSOs) that are essential to a draft standard prior to the formal adoption of the draft as a final standard
  2. Disclosure prior to adoption of the draft standard of the terms on which such identified patents would be licensed for the purpose of implementing the proposed draft standard

Identification of essential patents

Various provisions in SSO IPR policies can promote this type of transparency including (i) disclosure obligations and (ii) default licensing obligations for patents that have not been disclosed by a particular deadline occurring before final adoption of a draft standard. We believe that a royalty-free (RF) default licensing obligation for the active participants in the development of a standard is the best way to avoid the type of patent holdup phenomenon that has been the subject of recent litigation in the Rambus and other cases. Such an obligation for an essential patent owned by an active SSO participant can be avoided through timely disclosure of the patent. An example of this approach is taken by W3C's Patent Policy which prescribes a default RF licensing obligation for the essential patents owned by members of the working group (WG) that is developing a particular standard. This default obligation can be avoided for any patent that a WG member discloses prior to a deadline specified in the policy. The W3C Patent Policy also imposes significant constraints on the non-monetary terms of the default licensing obligation. We believe such constraints are justifiable, in that the non-monetary terms in a license for an essential patent may have significant anti-competitive effects (e.g. an unduly broad reciprocal grant).

Disclosure of licensing terms for identified patents.

We believe that transparency with regard to licensing terms is important to enable SSOs to take into account cost and potentially other licensing issues when considering various alternatives for a standard under development. So-called ex-ante provisions which mandate or at least permit disclosure of licensing terms by an SSO participant can help promote this type of transparency. An example of such a provision is contained in the revision that VITA (an ANSI-accredited SSO) made to its Patent Policy in 2007, after a favorable business review letter from the US Department of Justice. The VITA policy requires each SSO participant that discloses an essential patent to provide a maximum royalty and encourages the disclosure of a draft licensing agreement. If a licensing agreement is not provided, the VITA policy limits the future licensing discretion of the patent owner with regard to several key non-monetary issues (e.g., scope of a reciprocal grant).

We support recent statements made by Commissioner Kroes that the ex ante disclosure of the existence of essential patents, as well as the ex ante disclosure of maximum royalty rates can constitute means to improve the effectiveness of the standard setting process. Increased effectiveness of the standard setting process can "lead to more competitive solutions and reduce the risk of later antitrust problems.

The Commission has repeatedly confirmed their view that standardization is, and should remain, a market-led activity. In this light, we feel the White Paper should acknowledge the importance of fora/consortia for developing standards especially in the software industry1. This is necessary because modern software systems including the Internet depend on such standards for their existence. That fact should now be admitted in case law and recognized as acceptable practice in interpretations of the intent of the relevant European law, directive or regulation.

In Directive 98/34, a standard includes three European Standards Organizations (ESOs) and organizations that produce «international standards»: where the latter is defined as «a standard adopted by an international standardisation organisation and made available to the public». We would submit that the way «international standards organisation» is defined in the Directive 98/34 could, in 2008, lead to credible interpretations that these organizations may include Oasis, W3C and possibly other standards setting organizations that are fully open in their procedures, allow national representation and give public access to their standards. Even in CD 87/95, «international standard» means a standard adopted by a «recognized international standards body», but the term is not defined further and could already be taken to include W3C and Oasis, given their recognition for openness and the spread of their respective standards across the world, in both government and industry.

In a straightforward revision of 98/34, the Commission could subsequently simply add W3C and Oasis to Annex I, thus recognizing them as European Standards Bodies, provided they continue along the openness path and are subject to periodic review. Alternatively, the Commission could specify the openness criteria needed to obtain such a status (essentially following the WTO-criteria), and put in place a simple and straightforward accreditation/recognition process.

See the World Trade Organization's (WTO) Technical Barriers to Trade (TBT) Agreement and the principles of openness, impartiality, and consensus.

Statement made on 19 March 2009

First, just one observation: the group does agree that deliverables from fora/consortia are highly relevant. There is no disagreement on that point (I believe we should also add: the lack of recognition of fora/consortia deliverables hampers innovation in the European software industry by creating unnecessary competing standards and organizations). Also, I have seen no arguments against the ideal of ex ante (only that some feel it is not sufficient). Hence, OFE feels the disclaimer Harald wants to introduce is not completely accurate. We might be wrong?

