annotated policy clauses - american bar...

An “Affiliate” of an entity means an entity thatdirectly or indirectly, through one or moreintermediaries, controls, is controlled by, or isunder common control with such entity. Forthe purposes of this definition, the term “con-trol” means ownership of more than fifty per-cent (50%) of the voting securities of acorporation or other business organizationwith voting securities.

“Claim” means a claim of an

issued and unexpired [utility] [1] patent,

This definition is used in the case when anSDO elects to extend its Policy not only to theParticipating Organization but also to parentcompanies, subsidiaries, and sibling companies(under common control) of the ParticipatingOrganization.

Some SDOs do not adopt this definitionbecause Participants may be large organiza-tions with multiple affiliates within the corpo-rate family. It is sometimes the case that oneaffiliate is not in a position to cause anotheraffiliate to act in conformance with or bebound by an SDO policy that is only agreedto by the participating affiliate.

A concern with not including Affiliates is thatone member of a corporate family could be aParticipant in an SDO and enjoy license rightsfrom other Participants, while another familymember that may not need a license holdsEssential Claims that it is not required tolicense. While one family member may nothave control over another, other measures(e.g., intercompany agreements) can be used toensure conformance with the relevant Policy.Thus it may be prudent to require the highest-tier member of corporations under commoncontrol to be the participant and to substitute“Subsidiary” for “Affiliate.”

Another way to avoid the risk of circumventionof the intent of this Policy is to require Partici-pants to represent (as part of their Participa-tion Agreement or otherwise) that all EssentialClaims in patents owned by any member of thecorporate family are Controlled by the Partici-pant. See definition of “Control.”

It is advisable to include a general definitionof “Claim,” as this term is used frequentlythroughout the Policy and should be givenconsistent treatment.

Patents

All definitions of “Claims” should includeclaims of issued patents.

5

ANNOTATED POLICY CLAUSES

I. DEFINITIONS

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[published/published and unpub-lished][1] patent application [2],

If an SDO encourages or wishes to imposebaseline disclosure/licensing obligations on itsParticipants, it may wish to limit the definitionof Claims only to issued patents, or to imposethis limitation in a related definition (such as“Essential Claims”). SDOs wishing to achievegreater disclosure or licensing may wish toinclude some of the other patent variationsdescribed below.

[1] “Utility” patents may be distinguishedfrom design patents, which have only limitedrelevance to most technical standards.

Patent Applications

[1] Patent applications in the U.S. (and manyother countries) are generally published 18months after filing. Thus, for the first 18months after filing, U.S. patent applicationsare not publicly disclosed. The SDO mustdecide whether the interest of Participants inmaintaining the confidentiality of unpublishedpatent applications and related trade secrets(which may, in some cases, be required by con-tracts to which the Patent Holder is a party)and avoiding the possibility of patent interfer-ence is outweighed by the benefits of disclo-sure of potential Claims in unpublished patentapplications. Some SDOs may allow the PatentHolder to elect whether it wishes to disclose anunpublished patent application, rather thanrequiring such disclosure. Some SDOs remainsilent on whether “patent application” appliesto published and/or unpublished applicationsand leave it to the discretion of the PatentHolder. Other SDOs may require the PatentHolder to disclose only the existence of theClaim in a patent application and no otherdetail such as the patent serial number, etc.In any case it is preferable that the Policy clearlystate whether or not the definition of Claimincludes unpublished patent applications.

[2] An SDO that wishes to require disclosureand/or licensing of patent applications shouldbe aware that claims in patent applicationsare transitory. The claims may be changed inscope before issuing in a patent or may notissue at all.

6 STANDARDS DEVELOPMENT PATENT POLICY MANUAL

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and any other [claim-based] exclusionaryright granted by a governmental authority.

“Contributor” means an Individual Participantthat makes a Contribution to the SDO.

Thus, if the SDO requires patent applicationsto be disclosed, SDO Participants should moni-tor the manner in which claims change duringthe prosecution process in order to ensure thattheir SDO disclosures remain accurate. In addi-tion, as standards under development evolve, itmay be difficult to determine whether evolvingpatent applications apply to the unsettled termsof a standard, and it may be overly burdensomeon a Patent Holder to monitor this on a con-tinuous basis.

One of the benefits to the SDO of requiring orencouraging the disclosure of patent applica-tions is to give the relevant Working Groups anearlier awareness of potential patents for whichlicenses may need to be acquired for implemen-tation of a Standard (as it often takes severalyears for a patent to issue after the filing of apatent application).

It should be noted that the ANSI patent policydoes not require the disclosure of patent appli-cations, though ANSI-accredited SDOs are per-mitted to encourage the disclosure of patentapplications. A typical disclosure expectationcan be acknowledgment of the existence ofapplication claims that potentially may coverthe standard. Another typical disclosure expec-tation is to reference the section of a standardor proposed standard potentially affected bythe application, in each case without specifi-cally disclosing the application itself.

“Catch all”

This term may include utility models, inven-tion certificates, design patents, and otherpatent-like rights issued in jurisdictionsthroughout the world. It is not intended, how-ever, to include other types of intellectual prop-erty such as copyrights and trademarks, whichrequire the consideration of different factorsand are not addressed in this manual.

While a Participating Organization may becredited with making a Contribution to theSDO, and may be required to disclose and/orlicense rights with respect to a Contribution,only individuals can actually make a Contri-bution to the SDO process. This definition isused to identify such individuals.

See definition of “Individual Participant.”

