Paradigms of Standards and Patents Systems
An Interview with Konstantinos Karachalios, Ph.D., Managing Director of IEEE-SA
Konstantinos Karachalios brings a global viewpoint to an interview about standards systems and patents from his years at the European Patent Office and, now, at the IEEE Standards Association.
In the last year you have made a big transition moving from Europe to head up the Standards Association of IEEE. From your tenure with the European Patent Organization and your familiarity with international standards systems, what is your perspective on European standards bodies and the global standards development system?
The function of the European standardization system is characterized by a territorial logic. The actors must have a legal presence within a European country. Thus, an individual from Japan or a company from the United States without a European subsidiary cannot participate in the system. Normally, a consent is created first at a national level before it is exported to one of the three European standardization organizations (CEN, CENELEC, ETSI).1 In some cases, an exclusively European outcome is pushed onto the world scene through ISO or IEC.2 This is the standardization model that Europe knows well and promotes in the international arena, including through World Trade Organization and other bilateral treaties. In my opinion, globally acting standards development organizations based outside Europe should carefully study how European actors use these channels to produce world standards with locally controlled origin. However, I do not advocate that these strategies should be emulated.
On the contrary, I am in favor of a simple principle: standards destined for global markets should be produced in a process that is, a priori, open to the world expert community without any territorial restriction. This is the practice both of ASTM International and IEEE-SA, and I think this is the future. Only in this way can we act against a growing techno-nationalism/regionalism, which can seriously undermine the current globalization era, a danger depicted in “Whose Game,” one of the published EPO Scenarios for the Future.3
With the pending United States-European Union negotiations about a free trade agreement, what do you believe might be the impacts on European and U.S. standards development organizations? How can global standards developers in the United States work more closely with those in Europe? What do SDOs need to do to prepare?
In the recently reinvigorated negotiations around the Transatlantic Trade and Investment Partnership between the United States and the EU, discussions of standards and regulatory convergence have begun to take center stage. Position statements forwarded by European regulators that came to my knowledge unfortunately reveal that the above mentioned globally inclusive standardization model is perceived as an “acute problem,” and the organizations that apply it are reduced to producers of U.S. standards.
There are several misconceptions behind such positions and the perceptions that produce it. What is particularly difficult to understand is how in the era of challenges that can be addressed only at the global level, the readiness to open the process of standardization of critical global platforms to bottom-up, market-driven, worldwide participation, without any limitations or pre-conditions, can be perceived as an “acute problem.” One would think mechanisms that allow the establishment of global standards through globally inclusive expert communities are, rather, part of an urgently needed solution. Of course, European standards developers are welcome — as is everybody else — to participate in the establishment of such global standards, and they do participate, as for instance, in the vibrant, global 802 community of IEEE-SA.4
As the global community strives to keep pace with technology acceleration and convergence and to anticipate their technological, societal and cultural implications, and as it faces the increasing intersection of technology with economic, political and policy drivers, embracing a globally inclusive and market-driven standards development paradigm will help ensure strong acceptance, integration, interoperability and increased synergies along the innovation chain. Working within a framework of open participation and diversity, this paradigm espouses competition among stakeholders to drive innovation and global market advancement, which evidently benefits humanity.
Moreover, reducing the genuinely open and cosmopolitan character of the standardization model of ASTM International, IEEE-SA and other organizations with similar rules to a single market and region is both conceptually and politically wrong. The globally inclusive, market-driven standards approach has demonstrated agility and is driven by technical merit. The approach conveys the impact of bottom-up collaboration in harnessing global creativity and expertise to the standards of any technology space that underpin the modern economy. It results in the advancement of cutting-edge technology and empowers the rapid economic implementation of high value, high demand products and new services with societal benefits. It drives technical innovation via processes of direct, open participation that embrace different perspectives and interests to reach common goals. It produces standards, developed according to accepted World Trade Organization principles, without borders and without limits, to help ensure a better future for ourselves and the generations that follow.
