The rules for licensing the patents essential for standards are hard to understand, even for experts. Participants in standards bodies, whether or not ANSI-accredited, have claimed that their duty to disclose essential intellectual-property rights (IPR) is unclear and that the obligation to license IP on "fair, reasonable and nondiscriminatory" (FR&ND) terms has no legal content. Standards bodies have traditionally stayed far away from discussions of licensing, out of fear of antitrust repercussions.
Moreover, the legal environment is shifting as courts and regulatory bodies have offered conflicting views in recent proceedings involving patent disputes.
One leading view is that any participant in a standards body is duty-bound to disclose patents essential to implementing a proposed standard, and that each participant should either confirm its willingness to license such patents on FR&ND terms or set out its "maximum terms" for licensing. But such a mechanism for "voluntary ex ante disclosure of IPR and licensing terms" is not free of difficulties, because the participant is not required to conduct a patent search and could claim a knowledge exception. Once a declaration is made, its content of royalties and legal terms may be difficult to assess--or to weigh against declarations submitted by proponents of competing technologies.
The right of standards participants--who could be potential licensees--to speak openly about the terms offered, or indeed to negotiate with the patent holder, is held to be full of antitrust perils. And the number of declarations can become unmanageable: By November 2006, the European Telecommunications Standards Institute had received more than 14,000 declarations--not counting the 1,988 declarations submitted in the summer of that year by one company that ETSI was assimilating into its disclosure framework.
DVB stakeholders have found an alternative path through this minefield. The DVB Project is a standards forum of some 280 members that has been developing specifications for digital video broadcasting since 1993. The forum's early work focused on transmission standards. It has more recently completed work on specifications for the Multimedia Home Platform (MHP), mobile broadcasting and content protection/copy management. The Geneva-based group's specifications have been adopted worldwide.
Shortly after its formation, DVB adopted a novel policy for licensing IP rights essential to its specifications. Instead of requiring affirmative disclosure--declaration of IPR and confirmation of licensing on FR&ND terms--DVB's memo ran dum of understanding calls for every member to grant FR&ND licenses for all its patents essential to a DVB specification unless the member gives notice that it is incapable of granting such licenses. This requirement is called "negative disclosure."
The rule provides two "windows" for negative disclosure: immediately after a specification has been adopted by the DVB's Technical Module and up until its final adoption by the recognized standards body, such as ETSI, as a standard. The rule has been in place for well over a decade, yet to date no notice has been filed with DVB invoking the negative-disclosure option to withdraw an essential patent.
DVB's rules turn the commonplace process for IPR disclosure on its head. The policy avoids the disadvantages of affirmative disclosure: placing uncertain burdens on participants in standards bodies, raising disputes on the meaning of proposed licensing terms and risking an unmanageable flood of declarations.
Rather, DVB's mechanism of negative disclosure ensures implementers of its specifications that they will not be ambushed by a DVB member insisting on unreasonable royalties or even seeking to block use of its patent.