Microsoft Demonstrates why FRAND Licensing is a Sham

A little while back I was pointing out how free software licences aren't generally compatible with Fair, Reasonable and Non-Discriminatory (FRAND) licensing, and why it would be hugely discriminatory if the imminent European Interoperability...

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A little while back I was pointing out how free software licences aren't generally compatible with Fair, Reasonable and Non-Discriminatory (FRAND) licensing, and why it would be hugely discriminatory if the imminent European Interoperability Framework v 2 were to opt for FRAND when it came to open standards, rather than insisting on restriction-free (RF) licensing.

I noted how FRAND conditions are impossible for licences like the GNU GPL, since the latter cannot pay per copy licensing fees on software that may be copied freely. As I commented there, some have suggested that there are ways around this – for example, if a big open source company like Red Hat pays a one-off charge. But that pre-supposes that licence holders would want to accommodate free software in this way: if they simply refuse to make this option available, then once again licences like the GNU GPL are simply locked out from using that technology – something that would be ridiculous for a European open standard.

Now, some may say: "ah well, this won't happen, because the licensing must be fair and reasonable": but that then begs the question of what is fair and reasonable. It also assumes that licensors will always want to act fairly and reasonably themselves – that they won't simply ignore that condition. As it happens, we now have some pretty stunning evidence that this can't be taken for granted.

Surprisingly enough, that evidence comes from Microsoft, of all people:

Microsoft filed an action today in the U.S. District Court for the Western District of Washington against Motorola, Inc. for breach of Motorola's contractual commitments to the Institute of Electrical and Electronics Engineers (IEEE) and the International Telecommunications Union (ITU) to license identified patents related to wireless and video coding technologies under reasonable and non-discriminatory terms and conditions. Those commitments are designed to benefit all parties that rely upon these standards, and Microsoft has been harmed by Motorola's failure to honor them in recent demand letters seeking royalties from Microsoft.

The key part here is that Microsoft accuses Motorola of failing to honour its commitment "to license identified patents related to wireless and video coding technologies under reasonable and non-discriminatory terms and conditions." That is, even when FRAND (called RAND here) has been agreed as the terms under which technology will be licensed, there is no guarantee those terms will actually be "reasonable" (or "fair") in everyone's eyes.

This is exactly what I was suggesting in my previous piece – but even worse here, because this isn't even about the non-availability of "special" terms for free software, but the squabbling amongst traditional proprietary vendors over what FRAND means in practice. Basically, it demonstrates nicely that FRAND means precisely and exactly nothing: grand-sounding though "fair" and "reasonable" may be, in the red-in-tooth-and-claw world of patent licensing, they are hollow words that offer absolutely zero guarantee for those that foolishly take them at face value.

Indeed, Microsoft's action shows that the only way to obtain "fair and reasonable" terms under FRAND is fight for it in the courts – which again is completely impossible for free software projects that are not bankrolled by major companies. This is yet another way in which FRAND is biased against such smaller, players that make up most of the free software world.

Microsoft's latest action provides one more compelling reason why the European Commission should not use FRAND for EIF v2 if it wants to create a level playing field for software in Europe through support for open standards. If it does, the only people who will benefit will be the big, bullying software companies that will simply ride roughshod over any sense of "fairness" or "reasonableness" - and the lawyers.

Follow me @glynmoody on Twitter or identi.ca.

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