There is overwhelming evidence of the strength of the bottom-up, market-driven system of standardization in literally every technical field, including information and communications technology, safety, automotive industry, standards for the environment, buildings (construction and materials, etc.), power generation and distribution, nuclear safety, etc.
One singularly successful case is the development and evolution of the Internet. The Internet evolved from a networking community for demonstrating packet switching technology to a global collection of communities and widespread information infrastructure that has resulted in today’s e-commerce, information sharing and community operations. The standards on which the Internet was built (and continues to evolve on and advance) were developed via a bottom-up, open and decentralized model that allows for diversity of opinions and approaches as well as the flexibility to acknowledge and address change and varying needs. The process of developing these standards represents cross-organizational coordination and collaboration among IEEE (see for instance the mentioned ubiquitous 802 family of standards), the Internet Engineering Task Force and the World Wide Web Consortium (W3C). These organizations collectively established a suite of standards that forms the foundation for the Internet in markets around the globe.
Thus, the universally open, voluntary and bottom-up standardization paradigm followed by ASTM International and IEEE-SA is the solution to the question of how standards for global markets should be produced. Cooperation with national and regional actors is of course possible and takes place on many occasions, e.g., for specific territorial adoptions or adaptations of our standards. The same is true for the collaboration with the Geneva, Switzerland, based international standardization organizations.
What do you feel are the most pressing issues facing today’s global standards organizations with regard to their intellectual property? What role do you feel that government should play in this situation?
Intellectual property includes both patents and copyright (more about patents below). I will focus here on the copyright aspects, in particular the issue of accessibility, of standards documents to the broad public. Here there is often confusion about what “open” means.
I recognize the complexities related to open access, open content and open standards due to the different economics and usage or licensing definitions associated with these terms and concepts. Open access provides unrestricted access via the Internet to content at no cost and/or with determined usage rights. Open content refers to content that is licensed in a construct that provides users with rights to develop additional uses of the content. In short, users can modify, use and redistribute under licensing terms similar to those used by the open source community. Open content allows for reuse of the content in its verbatim form; to revise, adapt, modify or alter the content; remix the content, combining the content with other content to create something new; and to redistribute the content, be it the original content, revisions, etc.
Open standards mean much more than the conditions of availability. Incorporated into the definition of open standards are the principles behind the standards and terms or practices associated with the use and implementation of the standard. Without going into great detail, I would like to express here my personal perspective. Openness should stand in both the standards development process, which means everybody should be allowed to participate, and the outcome, which means the implementation and use of a standard that is claimed to be open should be very broadly affordable, not only to a handful of players.
In general, there is momentum in the standards ecosystem for open access to standards and specifications. IEEE advocates working in partnership with standards bodies across borders to determine an open access framework that reduces challenges with copyright and allows for standards to be accessible for implementation and deployment while protecting the IP of the originating body and ensuring respectful cooperation between standards bodies, whereby each respects the autonomy, integrity, processes and IP rules of the others.
I would repeat here my opinions that the concept of openness should be extended to the participation geography as well and that “open” does not necessarily mean “free of any charge,” as for instance there may be a fee to drive on a particular highway. This is the case of the standards produced through ASTM, IEEE-SA and other globallly acting SDOs based in the United States, because they have to somehow finance the infrastructure that is necessary for the production and dissemination of their standards. Therefore, they must be careful when ceding their copyright for national or regional “adaptations” of their standards because this may mean in many cases loss of control of the original text and loss of revenue.
Governments already play a role in many regions. For instance, some European standardization organizations are subsidized and can therefore make their standards accessible without a fee. Given the diversity of the standardization landscape and the number of actors, this is not a model that could easily work in the United States, but this does not mean that government should always remain a spectator. The government could coordinate standardization in cross-cutting fields and clarify the rules of the game where necessary, in order to support the viability of the very successful market-driven standardization paradigm.
What is the relationship of the standards system and the patents system?
IEEE-SA recognizes the standards system to be one of the pillars of the global knowledge community. Through an open standards system, knowledge is supplied to the global scientific and technical community — information that is representative of collaboration for technological advancement.