ANNOTATED POLICY CLAUSES 7

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“Contribution” means

any [written] [2] submission to the SDOintended by the Contributor for publicationor use as all or part of a Standards Docu-ment, [and submitted in accordance with thefollowing Submission Guidelines: ] [1]

Alternative Options:

1. [and any other statement made within thecontext of an SDO activity. Such statementsinclude oral statements in SDO sessions, aswell as written and electronic communica-tions made at any time or place, which areaddressed to an SDO mailing list, session, orSDO management.]

2. [Oral statements shall not be deemed toconstitute “Contributions” unless recordedin the minutes of the relevant SDO groupand approved in writing by the Contributorwithin [__] days after the minutes becomeavailable.]

3. [Statements made outside of an [SDO]session, mailing list, or other function thatare clearly not intended to be input to an[SDO] activity, group, or function, are notContributions in the context of this Policy.]

A “Contribution” is an item (whether a techni-cal standard, specification, protocol, design,software code, or methodology, or any portionof any of these) that a Participant submits toan SDO as part of its standards developmentprocess. Because an SDO may impose specialdisclosure and/or licensing obligations forContributions that are intended to be includedin a Standard (See “Mandatory Portion” below),the SDO should consider what types of commu-nications will be considered to be Contributions.

A “Contribution” to the SDO almost alwaysincludes written submissions within the SDOstandards process (including written materialthat is submitted via e-mail, ftp site, posting toa website, or otherwise).

[1] In some cases these written submissionsmay need to be in a special format or submit-ted within specified time frames. The SDOshould determine whether any of these require-ments is desirable. If an SDO elects to requireContributions to be made formally and inwriting, more informal suggestions such asexamples or other submissions of technologythat may occur during discussions in a stan-dards development session would not be con-sidered “Contributions.” In such cases, the SDOshould define whether inputs, refinements,alternatives, etc., generated through WorkingGroup activity should be captured. See defini-tion of “Working Group.”

[2] Some SDOs may also wish for Contribu-tions to include statements made by an Individ-ual Participant during a standards developmentsession or on SDO mailing lists as well as docu-ments submitted to the SDO for considerationas a proposal or commenting on a proposal.If an SDO desires to treat such statements asContributions, it should ensure that it main-tains accurate records of the relevant discussionsand other communications media (includinge-mail archives and written minutes of meetingsand/or telephone conferences). In determiningwhether to allow oral contributions, an SDOneeds to balance the administrative burden tothe SDO of recording and disseminating accu-rate minutes with the burden on Participantsand possible disruption to the flow of the stan-dards development process of requiring Contri-butions to be submitted in writing.


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“Control” over a patent means ownership ofsuch patent [and/or] [1] the right to grantlicenses under such patent to third parties[without such grant resulting in payment ofroyalties or other consideration to third partiesthat are not Affiliates] [2] or [provided that ifthe granting of such license would trigger thepayment of any amount to a third-party ownerof such patent, then “Control” shall be deemedto exist only if the prospective licensee agreesto make any such payment on behalf of thelicensor and otherwise accepts applicable termsset forth in the license agreement] [3].

The term “Control” is used to identify patentsover which a Participant exercises a certaindegree of authority, such as ownership or othermeans of directing its enforcement or licensing.This definition is important because it definesthe Essential Claims for which a Participantwould be subject to the disclosure and licensingprovisions of this Policy.

[1] “Control” typically includes patents ownedby a Participant (either originally or by assign-ment, and whether solely or jointly with others).“Control” may also include patents owned by athird party, but that a Participant has the rightto license. Some SDOs may wish to considerwhether a Participant should be deemed to“Control” patents that it owns, but that it isunable to license (due to contractual restric-tions or exclusive licenses previously granted,for example). While such situations are nottypical, and may be seen as a way for a Partici-pant potentially to circumvent its licensing ordisclosure obligations, an SDO that wishes tonarrow “Control” in this manner should use“and” in the proposed clause. Otherwise, “or”should be used.

An SDO may wish to address instances relatingto Essential Claims Controlled by companiesthat are owned by several Participants jointly(but in which no one Participant has a major-ity ownership position). (See Sections III.A.3and IV.A.1.h)

[2] “Control” is often deemed to exist forinbound patent licenses only if the Participanthas the right to grant licenses without incur-ring any payment or other material obligationto the third-party licensor. This precautionwould protect Participants from incurringunexpected royalty obligations when licensingpatents as required under this Policy. It couldalso, however, give Participants an opportunityto encumber patents with royalty obligations inorder to avoid obligations under this Policy,though the authors are unaware of instances ofsuch conduct in the standards-setting area.

[3] This clause seeks to address the risk identifiedin [2] above by including all licensable patentswithin the definition of “Control,” but requir-ing the licensee to bear any payment or otherobligations to the third-party patent owner.


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“Disclosed Claim” means a Claim that a Partici-pant has previously disclosed to the SDO [in aPatent Disclosure.] [1]

“Draft Standard” means any Standard Docu-ment that has been submitted/accepted forconsideration as a Final Standard or portionthereof, but that has not yet been [approved/published] by the SDO in accordance with theSDO’s approval process as described in [refer-ence to SDO approval process].

[1] Some SDOs that do not have a requiredform for Patent Disclosures may not wish toinclude this limitation, and may prefer to allowPatent Disclosures to be made in any form,such as in a Contribution. Many SDOs, how-ever, have prescribed forms for Patent Disclo-sures, and will not recognize Patent Disclosuresunless made in the proper form.

