Internet DRAFT - draft-hallambaker-ipr-patent-harmonization
draft-hallambaker-ipr-patent-harmonization
Internet Engineering Task Force P. Hallam-Baker
Internet-Draft VeriSign Inc
Intended status: Informational D. Hallam-Baker
Expires: May 7, 2008 World Wide Web Consortium
November 4, 2007
IETF Patent Policy: A Quantum Approach
draft-hallambaker-ipr-patent-harmonization-00
Status of this Memo
By submitting this Internet-Draft, each author represents that any
applicable patent or other IPR claims of which he or she is aware
have been or will be disclosed, and any of which he or she becomes
aware will be disclosed, in accordance with Section 6 of BCP 79.
Internet-Drafts are working documents of the Internet Engineering
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This Internet-Draft will expire on May 7, 2008.
Copyright Notice
Copyright (C) The IETF Trust (2007).
Abstract
Considerations for IETF patent policy are considered and proposals
made for reform. The particular objective of these proposals is to
reduce the amount of time spent in unproductive discussion of IPR
issues and to allow Working Groups to provide Patent Rights Holders
with clearly defined criteria that must be met in order for their
technology to be accepted.
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Table of Contents
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1. Requirements Language . . . . . . . . . . . . . . . . . . 4
1.2. Definitions . . . . . . . . . . . . . . . . . . . . . . . 4
2. Stakeholder Concerns . . . . . . . . . . . . . . . . . . . . . 5
2.1. Patent Rights Holders . . . . . . . . . . . . . . . . . . 5
2.1.1. License Revenue . . . . . . . . . . . . . . . . . . . 5
2.1.2. Monopoly Rights . . . . . . . . . . . . . . . . . . . 5
2.1.3. Defensive Use . . . . . . . . . . . . . . . . . . . . 5
2.1.4. Protecting Rights . . . . . . . . . . . . . . . . . . 5
2.1.5. Attribution . . . . . . . . . . . . . . . . . . . . . 6
2.1.6. Adoption . . . . . . . . . . . . . . . . . . . . . . . 6
2.2. Implementors . . . . . . . . . . . . . . . . . . . . . . . 6
2.2.1. Litigation Risk . . . . . . . . . . . . . . . . . . . 6
2.2.2. Damages Risk . . . . . . . . . . . . . . . . . . . . . 6
2.2.3. License Cost . . . . . . . . . . . . . . . . . . . . . 6
2.2.4. Encumberance . . . . . . . . . . . . . . . . . . . . . 7
2.2.5. Adoption . . . . . . . . . . . . . . . . . . . . . . . 7
2.2.6. Patent Rights Holders . . . . . . . . . . . . . . . . 7
2.3. Users . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3.1. Indeminity . . . . . . . . . . . . . . . . . . . . . . 8
3. Patents in the Standards Process . . . . . . . . . . . . . . . 8
3.1. Issues Arising from Current IETF Practice . . . . . . . . 8
3.1.1. Royalty Terms . . . . . . . . . . . . . . . . . . . . 8
3.1.2. Time Taken for Discussion . . . . . . . . . . . . . . 8
3.1.3. Weak Negotiating Position . . . . . . . . . . . . . . 9
3.1.3.1. No Decision Maker . . . . . . . . . . . . . . . . 9
3.1.3.2. Unequal Precedent . . . . . . . . . . . . . . . . 9
3.1.4. Unenforceable Patent Claims . . . . . . . . . . . . . 10
3.1.5. Uncertainty . . . . . . . . . . . . . . . . . . . . . 10
3.1.6. Access, not Licenses . . . . . . . . . . . . . . . . . 10
3.1.7. Non Participant Claims . . . . . . . . . . . . . . . . 11
3.2. Other Standards Bodies . . . . . . . . . . . . . . . . . . 11
3.2.1. World Wide Web Consortium . . . . . . . . . . . . . . 11
3.2.2. OASIS . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2.3. Other . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2.4. Stakeholder Concerns in IETF Process . . . . . . . . . 11
3.2.4.1. Disclosure . . . . . . . . . . . . . . . . . . . . 11
3.2.4.2. Predicatability . . . . . . . . . . . . . . . . . 12
3.2.4.3. Fairness . . . . . . . . . . . . . . . . . . . . . 12
4. Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.1. Increased NOTE WELL visibility . . . . . . . . . . . . . . 12
4.2. Specify IPR terms in chartering discussion . . . . . . . . 12
4.3. Reuse already existing IPR Policy terms . . . . . . . . . 13
