19 May 2013

There Ain’t No Such Thing as a Free Video Codec

Motion picturesGoogle, Inc recently achieved something that perhaps no other company or organisation on the planet could have done – it secured an agreement from most of the major corporate owners of patents relating to digital video coding standards, which will enable developers and users to access digital video on the web without payment of patent royalties.

At least, this is what will happen if the World Wide Web Consortium (W3C) takes up the opportunity that Google has created.  However, Google’s recent publication of the proposed terms of a royalty-free cross-licence for implementers of it’s digital video technology has drawn predictable criticism from a number of sources, including Open Source Initiative President Simon Phipps (‘proposal closes door on software freedom’) and FOSS Patents blogger Florian Mueller (effectively accusing Google of hypocrisy and disingenuousness).

It is easy to be cynical about the motivations of a company as large and ubiquitous as Google.  But it is worth having a closer look at exactly what Google has achieved here, regardless of its level of self-interest.  In my opinion, the deal that Google has struck is a significant step forward for royalty-free and open standards on the internet.  And while it is never going to satisfy those individuals and organisations at the more radical end of the free software and/or anti-patent movements, as a practical matter the deal will give the vast majority of internet users an assurance that there will be an open source and royalty-free video standard available for use on the World Wide Web.

Google’s Push for a ‘Free’ Video Standard

Back in March, Google reached an agreement with the video coding patent pool operator MPEG LA in relation to Google’s VP8 video codec – technology which enables the coding/decoding and compression/decompression of digital video content.

The VP8 codec, which forms part of the WebM media file format which Google is putting forward as a potential web standard, is the result of work initiated by a company called On2.  The objective of this work was to develop a codec which would be free of any liability to pay royalties to the owners of patents relating to existing industry-standard video coding formats.  Back in 2010, Google acquired On2, and made the VP8 codec technology available under an open source licence.

Almost immediately, MPEG LA put out a call for companies with patents they considered to be essential to implementation of the VP8 codec to come forward, with a view to forming a new patent pool.  Apparently, at least 12 prospective licensors did so

Google has always maintained that the VP8 codec is unencumbered by IP rights belonging to any other party.  I do not believe this, for at least three reasons.

First, since the VP8 implementation is open source, there is nothing to prevent patent holders from evaluating the codec to assess whether or not it implements any patented methods.  While it would not be surprising for one or two patent trolls to come forward asserting dubious claims, the likelihood that around a dozen substantial operating companies would do so without good cause seems slim.

Second, there have been so many researchers, in both public and private organisations, working on video coding technology for decades now, that the idea that any one company could develop a truly independent technology of comparable quality simply beggars belief.  Even the Chinese (not always known for their respect of foreign IP rights) were forced to concede that they could not develop a video coding standard of their own without employing at least some existing and patented techniques.  In the end, they took the pragmatic approach of incorporating the cost of licensing, in addition to technical specifications such as quality and bit-rate, into their criteria for an acceptable standard.

Third, although Google’s deal with MPEG LA and a group of 11 patent owners does not involve any public admission on either side that any patents either are, or are not, essential for implementation of the VP8 codec, it is difficult to believe that Google would have done any deal if it felt that it had a very strong case.  The cost of litigation to settle the question would not be any barrier to Google (although the uncertainty that this might cause for the duration could be a concern).  The licensors – all reputable operating companies – would have no desire to be cast in the role of ‘patent trolls’, effectively extorting money from VP8 implementers on the basis of bogus patent claims.

There is therefore good reason to believe that VP8 is not ‘royalty-free’.  Indeed, Google may well be paying, on behalf of the entire global internet community, for access to the relevant patents.  (Of course, we will be paying them back, with interest, through every transaction we conduct via Google services, but that is a separate issue.)  And Google may have further work to do here, because it seems that VP8 is not out of the woods yet – Nokia, which is not a member of the MPEG LA group, has since come out claiming patent rights of its own.

The ‘Problem’ With Google’s Proposed Cross-Licence

So Google has negotiated the deal, and is footing whatever bill there may be for access to the MPEG LA group’s patents.  So what is the problem?

