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<title>FSFE - Analysis on balance - Standardisation and Patents - by Georg Greve</title>
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<h1 align="center">Analysis on balance:<br />Standardisation and Patents</h1>

<h3 align="right">-- by <a href="/about/greve/">Georg C. F. Greve</a><br />
FSFE, President</h3>

<p class="indent"><em>This paper provides an analysis of the
interaction of patents and standards. It was written under the
assumption of very little background knowledge, and therefore
provides some of the background necessary to understand the
issue. An expert in the field should be able to skip the
Background section.
</em></p>

<h2>Introduction</h2>

<p>Software patents have been a hugely controversial debate, with
lines of battle drawn primarily between large corporations holding
large patent portfolios and engaged in multiple cross-licensing
deals, and the Have-Nots, entrepeneurs, small and medium
enterprises, and software users from the student using GNU/Linux all
the way to institutional users in governments.</p>

<p>This debate got a lot quieter with the rejection of the software
patent directive in 2005. Its place in the headlines was taken by
other debates, such as standardisaton. Open Standards have been a
buzzword for years, but never has this term been discussed more
intensively.</p>

<p>On Wednesday, 19 November 2008, both debates met in Brussels at a
workshop titled
"<a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr_en.htm">IPR
in ICT standardisation</a>", although "Patents in ICT
standardisation" would have been a more suitable name because the
discussion was exlusively about the interaction of patents and
ICT standardisation.</p>

<p>Patents and standards are fundamentally at odds, so many people
call for a balance between patents and standards. This article
comments upon the workshop and explains why standards should prevail
over patents at least in the area of software.</p>

<h2>Background: Patents &amp; Standards 101</h2>

<p>The idea of patents is not new. Its roots lie in the royal
"litterae patentes" that conferred exclusive rights to certain
people. Democratic governments eventually took the position of the
monarchs, and patent legislation has evolved over time, but the
fundamental characteristics of what is a patent have not
changed.</p>

<p>Succinctly put, a patent is a monopoly granted for a limited time
by the government on behalf of its citizens.</p>

<p>The term monopoly has many negative connotations, and for good
reason. A monopoly stifles innovation and increases price due to the
absence of competition. On these grounds a monopoly is generally
understood to be to the detriment of economy and society. It is not
illegal to obtain a monopoly, but society has a legitimate interest
in limiting abuse of the power that a monopoly confers, and seeks to
achieve this through antitrust law.</p>

<p>The monopoly right created by a patent brings with it all side
effects of a monopoly. It is granted by the state because it is
understood that the absence of patents might prevent publication of
breakthroughs, which is understood to be more harmful than granting
the patent monopoly.</p>

<p>This initial patent deal is based upon disclosure, so that others
can learn from and build upon a new idea. Lack of useful disclosure
or advancement of public knowledge translates into the granting of a
monopoly with no return for society.</p>

<p>Like patents, standards are closely related to disclosure. The root
of the word standard appears to go back to heraldry, where it refers
to a symbol that is used to make a rallying point visible in
battle.</p>

<p>Modern use of the term keeps that meaning of publicly visible point
of reference, although it has been transferred to other areas. So
among other things it is understood as "<em>something established by
authority, custom, or general consent as a model or example</em>" or also
"<em>a structure built for or serving as a base or support.</em>"
(from <a href="http://www.merriam-webster.com/dictionary/standard">Merriam-Webster
On-line dictionary</a>).</p>

<p>In Information and Communication Technologies, a standard has both
the above meanings. According to
the <a href="http://www.bsi-global.com/en/Standards-and-Publications/About-standards/What-is-a-standard/">British
Standards Institution</a> (BSI), a standard is "<em>an agreed, repeatable
way of doing something. It is a published document that contains a
technical specification or other precise criteria designed to be
used consistently as a rule, guideline, or definition. [...] Any
standard is a collective work. Committees of manufacturers, users,
research organizations, government departments and consumers work
together to draw up standards that evolve to meet the demands of
society and technology. [...]</em>"</p>

<p>The underlying idea is that a standard establishes common ground,
it provides the means for interoperability and competition. This is
especially true for ICT due to their strong networking effects. If
all participants in an ICT market adhere to the same standards and
make an effort to guarantee interoperability, not only can customers
choose freely between various products and services, they can also
exchange information with one another without problems.</p>