Where the definition of “Draft Standard” mayaffect Participant obligations, the SDO shouldcarefully consider which documents areincluded in this definition. In some cases, anSDO may have numerous levels of classifica-tion of Standards Documents, depending onthe state of review, approval, and adoption. Insome cases, the terms “Proposed Standard” or“Working Draft” may be used.

For example, in the International StandardsOrganization (ISO), there is a sequence ofdrafts prepared at different points along thestandards development process. At the prepara-tory stage, there is a “working draft,” then acommittee (work group) creates a “committeedraft,” after which a broader inquiry results ina “draft international standard.” A final “DraftInternational Standard” is submitted forapproval and, upon publication, a “Final Inter-national Standard” takes effect.

See discussion of “Final Standard” below.


Essential Claims:

The definition of “Essential Claims” is one of the most crucial definitions in an SDO’s DisclosurePolicy. It is used in two important contexts: (i) determining which patent Claims an SDO mayrequire or encourage a Participant to disclose within the context of SDO activities (see Section IIIbelow) and/or (ii) determining Claims for which a licensing commitment is sought from theParticipant in SDOs having Licensing Commitments (see Section IV below).

Note that many SDOs use the term “Necessary Claims” synonymously with “Essential Claims.”As discussed below, however, use of the terms “Essential Patent” or “Necessary Patent” are notrecommended unless they are clearly limited to mean the claims of such patents.

“Essential Claims” shall mean all Claims This definition relates only to “Claims,” and isthus limited to claims of patents and, depend-ing on the scope of the definition of Claim,patent applications and similar forms of legalprotection. It is generally inadvisable to baselegal obligations on nonclaim language in thepatent specification or other descriptive ele-ments of a patent, as those elements do notconvey enforceable rights.

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throughout the world

that would be Necessarily Infringed (asdefined below) by an implementation ofa Standard

that is compliant with [all][1] MandatoryPortions of the Standard.

As noted below, some Claims in a givenpatent may be Essential Claims and othersmay not—any obligation should be directed toEssential Claims and not spill over into non-Essential Claims, even in the same patent. Thususe of the term “Essential Patents” is discour-aged, unless it is clearly limited to mean theEssential Claims of such patents.

Also note that the Patent Holder generallymakes the initial determination whether aClaim is likely to be an “Essential Claim.” MostSDOs lack the resources to make such determi-nations, and expressly disclaim responsibility foridentifying or confirming whether a Claim is an“Essential Claim.” They must rely on the good-faith determinations of their Participants. If aParticipant makes such a determination in badfaith or recklessly, then certain remedies may beavailable to other Participants or implementersof an affected Standard (see Section II.B below).

Global Scope

Including the words “throughout the world” or“in any country” or “worldwide” in this defini-tion reinforces and makes explicit the unlim-ited geographical scope in which EssentialClaims may occur.

Some argue that these geographic words arerequired explicitly to ensure that the productsconforming with a standard can be licensed inother countries where Essential Claims subsist.Other attorneys argue that by omitting anywords restricting the geographical scope of theEssential Claims, the geographical scope isunlimited.

Requirement of “Necessary Infringement”

This clause is the crux of the “Essential Claim”definition, as it specifies what it means to be“essential.” See definition of “NecessarilyInfringed.”

Mandatory portions only

A Standard often contains Mandatory Portionsthat are required to be implemented for com-pliance with the Standard. This clause excludesfrom the definition of “Essential Claims” anyClaims that are infringed only by implemen-tations of Optional Portions or InformativePortions of the Standard. Requiring disclosureand/or licensing of Claims that cover only


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Notwithstanding the foregoing sentence,Essential Claims do not include anyClaims:

(a) other than those set forth aboveeven if contained in the same patentor patent application as EssentialClaims;

(b) that read solely on any imple-mentations of any portion of a Stan-dard that are not within the boundsof the Scope of the Standard activity;

(c) covering enabling technologiesthat may be necessary to make oruse any product or portion thereofthat complies with a Standard, butare not themselves expresslyrequired by the Standard.

Optional Portions or Informative Portions ofa Standard can give rise to antitrust issues andshould be undertaken only after careful legalanalysis. See ABA Handbook on Antitrust andStandards.

[1] Some SDOs require that Essential PatentClaims are those that read on a MandatoryPortion, but they do not require compliancewith “all” Mandatory Portions of the Standard.These SDOs permit “sub-setting,” so that, forexample, a Licensing Commitment may applyas long as all of the Mandatory Portions of theStandard that apply to that implementation arebeing implemented. This can be important, forexample, if certain Implementers are creatingimplementations of a portion of a Standard sothat their products can be incorporated into amore complete implementation by anothercompany.

See further discussion under “MandatoryPortions.”

Exclusions

Below are certain customary exclusions fromthe definition of “Essential Claims”:

Claims in the same patent that are notNecessarily Infringed

A patent usually contains multiple claims. Evenif one claim in a patent meets the definitions ofbeing an Essential Claim, the other claims inthat patent that do not meet that definition arespecifically excluded from being EssentialClaims.

“out of scope” implementations

SDOs and Working Groups may specify aScope that defines the areas of technology andpermissible uses for the Standard. If a Claimdefines an implementation that is outside ofthe Scope, then the Claim is not an EssentialClaim if this exclusion is included.

See definition of “Scope.”

Enabling technologies

In many cases, Implementers may requirelicenses under patents covering aspects of pro-ducts described in a Standard even when thoseaspects are not themselves covered by the Stan-dard. These are termed “enabling technologies.”


