10.1 Introduction
The term “Fab City” describes a city that is both “globally connected” and “locally productive” (Fab City Global Initiative, n.d.). It envisions “cities and regions” that “share data, information and know-how […], whereas the creation, repair and recycling of those physical goods and artifacts happens in the local sphere close to the place of need” (Interfacer, 2022, p. 4; see no. 9: Fab City Global Initiative, 2018). The concept of sharing, deeply ingrained in open-source philosophy, is further associated with communal ownership over data and technology in a digital space such as a “Digital Commons” (Bauwens et al., 2019, p. 7).
To create this open ecosystem, which may help establish a circular economy, a Fab City requires, besides a digital, also a legal infrastructure, i.e., rules governing the exchange of data and knowledge, which are essential to “control your own destiny”, as aptly put by Linus Torvalds, the creator of the Linux Kernel.1 The law presents two conflicting approaches to the sharing of “data, information and know-how”. One of these approaches is based on intellectual property rights (“IPRs”) and protects the product of intellectual work, such as creations, inventions, symbols, designs, and secret information (WTO, n.d.). IPRs create exclusivity in their respective owners and entitle them to prevent the unauthorized use of protected property by third parties.
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The other approach, by contrast, is based on the credo of the open-source movement and requires knowledge to be shared and made available, free from exclusive rights (Ackermann, 2009, p. 183). This movement first took hold in the field of software development. Consistent with this credo, both the open-source software (“OSS”) and the open-source hardware (“OSH”) movements embody the concept of freedom to study, use, modify, and distribute software (Stallman, 1986, p. 8).
Against this backdrop, scholars (Thiruthy, 2017 pp. 80–81) have questioned whether open-source (OS) and IPR are modes of knowledge governance which can coexist. Closer examination shows that, while seemingly in tension, OS and IPR constitute symbiotic modes of knowledge production and dissemination, both based on IPR. While IPRs are designed to incentivize innovation by means of exclusivity, they also enable the existence of OS. In this way, use of IPRs plays a crucial role in the Fab City context: on the one hand, to ensure openness, and on the other, to generate value. We will address this seeming dichotomy in this article. We will further examine the relevance of IPRs and their respective features to the Fab City framework and address licensing challenges that may emerge from their use.
10.2 Creating Openness Using IPRs
OSS first emerged over two decades ago, with the four freedoms – to run, copy, distribute, study, change, and improve software – articulated by Richard Stallman (1986, p. 2). Today it is clear that OSS has brought about a paradigm shift in the production and dissemination of knowledge. More than 35 million developers contribute to code (Agarwal, 2021), 90% of companies use OSS (Octoverse, 2022), and major companies, who use a proprietary business model, such as Microsoft, use and invest into OSS.
The reasons for the rapid growth of OSS are numerous. First, and most obvious, is the fact that OSS is generally free to use and distribute. Second, OSS provides flexibility. It is easily modifiable and customizable to meet users’ specific needs (Daley et al., 2018, p. 10). Next, OSS fosters collaboration. Most software projects are developed collaboratively by a community of developers and result in follow-on innovation, faster development cycles, and higher quality. Users also consider OSS more secure. Vulnerabilities can be identified and fixed rapidly, given the publicly available source code that can be audited by the community (Beldiman, 2018, pp. 27–28). Finally, the key benefit of OSS is its openness. Almost counterintuitively, openness is achieved as an effect of IPRs. It is commonly accepted that IPRs operate by granting owners exclusive rights in their inventions or creations. However, on the flipside, IPRs can effectively create openness as well. The existence of an exclusive IP right allows its holder to impose conditions on the transfer of its IP to third parties. An IP owner who conditions transfer of source code or modifications thereto, on their continued downstream openness has established an open license (Nadan, 2002, p. 357), which grants users free access to utilize, modify, and distribute the source code and its derivatives. In this manner, a symbiotic interplay occurs between IPRs and open-source. IPRs can operate on the one hand, to create exclusivity and incentivize innovation; on the other, they establish the conditions underlying openness. This duality provides members of the Fab City ecosystem with flexibility in structuring its flow of knowledge and opportunities to create value based upon it.