<p>In contrast, absence or failure of standardisation warps networking
effects in a way that monopolisation becomes almost certain. Users
of one product or service could only interoperate with users of the
same product or service. Over time, one solution would attain such
a large user base that other users are de-facto left with the choice
to join this group, or be unable to communicate fully with the
majority of users. This could for instance be achieved by bundling
software with a predominant hardware platform.</p>

<p>So standards are largely an instrument to enable competition for
the public benefit. The purpose of standards is intrinsicly
anti-monopolistic.</p>

<p>It is also pro-innovative. Since derivation from a standard
automatically breaks it, standardisation and innovation seem opposed
goals, and to some extent they are. But where all changes are done
in consensus between implementors, the result is an updated version
of the standard available to all. The second path is innovation on
top of the standard, using the standard as a base for innovation
rather than innovating inside the standard.</p>

<p>Due to its global, consensus-driven nature, the first process is
comparatively slow. Another problem is the a substantial barrier to
entry into the standards process. As a result, large companies are
overrepresented in comparison to small and medium enterprises (SME).</p>

<p>The second path is open to everyone, private person, SME, or large
industry. It is also limited only by the speed of development of the
team making the innovation. If the innovation was made by just one
party, there will be a temporary monopoly. But given a certain
maturity, the innovation is then likely to be formalised into a
standard again, forming the base for the next innovation to be built
on top.</p>

<p>While the first path allows primarily for slow, small improvements,
the second path allows for full participation of the economic
majority and is much better suited for groundbreaking ideas and
arguably the more important to protect for society.</p>

<h2>Conflict: Fundamentally opposed instruments</h2>

<p>The fundamentally different goals for patents and standards
surfaced multiple times during the debate, for instance in the
speech of Mr Karsten Meinhold, chairman of the ETSI IPR Special
Committee, <a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/presentations/21meinhold_en.pdf">who
summarised it</a> as "<em>IPRs and Standards serve different
purposes: IPRs are destined for private exclusive use, Standards are
intended for public, collective use</em>".</p>

<p>Both patents and standards derive their justification from the
public benefit, yet upholding one deprives the other of its
function. Standards seek to counteract monopolies, patents establish
them. Or, as Tomoko Miyamoto, Senior Counsellor of the Patent Law
Section in the World Intellectual Property Organization (WIPO) said
in <a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/presentations/14miyamoto_en.pdf">her
presentation</a>: Patent thickets and patent hold-ups arise from
legitimate exploitation of the exclusive rights intentionally
conferred by patents. They are a normal and intended consequence of
the patent system.</p>

<p>Allowing patents on standards consequently is an intentional act to
grant monopolies on standards to certain parties that includes the
right to block implementation by other parties.</p>

<h2>Ex-Ante Disclosure</h2>

<p>There are multiple attempts through which the standardisation
community has tried to mitigate these effects over the years. One of
these mechanisms is called "Ex-Ante Disclosure." The parties working
on a standard use this mechanism to commit to licensing terms while
the standard is still being drafted. If these terms are not
acceptable to the other parties working on the standard, the
technology that is covered by the patent is not included into the
standard.</p>

<p>What are acceptable terms is highly subjective. A large corporation
with big patent portfolio and existing cross-licensing agreement
with the holder of the relevant patents might consider adding one
more patent to the agreement a minor inconvenience. The same
situation looks substantially different from the perspective of a
small or medium enterprise that typically has at most a small patent
portfolio and has to expect extortionate licensing.</p>

<p>Since SMEs are strongly underrepresented in standardisation, Ex-Ante
Disclosure is likely to bring more satisfactory results to large
corporations with large patent portfolios that compete in the same
area. The economic majority generally has no say about the
acceptability of the terms.</p>

<p>Another issue of ex-ante disclosure is difficult enforcement, as
Suzanne Michel, Assistant Director Office of Policy and Coordination
of the U.S. Federal Trade Commission
(FTC) <a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/presentations/12michel_en.pdf">pointed
out in her presentation</a>. The FTC had found
that <a href="http://en.wikipedia.org/w/index.php?title=Rambus&amp;oldid=251605519">Rambus
Incorporated</a> had joined and attended standardisation meetings of
the <a href="http://en.wikipedia.org/wiki/JEDEC">Joint Electron
Device Engineering Council (JEDEC)</a> in order to modify their
patent applications to cover technology that was under discussion
for inclusion in future standards. In the opinion of the FTC, this
behaviour was deceptive, violated JEDEC's disclosure policy, and
illegaly gave Rambus monopoly power.</p>