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“Final Standard” means any Standard Docu-ment that has been [approved/published] by anSDO in accordance with [the SDO’s approvalprocess as described in [reference to SDOapproval process]].

“Implementer” means any Person who makes,uses, sells, distributes, imports, or otherwisedisposes of any product, or practices anymethod, that embodies all [or any portion of]a Standard.

“Individual Participant” means an individualperson who is a Participant in an SDO.

“Informative Portion”

“Informative Reference”

Not Needed for Use: A specification or otherdocument to which reference is made in theStandard that assists the user with regard to aparticular subject area but is not indispensablefor the implementation of the Standard. [1]

Where Essential Claims relate only to thematters specifically described in the Standard,Claims covering “enabling technologies” maybe considered “Essential Claims.” However,SDOs should consider the impact of excludingsuch technologies through such a provision ifsuch technologies are required to implementthe Standard.

For example, a Standard may cover only a nar-rowly defined mechanical dimension on anintegrated circuit. In this example, the Imple-menter could argue that the Standard requiresthe Patent Holder to license all semiconductormanufacturing technology in order to complywith the mechanical dimension of the inte-grated circuit described in the Standard.To avoid this argument, this clause specificallyexcludes from “Essential Claims” any “enablingtechnologies.”

The nature of “enabling technologies” differsgreatly depending on the nature of the Stan-dard. Thus, it is difficult to provide compre-hensive examples of the types of technologiesthat may be generally considered to be enablingin any given case.

Contrast to “Draft Standard.”

Implementers include any person or entity who“implements” a Standard in a product or ser-vice. The Policy may or may not require thatImplementers be Participants in the SDO.

Contrast with “Participating Organization.”

See definition of “Mandatory Portion.”

[1] References to informational materials canbe useful for background or for illustrativepurposes. Unlike Normative References, Infor-mative References are not an indispensable partof the standard and need not be implementedfor the standard to be used.


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Not Needed for Conformance: The whole orparts of a document where the referenced doc-ument has been used as supplementary infor-mation in the preparation of the Standard or toassist in the understanding or use of the Standardand to which conformance is not necessary. [2]

“Knowledge” means

the actual, personal awareness by an individualof information relating to a particular matter,

[as well as information relating to such matterthat such individual reasonably should haveknown by virtue of his or her position] [1]

[without any duty to conduct patent searches].[2]

[Knowledge shall not be deemed to includeknowledge held by other personnel of the rele-vant Individual Participant’s Sponsor, providedthat such Sponsor will not deliberately with-hold relevant information from Individual Par-ticipants in the SDO’s activities for the purposeof avoiding disclosure or licensing under thisPolicy.] [3]

[2] Some SDOs define references as informa-tive so long as an implementation of the refer-ence is not required to claim conformance.While not necessary for conformance, such ref-erences could be indispensable for the use ofthe standard.

It is important to define “knowledge” in thecontext of an SDO, as many SDOs limit theobligation to disclose Essential Claims to thosewithin the Knowledge of a Participant. Thiscriterion is almost always applied to the Indi-vidual Participants who participate in activitiesof the SDO, rather than institutionally to theParticipating Organization that employs orsponsors the Individual Participant.

[1] One extension of the personal knowledge ofthe SDO Participants is knowledge that suchParticipant “reasonably should have known” byvirtue of his or her position. This criterionwould prevent a Participating Organizationfrom deliberately insulating its personnel frompatent information for purposes of thwartingthe Knowledge requirement of the Policy. Itshould also be pointed out, however, that such“constructive knowledge” criteria could intro-duce a significant element of uncertainty intothe Knowledge determination. Note the ANSIpatent policy does not address the issue ofKnowledge. ANSI has stated in testimony thatKnowledge will not be imputed to IndividualParticipants in the development of AmericanNational Standards.

[2] Given that many organizations that par-ticipate in standards development have largepatent portfolios, SDOs may wish to state thatParticipants are not required to conduct “patentsearches” in order to discover Essential Claims.Patent searches, for this purpose, would includeboth reviews of internal patent departmentrecords as well as searches of public patentdatabases. It should be noted that the policiesof many SDOs (including, for example, TIA,ETSI, and ITU) explicitly state that patentsearches are not required.

[3] This clause limits Knowledge to that infor-mation known by Individual Participants, andalso prevents Sponsors from deliberately insu-lating its personnel from patent informationfor purposes of thwarting the Knowledgerequirement of the Policy.


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“Licensing Call” means a [written] requestfrom an SDO to one or more Participants tosubmit a Licensing Statement.

“Licensing Commitment” means a Participant’scommitment to grant a license under EssentialClaims on terms specified in Section IV.A.

“Licensing Statement” means a written state-ment submitted by a Participant to an SDO [inthe form required by this Policy] [1] thatdescribes the terms, if any, under which suchParticipant [commits to] [is willing to][herebydoes] [2] license Essential Claims [listed oridentified in __].

It should be noted that a Licensing Call is dis-tinguished from a “call for patent disclosures.”See Section III.B.2[6] and B.3[5]. For addi-tional commentary, see Section IV.C.2.c.

A Licensing Commitment contains a descrip-tion of the terms (such as “reasonable andnondiscriminatory” license terms) that a Par-ticipant agrees to offer to all Implementers ofa Standard under the Participant’s EssentialClaims.

