Simon Phipps, Director of Standards Open Source Initiative
State of Open: The UK in 2022
Phase One: “The Open Source Journey”
Simon highlights the paradox of supposedly “open” standards requiring licenses for implementation, a practice adopted from the hardware-centric era. Standards ratified by organisations like ISO, CEN, and ETSI necessitate companies to seek licenses from major corporations, undermining the essence of openness. The exploitation of legal loopholes has entrenched this practice, making it difficult to rectify. Rich consumer electronics and telecom companies lobby to maintain their revenue streams from licensing patents in “open” standards, while the open-source community faces challenges in maintaining interoperability due to standard essential patents (SEPs). The Open Source Initiative (OSI) advocates for standards with waived rights to align with open source principles, emphasising the importance of open innovation for the future. The survey results indicate a division in participation in standards organisations, reflecting the ongoing struggle between proprietary and open standards based on business models.
Open Source and Standards – Thought Leadership
Simon Phipps, Director of Standards Open Source Initiative
It may come as a surprise to find that some supposedly “open” standards – including those ratified by standards development organisations (SDOs) like ISO, CEN and ETSI – can’t be implemented without going cap-in-hand to the world’s largest companies to buy a licence. It’s the result of a legacy approach to innovation from the days when it was only really about hardware
As with any legal loophole, simply existing meant it was exploited and became the norm, even if it was initially temporary (“like income tax”). Once exploitation of a legal loophole becomes competitive, it becomes its own justification for the existence of the regulations (“look at the economic value of this segment”) and they become near impossible to remove – even when the original justification has ceased to need preferential protection.
So today we see a swathe of rich consumer electronics and telecoms companies, unwilling to give up the revenue they get from licensing the patents (SEPs) they have embedded in “open” standards[1], lobbying hard to ensure their value to the economy is recognised. They have much to lose from the loss of their special status, so invest much to protect it.
On the other hand, software companies have less to gain by the reformation of this anachronism – to the extent they have flirted with SEPs, maybe even a little to lose. Meanwhile, the new world of Open Source powered innovation lacks rich lobbyists due to its diffusion. While the freedoms of Open Source Software mitigate to a degree, this means interoperability and interchangeability are being sacrificed on the altar of SEP protection.
It is not an ideological outlook that makes thoughtful Open Source advocates oppose patents in standards. It’s pragmatic. Requiring a patent licence to implement a standard implies that those implementing it must engage in private negotiation to get a licence to proceed. That’s toxic to Open Source, whose mainspring is code owners giving advance, un-negotiated, equal permission to enjoy the software in any way – use, improve, share, monetise – all protected by a rights licence reviewed and approved by OSI. So most projects avoid or work around SEP-encumbered standards and the ones that don’t are industry-specific.
OSI takes the position that standards destined to be implemented as “Open Standards” must come with all the rights waived (and has done so for 15+ years) in respect of Open Source Software. The future of innovation is open innovation, implemented as Open Source. Using anachronistic patent-centric metrics and regulations will chill that future. How about we don’t do that?
Survey Results – Participation in the work of a standards organisation
45% of respondents participate in the work of a standards organisation whose standards may impact Open Source Software, while 43% don’t and 12% stated that they do not know if their organisation is participating.
Standard setting is essential to address concerns outlined above on good governance and transparency, while it can also help set the terms of collaboration between organisations and suppliers it must be undertaken in a way that works with Open Source Software licensing including with respect to Standard Essential Patents and Fair Reasonable and Non Discriminatory (FRAND) licensing which is problematic.
“There’s a friction between proprietary standards and open standards only because of business models, both proprietary standards and Open standards need to move their business models.”
Dr. Jacqui Taylor, CEO, Founder, FlyingBinary Ltd