Huawei settles video codec patent dispute and adopts H.264

With Huawei being caught up in all manner of controversies, it was easy for its video-related announcement to slide under the radar unnoticed this week, as the mobile mountain dropped its guard and adopted the AVC/H.264 patent portfolio after a relatively short-lived dispute.

The decision signifies a willingness to work with the western world, which may be part of the ongoing process of persuading US allies that Huawei is a partner to be trusted.

Clearly Huawei is putting much more energy into triumphing in 5G markets than in the video codec space – but the about-face is unexpected and significant nonetheless, given that Apple and Samsung are the two lead players and beneficiaries of MPEG LA, the AVC and HEVC licensing body.

MPEG LA has not released any details regarding the settlement, of a dispute which stemmed from handsets launched in Germany last year. This resulted in Huawei Deutschland, along with ZTE Deutschland, being issued with a cease and desist order relating to offering AVC-compliant smartphones and tablets that used the patents at issue in Germany. The MPEG LA proudly proclaimed all such products in their possession or the possession of third parties were recalled and destroyed, following a decision by a German district court in December.

Huawei was deemed to infringe upon patents from two holders in the MPEG LA’s AVC patent portfolio, although the press release this week did not touch on ZTE’s situation, so we presume the case is ongoing.

Despite the emphasis on its successor HEVC, as well as the emerging royalty-free codec AV1, AVC is by far and away the most widely adopted of the video codecs globally. AVC has emerged as the winner simply because it was supported by just about every operating system, browser, player and encoding device, and also due to Apple shunning VP8, which kept it out of its extensive ecosystem.

MPEG LA has over 200 licensees, way ahead of any other royalty bearing group and the fact that neither Apple or Samsung are members of HEVC Advance seems to suggest that handset manufacturers don’t want to license from HEVC Advance.

“Although the failure to be licensed has made these enforcements necessary, taking a license under the AVC patents would easily remedy it, and we continue to welcome Huawei and ZTE to do so,” said Larry Horn, CEO of MPEG LA.

On a final note, just to balance the scales, there is an argument that the MPEG LA has a stranglehold on the video codec royalties for HEVC due to the uniqueness of each patent pool. An example being in August 2017 when the patent licensing group and several TV manufacturers were accused of monopolization of patents relating to the digital TV standard ATSC, as well as conspiracy to force companies to pay higher licensing fees, improper royalty stacking, and reducing or eliminating competition.

It isn’t totally surprising to hear that the MPEG LA is being accused of stifling competition given that the group is led by Apple and Samsung, but that’s a story for another day, and the onus of this week’s decision is that it may open doors for additional patent licensing rulings across Europe and increased collaboration.