4.4. Liase with in Discussion in Appropriate Venues . . . . . . 13
5. Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . 13
6. IANA Considerations . . . . . . . . . . . . . . . . . . . . . 14
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7. Security Considerations . . . . . . . . . . . . . . . . . . . 14
8. Normative References . . . . . . . . . . . . . . . . . . . . . 14
Authors' Addresses . . . . . . . . . . . . . . . . . . . . . . . . 14
Intellectual Property and Copyright Statements . . . . . . . . . . 15
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1. Introduction
1.1. Requirements Language
The key words "MUST", "MUST NOT", "REQUIRED", "SHALL", "SHALL NOT",
"SHOULD", "SHOULD NOT", "RECOMMENDED", "MAY", and "OPTIONAL" in this
document are to be interpreted as described in RFC 2119 [RFC2119].
1.2. Definitions
The following defined terms are used:
Open Source a set of principles and practices intended to promote
access to the design and production of goods and knowledge through
full disclosure of all relevant design materials.
Open Source Implementation a software or hardware implementation
that is licensed on terms compatible with Open Source principles.
Zero Cost Open Source Implementation An Open Source implementation
that is provided at no charge to any party and which may be
extended or adapted without restriction.
Patent a set of exclusive rights granted by a state to a patentee
for a fixed period of time in exchange for a disclosure of an
invention.
Patent Access terms that allows a party to practice the invention
covered by a patent without risk of a lawsuit.
Patent License a contract granting a Patent Access.
RAND Reasonable and Non Discriminatory terms
RANDZ Reasonable, Non Discriminatory and Zero cost terms
Royalty RAND Reasonable and Non Discriminatory terms in which a
royalty fee is required for some or all uses..
Reciprocal Rights rights granted by one party to another on the
condition that the recipient grant terms that are equally
favorable to the granting party.
Certain definitions are adapted from text found in Wikipedia.
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2. Stakeholder Concerns
2.1. Patent Rights Holders
2.1.1. License Revenue
A Patent Rights Holder may seek revenue in the form of license fees.
The terms offered for these rights may or may not be RAND.
In many instances a Patent Rights Holder seeking to obtain license
revenue will offer RANDZ terms for certain types of use (e.g. non-
commercial, educational) or certain uses of the patent (e.g. allow
free use of rights to decode content but charge fees for encoders).
Such terms are properly regarded as a business model rather than Zero
Cost terms.
2.1.2. Monopoly Rights
A Patent Rights Holder may seek to use patent rights to establish or
extend a dominant or otherwised advantageous market position. As
with a revenue exploitation model the Patent Rights Holder may offer
liberal terms in some areas while protecting others.
2.1.3. Defensive Use
As issue of Patent grants has increased Implementors and Users,
particularly those with deep pockets have become increasingly
concerned about their exposure to litigation and damages risks.
Defensive patent applications provide a degree of mitigation for this
risk.
Establish Prior Art A defensive patent application establishes prior
art for the invention(s) claimed. This MAY pre-empt subsequent
grant of a patent for the same claims by another party or allow
for a successful defense should a subequent patent be issued.
This is not certain however.
Obtain Reciprocal Access A defensive patent applicatiopn MAY be used
to obtain reciprocal rights from other patent rights holders.
2.1.4. Protecting Rights
A Patent Rights Holder may be subeject to limitations of their rights
or lose them entirely for certain specific types of inequiable
conduct. This has occurred in the US courts for failure to disclose
the existence of rights to an invention when the Patent Rights Holder
was under a specific obligation to do so.