Reaching a workable agreement with a patent owner is not the same thing as making the patent ‘go away’.  The patent holders do not want their patent rights to become available, without payment of royalties, for just any purpose.  The agreement is that Google can sublicense the right to implement the VP8 codec (and its successor, VP9).  In doing so, Google is obliged to impose certain conditions on sublicensees.

Most significantly, the licence is limited to implementation of the VP8/VP9 codecs.  A sublicensee has no right to use the patented technology for any other purpose (including non-standard variations of VP8).  In order to ensure that every implementer is bound by this obligation, all must be licensed directly with Google – no further sublicensing is permitted. 

These arrangements are incompatible with most open source principles, which generally eschew any restrictions on use, and are predicated on automatic sublicencing to enable redistribution of code, in source or executable form, without the need to seek further licence grants.  And that is why dedicated open source and free software proponents are never going to be happy with this kind of arrangement.

On the other hand, the proposed cross-licence has a grant-back clause: any party which takes a royalty free-licence through Google agrees that it will contribute back any patents it may own or obtain which are essential to implementation of the VP8/VP9 codecs.

Market-Based Development of ‘Open’ Standards

The digital video technologies we enjoy today, including broadcast TV, DVD Video discs, Blu-ray discs, dowloadable content and online streaming video, are the result of over 30 years of research and development, most of which has been conducted by private sector companies, at the considerable collective expense of their shareholders.  Owners of IP relating to the H.264 (or MPEG-4 AVC) video coding standard, which is used for most high definition video applications, include Philips, Sony, Ericsson, Toshiba, Apple, Cisco, Dolby Labs, Hewlett-Packard, Hitachi, LG Electronics, Microsoft, Panasonic, Samsung, Sharp, Fujitsu and ZTE.

Of course, these companies engaged in the standardisation activities for sound commercial reasons – they wanted to ensure that their own technologies would have an opportunity to be adopted and that they could get in on the ground floor with the development of products compatible with the standards.  One further financial benefit gained by companies which elect to contribute proprietary-developed technologies to a standard, is the right to collect royalties from future implementers of the standard.

Viewed from a free-market perspective, all this is a good thing.  The market – including the market for IP rights, as well as compatible products – provides the incentive for many companies, which would otherwise be competitors, to get together and develop a common standard.  During the standardisation process, they compete to put forward the best solutions to technical problems, in the hope that they will be adopted into the standard.  The best solutions (in terms of practical commercial implementation as well as technical merit) emerge from the process.

Modern standard-setting activities are therefore, first and foremost, market-driven.  The reason this is possible is because the IP developed by participants can be owned, which means that it can be bought, sold and licensed for commercial gain.  Furthermore, in the early stages of adoption of a new technology standard, the fair cost of accessing the IP is also determined by the market.  If the price is set too low, the companies contributing to the standard do not receive adequate compensation, and may therefore decline to participate.  On the other hand, if the price is set too high, then the standard may not be widely-adopted, which is to the detriment of all of those who contributed to its development.

(I should note that this balance of market power shifts once a technology standard has become widely adopted, but that is a topic for another time.)

By and large this process has worked well.  The global proliferation of interoperable devices and software is proof-positive of this.  It need not have been this way.  History is littered with examples of markets fragmented by a lack of agreement over standards: VHS vs Beta VCRs; MiniDisc vs DAT vs CD; HD-DVD vs Blu-ray; PAL vs SECAM vs NTSC analog TV broadcasts; and different power supply standards (AC vs DC, 110V vs 204V, 50Hz vs 60Hz) to name just a few.  Many of these resolved themselves through one technology eventually dominating, while others have been solved by the development of various types of adapters, or multi-system compatible products.  Consumers pay for these solutions, either because they backed the wrong horse, or because they end up paying for products which support multiple systems which many do not need.

‘Are You a Socialist?’

So if you want global standardisation and interoperability, but you do not want private corporations to ‘own’ any of the adopted technology, you need to put forward an alternative mechanism to the free market approach which currently operates.  In short, if companies do not pay for the research and development, and the costs of participation in the standards-setting processes, who does?  Governments (i.e. taxpayers)?  Philanthropists?  Perhaps all the labour could be crowdsourced through the open source movement?

