RAND - Reasonable and Non Discriminatory

By: Srividya Iyer

Meaning of RAND - "Reasonable and Non-Discriminatory license is granted by the World Wide Web Consortium (W3C) to companies wanting to patent their products or applications.They charge royalty-fees and other fees as applicable for patenting these products.

This licensed product can then be purchased from the licensor and implemented by any organization around the world. RAND terms state that any charges applied on the patent being implemented by the licensee should be reasonable. The charges should, at the same time not vary depending on who buys the patent. In other words, the charges for patenting the product should be non-discriminatory. However, royalty fee needs to be paid to the W3C for obtaining a patent and by the other companies to obtain rights to implement those patented products.

In effect, RAND licensing favors the big and rich companies since only established businesses can afford to pay these royalties and fees. These companies would monopolize the market leaving fewer options for smaller businesses to choose from and the solutions would be expensive. Imposition of this standard also poses a threat to open-source, royalty free developers. They would need to get their products licensed by paying royalty fees and the charge the end user for using the licensed product. It would also hamper creativity and would deprive the internet community of open source alternatives. At the same time not all countries support software patents. Many questions would arise if software developed by a company following the RAND terms is being implemented in such a country. Would royalties be applicable? Can the product be sold only to countries that do not support software patent? The RAND terms turned out to be non-reasonable and discriminatory causing a lot of dissatisfaction in the software community. With this feedback, a new license called Royalty-Free or RF License was implemented where royalty will not be charged by W3C if the licensor does not charge the licensee for their product. This includes the source code and the right to copy, modify and distribute the product.

Other Related Definitions:

“…RAND stands for "reasonable and non-discriminatory" terms. A "RAND License" shall mean a license that:

shall be available to all implementers worldwide, whether or not they are W3C Members;

shall extend to all Essential Claims owned or controlled by the licensor and its Affiliates (except as described in section 8.2 concerning licenses relating to Contributions);

may be limited to implementations of the Recommendation, and to what is required by the Recommendation;

may be conditioned on a grant of a reciprocal RAND License to all Essential Claims owned or controlled by the licensee and its Affiliates. For example, a reciprocal license may be required to be available to all, and a reciprocal license may itself be conditioned on a further reciprocal license from all (including, in the case of a license to a Contribution, the original licensee).

may be conditioned on payment of reasonable, non-discriminatory royalties or fees;

may not impose any further conditions or restrictions on the use of any technology, intellectual property rights, or other restrictions on behavior of the licensee, but may include reasonable, customary terms relating to operation or maintenance of the license relationship such as the following: audit (when relevant to fees), choice of law, and dispute resolution.

” [W3C Patent Policy Framework]

 “…IrDA requires that IrDA standards are available to implementers on open, royalty-free and other reasonable and nondiscriminatory terms or reasonable terms and conditions that are demonstrably free of any unfair discrimination. IrDA will not approve or publish standards that knowingly include unreasonable and discriminatory license requirements. IrDA requirements are intended solely to protect IrDA, Members, implementers and users from the threat of unreasonable and discriminatory royalty payments or legal remedies resulting from the manufacture, use or sale of goods which incorporate the intellectual property of a Member required to implement the IrDA standards. " [Infrared Data Association]

 “…Today virtually all standards organizations have guidelines permitting members to contribute proprietary technology under certain conditions. The conditions are mostly the same: contributors must disclose relevant patents or patent applications before their technology is considered, and must agree to grant licenses on a nondiscriminatory basis and on reasonable terms." [IEEE Spectrum]

“… Microsoft has made available, on reasonable and non-discriminatory terms, each communications protocol implemented in a Windows 2000 Professional, Windows XP or successor desktop operating system that is used to interoperate or communicate natively with a current Microsoft server operating system. " [Microsoft Corp] 

“… In HP's view, even the so-called 'Reasonable and Non-Discriminatory' patent licensing would distort the standards selection process to an unacceptable level for Web infrastructure software standards. We continue to work to draft a policy that requires the W3C to endorse only those recommendations which can be used free of royalties." " [Hewlett Packard] 

Related Links:

United States Standards Setting
Intellectual Property Rights and Standard Setting Organizations
Current Patent Practice-W3C
OSI letter of comment on W3C's proposed RAND policy
Can You Patent An Industry Standard?
Introduction to ANSI
The W3C needs to be royalty free
AT&T Warns Apple, Others, Of Patent Infringement

Technical Resources:

OASIS IPR FAQs
IPR in ETSI Deliverables - Legal Frequently Asked Questions
Frequently Asked Questions concerning 3GPP

Products and Solutions:

3GPP

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