Who Owns XML?

A small software-maker has patent rights on parts of the Web language, according to company officials who spoke with TR Executive Web Editor Wade Roush.

For Web programmers, the Extensible Markup Language (XML) is not only a lingua franca -- it's the water that floats the boat, the air that holds up the plane. In other words, it's a free resource without which the rest of the Web wouldn't work.

Developed by the World Wide Web Consortium (W3C) between 1996 and 1998, XML has become the dominant way of describing and structuring data so that it can be shared across the Internet and displayed in any browser.

But now executives at Scientigo, a small software maker based in Charlotte, NC, say the company owns two U.S. patents (No. 5,842,213 and No. 6,393,426), that cover one of the fundamental concepts behind XML: the idea of packaging data in a self-defining format that allows it to be correctly displayed wherever it travels.

Scientigo CEO Doyal Bryant says the company plans to capitalize on the patents either  by reaching licensing agreements with big corporate users of XML or by selling them to another company.

The very idea of patents on software is a contentious one, though. In July, the European Parliament threw out a bill that would have legalized software patents across all EU member states. In the United States, where the courts have recognized software patents for some time, groups such as the Electronic Frontier Foundation (EFF) have charged that many of those patents are too broad and granted without adequate review.

In EFF's view, that makes it too easy for patent holders (sometimes labeled "patent trolls" or "patent assertion companies") to threaten legal action against alleged infringers if they don't pay license fees.

That's why actions like Scientigo's, which could affect every company that uses XML, spook the community of Internet engineers and Web developers.

Most programmers and computer scientists agree that open standards like XML are a big reason why the Internet works as well as it does and has spread as far as it has. The majority of the people who invented the protocols underlying basic Internet features -- packet switching, electronic mail, the World Wide Web -- never bothered to copyright or patent their contributions, or else have waived most of their intellectual property rights under various open-source licenses. As a result, anyone can build new content or software on top of existing Internet technologies without having to obtain permission or pay a fee. So if a business is thinking of building a new product or service using technologies they think are open source, the sudden prospect of owing license fees can dampen enthusiasm.

Take the ongoing case of SCO versus IBM. After a Utah company, SCO, sued IBM in 2003 for allegedly including Unix software code owned by SCO in its version of the Linux open-source operating system, Linux adoption slowed in the business world for more than a year.

Bryant says Scientigo's claims -- which relate to XML "namespaces," a universal system for naming data types, which was added to the XML standard by the W3C in 1999 -- are not a repeat of the SCO episode. According to him, the company simply wants to find a way to earn a reasonable return on its intellectual property. And when South Carolina-based e-business software developer Commerce One auctioned off a collection of their own XML-related patents last December for $15.5 million, a way appeared.

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"It was the Commerce One transaction that really got our attention," says Bryant. "If there was no interest in this [technology], there wouldn't have been a last-minute bidding frenzy by the major players."

According to Bryant, the company so far has held talks with more than 40 companies about its patent claims, including Microsoft and Oracle, and this week Bryant says he's finalizing an agreement with an IP licensing firm.