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2.1.5. Attribution
A Patent Rights Holder that has invested substantial resources in
developing an invention may desire credit for doing so.
2.1.6. Adoption
The value of a communication protocol is dependent on adoption. As
Nicholas Negroponte observed, the utility of the first fax machine
was nil until the second one was produce and has climbed steadily as
the number of faxes has increased.
The need for widespread adoption is the reason that standards play an
unusually critical role in the development of communication
technologies. Without standardization of features such as thread
pitch, nuts and bolts would be considerably more expensive. Without
standardization a communications protocol is no use whatsoever.
Without adoption, the value of a typical communications invention is
zero. It is thus in the interests of Patent Rights Holders to seek
adoption of the inventions they have rights to by promoting them in
standards process.
2.2. Implementors
2.2.1. Litigation Risk
The cost of defending a patent infringement lawsuit can be enormous.
Litigation risk is a particular concern in the US where costs cannot
be recovered from a losing plaintif and cases routinely cost
defendants with 'deep pockets' $2 million or more.
2.2.2. Damages Risk
Damages in patent lawsuits can be very high. Several recent awards
have exceeded a hundred million dollars.
US law allows for damages to be trebled in cases of willful
infringement. As a result some companies have policies which
prohibit engineers fro engaging in any patent searches or other
activities that might bring patents to their notice and thus provide
grounds for a treble damages claim.
2.2.3. License Cost
The cost of patent licenses is usually paid by implementors.
Although these costs will subsequently be passed onto users certain
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types of implementors may be unable to meet these costs. In addition
to providers of Zero Cost Implementations, smaller implementors may
be unable to afford minimum license fees or meet other licensing
requirements.
2.2.4. Encumberance
Once a patent license is accepted, the licensee is bound by the terms
of the license. These terms may continue even after the original
patent term expires or the patent is found to be invalid.
A royalty-free license may still be regarded as an encumberance by an
implementor. For example a royalty-free license may require the
licensee to use a particular technology (e.g. programming language)
or support particular features (e.g. direct access to a particular
online store) that the implementor would not otherwise accept.
In particular 'royalty-free' license terms that require the
implementor to surrender patent rights to unrelated technologies or
to provide the implementation at zero cost are generally considered
an encumberance by the affected parties.
Sublicensing terms have proved problematic in this respect.
Commercial providers of middleware products have objected to license
terms which would require their customers to obtain a royalty-free
license from a Patent Rights Holder as requiring them to reveal their
customer list to a competitor. Sublicensing is also a concern with
certain open source licenses as a patent license obtained by the
developer may not transfer to another developer that modifies the
code.
2.2.5. Adoption
Adoption is also a concern for Implementors. Implementors will not
adopt a technology unless they beleive that they can access all
necessary and enforceable patents on acceptable terms.
2.2.6. Patent Rights Holders
Some Implementors are also Patent Rights Holders. Their interests in
one role may conflict with those in the other. In some cases this
conflict may lead to proloinged indecision and thus inaction which in
itself impedes the standards process.
A particular concern raised by some Implementors/Patent Rights
Holders is that the reciprocal rights clause of a Patent License may
not be enforceable against a party that obtains a patent grant
indirectly through a sublicense. While it has been argued that such
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reciprocal rights are likely to be found enforceable by a court, in
the absence of binding precedent this argument does little to
convince a party concerned about litigation risk.
2.3. Users
A lawsuit for patent infringement may in certain circumstances be
brought against the user of an infringing article. Users with deep
pockets may thus be exposed to the same litigation and damages risks
as developers and all users can expect that licensing costs paid by
implementors will be passed onto them.
In some recent cases a plaintif who has been successful in a patent
infringement lawsuit against an implementor has subsequently brought
suit against users, effectivly claiming double damages for the same
infringement.