<p>The <a href="http://en.wikipedia.org/wiki/United_States_Court_of_Appeals_for_the_District_of_Columbia_Circuit">D.C. Circuit
Court</a> disagreed with the interpretation of the FTC in their
April 2008 decision. According to Ms Michel, the court said that
avoiding so-called
"<a href="http://en.wikipedia.org/wiki/Reasonable_and_Non_Discriminatory_Licensing">Reasonable
and Non-Discriminatory</a>" (RAND) licensing terms does not
constitute abuse, and that there is no proof that JEDEC would have
avoided technologies if it had known that Rambus was planning to
use its patents to the fullest extent allowed by law. The court
also expressed reluctance to make patents unenforceable based on
vague disclosure policies.</p>

<p>Both patents and standards derive their justification from the
public benefit. There was no additional disclosure of new technology
provided by the patents that Rambus filed on the standards that were
about to be published. Giving Rambus monopoly power over standards
developed by JEDEC is also detrimental to public interest. So it
seems likely that a full public interest evaluation of this
situation would give that indeed the public interest did not prevail
in this case.</p>

<p>So it would appear that the FTC was correct in its evaluation, and
so was the court, because establishing time-limited monopolies is
the very purpose and function of patent law. The role of courts does
not extend to the undoing of laws and most legislators have not
given the public interest conflict between patents and standards
consideration.</p>

<p>JEDEC has meanwhile updated its disclosure policy, which may help
to avoid similar issues in the future. Considering the value that
patent law has in relation to standardisation for many courts, only
a future court case can demonstrate whether the issue has been
resolved in a way that holds up to formal legal review.</p>

<h2>(F)RAND</h2>

<p>This is true for all standardisation bodies that require ex-ante
disclosure, which most of them don't. Instead the majority of bodies
appear to rely on purely voluntary disclosure and the assurance that
patent holders involved in the process will agree to so-called RAND
or FRAND
("<a href="http://en.wikipedia.org/wiki/Fair,_Reasonable_and_Non_Discriminatory_Licensing">Fair,
Reasonable and Non Discriminatory</a>") terms.</p>

<p>One common criticism of (F)RAND terms is the lack of a definition
of what is reasonable and for whom. During the 2006 Internet
Governance Forum (IGF) in Athens, Susy Struble of Sun Microsystems
<a href="http://www.youtube.com/watch?v=CNUdqEqjbOQ">pointed out</a>
that what is reasonable for one party may not be reasonable to
another.</p>

<p>Licensing practices do indeed vary, and are influenced by various
factors, including, but not limited to, the questions whether or or
not a company has a stake in the relevant market, and how
aggressively it pursues its patent revenues.</p>

<p>Additionally, patents can be sold or acquired as part of a business
restructuring or acquisition. A future patent holder may consider
different terms reasonable, so could a patent holder who did not
participate in the standardisation process and never committed even
to RAND terms.</p>

<p>RAND terms generally amount to a vague assurance to license upon
request. Such an assurance does not constitute a perpetual license
on the patent and is not valid for the new holder of a patent. So a
new holder can choose freely how to enforce the patent, including
patent hold-ups on all existing implementations of the standard.</p>

<p>As Ms Miyamoto from WIPO pointed out, a patent hold-up is a
legitimate and intended use of the patent system. So even in a RAND
regime, there is a substantial amount of uncertainty that invariably
favors large companies, which not only have deeper pockets, they
also have larger legal departments and patent portfolios.</p>

<p>It is this uncertainty that has caused great frustration among SME,
which Charles Schulz of Ars Aperta summarised as RAND referring to
"RANDom licensing at the sight of competitors."
In <a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/presentations/25schulz_en.pdf">his
presentation</a>, Mr Schulz also pointed out that (F)RAND terms are
discriminating against Free Software. Even RAND terms linked to zero
royalties, the so called RF-on-RAND ("Royalty Free on RAND"),
RAND-RF ("RAND Royalty Free") or RAND-Z ("RAND with Zero royalties")
terms often exhibit the same problems because they do not permit
sublicensing.</p>

