We said when the essential patents were listed for HEVC by the MPEG LA, that whether it was right on wrong, the brief list of just 23 organization was going to create dissent in the ranks, and so it has proved with an alternative patent pool emerging around a cluster of alternative licensees calling itself HEVC Advance.
The entire community will now not understand who to pay and what to pay for patents. The membership of Dolby in the list points indirectly to Via Licensing being the company which has the experience to operate patent pools for this alternative group, since it is a subsidiary of Dolby, and has competed head to head with the MPEG LA in the past. Nothing has been said, but it makes sense.
We listed in October Technicolor, Microsoft, Google, LG, Sony, Philips, Toshiba and Panasonic, to name but a few, which held patents that were considered essential for earlier MPEG video patents, but which were not going to get anything out of HEVC. Given that HEVC uses almost all of the prior techniques used in MPEG2 and H.264, it seemed unlikely they would be happy with that as an outcome, especially as new arrivals like Vidyo were invited to the party. We expected that the MPEG LA patent pool would be expanded, but that clearly has not happened and instead this must be seen as a rival patent pool.
It is interesting that while this group argues over who invented HEVC, we are running a story on the front page talking about a breakthrough new codec technology which may make all these claims redundant, and replace HEVC.
The release said, “The HEVC Advance patent pool will address marketplace demand for an additional licensing option of HEVC essential patents,” which is pretty much a euphemism for “we got left out and are upset.”
The initial list of members of the patent pool were GE, Technicolor, Dolby, Philips and Mitsubishi Electric, so there’s a partial overlap with our prediction.
The MPEG LA list has now risen to 27, but it looks like there are some politics being played over who can join that particular club, and it very much looks like this is the mobile phone industry taking over the video patents from the older TV industry, built around a phalanx of Apple and Samsung, and the two main Korean operators plus NTT.
We suspect that HEVC Advance is really just a bluff to get the attention of the MPEG LA, hoping it will broaden its understanding of just what is an essential patent. If not then this market will stall waiting for clarity over what the cost of using HEVC really is. Certainly HEVC Advance HAS to sue someone using their collective patents if no-one takes them seriously – then the entire standard will lose out.
HEVC Advance statements have barbs in it like “Utilizing a balanced business model for HEVC IP commercialization, HEVC Advance will provide an efficient and transparent means for accessing and licensing HEVC essential patents,” suggesting that the “other” patent pool is not balanced.
It also suggests that HEVC relies on something like 500 essential patents, which is way more than any single standard ever had before – even LTE. It will publish its licensing costs later this year and we bet they will be lower.
MPEG LA’s license is already published and the first 100,000 units a year are free of royalty. After that it relies on a simple 20 US cents per unit, which is the same basic payment unit that was eventually settled on for H.264, with a maximum payable of $25 million, for anyone who ships 125 million devices.
In MPEG LA not everyone in the eco-system has to pay, so if the chip makers pays then the device maker and operator do not have to. The chip maker can therefore claim it back in chip pricing from the eco-system at large, passing the cost on. In H.264 licensing the MPEG LA introduced the idea of a variety of types of sub-licenses, which have now gone. That looks like a lesson learned from the Apple Samsung patent wars.