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  <title>Weitzner-W3C DOJ FTC Testimony - Antitrust, Intellectual Property
  and Standards - 18 April 2002</title>
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<p><a href="http://www.w3.org/"><img src="http://www.w3.org/Icons/w3c_home"
alt="World Wide Web Consortium" /></a></p>

<h1>Before the United States Department of Justice and United States Federal
Trade Commission</h1>

<h2>Joint Hearings on Competition and Intellectual Property Law and Policy in
the Knowledge-Based Economy: Standards and Intellectual Property: Licensing
Terms</h2>

<p><font face="Arial">Testimony of <a
href="http://www.w3.org/People/Weitzner.html">Daniel J. Weitzner</a> <br />
<a href="http://www.w3.org/TandS/">Technology and Society</a> Domain
Leader</font><a href="http://www.w3.org/"><font face="Arial"><br />
World Wide Web Consortium</font></a></p>

<p><font face="Arial">18 April 2002<br />
Washington, DC USA</font></p>

<h2>Introduction &amp; Overview</h2>

<p>My name is Daniel J. Weitzner. I want to extend my thanks to the Justice
Department Antitrust Division and the Federal Trade Commission for holding
these hearings. I am the head of the World Wide Web Consortium's (W3C)
Technology and Society activities, responsible for development of technology
standards that enable the Web to address social, legal, and public policy
concerns. W3C, an international organization made up of nearly 500 members
from industry, academe, users organizations and public policy experts, is
responsible 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 serves
as the Director of the Consortium. In addition to my work at W3C, I also hold
a research appointment at MIT's Laboratory for Computer Science, teach
Internet public policy at MIT, and am a member of the Internet Corporation
for Assigned Names and Numbers (ICANN) Protocol Supporting Organization
Protocol Council.</p>

<p>W3C has been actively engaged in developing responses to challenges raised
by patents in the context of Web standards over the last four years, so we
are 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 the
experience that the World Wide Web community has had with patents over the
last four years. This testimony will highlight three main points:</p>
<ul>
  <li>First, the Web itself has been possible only in the context of open,
    royalty-free (RF) standards.</li>
  <li>Second, the "reasonable, non-discriminatory terms" (RAND) licensing
    model common in many traditional standards bodies is unlikely to be
    accepted in the Web environment.</li>
  <li>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.</li>
</ul>

<p>Patent policy considerations for any technical standards effort must be
grounded in an understanding of the goals of the underlying technology, as
well as the unique characteristics of the environment in which the standards
will be used. So I will begin by describing the fundamental technical and
licensing characteristics of the Web to date.</p>

<h2>I. General characteristics of the Web: A universal information space</h2>

<p>The World Wide Web was designed to be an easy-to-use, universally
accessible open platform for publishing and accessing information, enabling
linking and distribution of documents amongst computers, regardless of
operating system, all around the world. While the Web does not yet reach
every single person in the world, it has enabled an unprecedented exchange of
knowledge, information, goods and services around the world. Of critical
importance to the rise of electronic commerce as a new marketplace, Web
technology allows a wide variety of new systems and technologies to be built
on top of the basic architecture of the Web, thus enabling continual
innovation in the design of Web-based applications and services. Two key
attributes of Web standards are responsible for the ubiquity and flexibility
of the Web: 1) simple, extensible design, and 2) open, unencumbered
standards.</p>

<p>Much has been <a
href="http://www1.ics.uci.edu/~fielding/pubs/dissertation/rest_arch_style.htm">written</a>
about the aspects of Web technical architecture which have lead to its
ubiquity and universality. For the purposes of this discussion, it will
suffice to note that in contrast to the hypertext systems which existed
before 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 hardware
and software platforms. Earlier hypertext systems (for example, <a
href="http://xanadu.com/">Xanadu</a>) often had far more sophisticated design
that anticipated many of the problems (broken links, need for long-term
archiving, difficulty managing intellectual property rights, etc.), but none
achieved the wide deployment of the Web. Indeed, the architects of the
Internet believed that a simple design, based on standards that are
technically easy to implement, would be a critical part of helping the Web to
grow to be a truly world-wide phenomenon. Ease of implementation is vital for
both Web software developers as well as those who simply seek to publish
information on the Web.</p>

<p>In the history of the Web, low legal and financial barriers to use of Web
standards have been as important as ease of deployment from a technical
perspective. W3C Recommendations are often implemented in a large number of
individual software environments. Indeed, the Web standards design process
depends on the implementation experience of a large number of developers to
assure that each component of the Web is well designed and satisfies the
needs of the increasing diverse communities of Web users. Gathering early
implementation experience from a wide range of developers is particularly
important for security-related standards. This broad experience helps assure
that security standards are subject to rigorous testing before being
finalized. Open source implementations have played an essential role in the
evolution and broad access to Web technology. Among the most popular versions
of Web server software, <a href="http://www.apache.org/">Apache</a>, is
produced on an open source licensing basis. In addition to Apache, many of
our new standards are implemented early with open source code, enabling large
numbers of developers, commercial and non-commercial, to incorporate new Web
features into software they are writing without having to develop those
features from scratch. Finally, the diversity of content represented by the
over 2 billion Web pages is only possible because the creators of each of
those pages is able to use key web standards such as HTML (hypertext Markup
Language) and CSS (style sheets) without paying a royalty.</p>

<h2>II. History of patents at W3C</h2>

<p>Web technology has developed over the last decade through an unprecedented
burst of entrepreneurial energy and global cooperation. Both the
<em>competitive</em> forces which have lead to innovative technology, and the
<em>cooperative</em> spirit which has produced global interoperability
standards at an extremely rapid pace have occurred, until very recently, in a
market environment without any significant patent licensing requirements.</p>

