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Open standards: telecoms companies seek better licences

In-house counsel say they want more certainty in open source licences and on the term ‘open source’ itself so that they can contribute to telecoms standards projects without the risk of losing IP


With the rising popularity of open source collaboration on standardised technology projects, telecommunications companies say they need better licences and governance models to allow them to contribute to core technologies without the considerable risk of losing their IP.

Counsel at Nokia, Ericsson and Qualcomm, three companies that are leading the charge for the creation of effective open standards licences, explain that expanding the open source world to areas of technology that need to be standardised enables those inventions to be developed faster.
Open source collaboration has already helped telecoms businesses advance less core areas of standardised technology that are hard to protect with patents or to get patents for because of the difficulties in proving inventive step or eligibility requirements or detecting infringement.
Such technologies include the software that dictates how networks operate.
But sources say they are increasingly looking to contribute to core technologies, such as base stations and handsets, in the open source space that can be effectively protected by patents. This move is being driven partly by the 5G space, which has kick-started a convergence of technologies in different sectors, and partly by the increasing importance of software to telecoms companies.  
“The move has also been is fuelled by artificial intelligence and the need for heavier processing outside the data centre with some processing loads moving towards the edge,” explains David Marr, vice president and legal counsel at Qualcomm in San Diego. “Both at the edge and within the data centre for 5G you need optimisations that need consistent protocols enabled by software.
“The question is, what is the best model to enable that to happen?”
He adds that many Android-enabled handsets run software that is optimized for and provided by the semiconductor hardware vendor, which means that while the base Android software might have originally come from Google, the specific optimized version of the Android software for a given hardware platform probably came from that vendor who supplied the hardware chip. 

Out in the open

When companies decide to contribute to standardised core technology and seek to benefit financially from that contribution, however, they must also decide what kind of licence they want the project to be on and, more importantly, determine what the term ‘open source’ means in that context.
"We like that simplicity in the Clear BSD licence – it is legally compatible with almost every licence out there because it is permissive, simple and clear"
David Marr, vice president and legal counsel at Qualcomm

Companies that hold patents in a particular technology do not usually want to run the risk when contributing code under an open source licence that their patents may become licensed under that agreement, meaning that anyone could use their technology under that licence without paying royalties and thus destroy a potentially lucrative revenue stream.
“It is a little easier for us, and others, to contribute to open source projects when they are aimed at implementations in higher layers in the protocol stack, for example, directed to how the network exchanges information within itself.  Patents are less of an issue here.” says Adrian Howes, head of IP and standards at Nokia in London.
“But when we step into the handset and base station areas, where there are many valuable patents, the problem becomes whether we are able to contribute to open source projects in these areas without the potential risk of losing value in our patents. There is uncertainty around what open source means and whether licences understood to be open source cover patents, and so uncertainty whether patents we have are licensed, or perceived to be, by our contributions to code under that licence.”
Part of the reason this risk exists is because there is a debate between different telecoms and technology companies and inventors over whether the term ‘open source’ means an invention is free from copyright only or free from all IP rights. There is currently no single common understanding for either the term ‘open source’ or ‘open standards’ with respect to patents.
The Open Source Initiative (OSI), a California-based body that promotes open source use, claims ownership of the term ‘open source’ from a historical perspective, and argues that the definition stipulates that open source licences make the technologies they cover free from all IP rights.
Van Lindberg, general counsel and director of the Python Software Foundation, a non-profit corporation that holds the rights behind the Python programming language, argued this point in an article in the Columbia Science and Technology Law Review.
He made the argument that an open source licence is selected and not negotiated and that ‘open source’ is a defined term; he rebutted arguments made by former USPTO director David Kappos and IP lawyer Miling Harrington in the same publication that the OSI’s open source definition was never intended for patents.
Sources note that it is likely that someone will start litigation over an open source matter at some point, at which time open source licences will be interpreted by the courts, which may also fall on the side of the OSI.

“Are SDOs really well placed to develop open source solutions? I am not sure they are. There may be better organisations for that purpose”
Adrian Howes, head of IP and standards at Nokia

Jimmy Ahlberg, IPR and open source policy manager at Ericsson in Sweden, adds that the benefits and downsides of being in the open source arena very much depend on the way the term ‘open source’ is ultimately interpreted.
Regardless of whether the OSI’s definition is ultimately deemed to be correct or not, organisations must also accept that there are arguments out there that some open source licences may or may not cover patent rights.
“There is a risk there because of those arguments,” says Howes. “As soon as the focus in the open source space moves to patents, and that questions is coming up more and more, the degree to which these licences cover patents will become more acute. That is something we must take very seriously if open, collaborative software development is to be successful in certain technology areas.”
It is often difficult for organisations to tell whether OSI-approved licences cover patents or not because many are written badly; at least from an IP lawyer’s perspective. Most of these licences set out in broad terms that ‘open source’ refers to software that is free to pick up, use and modify as the user sees fit. 

Telecoms’ next top model

With those challenges in mind, telecoms companies have been looking to standards setting organisations to create  or use new software licence models that are better catered to both contributing to and licensing open standards technologies as well as to software development related to those standards.
Howes at Nokia says such efforts, if successful, would help reduce the fear of interpretation issues when contributing code and would help avoid litigation in the future. But questions have been raised over whether standards setting organisations are the right bodies for the job.
“Are SDOs really well placed to develop open source solutions? I am not sure they are. There may be better organisations for that purpose.”
“It is up to SDOs, after all, to develop standards - not to implement them, that is for others to do.”
The other way telecoms companies are looking to find or establish the right licences for open standards projects is outside the SSO space. The Open Air Interface (OAI), a membership organisation for businesses involved in 5G, created a software licence that sets out that businesses can use the technology under their licence for R&D purposes without paying royalties.
For commercial purposes, however, the licence requires contributors to commit to license their patents to their contributions on fair, reasonable and non-discriminatory (FRAND) terms to users of the software.  
“That licence has been going for a few years and I helped change some of the licence terms,” says Howes. “I like that it takes a new approach, similar to that used for standard essential patents, and it is a good step in the right direction. The FRAND approach balances the interests of patent owners with those of users, and it tallies well with how standard setting organisations have incentivised contributions of best technology solutions to their standards.”
Marr at Qualcomm agrees that the OAI software licence is a good start because it sets out broad rights around what people can do with the code in a pre-commercial environment, specifically covering rights to use the software for research purposes but then defaults back to the IPR policies of the standards development organisation when it comes to commercialisation.
But he adds that a slightly better licence for open standards might be the Clear BSD licence, which was designed by a company called MetaCarta. The licence sets out that the rights holder will provide the software to those who want to use it but makes it clear that it is not a patent licence but a pure copyright licence.
“We like that simplicity – it is legally compatible with almost every licence out there because it is permissive, simple and clear,” he says.
The open source space offers enormous opportunities for telecoms companies, and other businesses involved in technologies that need to be standardised, to develop their products. There are clear efficiency wins to be made by having all technologies in one basket – and those involved in that space are taking steps to make sure that doing that is easier and less risky than it is now.


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