1. If people could exclude IP, members would have to familiarize themselves with all of the excluded IP so that they could come up with specs that didn't read on it. People may also want to know what IP is excluded before joining the forum.

My vision is that IP exclusion is done very specifically, i e "claims X Y and Z from patent PPPP," and that the exclusion applies only to the specific proposal/standard. If some other proposal/standard comes out that reads on the same IP, you'd have to exclude that, too, if the IP was that important to you.

2. When a WG puts out a spec, there is the possibility that the IP owner will say that the spec reads on the excluded IP. The WG will likely say no, and a disagreement will ensue. This disagreement could be with or without merit, but would have to be resolved before the group could move forward on that particular specification. How this process is managed would have to be defined and agreed upon.

Excluding the IP means that the forum member says "I reserve the right to enforce these protections against members of the forum." If the WG really feels there is no infringement, the WG (in cooperation with the SC) can still release the standard, with the caveat that a court may find that an implementation of the standard might actually infringe on the IP, should the excluding member decide to pursue.

3. If IP were excluded, a WG could then possibly be in the position of coming up with a substandard way to do something as the excluded IP might contain a better, or the best way.

That being the whole point of IP for start-up companies. I believe that it is totally possible to come up with many relevant, useful and enabling interoperability standards for virtual worlds, while still letting those doing the work have IP on implementation details, and maybe even on "more efficient" ways of doing things. Purposefully excluding those who actually do work in this area and have some core IP they are not prepared to give up seems to be bad for the forum.

5. The addition of an exclusionary procedure for IP adds considerably to the complexity of the organization and the administrative costs for participants.

We have to weigh the openness for organizations to join and participate (no matter what their particular IP situation) against the costs of participating in the forum. I don't understand how an IP agreement that says "you have to give up any IP to anything that anyone gets into a standard from the forum" would be viewed as less of a bar to entering? To my mind, that's a much higher bar to clear.

I posted the meeting minutes on the wiki here: http://vwinterop.wikidot.com/jan222008meeting

I wanted to raise a couple of points regarding excluding IP from either the Forum or a particular WG which is embodied in position number 2 and 3 in the minutes.

1. If people could exclude IP, members would have to familiarize themselves with all of the excluded IP so that they could come up with specs that didn't read on it. People may also want to know what IP is excluded before joining the forum.
2. When a WG puts out a spec, there is the possibility that the IP owner will say that the spec reads on the excluded IP. The WG will likely say no, and a disagreement will ensue. This disagreement could be with or without merit, but would have to be resolved before the group could move forward on that particular specification. How this process is managed would have to be defined and agreed upon.
3. If IP were excluded, a WG could then possibly be in the position of coming up with a substandard way to do something as the excluded IP might contain a better, or the best way.
4. In a RAND model, people can work to get their stuff (or their friend's stuff) as part of the spec in order to generate royalties.
5. The addition of an exclusionary procedure for IP adds considerably to the complexity of the organization and the administrative costs for participants.

Each of these points is contrary to the goals of the forum, which is a free and lightweight forum to develop RF specs to enable wide and unfettered industry adoption.

I think everyone needs to come to Tuesday's call with a firm stance on at least two things:

1. Do you support RF or RAND specs as output of the forum?
2. Do you require IP be excluded (at either the Forum or Working Group level)?

Let me know your thoughts, and/or we will continue the discussion on Tuesday's (1/29) call.

IPR Policy Discussion Summary and Analysis

During the phone conference on 1/15/2008, the tentative Virtual World Forum members discussed a number of different approaches to structuring the Intellectual Property Rights agreement. This document attempts to condense the main points made, and do an analysis of the proposals in the context of the goals of the Forum. The document is based on notes taken by Jon Watte, Forterra Systems, during the phone call, and may not perfectly capture all the points made. Please feel free to add anything you find missing to the Wiki, or send me e-mail as jwatte at the company forterrainc in the com domain.

Glossary:
IP: Intellectual Property (typically patent rights)
RAND: Reasonable And Non-Discriminatory terms
RF: Royalty Free
SC: Steering Committee
WG: Working Group

Conflicting perspectives/goals

There are multiple perspectives that the procedures and IPR policy needs to take into account. During the discussion, at least the following perspectives were identified:

IP holder’s perspective
Wants to be able to monetize crucial IP
Wants low risk of inadvertently losing that right
Wants low cost of participating in the Forum
Forum’s perspective
Wants to develop standards without extensive terms/cost discussions
Wants to include as many market actors as possible
Wants standards to be adopted
Individual implementer’s perspective
Wants standards adoption to be uncomplicated
Wants known costs of adhering to a standard
… only possible WRT Forum members, not others

The current agreement (call it “Option 0”) has two deficiencies that make it unpalatable to IP holders:
1) It forces any member to make any IP available on RF terms, even if that member was not part of the WG.
2) The only way to opt out is to totally leave the forum, which does not lead to good co-operation; this can be used to effectively force people out.

Additional assumptions:
- Any disclosure from an IP holder should cite specific patent language, and how it applies to the standard. This is to avoid IP holders making statements like “we’re sure we have something that might apply, so we’ll just make a blanket statement and sort it out later, if we feel like it.” The possibility of making such statements will likely be a hindrance to developing and adopting open standards.
- Any IP holder must have some mechanism of opting out of providing their IP on an RF basis, even if that IP holder is not member of the WG. Else some IP holders may never join the Forum to begin with.
- Non-RF, Non-RAND terms likely are equivalent to vetoing a standards proposal. I have a hard time seeing how a standard could be adopted with someone disclosing their intent to discriminate and/or not license.