Any of these approaches might work on some occasions, for some technologies.  Development of the internet protocols was essentially paid for by US taxpayers through funding to the US Defense Advanced Research Projects Agency (DARPA).  Richard Stallman’s ability to devote himself to the GNU project was given a significant boost in 1990 by the award of a $240,000 grant by the John D. and Catherine T. MacArthur Foundation.  Tim Berners-Lee developed the Word Wide Web while working at CERN (the European Organization for Nuclear Research), which is funded by the governments of its member countries.  And, of course, open source developers have built a pretty solid computer operating system in Linux (although open source advocates rarely acknowledge the achievements of proprietary models, such as the release of Microsoft’s first GUI-based, fully pre-emptive, processor-independent, multiprocessing, multiuser operating system – Windows NT – way back in 1993).

But ultimately the solutions have to be not only technically sound, they also need to be commercially sound.  Something as complex as a digital video standard is not just about whether a smart kid with a PC can implement a software codec.  It is also about whether it is commercially feasible to build the kind of hardware required to deliver high-definition live global broadcasts of huge events such as the Olympics.  The reality is that there are some things that the open source community can do really well, and other things for which it is simply not equipped.

If you believe that Google is, indeed, pressing developers into a deal with the devil, then I think there is a question you need to seriously ask yourself: ‘Am I a socialist?’  Do you really believe that the current market-driven system of technology standardisation would be better replaced by some form of centralised bureaucracy, doling out funds, resources and whatever other forms of control and management may be required to get the job done within an acceptable time frame?

Alternatively, if you think that the free-market generally does a reasonable job of delivering technology advances that benefit society, then you might also need to consider one of the fundamental tenets of the capitalist system – that if you want the benefit of something that somebody else has paid to develop, then one way or another, you are going to have to pay for it. 

Conclusion

The fact is that when, for example, you buy a smartphone – which is, if you stop to think about it, an absolutely astonishing piece of technology for an extremely reasonable price, thanks to the competitive marketplace – you are potentially contributing something to every company that has invested in that technology.

Video codecs (which are, of course, themselves incorporated into smartphones) are just one of the many technologies which have come about as a result of significant investments by private corporations.

So, whether you are paying cash, or agreeing to some reciprocal obligations as a condition of your use, the fact is that there ain’t no such thing as a free video codec.

The bottom line is that somebody has got to pay.  It is about time that advocates of ‘free’ and ‘open’ standards for the internet acknowledged this.  There may well be viable alternative funding models, but they are not going to come about through advocating the abolition of relevant IP rights. 

For all its faults, at least Google is pragmatic enough to move this process forward.  If left up to the ideologues within the free and open source software movement, this would never happen.

18 comments:

Mark Summerfield said...

No? So, let's hear your conspiracy theory, then! :-)

Wayne Borean said...

Mark,

You've missed the most basic issue - are these Patents valid under Sections 102 and 103?

The answer is probably not. The U. S. Patent Office is woefully underfunded, and institutionally incapable of evaluating patents according to the standards of Sections 102 and 103. That's why so many patents which actually see a courtroom are invalidated.

This has nothing to do with software, or hardware. It is an issue that is common to all patents.

Consider the iPhone. Apple was proud of what they'd produced in the iPhone. It's a damned nice phone (I have one), and set a new bar for user interface design. The problem is that there were NO inventions involved in the iPhone. Everything in it existed in previous phones from other manufacturers.

What is in H.264 that didn't already exist? Nothing. The same with H.265.

The patents are invalid, and are holding up innovation.

Wayne

Robert said...

While FOSS advocates obviously don't like the licence terms that Google has been able to negotiate, I think their real problem with this is that Google wants to have VP8 included as part of the W3C standard, against W3C's official patent policy. Since the VP8 licence is incompatible with many (most?) open source licences, this would make it very difficult or impossible to implement a standards-compliant FOSS web browser. This is a big deal and I'm not surprised they're not happy.

GregorVorbarra said...

The "Open Source Community" includes some very big players (Red Hat, IBM, Google) and goes far beyond the usual "bunch of smart kids in their bedrooms" which those favouring proprietary software would have people believe comprises the community.

