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Tollhouses & Cookies

Is W3C's proposal to allow fees for Internet standards a recipe for Web disaster?

Technology patents exist, and the Web is built on technology. Those basic concepts are combining to cause a swirl of controversy. The World Wide Web Consortium (W3C), the standards-making body of the Web, has proposed allowing patent holders to charge fees for technologies that become part of the Web standards. Proponents say it's the sensible thing to do. Opponents say it will sabotage the open foundations on which the Web is built.

Up till now, "www" has meant "free for all." Web standards such as HTML can be used royalty-free. All current standards are either nonpatented technology, or the companies don't enforce the patents.

The public comment period for the proposal generated more than 2,000 mostly opposed messages, calling it everything from a "great fallacy" to a "power grab by big business." Apple and Hewlett-Packard, both listed among the proposal's authors, have backpedaled and asked W3C to reconsider.

Large technology companies that can navigate the expensive patent process, push for their patents' inclusion in a Web standard and follow up to collect their royalties are the most likely to gain financially. But in practice, analysts believe it could be difficult to generate large profits from Web standards. The effect the policy could have on growing businesses is still unclear. Expect W3C to make a final decision this month.

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This article was originally published in the February 2002 print edition of Entrepreneur with the headline: Tollhouses & Cookies.

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