We have discussed two alternative structures: RAND default, or RF default.

Option 1: RAND default

Description:
Member on working group who has IP related to the standard will disclose what that specific IP is and what the terms will be:
- RF
- RAND
- Non-RAND*
Once the WG proposal is voted by SC, there is a waiting period. Any Forum member with IP related to the standard can during this period disclose what that specific IP is and what the terms will be:
- RF
- RAND
- Non-RAND
Under this option, a Forum member not disclosing within the waiting period, implicitly commits themselves to making any IP related to the standard available on RAND terms.
After the expiry of the waiting period, the WG and/or SC decides on whether the standard should be issued with the disclosures made, or re-worked. It is likely that non-RAND terms would be a deal killer.

Analysis WRT goals:
IP holder: This appears acceptable by most IP holders. An IP holder who does not wish to spend effort during the waiting period can do nothing, and later collect RAND fees if some infringement is detected, so exposure to giving up IP unintentionally is limited.

Forum: There is great risk that WG meetings will devolve into companies trying to get their particular technology legislated in a standard, to turn it into a money-making proposition. This is expected to add time to the standardization process, and might preclude certain standards from being formed or optimally executed.

Implementer: “RAND” is a big unknown for an implementer. What is “reasonable” for one person might be an economic infeasibility for another. RAND also likely excludes any open source implementations, as you couldn’t use them without paying license fees. Perhaps worst, even if a standard is currently thought to be unencumbered, any member can at any point in the future decide to enforce IP that was not disclosed during the waiting period, on “RAND” terms.

Option 2: RF default

Description:
Member on working group who has IP related to the standard will disclose what that specific IP is and what the terms will be:
- RF
- RAND
- Non-RAND
The WG will generally choose to work around any RAND or Non-RAND terms to keep the standard RF. Only in circumstances where there is no alternative would an encumbered standard be considered.
Once the WG proposal is voted by SC, there is a waiting period. Any Forum member with IP related to the standard can during this period disclose what that specific IP is and what the terms will be:
- RF
- RAND
- Non-RAND
A Forum member not disclosing within the waiting period, implicitly commits themselves to making any IP related to the standard available on RF terms.
After the expiry of the waiting period, the WG and/or SC decides on whether the standard should be issued with the disclosures made, or re-worked. It is likely that non-RAND terms would be a deal killer.

Analysis WRT goals:
IP holder: An IP holder that is part of a WG will have time during development of the standards proposal to analyze whether the standard necessarily infringes on its IP, and disclose it during the WG. Any IP holding member will have time during a waiting period to analyze whether any IP applies. This waiting period is intended to be in the 30-45 day period (and likely should be specified in the IPR).
A member of the forum who cannot do a full analysis during the waiting period runs the risk of having to make their IP available on an RF basis to any implementer of the standard.

Forum: When there is a requirement for WG members to disclose IP in the WG, and the WG favors non-IP-protected standards, then jockeying for revenue will likely not be a factor in the standards process.

Implementer: An implementer will know, after the expiry of the waiting period, that no member of the Forum will enforce non-disclosed IP against implementers of the standard after the fact. Free and Open Source implementations are allowable.

Discussion

Balancing the goals of IP holders, versus the goals of creating standards that will see widespread acceptance, is as much art as science. The W3C prefers royalty-free standards, and it is probably safe to say that the web we have today probably wouldn’t be nearly as open or widespread had it been RAND based. A standards policy based on RAND (Option 1) is safe and risk free for large and small IP holders, but is less likely to generate good standards in a timely fashion, and those standards are less likely to see widespread adoption on par with the 2D web.

Option 0 (the original agreement) seems to go too far in the other direction, making it possible for competitors to force others out of the Forum by proposing a standard that mimics core IP of those parties, and the only way to object to such a standard under that agreement is to leave the Forum. Given that the Forum could develop a large set of standards in different areas (from large-scale integration architecture, through virtual goods commerce, unified presence down to details like avatar looks), such an all-or-nothing approach probably will foment too much dissent.

I believe Peter (Haggar) is right: you join a standards body to actually do real work in the area of the standard. Part of that is the expectation that you have to give a little to get a lot. Thus, a system where members by default give RF rights to IP, but have the possibility to veto those rights, seems to strike the right balance. I don’t see how such standards can reasonably be accomplished without having a set calendar deadline, after which a proposed standard can be assumed to be RF from the point of view of Forum members. Thus, I believe a waiting period, with a default of RF licensing if nothing is said, is the right trade-off. If, as an IP holder, a standard concerns something you really care about, you’re likely either on the WG (and thus have lots of advance warning), or you know enough about it that you can find the proper IP during the waiting period.

Thus, a member joining the Forum, under Option 2, commits to review published standards within a given deadline, and takes the risk that anything missed during that review period will not be enforceable against implementers of that standard (or at least other members of the Forum that implement that standard). Although some IP holders may find that this is an uncomfortable risk, I believe it’s a risk we have to take, to achieve the greater goals of an interoperable 3D internet.