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The “open” philosophy embodied in OSS was readily adopted by the OSH system. From an intellectual property perspective, creating OSH is analogous to creating OSS. Exclusive IPRs to OSH components can be used to enable users to freely access, use, modify, and distribute them. The key difference, however, is that, unlike OSS which involves digital bits, OSH deals with tangible atoms (Beldiman, 2018, p. 29). With tangible, physical objects, come costs. Unlike software, the production of hardware products requires up-front expenses in purchasing raw materials, production equipment, transportation, storage, etc.
Thus, unlike OSS, where the costs associated with developing code are fairly balanced by an incentive structure based on subjective intrinsic and extrinsic motivations (Boudreau & Lakhani, 2015, p. 8), the OSH inventor also faces a possibly significant outlay of cash in the course of the development process. Without the prospect of the ultimate reward provided by the IP system, production of OSH poses economic challenges to the small inventor.
A further impact of tangibility is that, compared to an OSS context, different IP laws may apply to OSH. While the OSS system relies exclusively on copyright, which arises automatically upon a work’s creation, OSH may involve patents, designs and utility models, to which rights must first be acquired, before being able to construct a free sharing environment.
That said, the Fab City ecosystem relies heavily on the open system which enables a free exchange of information within a global network of cities. Utilizing OSS and OSH licenses, this ecosystem can achieve a process whereby intangible “bits”, including data, code, designs and documentation, created anywhere in the world, can reach remote local production sites where they are converted into tangible products (atoms). Without an underlying framework of OSS, such a network would be nearly impossible to establish.
10.2.1 The Relevance of IPRs for Open Value Creation
As described above, OSH projects involve sharing code, designs and technical information with the wider community, as well as the production of physical goods. All these instantiations of the OSH process are governed by IPRs, whether patents, utility models, design rights, copyright, trade secrets, or trademarks. Understanding how IPRs may be involved in the OSH process, their legal implications, as well as the requirements for obtaining rights, will facilitate collaborative and open initiatives on the one hand, and protection of intellectual assets on the other. The following will examine the IPRs that may be implicated in OSH processes.
10.2.1.1 Patents
Patent law protects functional utilitarian inventions as products and as processes (methods). The patent owner is granted the right to prevent others from making, using, selling, offering for sale and importing the patented invention (Article 28 TRIPS Agreement). Patent rights are territorial, in other words, they are valid and enforceable only in the country where the patent is registered (e.g., German patent rights are limited to Germany, while US patent rights to the United States). The validity of a patent is typically limited to 20 years (Article 33 TRIPS Agreement).
Patents have been crucial in protecting the early basic 3D printing technologies, such as fused deposition modeling (FDM), stereolithography (SLA), and selective laser sintering (SLS).2 The expiry of all three patents enabled the creation of community-driven projects such as RepRap3 and Thingiverse,4 which helped foster a global community of OSH developers and enthusiasts. These projects have encouraged collaboration and innovation, leading to the development of new technologies and products, having the potential to transform entire industries.
Eligibility for patents is based on four core criteria (Article 27 §§ 1–3 TRIPS Agreement). The invention
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(1) must consist of patentable subject matter, i.e., the invention must be functional, not purely aesthetic, and not related to certain excluded categories, such as human genes or animal breeds, while it should also not violate public policy;
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(2) must be novel, i.e., the invention must not form part of the “state of art”, which includes “everything made available to the public by means of a written or oral description, by use, or in any other way before the filing of the patent application” (Article 27 § 1 TRIPS Agreement);
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(3) must be non-obvious and therefore require an inventive step. The criterion of obviousness is meant to exclude any trivial inventions from patent protection (Article 27 § 1 TRIPS Agreement), and
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(4) must be useful and therefore have an industrial application (Article 27 § 1 TRIPS Agreement).
Provided a patent application is filed for an invention that fulfills all the required conditions, the competent patent office has the power to grant the patent.