<p>Free Software
(<a href="/documents/freesoftware">a.k.a. Open
Source, FOSS or FLOSS</a>) is based on the principle that every
living person and every legal entity can be a user, developer,
distributor, or any combination of the above. Only conditions which
permit this to take place are acceptable to Free Software, which is
<a href="http://www.flossimpact.eu/">estimated</a> to reach 32% of
all IT services and 4% of European GDP by 2010.</p>

<p>In <a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/presentations/32marasco_en.pdf">her
presentation</a>, Amy Marasco, General Manager Standards Strategy of
Microsoft, emphasised that she does not consider Free Software a
business model. That is true to the same extent that proprietary
software itself is not a business model. Business models are what is
built on top of both Free Software and/or proprietary software.</p>

<p>Ms Marasco continued to point out that all these business models
are legitimate. And while there are strong differences in opinion
about which software model is the better and more sustainable choice
for economy and society, from the perspective of a political
analysis of standards, all business models based upon proprietary
software, Free Software, or a mixture of the two need to be
considered valid and legitimate.</p>

<p>As mentioned before, the Free Software related parts of European
GDP are estimated to reach 4% by 2010. All parties agree that all
business models, including those incorporating Free Software, are
legitimate. This raises the question whether it can be considered
Fair, Reasonable and Non-Discriminatory to exclude this legitimate
part of economy by choice of patent licensing terms.</p>

<h2>Harm from exclusion?</h2>

<p>The situation bears an odd semblance to the situation with
<a href="http://en.wikipedia.org/wiki/Counterfeit_drugs">counterfeit
pharmaceuticals</a>, where the argument for patent enforcement is
generally accompanied by public health considerations. But only
effective pharmaceuticals that are identical to the patented product
would actually violate the patent. Health risks arise primarily
where the patents are not being violated.</p>

<p>In standards, the situation is somewhat similar. If patents are
part of a standard, only an implementation that is covered by the
patents provides an effective antitdote to monopolisation. Having to
circumvent patents will break standards compliance and harm the
public benefit that is the driving force behind standardisation.</p>

<p>So patents in standards have the potential to make full
interoperability impossible for legitimate businesses in some
markets. As the aforementioned
BSI <a href="http://www.bsi-global.com/en/Standards-and-Publications/About-standards/What-is-a-standard/">points
out</a>: "Standards are designed for voluntary use and do not impose
any regulations. However, laws and regulations may refer to certain
standards and make compliance with them compulsory."</p>

<p>Once a technology has been standardised, certain choices are no
longer made for technological quality. Even where a better solution
exists that would have the additional value of not violating a
potential patent on the standard, an implementor would choose to
follow the technologically inferior standard in order to have full
access to the market. Such a case turns the initial idea upside
down: The technology is valuable because it is patented, not
patented because it is valuable.</p>

<p>There are also cases where certain standardisation organisations,
e.g. the <a href="http://www.iso.org">International Organisation for
Standardisation</a> (ISO) have a priviledged position with
governments for procurement decisions. Due to patents and
insufficient (F)RAND conditions, not all standards priviledged in
this way can be implemented by all legitimate market participants
that should be able to compete in public tenders.</p>

<p>So through the special priviledge for organisations like ISO which
accept terms insufficient to guarantee competition, the monopoly
right conferred by patents translates into an oligopoly or even a
monopoly for public procurement. This exclusion of competition from
tenders by means of patents on standards is detrimental to the
public benefit because it leads to higher prices and consequently
higher taxes.</p>

<p>Remedies for this situation would have to address the way in which
governments grant procurement preferences to standards, the way in
which patents are handled in standards, the patent system itself, or
a combination of all of the above.</p>

<h2>Attempted remedies</h2>

<p>Good patent research costs around 100.000 EUR according to Rigo
Wenning, Legal Counsel &amp; Patent Policy Team Contact of the
W3C/ERCIM who spoke about
"<a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/presentations/22wenning_en.pdf">Standards,
Patents and the Dynamics of Innovation on the Web</a>." The W3C is
indeed the only Standards Setting Organisation (SSO) that has a
sufficient patent policy for its standards in order to accomodate
all legitimate business models.</p>

