The Internet is a truly global community within which myriad economic, social and technological forces interplay to cause its standardization.(1) Much of the competition in the industry has revolved around which product will become the standard for a given market sector. Some markets have seen victors; for example, TCP/IP is the Internet communication protocol,(2) MP3 appears to be dominating music compression,(3) and Microsoft Corporation's Windows ("Windows") is clearly the standard operating system.(4) Similarly, the Internet must adopt a standard for web browsing and searching, for email, and for web programming.(5) In many cases, the competition for this standard will be fierce,(6) because the winner likely will have intellectual property rights in the technology and hence reap a significant reward. Such incentives often are needed for the development of objectively good standards.(7) Yet, as a consequence of granting intellectual property rights, a monopoly is created in a product that Internet users need.(8) Once an Internet technology becomes a standard, how can the owner of the corresponding copyright be prevented from extracting monopoly rents and thereby negating the increase in consumer welfare that the standard created?(9)
It is an understatement to say that the Internet has become an important communications and commercial network,(10) The large number of Internet consumers grants each user the benefit of network effects -- the effects of a system whose value to a given user increases with the number of users of that system -- a significant externality that affects decisions by potential new participants.(11) Network effects are particularly important with regard to the Internet, because the more users it has, the more valuable it is as an information resource, a communications tool, and a marketplace for goods and services.(12)
In fact, the network effect of the Internet would be destroyed were it not for the adoption of common standards to ensure compatible communication. For example, computers use the public domain protocol TCP/IP, which allows the network effect to prosper, because it allows everyone using the Internet to speak the same language.(13) Without such compatibility, email messages would not be readable by, and web pages would not be accessible to, all users; such facile interchange is precisely the value of being on the network in the first place. Thus, the need for compatibility also drives the standardization of Internet protocols and tools, because the network effect requires users to be on the same network.(14)
Sun Microsystems ("Sun") created the Java programming language precisely because of the importance of compatibility. The chief advantage of Java is that it permits developers to write a single program in one language that consumers can run on any platform(15) that is "Java compatible."(16) This "write once, run anywhere" advantage is especially important on the World Wide Web, where host websites need to upload programs to users' computers in order to allow them to interface with the host's computer to, for example, make airline reservations on-line.(17) Both ease of use and cost-saving factors are implicated in the ability to upload universal programs to such users, because users need not even be aware of the transmission of the program to their computers, nor worry about whether or not their platforms are compatible with a given website.(18)
Sun's vision has serious implications for the vitality of Windows' virtual network, because with such compatibility, the network effects that indirectly benefit Microsoft likely would vanish or at least diminish significantly,(19) Although users would still need some platform, the benefit of having the same platform as other network users would decrease dramatically.
To accomplish its goal of cross-platform compatibility, Sun needed to incorporate its Java technology into each of the major platforms by licensing to them its copyrights and trademarks in Java.(20) Sun and Microsoft entered into a license agreement in which Microsoft promised that if it made any changes to Java technology to make it Windows-specific, Microsoft would include pure Java options as well -- options that would keep Java cross-platform compatible.(21) Further, Microsoft's Java implementations would need to pass Sun's compatibility tests.(22) Unsurprisingly, a dispute between Sun and Microsoft developed. Microsoft did make changes that inhibited compatibility and caused Microsoft's Java products to fail Sun's compatibility tests.(23) Sun sued Microsoft and successfully obtained two preliminary injunctions; both are in force until the products pass Sun's compatibility tests.(24) It appears likely that Sun will win summary judgment on these claims as well.(25) The dispute is important because it illuminates potential monopoly problems in this arena while serving as an example of the judicial enforcement of intellectual property rights in a standard, thereby maintaining the standard's integrity.
While Java presumably has copyright protection,(26) this conclusion is not indisputable. Two commentators have noted that to "the extent Sun's assertion of intellectual property rights might preserve the integrity of a cross-platform standard that might otherwise be fragmented, those rights are presently aligned with broader social welfare interests."(27) Thus, Sun's assertion of its copyright and trademark rights in the standard in this case is unlikely to raise antitrust or anticompetitive concerns,(28) because few will worry about Microsoft's unequal bargaining power or susceptibility to the control of a monopolist.(29) Yet, there are two reasons to pause for concern. First, this decision will have precedential power in other situations more likely to raise anti-competitive issues, especially if the exercise of Sun's rights exceeds the scope of maintaining compatibility -- if it were, for example, to try to control price, development, and access once Java is adopted. Further, Java, in concert with a web browser like Netscape Navigator, has the potential simply to replace Windows as the market standard for a platform, substituting monopolist for monopolist.(30) The only difference is that Sun publicly has vowed to keep Java an open standard, and has made much of the technology and specifications public.(31) In contrast, Windows is a closed standard.(32) Of course, the question remains as to whether the public can ensure that Sun does not close the standard or try to extract monopoly licensing fees once Java is so adopted.(33)
Some argue that giving intellectual property rights to standards creates a monopoly problem and a consequential risk of diminution of social welfare and utility.(34) The concern is that standard holders are able to extract monopoly rents in excess of a normal intellectual property reward, an occurrence that decreases social welfare.(35) But others counter that there are cases like Java, where such concerns are moot because Sun is presently using its copyright and trademark rights to develop, enhance, and maintain an open standard.(36) This is important because one might want to treat the monopolist of an open standard with more leniency when it is not extracting monopoly rents, but rather is using its monopoly in procompetitive ways. The incentive-based justifications for intellectual property protection need to be balanced against the public interest and consumer welfare justifications.(37)
This Note suggests how standardization competition can proceed so as to tame the resulting monopolist, illustrating the debate by considering Java and the dispute involving Microsoft. This Note begins with the premise that although standards need intellectual property protection while competing to become the standard, limits should be imposed upon those rights once the standard is adopted in order to prevent monopolistic behavior. In Part I, this Note discusses the two traditional limits that have been applied to such standards in the past -- limiting the scope of copyright protection and antitrust remedies -- and concludes that the latter is too slow and limited in its effectiveness, while the former too drastic, especially in the case of Java. In Part II, this Note advocates taking a "middle ground" approach to limiting enforcement of intellectual property rights in standards through the use of the copyright misuse doctrine. Finally, Part III proposes a "modified copyleft"(38) to provide added assurance that intellectual property owners in standards will be held to their promise to mitigate, with an open standard, the dangers of enforcing intellectual property rights, providing another middle ground approach to the extreme options outlined in Part I. This Note concludes that the combination of the copyright misuse defense and a modified copyleft contract would prevent standard holders from turning around and locking up the standard, once adopted, with their intellectual property rights.
LIMITING COPYRIGHT: EVALUATING TRADITIONAL PARADIGMS
This Part analyzes the traditional limitations that have been applied to the enforcement of intellectual property rights in standards. Section I.A examines the use of the idea/expression doctrine, an approach some courts have used to define the scope of copyright narrowly so as to deny protection. It concludes that the results thus obtained are too severe, because they deny the copyright holder the ability to reap the full reward intended in the grant of copyright protection. Section I.B analyzes the use of antitrust actions and concludes that they are often too slow and ineffective to prevent damage to consumer welfare from the anticompetitive exercise of monopoly power.
Delimiting the Scope of Copyright
One way of mitigating the problem of intellectual property rights in a standard is to deny intellectual property protection to methods of operation as did the First Circuit in Lotus v...