Patent rights, as all other IPRs, are capable of both proprietary and open use. On the proprietary front, the inventor has the right to preclude others from using and monetizing the invention for the duration of the patent. In an OSH context, this would translate to the ability to ensure that a patented invention is not copied or misused. Conversely, when the OSH project uses third-party technology, it is essential to ascertain whether the technology is subject to a patent. Proactiveness in this regard may prevent legal repercussions that may halt the project.
Patents can also be used to maintain the openness of an invention. This would require the owner to forego enforcement of the patent against any transferees who abide by the owner’s license conditions, including openness. Note that a patent registration is required for this purpose; a simple, unpatented invention, is insufficient for the creation of an open license.
10.2.1.2 Utility Models
As “little cousins” of patents, most countries’ laws protect utility models, which, similar to patents, protect technical products, apparatus and substances (but, unlike patents, no processes), upon showing of novelty and an inventive step. During the 10-year exclusivity period, a utility model holder has the right to prevent others from unauthorized commercial exploitation of the protected invention. Applications are generally not subject to a substantive examination and registration issues in a matter of weeks.
Several aspects make utility models extremely attractive in OSH contexts. First, they are inexpensive and easy to obtain. A utility model is a good substitute, for purposes of both proprietary and open use, when obtaining patent protection is impossible, due to cost, time or a low level of inventiveness. The openness of an OSH license can be based on a utility model registration. Second, utility models constitute prior art for purposes of patent applications, a feature useful to OSH inventors who seek to maintain a given field of technology in the public domain. Finally, utility models offer a 6-month grace period (in other words, their owner may use them for up to 6 months prior to filing of the application, without their novelty being destroyed). This fact makes them popular in instances where the invention is already in use.
10.2.1.3 Copyright
Copyright law provides protection for a variety of creative works including all types of writings, music, painting, sculpture, cinematographic works, dance, software code and possibly specific patterns of circuit boards (Article 2 § 1 Berne Convention). The scope of copyright is defined by the national law of each country but generally grants authors the exclusive economic rights to reproduce, modify and distribute copyrighted works.
Because rights arise upon creation of the works, once they are fixed in a tangible means of expression (Article 2 § 2 Berne Convention), no formalities, such as applications or registrations are required.5 Furthermore, the required threshold of creativity is quite low, with the result that most works are considered protectable. This means that virtually all programmers automatically are deemed to be owners of copyright in the software they develop.
Copyright is essential to the Fab City ecosystem as its features lend themselves best for creating openness by way of the OSS license, as well as, to some extent, the OSH license. Copyright applies to all types of digital “writings”, including software code, designs, and technical documentation. In the OSH context, software is, for instance, used to control RepRap 3D printers (firmware and graphical user interface). The software code itself is subject to copyright as is the applicable technical documentation, such as design files needed to build and modify hardware (for reference and documentation: Duet3D, n.d.).
To qualify for copyright protection, a work is required to be a personal intellectual creation and must
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(1) be the result of human creation, i.e., machines cannot create copyrightable works (Ginsburg, 2018, pp. 133–134);
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(2) be in a form that is perceivable to humans (Ricketson & Ginsburg, 2006, p. 403 (8.03), 499 (8.105));
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(3) be influenced by the creator’s spirit, i.e., tedious mechanical work that is performed without thinking would not qualify for protection (Justitia, 1991); and
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(4) meet a minimum standard of creative quality, i.e., the answers given while filling out a governmental form would not qualify as a copyrightable work, as they are solely dependent on the circumstances (Ricketson & Ginsburg, 2006, p. 402 (8.03), 405(8.05)).
As with other IP rights, copyright can be applied in a proprietary as well as in an open manner. The former entails the exclusionary exercise of the rights to copy, modify and distribute with the goal that the author’s retain control over the work. Use of copyright under an “open” philosophy manifest in the OSS license which frees up access and use of the copyrighted work.
