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
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

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
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

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

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.

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