<p>From the perspective of most SMEs, 100.000 EUR patent research costs
are prohibitively expensive. But even large companies will find this
cost considerable, which is only one of the cost generators. More
damage can be caused by injunctions against a product, or claims for
damages. In
his <a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/presentations/41burt_en.pdf">presentation
of IBM's "SoftIP"</a> concept, Roger Burt, Senior Counsel of IBM
Europe introduces the issues with a quote from a BSA et al. Amicus
brief in eBay v MercExchange. The quote summarises the problems of
large industry rather well:</p>

<quote class="indent"><em>"Technology products typically consist of hundreds or
thousands of patented components. It therefore is impossible for
technology companies to investigate all of the patents, and pending
patent applications that may be relevant to a new invention (product),
notwithstanding their best efforts to do so. When, as frequently
occurs, the claim of infringement is not made until after the new
product is released or the industry standard has been adopted,
designing around the claim is no longer a realistic option. Because an
injunction will issue automatically upon a finding of infringement –
even if the claim relates to an insignificant part of the product –
the target of the claim is forced to pay an extortionate settlement in
order to preserve its business."</em></quote>

<p>Another attempt to keep patents fees from becoming exorbitant even
for the largest corporations was introduced by Tim Frain, Director
IPR regulatory affairs, Nokia in his presentation about
"<a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/presentations/43frain_en.pdf">FRAND
Best Practice</a>." Mr Frain advocates a system based on "Aggregated
Reasonable Terms" &amp; "Proportionality" (ART+P).</p>

<p>The underlying idea of this approach is that if every patent holder
individually charges patent fees they consider Fair, Reasonable and
Non-Discriminatory, the resulting fees may easily add up to 50% or
more of the cost for the end product. So all patent holders should
commit ex-ante that the aggregate licensing cost for all patents
should be reasonable. As an example, Mr Frain cited that in Nokias
view, the patent licensing fees on the communication technology for
mobile phones should be below 10% per handset.</p>

<p>Both approaches are attempts to control the use of monopolies
granted by patents and as such are trying to get voluntary buy-in
from other parties to not exercise rights that the patent system has
granted them.</p>

<p>Unfortunately they both fall short of the criterion of
non-discrimination against legitimate business models, and the ART+P
approach also has the practical weakness that convergence joins more
than one kind of technology per device, so the total patent
royalties on a smart phone may still reach 50% even if the cost for
GSM &amp; Co are limited to 10%. But even these 10% can be
considerable for laptops with included UMTS modems, or embedded
devices, an area in which the profit margins are typically far below
10%.</p>

<p>To put it in the form of a controversial question: Is it fair and
reasonable that patent holders receive a higher monopoly rent than
an innovative company stands to gain by bringing out a new product
and bearing all the risk associated with it?</p>

<h2>Cui bono?</h2>

<p>So who benefits? As explained before, patents are designed as a trade-off. Their
benefits are often explained with the lone inventor having a genius
idea. Would it be fair if this inventor published the idea only to
see a large company bring it to market faster than the inventor
could, with no financial reward for the inventor? Most people would
agree this is not fair.</p>

<p>In the absence of patents, such an inventor could only choose
between accepting fate, or keeping the innovation secret for as long
as possible while trying to bring it to market. Patents grant a
temporary monopoly for the inventor in return for publication, such
that the inventor can find investors, set up a company, finish
product development, bring it to market, and enjoy a head start
before others can compete normally.</p>

<p>This mechanism seems to have worked reasonably well for some time
in the past. But some basic parameters have changed, while patents
have been extended in an essentially unreflected way to more
areas. This is particularly true for software, where patents play no
meaningful role in disclosure, breaking the patent deal for
society. More importantly, while the time of bringing new innovation
to the market and the time between groundbreaking discoveries has
been decreasing.</p>

<p><a href="http://en.wikipedia.org/wiki/Ray_Kurzweil">Raymond
Kurzweil</a> found an exponential pattern in innovation reach back
all the way to single-cell organisms. Concluding that this must be
a universal principle, Mr Kurzweil has been
making <a href="http://en.wikipedia.org/wiki/Predictions_made_by_Raymond_Kurzweil">predictions</a>
for the future of which several have turned out to be largely
accurate so far. When applying this principle to patents, from the
constant duration of the monopoly guaranteed follows an
exponential growth of the value of an individual patent.</p>