10.2.1.4 Trade Secrets
Trade secret laws protect valuable and classified information that is kept secret. It does not protect against a third party’s independent discovery of the secret information. In other words, if a third party independently and without malice discovers the secret information it is allowed to use it without incurring liability. Usually, the trade secret is destroyed as a result, as the “cat is out of the bag”. As with copyright, trade secret protection arises automatically (registration is not required). Protection lasts for an indefinite amount of time, or as long as the trade secret remains classified.
In principle, any information qualifies for trade secret protection, if it
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(1) is secret in the sense that it is not commonly known (Article 39 § 2 lit a TRIPS Agreement);
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(2) has commercial value because it is secret (Article 39 § 2 lit b TRIPS Agreement); and
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(3) is subject to reasonable steps to keep it secret (Article 39 § 2 lit c TRIPS Agreement).
Trade secret protection allows its owner to prohibit others from disclosing and misappropriating secret information, if obtained through illegal means (e.g., through corporate espionage via hacking a server; Article 39 § 2 TRIPS Agreement). Trade secrets may provide the requisite secrecy for items which are to be ultimately protected by patents, designs, trademarks, etc., and help in preparing applications for such rights without fear of interference by malicious third parties. Once the project is released to the public or the right is granted and published, trade secret protection terminates automatically.
10.2.1.5 Design Rights
Design rights protect aesthetic features of products. They provide the owner with exclusive rights to prohibit others from using identical or similar designs and, in most countries, come in a registered and unregistered version. Registration is usually required to obtain protection and the rights are limited to the territory in which they are registered. Registered design rights usually last for 10 years with options to extend the registration period, while this timeframe is often shorter for unregistered design rights (e.g., 3 years for an unregistered EU design right).
For example, Apple Inc. possesses design rights for the distinctive appearance of its iPhone models.6 Design rights may also be used for protecting the visual appearance of a graphic user interface. In the context of OSH, design rights could be applied to e.g., the visual appearance of hardware components or the stylization of accompanying software.
Designs may be protected if they are new and have an individual character (Article 3 § 2 EU Directive on the Legal Protection of Designs). These requirements entail that the overall impression of a design be significantly different from existing ones (Articles 4 and 5 § 1 EU Directive on the Legal Protection of Designs). If the design’s features are mostly dictated by technical or functional characteristics, they are excluded from being eligible for protection (Article 7 § 1 EU Directive on the Legal Protection of Designs).
Securing design rights enables companies to prohibit competitors from creating or selling products that look identical or similar. For OSH developers, obtaining design rights can ensure that their hardware designs remain unique and distinguishable from those of competitors, while also providing the opportunity to license the designs on reasonable and equitable terms to others, ultimately helping to promote innovation and collaboration within the OSH community while also safeguarding the integrity of the design.
10.2.1.6 Trademarks
Trademark law protects symbols that distinguish products or services of one entity from those of another. They grant the exclusive right to use the registered trademark and prohibit third parties from using identical or similar trademarks that could cause confusion among consumers. In most countries, registration is a prerequisite for trademark protection, and the associated rights are restricted to the jurisdiction where they are registered. Once granted, trademarks are usually valid for 10 years. However, if in continuous use, they can be renewed without limitation.
Certification marks represent a specific use case of trademarks, indicating that products or services meet certain quality, safety or environmental standards established by an independent organization. For instance, the “OSHWA certification mark” is awarded by the Open-Source Hardware Association to hardware products that meet specific criteria relating to openness, documentation, and licensing (OSHW, n.d.).
The requirements for trademark registration are as follows: first, a sign needs to be capable of distinguishing the owner’s intended products from those of competitors (Article 15 § 1 TRIPS Agreement). The sign should not be understood to describe the properties of the intended product but should act as an indicator of the product’s origin. Second, the sign should not be confusingly similar to prior registered trademarks (Article 16 § 1 TRIPS Agreement).
In OSH projects, trademarks may primarily serve to safeguard the branding elements. While they may not prevent third parties from copying a product’s features, trademarks can help maintain quality consistency.
