EC thwarts 'patent ambush' tactics

By Matt Whipp

Posted on 12 Dec 2005 at 16:45

The European Commission has approved a proposed change in the way European telecommunications standards are created by forcing stake-holders involved in the formation of new standards to declare any intellectual property as early as possible.

The rules have been changed in order to prevent 'patent ambushes' whereby companies involved in creating standards wait until a standard has been ratified before declaring their IP interests. Thus they are able to place licensing and other restrictions that create a barrier to entry and distort competition within the market.

If the IP is declared as valid it can preclude the possibility of looking at other technologies unencumbered by intellectual property claims. This is because the standard will be too far along the road to make such fundamental changes without essentially going back to the drawing board.

Competition Commissioner Neelie Kroes welcomed the changes, stating: 'Standards are of increasing importance, particularly in hi-tech sectors of the economy. It is crucial that standard-setting bodies establish rules which ensure fair, transparent procedures and early disclosure of relevant intellectual property. We will continue to monitor the operation of standard-setting bodies in this regard.'

The abortive attempt to create a standard around authenticating email, for the prevention of phishing attacks, was a high-profile example of the problems intellectual property can cause within the process of forming new standards.

Towards the end of last year, the Internet Engineering Task Force (IETF) oversaw the formation of the SenderID standard, which fell apart when Microsoft said it had intellectual property tied up in the CallerID technologies which it was contributing.

The company needed participants to licence patent-pending technologies in order to allow use of them. However, open-source companies such as Apache, whose web server software is widely used, said the licence terms were incompatible with the open-source licence under which it sold its software.

Eventually progress on the standard ground to a halt when the IETF decided it was pointless to continue work on a standard over which the shadow of Microsoft's IP loomed until the extent of the IP claims were known and alternative options could be sought.