The issue with video codecs at the moment is that even if you sat down with a video encoding textbook predating the validity of any current patents and came up with a brilliant new codec without reference to the state of the art, you would probably wind up violating one or more patents simply because video codecs are complex, and there are so many patents around covering so much of the art. That's not socialism; it's simply a sad reflection on the current state of software patents.

Even if you made such an invention, then looked for any matching patents and tried to work out alternative approaches, you would find that most of the alternative approaches had also been patented. That's more or less what Google has done. Their original intent was to create an unencumbered codec, but the maze of patent toll roads has put paid to that idea.

Mark Summerfield said...

Of course the 'Open Source Community' is not a single, homogeneous, collective. My comments here are directed to those in the community who think that it should be, and are unwilling to accept the existence of any model which does not result in total and unqualified freedom.

'Open Source Community' member IBM, for example, spent over $6 billion on R&D in 2012, and generated over $1 billion dollars in income from IP-related activities, including sales, licensing and custom development (http://www.ibm.com/annualreport/2012/ ).

The fact that video codecs are complex is the reason why much of their development has been conducted by corporate entities with the means to employ people with the necessary technical qualifications, and to commercialise the outcomes.

Video coding is also one of the areas in which it is not too difficult to identify the relevant patents. Yes, there are quite a few of them, but the same can be said for the number of papers published in the technical literature, and the number of documents generated by the standardisation activities. Most patents have been declared by their owners, and most are included in the portfolio lists maintained by the relevant patent pool operators.

Many of the earlt MPEG-1 and MPEG-2 related patents (originally filed in the late 1980s and early 1990s) have expired, or are nearing expiry. To the extent that MPEG-4/H.264 involves patentable developments and improvements, the patents date from the early 2000s, and will expire in the early 2020s. There will no doubt be further patentable developments in the meantime, made mostly by people who are investing actual money in the relevant research.



Unlike some of the stupid and trivial 'software patents' that undoubtedly exist, video coding inventions are, in large part, genuine and non-trivial technical inventions.


Mark

Mark Summerfield said...

I understand this, which is why the response from FOSS advocates is so predictable.


But in the real world, you sometimes have to pay for stuff other people developed. The point of this article was to try to explain why there is, in fact, no such thing as a free video codec. Wanting the world to be different will not make it so. For better or worse, there is no FOSS alternative.


Google's effort may at least make it possible to implement a FOSS web browser which is able to link with a non-FOSS codec at compile or run time, at no financial cost to the developers or the end users.


Mark

Mark Summerfield said...

Hi Wayne,

I disagree that most of the patents relating to advanced video coding are likely to be invalid. They have generally been filed contemporaneously with the competitive R&D activities conducted by the various companies and organisations involved in developing the coding standards.

There is a great deal in H.264 that did not already exist. If it had already existed, there would have been no need to develop it.

But you are welcome to demonstrate that there is relevant prior art to any of the patents relating to H.264 coding. How about the MPEG LA portfolio list. This patent is owned by Toshiba, and has a priority date of 22 November 2002. It relates to efficient coding of fading images.



I look forward to you demonstrating that Toshiba's approach already existed before November 2002!


Mark

Mark Summerfield said...

OK, so here are a few of the things I do not say in this article.


I do not say that the current system is 'working perfectly', nor am I trying to set up some sort of universal 'dichotomy'. This post has just one topic: why there are no 'free' video codecs.


I do not say that patents 'create' universal standards. I say that the availability of tradeable IP rights can facilitate collaborative activity amongst competitors which, in some cases at least, can result in the creation of widely-adopted standards.


I do not suggest that anyone is a 'freeloading communist' (even though 'from each according to his means, to each according to his needs' would probably not be an inappropriate mantra for some in the FOSS movement). I simply challenged people who hold certain inflexible views in relation to software freedom to consider whether these views are entirely consistent with their political and economic views on other matters. In my experience, most FOSS advocates would consider themselves more 'libertarian' in their general attitude to politics and economics. Asking a libertarian if s/he is a socialist is obviously a provocative piece of rhetoric.