10.2.1.7 Summary of Relevant IPRs
It follows from the analysis above that several IPRs may be involved in the OSH process in different ways. These rights and the parts of OSH they may be attached to are broadly summarized in Table 10.1.
Table 10.1
IPRs and their relevance for OSH
Type of intellectual property right | Relevant part of OSH |
|---|---|
Patents | Technical products, apparatus, and substances |
Utility models | Technical products, apparatus, and substances |
Copyright | Creative works including all types of writings, music, painting, sculpture, cinematographic works, dance, software code and possibly specific patterns of circuit boards |
Trade secrets | Any classified information that is kept secret |
Design rights | Aesthetic features of products |
Trademarks | Branding |
10.3 Challenges to Licensing IPRs in the Fab City
We believe that open licenses, specifically licenses which grant permission to access, use, modify, and distribute a work freely, subject to limited and non-monetary restrictions, are crucial in facilitating access to knowledge by allowing the sharing of ideas and intellectual property rights through contractual agreements. It should be kept in mind, however, that the options for OSS are as diverse as the open-source material that is licensed. When choosing the appropriate open license, it is therefore important to consider the OSH project’s licensing needs for software as well as for hardware.
As explained above, open licenses may be used to control the flow of knowledge. Their openness is primarily premised on two provisions: the first results directly from the primary function of a license, which is the permission to use, modify and distribute the licensed content; the second is to require that any further re-distribution of the licensed material, or derivatives thereof, must adhere to the same conditions (Nadan, 2002, p. 357). This is also known as the “viral” effect of open licenses (Gal, 2012, p. 505) and is designed to promote open sharing and accessibility to downstream users.
Today, a number of established open-source licenses exist, most of which are OSS licenses. By contrast, licenses specifically designed for OSH environments are relatively new and have not been tested in court yet. Bearing in mind that hardware and software are different in nature, not all the current licenses may be suitable to be used in a Fab City ecosystem. Against this backdrop, we examine potential issues presented by OSS and OSH licenses and discuss licensing needs within the Fab City.
10.3.1 Common Open Source Licenses
According to the OpenNEXT library of Open-Source Hardware, the CC-BY-SA, GPL 3.0 and CERN 1.2 licenses are among the most popular licenses used for making available OSH (OpenNEXT, n.d.). We will therefore focus on the analysis of these licenses.
10.3.1.1 Creative Commons (CC) Licenses
CC licenses are designed primarily for creative works such as art, music, and other types of creative content. CC licenses are a set of standardized licenses that allow content creators to grant specific permissions in regards to how their work can be used, modified, and shared. The CC licenses include several options for different levels of permission, such as whether commercial use is allowed, whether derivative works are allowed, and whether attribution is required (an overview over CC licenses: Creative Commons, n.d.).
While these licenses can be used for OSS as well as OSH, they may not be the best choice for the latter since they are tailored towards creations such as graphic designs (Creative Commons, n.d.) and do not provide specific provisions for patents or hardware-related issues.
10.3.1.2 The General Public License (GPL)
The GPL is primarily intended for open licensing of software. It ensures that any modifications or improvements made to the software are also available to the public and can be freely used and distributed. The GNU General Public License, Version 3 (GPL 3.0; GNU, 2007) which includes a copyleft feature, specifically, requiring that the work be further distributed subject to the same license as the original one, is probably one of the most frequently used licenses for making available OSS.
According to the Free Software Foundation, GPL may also be utilized for licensing physical objects such as designs of protected circuits (GNU, n.d.). Despite this recommendation, GPL 3.0 may not suit the needs of OSH-licensing, as it does not distinguish between hardware and corresponding documentation on how to build it. However, different parts of OSH, may have different licensing needs regarding the production costs associated with OSH. For instance, in some cases, while distribution of documentation (bits) must be non-commercial, this feature is not required for the distribution of assembled OSH (atoms). In addition, the license grant in the GPL depends on copyright. Although corresponding patents may also be licensed under the GPL, other rights such as designs, and utility models are not covered by the license. Finally, the wording of the license is clearly targeted towards licensing software and may create ambiguities when applied to hardware (e. g. “Source Code”, “Program”, “System Library”, etc.).
