Open Standards Licensing: Apple's Key Evidence

As regular readers know, there is a struggle going on between the free software community that needs open standards to be RF (strictly speaking "restriction-free", but usually called "royalty-free") and traditional companies based on proprietary...

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As regular readers know, there is a struggle going on between the free software community that needs open standards to be RF (strictly speaking "restriction-free", but usually called "royalty-free") and traditional companies based on proprietary software that are pushing for FRAND – Fair, Reasonable and Non-Discriminatory – not least because it will allow licences like the GNU GPL to be excluded. The argument is that RF means that any claimed patents within a standard must be made available at zero cost – and that, the proponents of FRAND insist, is unworkable, since companies will not be prepared to "sacrifice" their patents in this way.

If this story on FOSS Patents is confirmed, it would seem that Apple begs to differ:

A perfectly reliable source that I can't disclose has shown me a letter dated March 19, 2012 that a senior Apple lawyer sent to ETSI [European Telecommunications Standards Institute]. The letter addresses the primary concern of critics of the proposal [for a new "nano-SIM".]. The FT said that "the Apple-led proposal has caused some concern among its rivals that the US group might eventually own the patents". But Apple's letter has removed this roadblock, if it ever was any, through an unequivocal commitment to grant royalty-free licenses to any Apple patents essential to nano-SIM, provided that Apple's proposal is adopted as a standard and that all other patent holders accept the same terms in accordance with the principle of reciprocity.

So why on earth would Apple, not known for being a deeply altruistic company, be prepared to offer a royalty-free licence in this way? Simply because the benefits of getting its standard adopted outweigh any purely financial considerations. And that's the key point here. In the networked world, where first-mover advantage is critical, being in the driving seat for a standard is generally vastly more important than trying to squeeze a few pence out of companies.

If your standard is adopted by the industry, you already have a major competitive advantage. After all, if you designed that standard, you will have done that in part because it fits with your overall strategy. Getting everyone to follow you means everyone is doing something your way. Moreover, as we are see on a depressingly frequent basis, the power of patents to hobble competitors means that other companies will be increasingly sceptical about any standard that includes these unexploded legal bombs – unless they are made available under an RF licence.

Apple's action may be a one-off at the moment, but it shows that the argument about RF being impossible for companies to contemplate simply isn't true. The question is: who will be the next to realise that RF open standards are not just possible, but actually the future?

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