Francois Leveque on Standards, Patents, and Antitrust

As part of our [email protected] celebration this year, we at the Berkman Center tonight welcome Francois Leveque, professor at the Ecole des Mines, Paris, and visiting prof at the faculty of law at UC Berkeley. He’s presenting the findings of two new papers, each co-authored with Yann Meniere: “Technology standards, patents and antitrust” and “Licensing commitments in standard setting organizations.”

Prof. Leveque offers us a series of insights about the interaction of economics and law in the context of patents in the standards setting process. One key finding of his papers: it would be best for consumers and for innovation in general for the licensing of patents by players in standards setting processes to occur ex ante, rather than ex post. More surprising, he and M. Meniere argue that it also may be better, under some circumstances for the patent holder also to set the royalty level ex ante. He notes that, in this setting, the interests of consumers and patent owners are aligned. As he goes on to explain, in other settings, these interests may not be so well aligned. Read the papers for more insights, including with respect to the VITA royalty cap policies, ways to mitigate the costs of the risk of hold-up, and his proposal of announcing a royalty cap ex ante as a more flexible means of accomplishing such mitigation while still enabling patent holders to revise the royalties.

Prof. Leveque very kindly participated in both the Weissbad (Switzerland) and Cambridge (MA, USA) workshops that guided our work on Interoperability and Innovation over the past year. His interventions were crucial to informing our understanding of these complicated matters and he was unusually generous with his input, for which Urs Gasser and I and our teams are extremely grateful.

Yale ISP's Open Standards Conference

I’m with our friends at the Yale Information Society Project today for a fine conference called the Open Standards International Symposium. Eddan Katz and company have assembled a group from many of the places around the world where this issue is raging, along with representatives of many of the key industry players and stakeholders, like CDT. My notes for the Law panel are here. My focus is on the relationship between open standards and interoperability.

Microsoft's Open Specification Promise

Microsoft has just unveiled a new commitment not to assert certain rights against people who develop code based on specifications that Microsoft has developed. It’s called the Open Specification Promise. Warning: the announcement itself, at the top of the page, is written in legalese, though probably pretty readable legalese. The FAQs make things a lot clearer for non-lawyer readers.

The upshot of this announcement is that it will hopefully turn out to be a Very Good Thing. Bravo to the lawyers and the policy people who no doubt worked very hard on it; the promise obviously reflects a huge amount of careful and open-minded thinking. The notion is that Microsoft agrees unilaterally not to come after people based on IP rights that the company holds with respect to a series of widely-used web services, such as SOAP and various of its progeny, WSDL, and so forth (all listed mid-way down the announcement page). From a geeky-lawyerly perspective, one of the things I like a lot is the fact that the requirement of availing oneself of the promise is yourself NOT to participate voluntarily in a patent infringement suit related to the same specification — commitments of this sort could help to create an anti-patent-thicket. (Maybe, down the road, this aspect of the promise might not prove to be as great as I think it could be, but for now, from here, it looks very appealing, in a detente kind of way.)

Why could this promise help? Any promise of forbearance by a huge player — where they say they won’t stand in the way of your innovating on top of the work of others — is certainly positive. More than that, such a promise that is made “irrevocably” establishes a commitment on the part of the company for the long haul. Set aside the legal enforceability of such a promise, the idea has enormous rhetorical force and would make it very hard for the company to backtrack and to go in another direction. Of course, the idea no doubt has good business judgment behind it in an era of dramatic growth in terms of the open development of web services, including those related to security and to web 2.0 apps.

Why might it not be so great? Well, I think it is a great thing, and not just because we at the Berkman Center have been looking into interoperability, with support from Microsoft and others, and learning more about how companies are taking novel steps in this sort of direction. Its limitation might take a few forms, I suppose. The promise itself has limitations — it applies to some specifications and the promise extends only to some possible IPR-related claims, of course, but that seems natural, especially with such a first step. Other possible limitations: 1) Will developers pay attention to it, and in fact believe it? 2) Will this promise itself be interoperable with other such promises? I am reminded of Prof. Lessig’s speech at Wikimania last month, when he talked about interoperable licenses. Hopefully, others will either follow this lead or help developers to understand how this meshes with other similar promises of forebearance in the marketplace. 3) I don’t know well enough whether these are the right specifications to be included in such a promise. Are there other specs that developers would like to see opened up in this fashion?

Lessig on Interoperability at Wikimania 2006

Lawrence Lessig is giving a rousing lecture right now to a standing-room-only crowd in Ames Courtroom at Harvard Law School. It’s a plenary session of Wikimania 2006. He is in his element. It’s amazing to feel the energy in this room — unconveyable by blog or any other Internet-borne medium, but very very real.

Interoperability, he’s saying, is the key to the story — the Free Culture story — of which Wikipedia is such an illustrative chapter. The instinct to control a platform that you give (or sell) to other people is understandable, but it is also stupid. There needs to be interoperability and free standards that provide the widest range of freedoms for human beings to build upon the platform (sounds a lot like JZ’s Generativity).

We need to remember this lesson as we build a free culture. But we also need to make it possible for this platform to enable people to participate in a free culture. We need also to support the work of the Free Sofware Foundation and work toward free CODECs to allow content to flow across various platforms.

But we need to move past the technical layer, and enable a platform at the legal layer, too, one that protects free culture. The CC movement is an important piece of the story.