As described in Section IV, a Licensing Com-mitment may arise as a condition of partici-pation in an SDO, or may be voluntarilyundertaken by a Participant when making aLicensing Statement. The Licensing Commit-ment is not an actual license, but an agreementto make a license available upon request. Awillingness to license can be communicated asa Licensing Commitment in a Licensing State-ment (see definition of “Licensing Statement”below).

As described in Section IV.C, some SDOs mayrequire that a Participant disclose its positionregarding licensing of Essential Claims at speci-fied times during the standards developmentprocess.

[1] This phrase should be included if a speci-fied form of Licensing Statement is required.See Section IV.C.3 below.

[2] The choice between “commits to,” “is will-ing to,” or “hereby does” is one of the crucialchoices to be made with respect to LicensingStatements. If a Participant “commits to” (or“hereby does”) license Essential Claims onterms (such as RAND) specified in the Licens-ing Statement, then that commitment is likelyto have legal force, and Implementers will havegreater certainty regarding the terms or natureof the terms that will be offered when theyimplement Standards covered by the Partici-pant’s Essential Claims. This commitment isessentially a “Licensing Commitment.” Makingthis commitment, however, is a serious matterfor Participants, and may be difficult for Par-ticipants that wish to retain flexibility in theirlicensing programs.


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A “Mandatory Portion” of a Standards Docu-ment typically conveys criteria that mustalways be fulfilled in order to claim full confor-mance to the Standard.

An “Optional Portion” of a Standards Docu-ment typically contains those Portions or crite-ria of a Standard that may, but are not requiredto, be selected in an implementation of theStandard.

An “Informative Portion” typically refers tolanguage in a Standards Document that is onlyinformative or permissive, such as the back-ground leading to the need for the Standard,or other references in the area that may beof interest to the reader. Informative Portionsare not intended to be implemented in theStandard.

An “Alternative Portion” typically exists whenthere is more than one way to satisfy a Manda-tory Portion or an Optional Portion.

By simply asserting that it is “willing to” grant alicense, a Participant states its intention at thetime of the statement, and does not necessarilymake a binding commitment for the future.Under this approach, Implementers will haveless certainty regarding the terms that will beoffered when they implement Standards cov-ered by the Participant’s Essential Claims, butthis approach may be more palatable to Partici-pants who wish to retain greater flexibilityregarding their licensing programs. SDOsshould carefully consider the level of commit-ment they wish to obtain from Participants andchoose the wording of this clause accordingly.

Other terms used by SDOs for Licensing State-ments include “Letter of Assurance,” “LicensingDeclaration,” and “Patent Holder Statement.”

These terms are being discussed in the samesection in order to clarify how they differ andpossibly overlap. Some or all of these termsmay be used to define the Essential Claims thatmay be subject to the Policy as well as the por-tions of the Standard that may be subject to aLicensing Commitment.

“Mandatory Portions” also can be called “nor-mative,” “required,” etc. Sometimes these por-tions are labeled as such in the standard.Sometimes they are identified through obliga-tory terms such as “shall” or “must.” In someSDOs, the term “normative” is used to desig-nate any portion of a standard that is imple-mentable, whether mandatory, alternative, oroptional.

“Optional Portions” of a Standard are, as theterm implies, optional, and are not required inorder to claim conformance to the Standard.Typically “Optional Portions” contain manda-tory language such as “shall” or “must” becausethey delineate requirements that must be met ifan Implementer voluntarily chooses to imple-ment the Optional Portion. Sometimes theterm “Optional” is used by an SDO to refer towhat is referred to herein as “Informative Por-tions,” and vice-versa, so it is important toascertain the nature of the text being includedunder the chosen label. Sometimes OptionalPortions and/or Informative Portions arelabeled as such in the Standard. Some SDOsuse the term Informative Portion only to refer


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to text that contains only informational or per-missive language such as “should” or “may” orother descriptive material.

As noted above, even though its implementa-tion is not required for full conformance to thestandard, an Optional Portion may containobligatory language (such as “shall” or “must”).Under these circumstances, if an Implementerdoes choose to implement the Optional Por-tion, then it must do so in accordance withthese mandatory requirements. As noted infra,an SDO’s Policy may apply only to MandatoryPortions of a Standard. Some SDOs maychoose to have their policies apply explicitlyto Optional Portions that contain mandatorylanguage. In Intel v. Via, 174 F. Supp. 2d 1038(N.D. Cal 2001), the court found some “options”of a standard to be “required.” Thus, if theStandard has a core to which options may beattached, and if attached the Claim is neededfor the option, the SDO should specify whethersuch Claims are Essential Claims subject toobligations of disclosure and/or licensingunder the SDO’s rules.

Mandatory Portions and/or Optional Portionsmay or may not include “Alternative Portions,”where an implementer must select from one oftwo or more alternative approaches in order toclaim full conformance to the Standard. Whileeach Alternative Portion may itself be “optional”because it does not have to be selected, an SDOmay or may not seek to ensure that any Essen-tial Patent Claims that read on any of theseAlternative Portions are subject to the SDO’sPolicy to prevent all such Alternative Portionsfrom arguably being blocked in this regard.Accordingly, an SDO may treat Alternative Por-tions in the same way it treats Mandatory Por-tions and/or Optional Portions that includeobligatory language. Some SDOs may define“Mandatory Portions” or “Normative Portions”to apply to all of these types of Portions inorder to clarify what its Policy applies to.

It should be noted that competition issuesmust be considered in this regard. While anSDO seeking licensing commitments vis-à-viscomplementary or blocking patents generallyavoids antitrust scrutiny, the pro-competitiveperspective is not so clear for alternatives orsubstitute technologies.