10.3.1.3 CERN 1.2 License
CERN OHL 1.27 is a popular open-hardware license developed by the European Organization for Nuclear Research (CERN) specifically with hardware designs in mind. In contrast to many other open licenses, it provides provisions for patents and other hardware-related issues (Ayass & Serrano, 2012, p. 72). This license is applicable to the use and distribution of documentation, as well as the manufacture and distribution of physical products.
The CERN 1.2 license is one of the first licenses to distinguish between hardware and corresponding documentation. Thus, CERN OHL 1.2 specifically provides a patent and design license. It can therefore be used on a piece of OSH containing patented or design protected hardware. The CERN 1.2 license is not a complete solution for open-source licensing. Utility models, for instance, are not covered by CERN 1.2, as they are not part of the license grant. Even more importantly, CERN 1.2 is probably not well suited for licensing software. Indeed, Sect. 2.3 of the license clarifies that the license only is applicable to software, firmware, or code as part of hardware, if it is explicitly made available under the license. The license requires the licensor to specify its application to software. Yet, when licensing software alone, necessary documentation that the license mandates be provided to any recipient of the licensed material is usually absent.
10.3.2 Licensing Needs in the Fab City Eco System
As is clear from the above, today’s open licenses do not address every possible licensing scenario in a single license. An overview over the licenses analyzed in this article can be found below in Table 10.2. Open licenses do not permit sharing of ideas as well as profits from open-source product sales. However, this may be necessary to address the cost reimbursement for hardware development and manufacturing. Another issue may arise in the form of license compatibility (Katz, 2012, p. 52). Since there is no one-for-all solution to the open licensing of IPRs, different licenses may need to be combined. License compatibility matters when an open license is altered to suit a modified version of the open-source material. The original license must permit the use of subsequently used open license, and the re-distribution requirements of all licenses involved must be met. As of now, with OSH, it is unclear which licenses are compatible with each other.
Table 10.2
Overview of analyzed licenses in this article
Type of license | Where they apply |
|---|---|
Creative Commons | Creative works (copyright) |
General Public License | Software (copyright) |
CERN 1.2 | Hardware and documentation (copyright, patents, design rights) |
10.4 Summary and Avenues of Further Research
The above analysis shows that intellectual property cannot only coexist with an open-source philosophy, but rather that IPRs are an important pillar of the Fab City ecosystem. At first glance, intellectual property may seem to contradict the open sharing of ideas and knowledge advocated by OSS and OSH, as it appears to be centered around exclusivity. However, a closer examination reveals that IPRs can serve as valuable instruments for regulating the dissemination of knowledge, without being biased towards any particular philosophy. In fact, they can help facilitate the construction of a network of interconnected Fab Cities on a global scale. IPRs are vital to OSS as well as to OSH, because they define the legal framework for the creation, distribution, and use of both soft- and hardware (for open-source software: Mann, 2006, p. 46).
To determine how best to balance exclusivity and openness in a way that facilitates the optimal flow of knowledge in a Fab City setting, additional exploration is required to establish the specific boundaries of each system, as well as any areas of congruity between them, to maximize the benefits both systems can offer to OSH ecosystems.
So far, little general and hardly any theoretical research has been conducted relating to the intersection of intellectual property rights and OSH. Yet, this field constitutes a fertile and promising area of inquiry that would help reduce the existing legal uncertainty and identify strategies that would be helpful in problem areas which impede the flow of knowledge, such as lockouts and hold-ups.
Areas of needed research also lie in the arena of open-source licensing. Sharing knowledge under IPRs can create value in the OSH context by allowing others to build and improve on existing knowledge. From a legal and business standpoint, the most secure way to do this is probably by means of open-source licenses. Yet, although various open licenses are available, none of them fully address the specific licensing needs of a Fab City network. In addition, compatibility issues may severely hinder the use of open licenses and with it the free distribution of knowledge.
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