I think I was pretty clear that there are a number of different models by which technology development can be funded, and standards can come about, so I do not disagree with you that the MPEG model is not the only one. However, I do not think (and I did not say) that patents were the 'driving force'. Again I reiterate -- patents make IP a tradeable commodity which can, in some cases, facilitate a collaborative process among competitors which might otherwise not be commercially attractive.


Mark

Wayne Borean said...

Mark,

I'm not saying it didn't exist. I'm saying that under 102 and 103 it might not be eligible for patent protection. That is a huge difference.

As to the Toshiba patent, can you prove it wasn't obvious to someone skilled in the art? Probably not, because like me, and like most of the staff at the USPTO you aren't skilled in the art, and have no way to make that judgement call.

A person shall be entitled to a patent unless -
(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or
(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or
(c) he has abandoned the invention, or
(d) the invention was first patented or caused to be patented, or was the subject of an inventor's certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor's certificate filed more than twelve months before the filing of the application in the United States, or
(e) the invention was described in - (1) an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that an international application filed under the treaty defined in section 351(a) shall have the effects for the purposes of this subsection of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of such treaty in the English language; or
(f) he did not himself invent the subject matter sought to be patented, or
(g)(1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes, to the extent permitted in section 104, that before such person's invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or (2) before such person's invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.

That overs a lot of ground. So does

35 U.S.C. 103 Conditions for patentability; non-obvious subject matter.
(a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.

This places heavy constraints on patentability, which the Patent Office has not been following.

Wayne

Chris said...

Sure!
The theory I heard was that google wants to extract lower licensing fees for HEVC by having an alternative they can threaten to use.
(note that although the AVC fees from MPEG-LA are quite reasonable, there is other IP outside the patent pool so the total could stack up a bit.)

Mark Summerfield said...

Thanks for the lesson, Wayne. I'll bear it in mind next time I am advising a client on responding to a rejection issued by a USPTO examiner!


But, sarcasm aside, it is certainly true that examiners cannot have perfect knowledge of the art in question, and that any search is necessarily incomplete. This is one benefit of third-party opposition procedures, which many countries (now including the US) provide, so that patents which are about to be granted, or which have recently been granted (depending on the country) can be challenged. People who work in the field, and especially competitors, are generally better placed to evaluate novelty and obviousness.


One issue with the US system is that, despite the fact that examination can only ever be an imperfect review, any patent granted by the USPTO enjoys a presumption of validity, so that it can only be invalidated by 'clear and convincing evidence'. You would find, if you were to look at the complete data for all of the patent cases decided across the US at the district court level every year (and not just the high-profile, controversial, ones), that patents are not invalidated as often as you think, or probably as often as they should be.


Everywhere else in the world, the courts are not required to give any deference to the original patent office decision. They can look at the question of validity afresh, and make a decision on the balance of the facts before them.


Mark

Mark Summerfield said...

Interesting. Time will tell, I suppose. It is hard to see, however, how any technology that has royalties associated with it (even if they are forced down) is going to be more widely-adopted than one which does not.


It will also be interesting to see who, other than Nokia, comes crawling out of the woodwork claiming rights over VP8/9. However, if VP8 does become a web standard, the strength of Nokia's position (and that of any other practicing entity) will be significantly diminished. It will need to license all of the patents covered by Google's program, and if it wants to do so royalty-free via Google then it will have to agree to the grant-back provisions.

Robert said...

Mark,

Patents may be an unavoidable fact of life, but if nobody can work out how to cut through the patent thicket and implement a free video codec, the best response is for the W3C standard not to include a video codec. There's no way the W3C can allow an exception to their patent licensing policy just this time. The expectation will be that the policy is negotiable, and the FOSS community will see the huge amount of work they've put into developing the web (which they have no less right to benefit from, morally if not legally, as any codec developer has to the algorithms they discovered) repaid with exclusion from the standard.

If Google wants to, they can take their bat and ball and try to set up VP8 as their own separate quasi-free video standard. If anyone can do it, they can - their size and defensive portfolio, not to mention their control of Youtube and Chrome, gives them the kind of licence to innovate that a smaller player can only dream of.