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A Claim is “Necessarily Infringed” when thereis no [commercially/technically feasible/reason-able] [1] noninfringing alternative for imple-menting a portion of a Standard,

[or when all alternative approaches are coveredby such Claim and other Claims [Controlled bythe same Participant or in the same patent]]. [2]

Similar competition concerns can arise whenan SDO requires a Patent Holder to offerlicense terms covering Optional Portions aspart of a package including Essential Claims, orwhen the Patent Holder requires that an Imple-menter license Claims covering Optional Por-tions as part of a package including EssentialClaims covering Mandatory Portions.

This definition is typically used within the defi-nition of “Essential Claim” to limit such Claimsto those that are unavoidably infringed by allimplementations of a standard.

[1] The SDO must determine whether theremust be absolutely no way to implement theStandard without infringing the Claim, orwhether qualifications (such as the commercialor technical feasibility or reasonableness) mayapply. The unmodified “no noninfringing alter-native” language results in a more limited defi-nition of Essential Claim, while adding a“commercially feasible” qualification, for exam-ple, makes more Claims into Essential Claims.However, the boundaries of what is “commer-cially feasible” may be less clear.

The difference between the terms “technically”and “commercially” can be illustrated by theexample of a standard for an “alarm.” Supposethat initially the only alarm that complies withthe standard is a bell that costs $1.00. A Claimthat covers the bell will be an Essential Claim,irrespective of whether or not the definitionstates that there must be no “technically”reasonable noninfringing alternatives or no“commercially” reasonable noninfringingalternatives. However, the situation changeswhen the Patent Holder or a third party devel-ops a buzzer that also complies with the alarmstandard. The buzzer costs $0.10, making thebell implementation cost-prohibitive in thecommercial market. If Essential Claims aredefined as those for which there is no “com-mercially” reasonable noninfringing alterna-tive, the Claim on the buzzer becomes anEssential Claim, because it would not be com-mercially feasible to use a bell costing ten timesthe cost of the buzzer. If the Policy, however,required that there be no “technically feasible”alternative in order for a Claim to be an Essen-tial Claim, then neither the bell nor the buzzer


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“Normative Portion”

“Normative Reference”

Needed for Use: A specification or other docu-ment to which reference is made in the Stan-dard in such a way as to make it indispensablefor the application of the Standard.[1]

Needed for Conformance: The whole or partsof a document to which it is necessary to con-form in order to claim conformance with theStandard containing the reference.[2]

Claims would be Essential Claims, becausethere would be a technical alternative for each.

An SDO policy may require the judgmentregarding the “technical” or “commercial” rea-sonableness to be determined at a specific time,e.g., when the standard is approved or published,so that an Essential Claim cannot change itscharacterization. Consideration should be givento competition issues before adopting a policythat omits a specific reference time, especiallywhen assessing whether or not there is any “com-mercially reasonable” noninfringing alternative.

[2] Under the traditional definition of “Neces-sarily Infringed,” if there are only two claimedtechnical alternatives that may be implementedto achieve compliance, neither is an EssentialClaim. An SDO may consider whether toinclude such alternative claims as EssentialClaims at least in certain cases—such as whenthe two claims are in the same patent or inpatents Controlled by the same Participant. Forexample, if a specification requires an alarmand a Participant has two claims in a patent onthe only two technically feasible alarms, a belland a buzzer, where one of the two claims mustbe infringed to implement the specification,the SDO might consider whether such Claimsshould be Essential Claims.


The determination of whether a reference is“Normative” or “Informative” may impactwhat Licensing Commitments are available toImplementers, as discussed in Section V. As aresult, SDOs should carefully define the termto satisfy both the SDO’s and implementers’expectations regarding such Licensing Com-mitments. Patent Holders can be asked tolicense their Essential Claims covering Norma-tive References to Implementers, as they areasked to license Essential Claims covering Nor-mative Portions of the standard. However,while many SDO policies set forth express rulesgoverning patent licensing and disclosure rulesfor Essential Claims that cover Normative Por-tions, not all SDOs require licensing or havedisclosure policies directed to Normative Ref-erences. Policies that do address NormativeReferences often have no licensing or disclo-sure policies for Informative References.


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“Optional Portion”

“Participant” means an individual or organiza-tion that Participates in the Standards-relatedactivity of the SDO.

Many SDOs expressly exclude Normative Ref-erences from the scope of their Policy, in partbecause the referenced material may have beendeveloped under a different patent policy (seediscussion infra at V.1). A concern in excludingtechnology or standards that are referenced isthat the standard may be unimplementable orimpaired without such necessary technologiesavailable.

[1] When a Standard references another docu-ment as opposed to copying the contents of thedocument into the Standard, the contentsnonetheless may be an important part of theStandard. Some SDOs define such referencesas “normative” when the standard cannot beimplemented or practiced without the use ofthe referenced document. In some SDOs, thereferenced document may be virtually anywritten material but most often is a specifica-tion or Standard developed by another SDO,while in others, such as ISO/IEC, the criteriafor documents that may be used as NormativeReferences are prescribed in detail (see Section6.2.2 of 2004 ISO/IEC Directives, Part 2).

[2] Some SDOs prefer to more narrowly definenormative references to those that are requiredfor conformance. For example a standard formaking emergency calls may not be usablewithout certain telecommunications protocols.However, conformance may be based solely ona device being able to generate a message fortransmission as defined by the standard.