By extension, and this is where the disagreement starts, under the link to the fora/consortia discussion in the document is created because SDOs like W3C and OASIS offer standards on RF terms that can be rather securely implemented by FLOSS. However, the RF discussion must be held separate. Actually, OFE would like to point out that the collection of royalties is in direct conflict certain aspects of certain FLOSS licenses, namely with the freedom of redistribution (The GPL mentions the second freedom as the "freedom to redistribute copies so you can help your neighbor"): since the author of the software grants to right to his neighboors to make copies to other neighboors, there is no possible way for the original author to count the number of copies distributed. Furthermore, the freedom to copy implies that cost to make copies is marginal and tends to zero, and most free software can be downloaded for free from the internet. The simple levy of a royalty of a millionth eurocent per copy renders free software non-free.

Furthermore, please note the complete lack of SME presence in this working group. Hence, it might be slightly inaccurate to qualify the trench as FLOSS only. There are other trenches, for example from companies who want to take a license, and the licensor asks for an entry ticket fee which is not easily accessible for small companies. So on the side of parties interested in having free standards, you can add SMEs who cannot afford the entry ticket. Furthermore, any license cost will be automatically reflected in the final price for the consumer, leading to higher prices. An accumulation of such RAND practices leads to royalty stacking and in the end, eats into the margin of the producer.

You can basically decompose the whole conflict into the following set of questions: -

  1. Do you want patent disclosure in standard setting?
  2. Do you prefer a) RF, b) FRAND or c) RAND as a licensing model?
  3. Do b/c have to be compatible with a widespread General Public License?
  4. Do you want 1) no patent policy 2) RF 3) RAND patent policy as minimum for standard setting institutions?
  5. Do you set higher standards when it is about public sector procurement and eGovernment, e.g. RF policy?
  6. Are you for mandatory schemes for markets or public procurement?
  7. Do you agree that for ubiquitious standards/specifications as www-standards RF schemes are more desirable?

The view of the OFE members is contained within the second and third basket. Second basket means "uncontroversial" proposals for reform the Commission can pick up now. Third basket requires is "unconventional" proposals,.

2nd Basket) - Legal Interoperability

Deliverable would be unified RF and RAND licensing/indemnification models for "self-selection" that are legally secure in all 27 member states under private law. - RF / RAND - Deliverable: Legal conference where lawyers discuss licensing models like RF/RAND/FRAND/RAND-Z/RRAND etc. as market offers - competition law - Deliverable: Com communication on standards and competition law and symposium - participation in standardisation: Deliverables: better representation of underrepresented stakeholders such as SME in standard organisations. - transaction costs: Deliverable: Com-Study on contraction, opportunity and information costs of standard-related patent licensing (and options to cut costs e.g. "license of right")

3rd Basket) - standard troll solution:

Deliverable: Study on contractual market defence tools against trolls - Defensive patents: Deliverable: Thought process how to ensure with contractual clauses that your own patents cannot be used for destructive purposes - Standard indemnification: Deliverable: Com IntMarket proposal on a new legal instrument for indemnification of EU-standards against submarine patent trolls, an overriding certificate of non-infringment to be issued by Alicante - Standard opposition: Patent opposition is suboptimal due to so called free rider effects, in particular when market players are small and many: the deliverable would be a special public institution or a foundation that files "patent oppositions" against those patents which endanger openness of crucial standards to compensate for the opposition market failure in the field of standardisation.

Finally, we should maybe consider referencing the bold, new UK policy, Open Source, Open Standards and Re--Use: Government Action Plan:

The UK Government Action Plan on re-use seems highly relevant to our group's work. This is an open standards friendly policy that bypasses the European formal/legal obstacles and simply speaks of furthering open standards, : "The Government will use open standards in its procurement specifications and require solutions to comply with open standards. The Government will support the development of open standards and specifications." (policy item 7).

When asked what he meant by an open standard, Andrew Stott, the UK Deputy CIO recently said: "If it walks like a duck and quacks like a duck, I would call it a duck." (at a meeting in the UK yesterday). This pragmatic, yet very clear view, means globally recognized fora/consortia standards that, in effect, are open the way most people view it, have a good chance of survival in the UK context, even in procurement, which is great news.

Note that Jerry Fishenden is Microsoft UK's lead technologist and a Visiting Senior Fellow at the London School of Economics and Political Science endorses the plan in his blog, as does the UK trade association Intellect and Intellect's press release emphasizes the open standards aspect of the plan: "Open standards are fundamental for ensuring interoperability across government, a crucial factor for a joined-up government. It is critical that the government use internationally recognised, industry standards where possible and ensure that any standard works with all software development models. Re-use of existing assets and capabilities will avoid unnecessary cost and increase standardisation and drive departments to work together to deliver best value for the taxpayer."