<p>The price that society is paying for granting patents has been
<a href="http://en.wikipedia.org/wiki/Exponential_growth">growing
exponentially</a> since the time that the initial patent bargain was
struck. This would explain why the price for the patent system seems
increasingly exorbitant with growing calls for reform, which have
led to the recent announcement of the
"<a href="http://www.ftc.gov/opa/2008/11/ipmarketplace.shtm">First
in Series of Hearings on Evolving Intellectual Property
Marketplace</a>" by the U.S. Federal Trade Commission (FTC).</p>

<p>Remedies to this problem could be to decrease the lifespan of
patents, adapt them to the specific situation in the field, and
exclude fields from patenting in which patents provide no meaningful
disclosure.</p>

<p>When it comes to standards, it was An Baisheng, Deputy Director of
the Division of Technical Regulations Department for WTO Affairs of
the Chinese Ministry of Commerce who raised the question of public
vs private benefit in his presentation titled
"<a href="http://ec.europa.eu/enterprise/ict/policy/standards/ws08ipr/presentations/13baisheng_en.pdf">Strike
the Right Balance between Public and Private Interests in IPR in ICT
Standardization</a>".</p>

<p>Taking our "lone inventor" scenario above, the question that we'd
have to ask for patents on standards is: Would it be fair if our
inventor could prevent someone else from bringing to market an
innovation of their own that somehow interacts with the initial
invention? To make it less abstract: Should a patent on a typewriter
extend to carbon copy paper that has the right size to be used in
that typewriter? Most people would agree this goes too far.</p>

<h2>Potential Remedies</h2>

<h3>Interoperability trumps patent</h3>

<p>During the software patent debate in the European Union there was
consensus among SME, Free Software and big businesses
representatives from companies such as IBM or Sun Microsystems that
patents should be unenforceable to limit or prevent
interoperability.</p>

<p>In the European Union, this could be introduced into the ongoing
Community Patent debate. On a global level, WIPO should consider
this as part of its ongoing Development Agenda discussions.</p>

<p>Once implemented, this would solve the most harmful side-effects
for all legitimate business models and give interoperability and
competition preference over monopoly rights. Considering the
extraordinary networking effects that exist in this market, such a
preference seems justified.</p>

<h3>Update policy in SSOs</h3>

<p>Secondly, Standard Setting Organisations (SSOs) could update their
patent policies to ensure that their standards are usable in all
business models. Many SSO representatives in the meeting maintained
that it was not their place to mandate certain patent policies. At
the same time,
the <a href="http://www.itu.int/ITU-T/dbase/patent/patent-policy.html">Common
Patent Policy</a> of ITU-T, ITU-R, ISO and IEC already states the
principle that "<em>a patent embodied fully or partly in a
Recommendation | Deliverable must be accessible to everybody without
undue constraints.</em>" As this analysis demonstrates, current
application of RAND falls short of that principle.</p>

<p>There is additional precedence supplied by the common way in which
SSOs protect standards against potential later claims from Copyright
holders by requiring all participants to a standardisation process
to assign their copyright to the SSO. Applying appropriate similar
measures on patents for similar reasons seems justified.</p>

<h3>Provide intermediate and migration possibilities</h3>

<p>Many patent-encumbered standards already exist, and even if WIPO
ends up agreeing on a general interoperability preference, it will
take decades for this to become local law.</p>

<p>As an intermediate solution, (F)RAND needs to be enforced in a way
that the license terms do not disciminate against any valid business
model, as is still common today. A potential solution could be to
tie (F)RAND royalties to the downstream licensing revenue.</p>

<p>Business models that are based on proprietary licensing based on
copyright or patents for revenue would continue to operate as they
do today. Business models that do not rely on such licensing revenue
would be enabled to interoperate and compete.</p>

<p>Taking this step would also realign ITU-T, ITU-R, ISO and IEC again
with their declared Common Patent Policy.</p>

<h3>Update governmental procurement guidelines</h3>

<p>Governments and Inter-Governmental Organisations should update
their procurement guidelines to procure only products based upon
standards that do not discriminate against any legitimate business
model. This means a review of blanket approval for certain standard
setting organisations, and only a limited approval for organisations
that have not updated their patent policies appropriately by the
time of the review.</p>

<hr />

<p class="indent"><em>DISCLAIMER: This paper was written from the
perspective of an expert in the field of software. The conclusions
may apply in their entirety, partially, or not at all to areas
other than software.
</em></p>

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