Depending on the SDO, “Participants” may beeither individuals or organizations that desig-nate individual personnel to participate in SDOactivities. In either case, “Participant” is the gen-eral term used to describe a person or entity thatParticipates in the Standards-related work ofan SDO. If “Participant” is used to designate anentity, the SDO may decide to clarify that cer-tain obligations (such as a disclosure obligation)are triggered only by the knowledge or conductof that entity’s “Individual Participant.” While aParticipant may also be an Implementer, theseterms are not synonymous, as there may beParticipants who do not implement a Standard,and there may be Implementers of a Standardwho do not participate in its development.


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“Participate” means active participation in anactivity of an SDO. Without limiting the gener-ality of the foregoing, an Organizational Par-ticipant shall be deemed to Participate in aWorking Group if any of its employees [aremembers/have attended __ or more meetingsof the Working Group] [during any 12-monthperiod][1], made any Contribution to theWorking Group [during the most recent 12-month period], and an individual Participantshall be deemed to Participate in a WorkingGroup if he or she [is a member thereof/hasattended __ or more meetings] [during themost recent 12-month period], made any Con-tribution to the Working Group [during themost recent 12-month period].

“Participation Agreement” means a documentdescribing or referring to the Policy that anindividual or organization must agree to inorder to be a member of, or Participate in, thestandards development activity of the SDO.

“Participating Organization” means a company,corporation, agency, institution, or other entityother than an individual person that is a Partic-ipant in the SDO or that sponsors the partici-pation of one or more Individual Participants.

“Patent Disclosure” means a [written] [1] state-ment submitted by a Participant to an SDO[in the form required by this Policy][2] thatdescribes specific Essential Claims relating toa particular Standards Document.

“Patent Holder” means, with respect to a par-ticular Claim, a person or entity that Controls aPatent including such Claim.

In SDOs where membership is individual-based, the SDO may seek or expect a level ofobligation from the individual’s Sponsor.

[1] The 12-month period in this clause isintended to provide a time period that is signif-icant, but not unduly so. An SDO may elect tochoose a time period that is longer or shorter,depending on standards development cyclesand other relevant factors in its particularindustry. Alternately, an SDO may elect notto use any specified time period.

This definition is relevant when an SDO has amembership (or WG membership) that isdefined by the act of agreeing to a ParticipationAgreement. Such an agreement is also referredto sometimes as a “Membership Agreement.”

(See Section II.A regarding SDOs with noParticipation Agreement.)

In SDOs that consider Participants to beorganizations, the actions of individuals repre-senting or sponsored by such organizations arelikely to be treated as actions of the organiza-tional Participant. Accordingly, an organizationshould be careful to select appropriate person-nel to participate in SDO activities.

[1] While most SDOs require that Patent Dis-closures be made in written form (which mayinclude electronic e-mail, web posting, or otherelectronic forms of communication), someSDOs also permit Patent Disclosures to bemade orally at certain SDO meetings asdescribed in Section III, Option 3 below.

[2] The use of a specific, required form forPatent Disclosures is discussed in Section III.Cbelow.

It should be noted that a Patent Holder may ormay not be a Participant in the SDO.


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“Policy” means this [Intellectual PropertyRights/Patent] Policy.

“RAND” means “reasonable and nondiscrimi-natory” license terms and conditions.

SDOs may have a complete intellectual prop-erty rights (IPR) policy that includes a patentpolicy or a stand-alone patent policy.

Many Licensing Commitments require that thePatent Holder be willing to grant or agree tooffer licenses that contain RAND terms andconditions. (Some SDOs may refer to RAND“terms,” which is generally understood to mean“terms and conditions”). There is not a preciselegal definition of RAND. It is generally under-stood, however, that RAND licenses may beroyalty-bearing or may include other reason-able fees.

RAND licenses may include other terms andconditions in addition to royalty and fee terms.These, too, must be reasonable. However, anSDO may wish to permit or prohibit specificterms and conditions in RAND licenses asdescribed in detail in Section IV.A.

“Nondiscriminatory” signifies that the licensormust not refuse to license different parties whoare similarly situated on materially similarterms. Typically the “nondiscriminatory”requirement is satisfied if a Patent Holder iswilling to offer one version of the license to anyand all Implementers. However, given that dif-ferent Implementers may want different licensescopes or have different consideration to offerin return, “nondiscriminatory” does not meanthat the terms of all licenses offered or grantedmust be identical.

As with any licensing negotiation, licensors andlicensees do not always agree on the reason-ableness of the terms offered or requested. ARAND commitment means that the PatentHolder must grant or offer a license under itsEssential Claims on terms and conditions thatare reasonable and nondiscriminatory.

Other common variants of RAND include:

“Fair, Reasonable and Nondiscriminatory”(FRAND). This formulation is used primarilyin Europe. Despite the addition of the word“fair,” most commentators agree that there is nodiscernible legal distinction between FRANDand RAND requirements. In addition, at theGlobal Standards Collaboration, it was agreedthat the terms FRAND and RAND reflected thesame concept across the continents and the


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“RANDz” means “reasonable and non-discriminatory” license terms [that do notinclude [monetary compensation/royalties]]. [1]

difference in terminology was more linguisticthan substantive. This agreement was reflectedin its Resolution GSC11/19entitled “IntellectualProperty Rights Policies.” http://www.itu.int/ITUT/gsc/gsc11/ documents/GSC-11_Resolutions_IndexR3.doc.