<p>The second decade of the Web has already demonstrated that patents will be
a factor in the ongoing development of the World Wide Web infrastructure. A
variety of factors suggest that the Web will be increasingly affected by the
patent process. The following factors are significant:</p>
<ol>
  <li>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.</li>
  <li>Rise in patent issuance: Patent offices, led by the U.S. PTO, are
    issuing patents, especially in the software sector, at record rates.</li>
  <li>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.</li>
  <li>Popularity of Business Method patents: Beginning with the <span
    style="text-decoration: underline">State Street</span> 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.</li>
</ol>

<p>All of the core Recommendations issued by W3C to date have been
implementable on a Royalty-Free basis. In the first four years of W3C's
history, no serious issues regarding patents had been raised at all. All
energy was concentrated on developing technical specifications. In the last
few years several patents issued by the United States Patent and Trademark
Office have stalled, or at least delayed, W3C technical work.</p>
<ul>
  <li><strong>P3P and the Intermind Patent</strong> : 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 (<a
    href="http://www.w3.org/TR/P3P">P3P</a>) standard. <a
    href="http://www.intermind.com/">Intermind,</a> 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 <a
    href="http://www.w3.org/TR/1999/NOTE-P3P-analysis-19991027">analysis</a>
    conducted by Barry Rein of Pennie &amp; 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.</li>
  <li><strong>Microsoft Style Sheet Patent</strong>: 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.</li>
  <li><strong>Sun XLink Patent</strong> : 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.</li>
</ul>

<p>After considerable effort on the part of W3C Members and staff, each of
these situations were, indeed, resolved in a way that enabled widespread
adoption of the standards in question. However, the general trends cited, and
the specific situations in which patent claims have been potential or actual
roadblocks to standardization have made it clear that the W3C must have a
clear and effective patent policy to ensure that the Web continues to develop
as an open, universal information platform.</p>

<h2>III. W3C Patent Policy Development process</h2>

<p>Responding to increasing concerns about patents, W3C created the Patent
Policy Working Group (<acronym>PPWG</acronym>) in July 1999 to forge a patent
policy that will</p>
<ul>
  <li>address the growing challenge of patent claims around Web
  technologies,</li>
  <li>foster an environment within W3C where technical decisions can be made
    unencumbered by patent claims.</li>
</ul>

<p>Whether patents and claims related to W3C technologies are in fact valid
or not, the risk of costly, time-consuming litigation and possible
limitations on use by the right holders, is sufficient to suffocate much of
the dynamic development activity that has been driving the Web industry. A
variety of factors already discussed suggest that the Web will be
increasingly affected by the patent process, and so W3C created the Patent
Policy Working Group to create a clear and effective policy.</p>

<p>The Patent Policy Working Group's <a
href="http://www.w3.org/TR/2001/WD-patent-policy-20010816/">first
proposal</a> suggested a two-track approach to patent policy at W3C, allowing
both RAND and RF licensing modes. According to the proposal, each time a new
Working Group is formed to develop a standard, a choice would be made about
whether the standard should be developed to be implementable on a
royalty-free or RAND basis.</p>

<p>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 detailed
comments. Public reaction to the draft was almost uniformly negative,
primarily because the framework would allow W3C to include in its
Recommendations technology known to be patent-encumbered, and that
implementors might therefore have to pay a license fee to implement a W3C
Recommendation. The strongest reaction came from various communities of open
source developers who declared, (in several thousand emails sent to the W3C
public comment mailing list) that a RAND approach would cause open source
developers to stop using W3C web standards, impel some to form alternate Web
standards, thus balkanizing the Web, and overall constituted a take-over of
the Web by large corporate interests.</p>

<p>W3C responded to input from W3C Members and the public by adding invited
experts to the Patent Policy Working Group to represent the Open Source
community, creating a task force within the Patent Policy Working Group to
examine how to accommodate the Open Source community, and creating a <a
href="http://www.w3.org/2001/ppwg/">public home page for the PPWG</a>,
publishing public meeting records, and committing to additional public drafts
of the framework before the policy was finalized.</p>

<p>Based on <a
href="http://lists.w3.org/Archives/Public/www-patentpolicy-comment/2001Nov/0147">input</a>
from a meeting the W3C Members, the Patent Policy Working Group recently
issued a <a href="http://www.w3.org/TR/2002/WD-patent-policy-20020226">draft
royalty free policy</a>. The main features of this policy are:</p>
<ol>
  <li>RF licensing goals for W3C Recommendations</li>
  <li>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</li>
  <li>the definition of a Royalty-Free license</li>
  <li>disclosure rules for W3C Members</li>
  <li>an exception handling process for situations in which the Royalty-Free
    status of a specification comes under question.</li>
</ol>

<p>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 formal
review by W3C Members in the coming months.</p>

<h2>IV. Conclusion</h2>

<p>W3C, it's Members, and many in the independent software developer
community around the world who have contributed to the growth of the Web,
have spent the last year in active discussion about the proper relationship
between patents and Web standards. Our debate is not yet concluded, but we
have learned together quite a bit about how important the tacit royalty-free
licensing environment of the Web to-date has been for the development of
extraordinary economic and social value that has been generated by the World
Wide Web. Our commitment is to find an approach the insures the Web's growth
into the future as a vibrant engine of technical innovation, economic
productivity and social growth. Above all, we will find a solution that
provides for the continued universality of the Web as an information medium,
and avoids uses of intellectual property rights that could lead to
balkanization of the Web. We welcome your consideration of these issues and
look forward to working with your agencies in future.</p>

<p></p>
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