Yochai Benkler’s extraordinary book oozes with praise for Wikimedia. You are the central element, the central example, of Yochai’s wonderful argument. It is out of praise for all Wikimaniacs that Larry got on a plane at midnight, he says.

He’s also got a plea for everyone at Wikimania 2006: enable free culture, generally. There are two ways, he says, to do that:

1) Help others to spread the practice with your extraordinary example. There’s a CC/Wikimedia project — PDWiki — to help do this. It will put works in the hands of Canadians in digital form. Beyond demonstrating what you can do with works, it will help to establish what’s in the public domain and what’s not.

2) Demand a user platform for freedom. It came from a conversation with Jimbo Wales; they were drinking awful coffee in Europe. The problem was a lack of interoperability among islands of free cultures. We need interoperability among licenses that are allowing you to do the same thing with the content. We need to support an ecology of different efforts seeking to achieve the same functional outcomes — just as the original web was architected, only this time for cultural works, for content, not for code.

The way it work work is not that CC would have control, but rather that Eben Moglen’s Software Freedom Law Center would be in charge of running the federation of free licenses. The outcome should be that you can say: Derivatives of works under this license can be used under other equivalent licenses.

If we do not solve this problem now, we will face an ecological problem. These islands of free culture will never become anything but silos. We could do good here; we should do good here. Keep practicing the same kind of Wikimaniacal citizenship, he urges, that you’ve practiced to date, and get others to join you.

[Loads of applause.]

* * *

Elsewhere: CNet picks up the event itself as well as a wiki-photo-stream. Artsy, and nice.  And Martin LaMonica has covered Lessig’s talk.
Dan Bricklin, David Isenberg, David Weinberger, Dave Winer, Doc Searls, Mitch Kapor, Wendy Seltzer, Yochai Benkler, many other great people are in the room. An old-home week for Berkman Center.

And what a happy picture this is, taken by Dave (he also has a movie of it): a group posing on the steps of the Old Berkman Center (we’ve just moved across campus).

Open Standards in Massachusetts: Summary of Remarks

The Commonwealth of Massachusetts is making history by considering a policy that would ensure the long-term integrity of our data. The importance of this process cannot be overstated. The implications of a policy that supports the development and implementation of open standards, if done right, would have substantial positive implications over the long run, here in the Commonwealth but also in other states and countries around the world. The Commonwealth’s leadership in this area could establish a model for others to follow, as it has so many times before on so many issues.

Several things are at stake in the move to such a policy:

* Interoperability: Creating and maintaining an open information ecosystem that achieves interoperability between computing environments, applications, and sources of data – whether created last year or 25 years from now – is the primary motivation for moving to an open standards policy.

* Access and Control: Ensuring that citizens and the state have access to our data and the ability to control our data long into the future, grounded in the knowledge that electronic data is becoming more and more important. It’s about the users — in the parlance of the states, the citizens — after all.

* Choice and Cost: Establishing a truly open standard can ensure that the Commonwealth, over the long-term, has the greatest range of technology choices and the lowest technology costs through competition. An open policy is not one that results in lock-in to a single technology vendor, nor one that precludes any vendor – which may be the most competitive – from participating.

* Innovation: Promoting the continued innovation in information technology, on Rte. 128, in university computer science labs, and in garages throughout the Commonwealth and beyond, supporting economic development in the process.
If there is any single concept that encompasses these themes, it is generativity, the policy prescription that my colleague Jonathan Zittrain calls for in his new paper, The Generative Internet.
A policy for the Commonwealth that supports open standards, if properly conceived and implemented, can help to achieve these goals. To get there, the legislature and the executive branch have a hard job.

That job is not to choose between competing technology vendors, circa 2005, in a fast-changing marketplace. The elephant in the room is the struggle between Microsoft on the one hand and IBM and Sun on the other. But that struggle is not, and cannot be, the real story on open standards policy. It’s essential to bear in mind the state’s proper role vis-a-vis this marketplace — a marketplace which may in fact establish, and re-establish, other open standards over time, all plausibly based off of the same concept of XML. Consider, for instance, the “web 2.0” version of this discussion and witness the dramatic changes in the syndicated technologies space — with RSS, Atom, OPML, the MetaWeblog API, and their ilk over the past few years — which, to all but a few visionaries, were unthinkable as possible “open document formats” a short while ago. The key is to ensure enough flexibility in the process so that those who know the technologies and the implications of any changes can help the state to adjust its approach on the fly as progress, inevitably, marches on — and such that citizens, or users, are not the ones left behind in the long-run.

Information technologies are increasingly important to our democracy. A policy that seeks to ensure a citizen’s access to information and a citizen’s ability to transform data with as few constraints by those who make technology as possible is a worthy one. These goals should not be pursued by the state without the active involvement of the technical community; the legislator needs to get to know the technology developer, and those who set technology standards, much more intimately if the state is going to play in this game.

The question before the Commonwealth today is not whether to strive for such lofty goals, but rather how to meet the challenge of crafting and implementing a policy that will in fact achieve them over the long run. If the Commonwealth gets this policy right, others will follow. If the Commonwealth gets this right, it will be good not only for our state’s economy but also for our democracy.
Summary of Remarks at An Open Forum on the Future of Electronic Data Formats for the Commonwealth, December 14, 2005 at the Massachusetts State House

John G. Palfrey, Jr.
Executive Director, Berkman Center for Internet & Society
Clinical Professor of Law, Harvard Law School