Open Connectivity Foundation, Part 1: Intel, Microsoft, Qualcomm and Others Come to Terms on IoT Framework Licensing and Intellectual Property Rights

by Steve Hoffenberg | 02/26/2016

The announcement on February 19th of formation of the Open Connectivity Foundation (OCF) stirred up much interest among participants in the IoT market. The OCF is the successor organization to the Open Interconnect Consortium (OIC), essentially consisting of the existing OIC members (Cisco, General Electric, Intel, Samsung, and many more) plus new members Electrolux, Microsoft, and Qualcomm. The OIC has been the force behind the IoTivity framework for interoperability among IoT devices from different vendors, particularly in the smart home market. All three of those new OCF member companies are also board members of the AllSeen Alliance, proponent of the AllJoyn framework which is directly competitive with IoTivity. Qualcomm’s addition to the OCF is especially notable, because Qualcomm’s Innovation Center was the creator of the AllJoyn framework prior to the technology being transferred to the AllSeen Alliance. (Both the IoTivity and AllJoyn are open source collaborative projects within the Linux Foundation.)

The prospect of two competing IoT frameworks split among numerous vendors in the smart home market has many in the industry concerned that neither would achieve critical mass in adoption among homeowners. (In reality, there are more than two competing frameworks, but we’ll get to that in Part 2 of our blog post.) Qualcomm, Microsoft, and Electrolux have not jumped ship away from the AllSeen Alliance, although their addition to the OCF is widely viewed as shifting the balance of industry weight in favor of IoTivity over AllJoyn and smoothing over some of the competitive friction between leading chipmakers Intel and Qualcomm. (Industry rumor has it that Microsoft acted as a matchmaker—or perhaps arm-twister— convincing Qualcomm to join Intel in the OCF.)

Much of the debate between proponents (and detractors) of IoTivity and AllJoyn center around intellectual property rights issues, wherein some vendors are concerned about Qualcomm’s potential hold on rights to portions of its contributions to AllJoyn, and others are concerned about their own inability to retain certain rights to intellectual property they might contribute to IoTivity. (We won’t rehash all the details here, but Broadcom reportedly quit the OIC over the latter issue.)

All this is a preamble to a meeting that VDC had at the Mobile World Congress trade show less than a week after the formation of the OCF. There, we met with Michael Richmond, Executive Director of the OCF (and former Executive Director of the OIC, as well as a current Intel employee).

A lot of our questions for Richmond focused on licensing and intellectual property rights issues. In response, he told us that when modifications or additions are proposed to the OCF specification on which open source IoTivity code is based, OCF members have 60 days to review the proposed specification and make claims that it contains provisions which violate any intellectual property of the member. That member would then be required to submit to the OCF’s board of directors proof of ownership over the intellectual property. The proof would then be evaluated by the board, which could decide either that the claim is invalid (in which case the questionable portion of the spec would remain); or that the claim is valid. In that case, the board could remove the questionable portion, or—theoretically at least—choose to expose OCF members to potential royalties to the claiming member. Imposing any such royalties would require a two-thirds majority of the board, and Richmond told VDC that the odds of a two-thirds majority ever agreeing to royalties is essentially nil.

If no member makes a valid IP rights claim to any provisions in a proposed spec during the 60 day review period, members would not be able to make such claims on that spec content in the future.

Richmond explained that this process not only gives members the opportunity to defend their own IP, but more importantly, it protects members certifying products under the OCF specification from other members retroactively claiming IP rights against them in the future.

Of course, the realities of intellectual property disputes aren’t always clear cut. That is, it is not necessarily apparent or agreeable between parties whether or not one piece of IP infringes on another piece of IP. A member might object to the board’s denial of its IP rights claims, or the board might need more than 60 days to properly evaluate a claim. When we asked Richmond about such situations, he acknowledged that those cases could potentially delay the adoption of proposed changes beyond the normal 60-day period.

Richmond said that full details of the OCF’s licensing terms would be published in March, and they would largely reflect the OIC’s terms with a few minor tweaks.

We at VDC are not lawyers, but we expect that IP rights disputes will arise regarding the IoTivity framework, albeit infrequently. Overall, we believe that the OCF’s licensing and review process represent a reasonable balance between individual members’ IP rights and collective members’ usage rights. (As with all matters legal, the devil is in the details.) Furthermore, we think it’s remarkable that the lawyers representing so many mega-corporations were able to agree with each other enough to institute such a scheme. Clearly, the drive to create a critical mass of vendors rallying around an IoT framework was exceptionally strong.

Despite the formation of the OCF, the AllSeen Alliance and its AllJoyn framework are not dead, and there are yet more players. For more on that point, see Part 2 of our blog post on OCF.