“Reasonable terms that are demonstrably free ofunfair discrimination”: This formulation wasused by ANSI at least as early as 1974 and isstill included in the current ANSI patent policy.Because this language is somewhat more cum-bersome than RAND, and because of the addi-tional uncertainty introduced by the terms“demonstrably” and “unfair,” some ANSI-accredited SDOs and non-ANSI-accreditedSDOs have moved away from this formulationto RAND.

Licenses granted on a RANDz basis (where “z”signifies “zero”) are subject to a RAND require-ment (see above), and are also intended toexclude royalties (for example, payments basedon product sales) and, in some cases, othermonetary consideration (such as up-frontlicense fees) for the license grant.

[1] Some SDOs who have adopted RANDzlicensing policies may wish to exclude all mon-etary compensation, while others may wish toexclude only royalties. For clarity, it is recom-mended that an SDO specify whether RANDzsignifies an exclusion of all compensation or anexclusion only of royalties.

Likewise, a number of SDOs have implementedso-called “Royalty-Free” (RF) Licensing Com-mitments. While many of these SDOs intendsuch RF Licensing Commitments to exclude allmonetary compensation, the term “Royalty-Free” may imply that only royalties areintended to be excluded. If an SDO wishesto exclude all monetary compensation, it ispreferable to use the term “RANDz” (with thelanguage noted above) for clarity and becausethe term RANDz also pertains to terms of thelicense other than compensatory terms (i.e., theterms and conditions other than compensationterms must also be reasonable and nondiscrim-inatory). The current ANSI patent policy pro-vides RANDz as an alternative to RAND andutilizes the term “without compensation.”


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“Scope” means [describe the technical scope ofthe standards activity].

“Sponsor” means the organization, if any, thatemploys or has otherwise sponsored an Indi-vidual Participant’s participation in the activi-ties of the SDO. For purposes of this Policy, theactivities of such a sponsored Individual Partic-ipant in relation to the SDO are deemed toconstitute actions of the Sponsor.

See definition of RAND for further discussionof RAND terms and conditions.

The “Scope” definition may be used to limitEssential Claims subject to the Policy or maywork in tandem with the Essential Claim defi-nition to narrow the Licensing Commitment.“Scope” typically defines the technologicalboundaries (for example the protocols, elec-trical signaling characteristics, connection,methods, tools, test scripts, register models,application program interfaces, physicaldimensions and characteristics, data struc-tures, mechanical requirements, and firmwaredescriptors, device, and driver architectures) tothe extent disclosed with particularity in theFinal Standard where the sole purpose of suchdisclosure is to enable products incorporatingthe Final Standard to interoperate, intercon-nect, or communicate as defined in the FinalStandard. The “Scope” definition may alsoexclude “enabling technologies” and specifictechnologies, such as microprocessors or busses.

In some SDOs, Participation is deemed to besolely by Individual Participants, and suchindividuals are said to attend SDO meetingsand deliberations in their individual capacities.Nevertheless, it is widely recognized that manyIndividual Participants in today’s technicalstandards activities are employed by companieswith a corporate interest in the standardsunder development, and that it would be naïveto proceed as though such companies had noinfluence over the actions of their employees.Accordingly, this definition seeks to link theactions of Individual Participants with theirSponsors. As a result, companies who wishtheir employees to Participate in standards-development activities should carefully instructsuch employees to comply with the require-ments of this Policy.

This is not to say that every Individual Partici-pant must have an associated “Sponsor.” Someindividuals participate in standards-settingactivities out of personal or academic interest.In particular, members of the academic com-munity, even though employed by academicor research institutions, may do so in theirindividual capacities, and not “on behalf of”their institution. Indicators of whether an


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“Standard” means any Draft Standard or FinalStandard.

“Standards Document” means any written doc-ument within the standards developmentprocess of the SDO, including any interim orfinal version of a document setting forth all orany part of a Standard.

“Working Group” or “WG” means a designatedsubgroup of Participants that is responsible forthe development of one or more particularStandards within an SDO.

individual’s involvement in SDO activities hasbeen sponsored by a company or institutioninclude: who pays for the individual’s atten-dance at SDO meetings, whether the individualuses personal or company-supplied equipmentto Participate in SDO activities, whether theindividual Participates in SDO activities duringbusiness hours or in his or her spare time,whether the individual works with (or takesinstruction from) other employees of the samecompany on matters relating to the SDO,whether the individual reports his or her activi-ties regarding the SDO to the company, andwhether the company or institution mayreceive any direct or indirect benefit from theoutcome of the standards development process.

This definition is intended to cover any deliver-able produced within the context of the SDOthat establishes engineering and technicalrequirements for processes, procedures, prac-tices, and methods. Standards may also beestablished for selection, application, anddesign criteria for material.

There are various terms that SDOs employ toreference their respective work products. Termstypically employed, in addition to “Standard,”include “specification” and “recommendation.”For purposes of this document, the term “Stan-dard” will be used to signify all of these.

Examples of such documents may includetechnical contributions, output of technicalWorking Group or committee meetings, pre-ballot versions, or ballot versions of a Standard.

Standards Documents are generally understoodnot to include external third-party documentsthat may be circulated within an SDO for infor-mational or other purposes, including whitepapers, documentation for existing products,and the like.

Each SDO has its own terminology to describethe hierarchy or structure of its standards devel-opment program. In addition to Working Group,SDOs may use terms such as Technical Com-mittee, Technical Working Group, Subcommit-tee, Drafting Group, Ad Hoc Group, etc.

For purposes of this publication, the term“Working Group” will be used to indicate thegroup of Participants that actively develop aparticular Standard.


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