As for the socialism thing, well, you hardly have to be a socialist to see statutory monopolies as at best a necessary evil. The libertarian side of the anti-software patent argument sees the patent system as market-distorting over-regulation by the state, a form of artificial property with few of the qualities of certainty or transparency that would allow an actual free market to exist. A market of individuals and companies all free to re-implement, adapt and improve each others' discoveries (perhaps subject to copyright or even some kind of less intrusive patent system) would be no less innovative than what we have now, not least because tech companies would be able to commercialise their innovations without facing huge patent search and litigation risks. Now *that* would be a free market!

Are they right? Maybe, maybe not, and we'll probably never get to find out - but they aren't obviously wrong. And they're definitely not socialists!

Back on point - there are, of course, all kinds of situations where capitalism allows one person to benefit from the work of another without paying. I can spend as long as I like developing a legal argument of unparalleled ingenuity, but as soon as it gets out anyone can use it. The patent system has its elaborate ways of rationalising this (and lawyers are far too clever to ever let ourselves get into the kind of mess the software industry is in!), but the rules of what's in and what's out of IP law are entirely contingent. You can tell the FOSS people that their attacks on software patents are unlikely to succeed, and you might be right, but you can't fault them for trying.

Robert

Mark Summerfield said...

Thanks for your thoughtful comments, Robert.

Another unavoidable fact of life is that video is a part of the Web already, so there will be at least one de facto standard, and it will not be 'free-as-in-freedom'. Since Chrome is already reportedly the leading web browser, and already incorporates VP9, I think the writing is probably already on the wall.

And as for capitalism, the general rule of the free-market is that you can always benefit from the work of others without paying... except when you cannot, due to some express legal restriction. You might think from reading the commentary in some segments of the media, and online generally, that the exceptions nowadays outweigh the general rule. Of course this is untrue, as any visit to a supermarket, department store, or any other retail outlet readily demonstrates.



Patents are 'market-distorting' if you are talking about the markets for innovative products and services. They are market-enabling if you are talking about the market for innovation itself. If anything, this market is under-regulated, not over-regulated -- witness its abuse by the bad actors truly deserving the name 'patent trolls'. Of course, libertarians are hardly going to be championing the cause for greater regulation of anything, as opposed to abolition of the instrument that creates the need for regulation in the first place!


Mark

Wayne Borean said...

I think that the "Presumption of Validity" is a huge mistake. The countries where that isn't the rule of law don't tend to have issues with PAEs, but still manage to develop and field new technologies.


The larger issue behind technological development appears to be related to the basic educational structure. Note that I said appears. I've run numbers a couple of times, and I think there's a correlation, but I'm not a statistician.


Wayne

Wayne Borean said...

Mark,


There's also the hardware issue. If VP9 takes off, and the hardware OEMS adopt it, that kills the MPEG.LA licensing group.


Or rather it does, unless they can prove they own the technology. This is where it gets really fun. Because of the various national laws on patents, it could be possible that VP9 might become the defacto standard for 95% of the worlds population, with only the United States and possibly Canada using H.265/


FYI, my real specialty is Corporate Evaluations. I made a call three and a half years ago that Microsoft was going to have major problems. Everyone laughed at me because Microsoft held 90% market share for operating systems. As of the final numbers for 2012, Microsoft only held 24% of the Operating System market share.


No, I didn't foresee tablets. All I did was read their SEC report, and realize how unstable the company was. I didn't know what was going to hit them. No one did. But I could see that they weren't in any shape to respond to a disruptive technology.


Heck, they still aren't.


Wayne

Mark Summerfield said...

If MPEG LA dies, it dies. There is a competitive market for patent pool operators these days, as well. They are all looking for opportunities to form new pools, as the patents in their existing pools expire.


I do not see all of these operators surviving. Patent pools are only effective if they consolidate patents, so there is limited scope for fragmentation in the market.


My first prediction is that MPEG LA will change its name, as it tries to diversify into operating pools that have nothing to do with MPEG standards. It will survive or fail based on its ability to present a compelling value proposition to prospective licensors, when compared with competing pool operators.


I hope that licensees will come to have more power as well, since the most important characteristic of a pool operator is the ability to deliver paying licensees to licensors. Licensees need to assert their right to deal only with pool operators which take their legitimate business concerns into account.

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