2.3.1. Indeminity
Users may seek an indemnity against these risks from a third party,
typically, but not necessarily, the implementor.
3. Patents in the Standards Process
3.1. Issues Arising from Current IETF Practice
3.1.1. Royalty Terms
Current IETF practice is that access to all essential claims
necessary to implement a specification MUST be available to all
parties on RAND terms. The IETF does not require Zero Cost access to
be available.
While it is clear that there is no IETF consensus to change this
policy, there is an even stronger preference for choosing technology
available on RANDZ terms unless an encumbered technology overs
exceptionally strong advantages.
3.1.2. Time Taken for Discussion
The most frequent complaint made of the IETF patent policy is the
amount of time spent dicussing it. Extended discussion of patent
access issues is particularly problematic when it occurs during
Working Group or IETF last call at a point where the Working Group
has invested considerable time and effort in developing the
specification.
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At present each IETF Working Group is responsible for deciding its
own IPR policy within the constraint of meeting the IETF RAND
requirments. While this allows WGs great flexibility in chosing
their IPR criteria it leads to a great deal of unnecessarily
repetative discussion at both the Working Group and IETF level.
A particular problem here is the fact that most IETF participants are
engineers. Almost none are qualified lawyers. As a result
discussions tend to revolve around the twin poles of ideological
commitments and the concerns of those who have in the past become
involuntary participants in patent litigation.
3.1.3. Weak Negotiating Position
Allowing Working Groups to negotiate IPR terms with Patent Rights
Holders directly is unsatisfactory because they are placed in a weak
negotiating position.
3.1.3.1. No Decision Maker
Negotiating with a Working Group as a whole is entirely
unsatisfactory for the Patent Rights Holder as no party in the
Working Group has decision making power, either for the Working Group
itself or the IETF as a whole. Any concession made by one member of
the Working Group can be repudiated by the group as a whole and even
if the Working Group comes to agreement with the Patent Rights Holder
this agreement may be repudiated at the IETF level
The result is a negotiating posture similar to Axelrod's Prisoner's
Dilema in which the rules of the game cause the parties to choose an
outcome that is suboptimal for all concerned.
3.1.3.2. Unequal Precedent
Any concession made by a Patent Rights Holder to one Working Group
becomes an unequal precedent. Having revealled their bargaining
position, the Patent Rights Holder knows that in the future it will
be expected to provide terms that are at least as favorable to any
other Working Group. The precedent established is only one way
however, the Patent Rights Holder has no assurance that its
competitors will be required to provide equally favorable terms in
the same circumstance.
Unequal precedence encourages Patents Rights Holders to offer the
least favorable terms that are likely to be acceptable to the Working
Group and is thus counter to the spirit of mutuality on which the
IETF is based.
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3.1.4. Unenforceable Patent Claims
The mere assertion of a patent claim does not by itself mean that the
claim is valid or enforceable. Patent applications are particularly
problematic in this respect as nobody knows if the application will
be granted.
Bad faith assertions of patent claims are far from unknown. The most
famous example being perhaps the notorious Selden 'automobile patent'
which prevented production of low cost volume automobiles until the
patent was disqualified in 1911 at the conclusion of a case brought
against Henry Ford.
A bad faith patent claim might be raised in a standards process in
the hope of receiving unjust royalty payments or to influence the
process itself. A rule against inclusion of any technology against
which a patent claim has been asserted would require the IETF to
either examine the validity of the patent claim or allow the Patent
Rights Holder to exercise a veto.
3.1.5. Uncertainty
Uncertainty imposes costs on all legitimate stakeholders. A Patent
Rights Holder seeking to fairly obtain royalties for use of their
technology has little incentive to invest in engagement in a
standards process if it is uncertain that Royalty RAND terms will be
acceptable. Equally an implementor is likely to object if having
engaged in a standards process under the expectation that the royalty
terms will be RANDZ and find that this is not the case at a late
stage.
