UHD TV patent pool begins not so reasonable Japan licensing

Japanese patent management firm Uldage has kicked off licensing activities for its UHD satellite TV broadcasting standards patent pool, releasing some terms of the activities, while retaining specifics on the 88-strong patent portfolio. We initially suspected they included HEVC and HDR patents, as well as multiplexing and broadcasting, but Uldage made it clear that compression at least was specifically excluded.

Essentially, if anyone wants to deliver 4K or 8K content in Japan, there is no other option than to cough up and license these patents from Uldage, and it plans to expand its UHD patent portfolio to IPTV and CATV. This is why Japan is such a closed shop – the companies which take the royalties including Fujitsu, Hitachi Maxell, JVC Kenwood, LG Electronics, Masproh Denkoh, Mitsubishi Electric, NEC, NHK, Panasonic, Samsung, Sony and Toshiba – all tend to have their own cross licensing deals anyhow. Additionally patents from Dolby, Orange, Thomson and The Trustees of Columbia University in the City of New York (Columbia University) are included in the patent pool.

Uldage claims these patents are essential for the broadcast of UHD satellite TV (including 4k and 8k transmission) and will be charging fees of around $0.88 for the privilege.

Broadcasters and receiver manufacturers will receive a license of bundled patents from patent holders under what Uldage says are “very reasonable conditions.” The rates have been set at 100 yen ($0.88) a unit for narrowband CS UHD TV receivers, and 200 yen ($1.77) a unit for advanced wideband UHD TV receivers. It adds that these rates take into consideration the development of the market going forward.

MPEG-LA’s licensing fees, in comparison, have been slipping and make Uldage’s fees look not so reasonable. For HEVC patents, MPEG-LA charges $0.20 per unit over 100,000 units.

For UHD broadcasting services Uldage will charge royalties of 1% of revenues. The group says it is currently planning to carry out talks about licensing terms for cable and terrestrial UHD TV broadcasting, once it has determined which companies hold those patents.

There are 16 companies contributing patents at present, which have been determined by the Japan Intellectual Property Arbitration Center:
Dolby Laboratories, Fujitsu, Hitachi Maxell, JVC Kenwood, LG Electronics, Masproh Denkoh, Mitsubishi Electric, NEC, NHK, Orange, Panasonic, Samsung Electronics, Sony, Thomson Licensing, Toshiba, and The Trustees of Columbia University in the City of New York (Columbia University).

Of the three competing codec groups, AOMedia, MPEG-LA and HEVC Advance, the 16 companies listed by Uldage shares the most similarities with the MPEG-LA membership list – which is backed by Apple, the BBC, ETRI, Fujitsu, Hitachi Maxell, Humax, JVC Kenwood, Korean Broadcasting, Korea Telecom, NEC and NTT, Orange, Samsung, South Korea Telecom, Vidyo and a handful of university and research institutes.

Seven companies each hold a 14.29% stake in Uldage – Sony, Sharp, Toshiba, Panasonic, JVC Kenwood, Hitachi Maxwell and Mitsubishi Electric.

The codec environment is in a state of flux, with AOMedia due to deliver its royalty free codec soon after multiple delays, backed by Cisco, Microsoft, Google, Netflix, Amazon, Intel, Hulu just recently, and a handful more.

The key drivers against AOMedia are handset leaders Apple and Samsung, plus Korean and Japanese operators and their suppliers.

Lined up against them are more traditional codec patent holders within HEVC Advance in Dolby Labs, GE Video Compression, HFI Innovation – part of MediaTek, and Philips, Mitsubishi and Warner Brothers.

The key name missing from both factions is Technicolor which left HEVC Advance last February and immediately claims that it signed a deal with one of the world’s largest device manufacturers – likely to be one of the big three handset makers Apple, Samsung or Huawei.

There is about one more year of potential royalty on codecs, and after that, there will be a rapidly deceleration of codec patent pool revenues, and this argument will go away, unless someone is confident in the HEVC camps to take on the combined patent might of Microsoft, Google, Cisco and others, and with the exception of Apple, we cannot see that as a remote possibility.