10 November 2010

Microsoft Demonstrates why FRAND Licensing is a Sham

A little while back I was pointing out how free software licences aren't generally compatible with Fair, Reasonable and Non-Discriminatory (FRAND) licensing, and why it would be hugely discriminatory if the imminent European Interoperability Framework v 2 were to opt for FRAND when it came to open standards, rather than insisting on restriction-free (RF) licensing.

I noted how FRAND conditions are impossible for licences like the GNU GPL, since the latter cannot pay per copy licensing fees on software that may be copied freely. As I commented there, some have suggested that there are ways around this - for example, if a big open source company like Red Hat pays a one-off charge. But that pre-supposes that licence holders would want to accommodate free software in this way: if they simply refuse to make this option available, then once again licences like the GNU GPL are simply locked out from using that technology - something that would be ridiculous for a European open standard.

Now, some may say: “ah well, this won't happen, because the licensing must be fair and reasonable”: but that then begs the question of what is fair and reasonable. It also assumes that licensors will always want to act fairly and reasonably themselves - that they won't simply ignore that condition. As it happens, we now have some pretty stunning evidence that this can't be taken for granted.

On Open Enterprise blog.


saulgoode said...

You had caught me out early when I'd confused FRAND with ZRAND (zero-cost or royalty-free) licensing terms. At the time I was pointing out that even ZRAND terms can be incompatible with Free Software licensing.

Even with my now corrected understanding of the terminology, I have to agree with the title of this article.

Firstly, the term "Fair and Reasonable" should be objectionable if only for its grammatical tautology. Whenever can anything be "unreasonably fair", or "unfairly reasonable"? Such nonsensical grammar has no place in objective discourse (especially so within legislation) and is significative of the political ambitions of the term.

In addition, with regard to open standards, "fairness" and/or "reasonableness" can be problematic not only for Free Software licensing, but for more traditional business models as well. This is because of the subjective nature of the term(s). A $50000 patent license for a particular invention might be "reasonable" when implemented in a multi-million dollar medical instrument such as a CAT scanner; however, would it be "fair" to charge an automobile manufacturer the same amount to practice the invention in a $20,000 vehicle? And if the automaker is only charged $10 per vehicle for the licensing, is that "fair" to the CAT scan manufacturer?

Once presented, the only way to resolve this dilemma would be to base "fairness" upon what is "reasonable" for the licensor; and the most "reasonable" course of action for a corporate licensor is the one which accrues the most profit -- and this goal is for most part contradictory to the goals of open standards (or at best orthogonal).

RAND licensing is not sufficient for the purpose of open standards, and substituting the term "FRAND" serves no purpose other than to herald an entirely unfair and unreasonable proposition will likely ensue.

glyn moody said...

@saul: all good points, thanks. I especially like the one about the tautology employed - it's almost as they were desperate to convince us...