The disadvantage created by uncertainty might be used to advantage by
a bad faith Patent Rights Holder, encouraging development of the
specification to proceed on the expectation that RANDZ terms will be
available without the intention of ever doing so. This is not as
great a concern in standards bodies where implementation and
deployment follow agreement of the specification. In the IETF and
other Internet standards bodies deployment and use is considered an
essential criterion for recognition of a standard.
3.1.6. Access, not Licenses
Conventional consideration of patent policy has centered on patent
license terms, this despite the fact that few parties have in fact
obtained licenses when offered.
In most cases the interest of the implementor is not to obtain a
patent license, it is to obtain an assurance that a lawsuit will not
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be brought for infringement. Nor is it likely to be in the interests
of a Patent Rights Holder to litigate for infringement of a RANDZ
patent license except as a countersuit to an infringement case
brought by the alleged infringer.
The objectives of the parties is therefore to grant and obtain Patent
Access as opposed to a Patent License. In the Microsoft Open
Specification Promise this takes the form of an irrevocable promise
not to assert any Microsoft Necessary Claims in connection with an
implementation that conforms to a covered specification provided that
no similar claims are made against Microsoft. This approach meets
Microsoft's goal of ensuring the enforcability of the Reciprocal
Rights clause in the patent license while avoiding the need for any
party to actually obtain a license.
3.1.7. Non Participant Claims
Any changes made to the IETF patent policy must bear in mind the fact
that it is only binding on IETF participants. If the policy is
changed in ways that Patent Rights Holders who are also Implementors
consider to be too onerous, they may cease participating.
Patent claims by non-participants have in practice proved far more
problematic than those brought by participants. A Patent Rights
Holder who is also an Implementor has to consider both the
3.2. Other Standards Bodies
3.2.1. World Wide Web Consortium
3.2.2. OASIS
3.2.3. Other
Some standards bodies begin all proceedings, including face to face
meetings and conference calls with a formal recitation of the IPR
(and frequently anti-trust) requirements.
3.2.4. Stakeholder Concerns in IETF Process
3.2.4.1. Disclosure
All parties should have equal understanding of the consequences of a
decision. Effective disclosure of IPR claims is thus essential.
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3.2.4.2. Predicatability
When a proposal is made the parties should be able to predict the
likely response.
3.2.4.3. Fairness
No party should be able to benefit from unfair practices such as
concealling the existence of IPR or bad-faith offers of Patent Access
on deliberately ambiguous terms.
4. Proposals
4.1. Increased NOTE WELL visibility
Display of NOTE WELL advice should be more prominent than is
currently the case. In particular ackinowledgement of NOTE WELL
notification should become a required element of subscription to all
IETF mailing lists, including lists discussing formation of BOFs.
4.2. Specify IPR terms in chartering discussion
The charter of a Working Group SHOULD specify the IPR terms which
proposals MUST meet in order to be accepted as Working Group work
items. In cases where the IPR situation is unclear the chater SHOULD
specify clarification of the IPR terms as a work item.
While a Working Group does not always meet the objectives set out in
its charter, the objectives should always be understood at the
outset. It is exceptionally unlikely that a Working Group that is
founded with the purpose of developing a RANDZ protocol is going to
subsequently choose a Royalty RAND alternative.
In some cases a Working Group will be chartered to create a protocol
for a technology that is subsequently discovered to be subject to
credible Patent claims. While this situation is unavoidable it does
not have to necessarily lead to the collapse of the Working Group as
has happened in the past. Stating the criteria for acceptable IPR
terms at the outset puts the Patent Rights Holder on notice of the
criteria they must meet for acceptance and provides them with an
assurance that the terms will be accepted if offered.
The purpose of a Working Group charter is to avoid unnecessary and
repetative discussions that are unproductive. Working Groups are
routinely chartered to rule out of scope discussions that would
duplicate the work of other Working Groups or have been found to be
unproductive in the past. These include definitions of SPAM,
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development of PKIs in groups not charterted for that express
purpose, development of new cryptographic algorithms and the like.
