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OASIS Opens Up Royalty-Free Terms

UPDATED: In a move reflective of the industry trend to offer technology users more choice, e-business standards body OASIS has added two sets of royalty-free terms to its Intellectual Property Rights (IPR) policy.

Members of OASIS committees may now work under the original Reasonable And Non-Discriminatory (RAND) mode, in which companies with IP could charge royalties for uses, or choose between the new Royalty Free (RF) on RAND Terms or RF on Limited Terms modes.

Under the revised OASIS IPR policy, the RAND mode lays out a set of terms a patent holder is obliged to offer, leaving all other non-specified terms to negotiations between the patent holder and the user seeking a license.

The RF on RAND Terms mode functions like RAND, but does not permit the patent holder to charge fees or royalties for the license.

The RF on Limited Terms mode is like the RF on RAND Terms mode, but it specifies the exact royalty-free licensing terms and conditions that may be included in a patent holder's license -- sans further negotiations.

While most standards under OASIS are already royalty free, Jim Hughes, chair of the OASIS board of directors, said the group added the new terms to clarify its standards process, assuring implementers that standards can be adopted without being hounded by litigious inventors.

"The idea was to give the IPR more teeth, some more muscle," Hughes said. "The new IPR is very clearly laid out and more strict."

For example, under the new rules, technical committees must declare what mode they're going to run in before producing a spec. Hughes said that wasn't the case before. This level of uncertainty made implementers reluctant to use technology in specs for fear they could get hit up for royalties by IP owners.

The move is sensible because of the explosion in new technologies created by individuals and companies, which all but make it impossible for a standards group to guarantee that its work is or will remain completely free of patent claims.

The IPR policy will be effective April 15, 2005. Technical committees formed prior to that date will be required to transition to the new policy by April 15, 2007. Committees that have not yet transitioned will continue to operate under the terms of the original policy.

Hughes said OASIS also made the move to avoid the firestorm of controversy that ignited four years ago within the ranks of the World Wide Web Consortium (W3C).

At the time, members were concerned with W3C's RAND policy, which also called for its specifications to use patented technologies for which companies could demand royalties. W3C later yanked its RAND.

A year later, W3C hit another stumbling block concerning IP when ratification of the SOAP 1.2 spec was held up by webMethods and Epicentric, which looked into whether or not they owned copyrights to technology described in the spec.

Ultimately, W3C installed only royalty-free terms. More recently, it lobbied to have the controversial ActiveX patent reexamined and reversed. The case, between Microsoft and Eolas, is still in the courts.