New HEVC Patent Pool Launches Creating Confusion & Uncertainly In The Market
Last month, a new group named HEVC Advance announced the formation of a new HEVC patent pool, with the goal of compiling over 500 patents pertaining to HEVC technology. Some were surprised by the announcement since MPEG LA already offers licensing for HEVC patents, but it’s not unusual for multiple patent pools to emerge. Philips and Mitsubishi have some essential patents and aren’t currently in the MPEG LA pool, so there was always the option that another HEVC pool might be formed.
What caught people off guard and what I don’t like about HEVC Advance’s approach is their lack of concrete details and clarity of their intentions. In a call with a company spokesperson who works at GE, one of the backers of the pool, they would not give me any details on what patents they have, what the licensing terms are or which HEVC applications they might impact. The company also took a shot at MPEG LA telling me that some patent holders wanted an alternative to MPEG LA, but wouldn’t tell me why, or what alternative HEVC Advance offers. In their press release, they say their initial list of companies in the pool are, “expected to include GE, Technicolor, Dolby, Philips, and Mitsubishi Electric” but didn’t break out which patents they each hold and would not share patent numbers with me.
The company has said they will have more details to share in the coming months, yet they acknowledge that the patents have not gone through an independent patent evaluation process. Essential patent evaluation generally works by having an evaluator compare claims in a patent with the applicable (HEVC) standard specification and if one or more claims is necessarily infringed in connection with use or implementation of/reads on the standard, then that patent claim is determined to be essential. A new patent pool should have that completed and in place, before announcing in the market. Immature licensing programs are a threat to everyone, and that’s what HEVC Advance is. Before launching, HEVC Advance needed to be way more mature, specific and decisive if they are trying to position themselves as a significant and industry-enabling HEVC patent pool.
Patent licensing and IP uncertainty is always a risk with any new video compression technology, and HEVC is no exception to that rule. Most in the industry have been predicting minimal concern on that front so far, given the well structured nature of the MPEG LA patent pool, the fair licensing structure, and a general belief within the CE and codec vendor communities that the industry had learnt from past experiences and would not adversely hinder HEVC uptake through patent uncertainty.
CE Adoption numbers have been looking promising since late 2014, with many smart 4K TVs and newest smart phones from Apple and powered by Android offering built-in HEVC decoding capability. 4K trials are also underway around the world, most recently by Tata Sky for the World Cup Cricket tournament, powered by Ericsson and Elemental. The recent announcement by HEVC Advance throws a hard wrench into that momentum for several reasons. One, it offers no clarity or reassurance to potential licensees that they will be given a smooth path to truing up on past shipments and be offered reasonable and financially viable terms. Second, it is heavy on brand names and light on details, which does not generally reflect a mature program that is designed to maximize adoption.
We also have no clarity on the strength of the claims that the group is making, or what exactly these patents relate to. If they are for areas not directly tied to core video processing, for example audio or certain HDR techniques or specific filters that offer incremental improvement, then their impact could potentially be circumvented. But if they cover core video processing tasks within the HEVC standard, then we have a big problem on our hands. The good news? The community has by and large had enough of patent related disruptions, and so if indeed the latter is the case, expect some heavyweights to jump into the fray quickly and decisively to resolve the mess.
You would think HEVC Advance would offer more details, but so far, they refuse to. They did tell me that their patents were “core” and “essential” to HEVC deployments, but didn’t define exactly what that meant, or which use cases they were referring to. Of the five companies they expect to have in the pool at launch, they offered no opportunity for me to speak to any of them and it’s clear that this GE is currently leading the pool. This might be good for patent holders who have a clear desire to make money from their patents, but bad for the industry participants that mighth have to license them. Of course HEVC Advance spins it in a positive way saying it’s good for the entire industry as it allows you to go to one place to license many patents, but if they are expensive, then that’s not positive.
One has to wonder why all of the five companies named in the press releases decided not to join the MPEG LA pool. They had the opportunity to join, but clearly felt they can earn more money with a new pool. How much more money we don’t know until we see their licensing terms. If you want a breakdown on MPEG LA’s HEVC licensing costs, see Jan Ozer’s great article, that gives you all the hard numbers.
HEVC Advance has been quoted as saying that the, “market is requiring a different approach to aggregating and making HEVC essential patents available for license”, but again, won’t say or detail how their approach is different. I also don’t see the “market”, defined as those who license HEVC patents, saying their needs to be an alternative model to what MPEG LA already has in place. Companies behind HEVC Advance simply want to get paid more than they could by being in MPEG LA’s patent pool, which we’ll know for sure when they disclose their licensing terms. As a CNET article pointed out, HEVC Advance promises a “transparent” licensing process, yet won’t share any details. There is nothing transparent about how they have decided to come into the market.
Note: Frost & Sullivan Analyst Avni Rambhia contributed to this post.