In addition, IEEE-SA recognizes the patent system to be one of the pillars of the global knowledge community. With the rise of a knowledge-driven economy, the importance of patents has grown considerably, indicating scientific and technology progress and innovation. The patent system by nature has a robust repository of information and knowledge — information and knowledge that, combined with the open standards system, can make a substantial and unique contribution to the global economy and knowledge community.
Patents and standards encourage innovation and support the diffusion of technology. Both the open standards system and the patent system generate, source and manage abundant information, and information can be powerful in helping to address today’s global challenges in an increasingly borderless, global market.
However, whereas the patent system fragments technical knowledge and assigns private property rights on its pieces, the standardization system does almost the contrary. The system assembles the fragments to create collaborative technological platforms on which new knowledge can be generated. The way such privately owned technologies are incorporated on strategic standards platforms is of paramount importance; the process can produce an open standard, one that is broadly avaliable and affordable or one that is de facto controlled through standards’ essential patents by a handful of corporations.
It is therefore vital to restrict as much as possible the proliferation of trivial patents on standards. Providing patent offices with access to technical contributions and early draft standards prior to final publication represents the most important source of prior art in this field. This wealth of information and knowledge realized through cooperative and collaborative relationships among standards bodies and patent offices can greatly improve the quality of patents issued and help reduce patent litigation. It is not a coincidence that the European Patent Office and IEEE are the first organizations of their sort that recognized the importance of a voluntary, strategic cooperation between the standardization and patent systems and signed a memorandum of understanding in 2010.
Another factor is geography. The patent system is always territorial; patents are valid and effective only where they are granted. The story of the windsurfing rig that was invented by a Dutchman and patented only in Holland is telling. This situation enabled French industry to copy his idea without any restrictions and become a world leader. This territoriality is also the feature of the European Patent Office, albeit at a broad regional level. Although the European Patent Office can receive applications from inventors from all around the world, the patents it grants may become validated in more than 30 European countries and countries that have concluded a special extension agreement. This is the limit; these patents are not valid in the United States or in China.
How can members of the global standards community make a difference in developing countries and in promoting innovative emerging technologies?
The global standards community can make a difference by working collaboratively to educate and build institutional capacity locally in developing countries. This work includes building awareness with policy makers and government officials regarding options in standards development, and the impact of standards on the economy and on the dynamics of innovation; it also includes campaigns for engaging technical experts. All these efforts can foster knowledge development and distribution and bring diverse resources together to build local capability and capacity among industry, nongovernmental organizations, standards bodies, civil society organizations and government bodies.
Global standards are “containers” of technological knowledge, facilitating interaction between local and global practices, which indigenous stakeholders can use to create new knowledge and innovations. By making use of global standards developed in a market-driven paradigm that enables and embraces openness, diversity and respect, stakeholders in developing countries have access to knowledge to help drive improvements, innovation and economic growth. In particular, the global community can work with developing countries to use and adapt existing knowledge and standards and work with stakeholders to meet regional needs — thereby building competence in the use of standards. This can lead to improved or specifically adapted processes and products.
1. CEN, CENELEC, ETSI are the European Committee for Standardization, the European Committee for Electrotechnical Standardization and the European Telecommunications Standards Institute, respectively.
2. ISO, IEC are the International Organization for Standardization and the International Electrotechnical Commission, respectively.
3. European Patent Office, “Whose Game,” Scenarios for the Future.
4. IEEE-SA 802 is the Standard for Local and Metropolitan Area Networks, familiarly known as WiFi, Ethernet, etc.Konstantinos Karachalios, Ph.D., is managing director of the IEEE Standards Association, Piscataway, N.J. IEEE-SA works on standards development and related collaboration to advance global technologies through IEEE. Karachalios previously had a 25-year tenure with the European Patent Office, most recently as the EPO head for public policy issues. In that role he initiated and championed cooperation between the patent system and standardization organizations, and he was also responsible for, among other things, building relationships between EPO and the United Nations and civil society organizations. His experience and expertise spans standards development, intellectual property, public policy, capacity building for developing countries and strategic planning.