The authors of Working Group Charters should be encouraged to add
discussion of IPR terms to this list.
4.3. Reuse already existing IPR Policy terms
Working Groups should be encouraged to require compliance with IPR
policy that has already been developed rather than develop new IPR
terms within IETF process. In particular requiring compliance with
the existing W3C policy requirements is recommended.
Reuse of existing IPR terms reduces the work that Implementors and
must perform to decide if the terms are acceptable and for Patent
Rights Holders to arrive at acceptable terms.
The less decision time required by the lawyers, the greater the
chance of a satisfactory result. Standardized terms transform a
legal question to be decided by the legal department into a business
question to be decided by the business unit.
Standardized terms have the further benefit of being more predictable
if the parties do end up in a potential litigation situation.
Standardized terms make it more likely that an applicable precedent
can be found. While precedent is not binding in all legal traditions
it is still informative in jurisdictions where it is not binding.
4.4. Liase with in Discussion in Appropriate Venues
Development of IPR policy terms is not core to the mission of the
IETF or any othe Internet Standards body. If extended discussion of
such issues is required this should be persued in a venue that has
the appropriate domain expertise.
In addition to developing the policy requirements themselves such a
forum might assist in the development of mutually acceptable support
materials such as standard Patent Access terms, standard Patent
License contracts, NOTE WELL and disclosure agreements for pre-
standards activity and the like.
Standardization of the legal layer of the Internet becomes
increasingly critical as the Internet becomes a social
infrastructure.
5. Acknowledgements
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6. IANA Considerations
This draft does not require any action by IANA.
7. Security Considerations
IPR management rasies critical security issues for all the
stakeholders involved. IPR is an asset which stakeholders must
carefully consider in deciding to grant access
8. Normative References
[RFC2119] Bradner, S., "Key words for use in RFCs to Indicate
Requirement Levels", BCP 14, RFC 2119, March 1997.
[RFC2560] Myers, M., Ankney, R., Malpani, A., Galperin, S., and C.
Adams, "X.509 Internet Public Key Infrastructure Online
Certificate Status Protocol - OCSP", RFC 2560, June 1999.
Authors' Addresses
Phillip Hallam-Baker
VeriSign Inc
Email: pbaker@verisign.com
Daniel Weitzner
World Wide Web Consortium
Email: djweitzner@w3.org
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Full Copyright Statement
Copyright (C) The IETF Trust (2007).
This document is subject to the rights, licenses and restrictions
contained in BCP 78, and except as set forth therein, the authors
retain all their rights.
This document and the information contained herein are provided on an
"AS IS" basis and THE CONTRIBUTOR, THE ORGANIZATION HE/SHE REPRESENTS
OR IS SPONSORED BY (IF ANY), THE INTERNET SOCIETY, THE IETF TRUST AND
THE INTERNET ENGINEERING TASK FORCE DISCLAIM ALL WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY THAT THE USE OF
THE INFORMATION HEREIN WILL NOT INFRINGE ANY RIGHTS OR ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Intellectual Property
The IETF takes no position regarding the validity or scope of any
Intellectual Property Rights or other rights that might be claimed to
pertain to the implementation or use of the technology described in
this document or the extent to which any license under such rights
might or might not be available; nor does it represent that it has
made any independent effort to identify any such rights. Information
on the procedures with respect to rights in RFC documents can be
found in BCP 78 and BCP 79.
Copies of IPR disclosures made to the IETF Secretariat and any
assurances of licenses to be made available, or the result of an
attempt made to obtain a general license or permission for the use of
such proprietary rights by implementers or users of this
specification can be obtained from the IETF on-line IPR repository at
http://www.ietf.org/ipr.
The IETF invites any interested party to bring to its attention any
copyrights, patents or patent applications, or other proprietary
rights that may cover technology that may be required to implement
this standard. Please address the information to the IETF at
ietf-ipr@ietf.org.
Acknowledgment
Funding for the RFC Editor function is provided by the IETF
Administrative Support Activity (IASA).
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