Author: Yellow Warbler
On March 28, MPEG LA, the patent pool authority, issued a statement that it had filed enforcement action against Samsung Electronics Co., Ltd. ("Samsung") in Düsseldorf, Germany, accusing it of infringing patents in MPEG LA's HEVC patent portfolio license. These patents are essential to the HEVC (also known as H.265 and MPEG-H Part 2) digital video coding standards, which are used in video encoding and decoding products transmitted, received, and used on the Internet, television, and mobile.
According to the complaint, from the fall of 2014 to the end of March 2020, Samsung Electronics Co., Ltd., the parent company of Samsung Electronics Co., Ltd., was the licensor and licensee of the MPEG LA HEVC Patent Portfolio License, but since its termination, Samsung has continued to offer products in Germany, including smartphones, tablets and TVs, that use the patented HEVC method without permission.
Finally, MPEG LA mentioned that the law firm it hired proposed enforcement actions such as seeking injunctions and monetary damages.
Source: PatPub Patent Licensing Project
However, in the field of video codec, there is a typical problem of "long time must be divided, and long time must be combined", that is, although MPEG LA has the first-mover experience of patent pool management, it will inevitably be difficult to reconcile the opinions of some right holders on the direction and rules of patent pool management.
Even some of the big tech giants have developed a no-license standard, but after market testing, it is currently transitioning from MPEG-2/AVC to HEVC, or even directly to VVC. This seems to have become the mainstream trend after the market choice.
However, in this transition, HEVC alone has formed three main patent pools, and there are some patentees who have not been included in the pool, and MPEG LA is no longer a monopoly, which can be referred to the previous article.
VVC was also established by Access Advance and MPEG LA at the beginning of this year, VVC Advance and MPEG VVC.
The rivalry between MPEG LA and Access Advance is becoming more apparent.
In fact, the fundamental reason why Access Advance, which was born out of MPEG LA, failed to establish a separate patent pool under the MPEG LA organization as scheduled was that several major shareholders of MPEG believed that MPEG's policies were difficult to meet their needs, so they established HEVC Advance (later renamed Access Advance).
As for the reasons behind this, Peter Moller, CEO of HEVC Advance and former GE ge, has made some comments, and it can be seen that the relatively low rate of MPEG LA has become a "stumbling block" for some people who want more stakeholders, that is, "rates and rules" is the main reason why the latter wants to leave MPEG LA.
The "profit-seeking" nature of capital has also laid the "bane of conflict" in this industry.
The trigger for the conflict between the two sides has to be mentioned Samsung.
As mentioned in MPEG LA's statement, Samsung was the primary licensor and licensee of the MPEG HEVC patent pool from the fall of 2014 to March 2020. As the obligee with the most necessary patents for HEVC technical standards, Samsung has 4510 HEVC patents, which is much higher than other rights holders. Thus its position and position can determine the strength of the two patent pools. In the end, Samsung chose to launch MPEG HEVC in early 2020 and joined HEVC Advance, and along with Samsung, there were eight rights holders in South Korea.
Production: Corporate Patent Watch
With Samsung's shift, some of the strong provisions in the HEVC Advance patent pool rules have caused dissatisfaction among some implementers, mainly focusing on those who have previously obtained MPEG HEVC licenses. How to refund the fee according to the rate situation of the two pools, and how to refund the fee after the MPEG LA has already paid the royalties to Samsung, then after Samsung moves to HEVC Advance.
In this regard, including Turkey's TV manufacturer Vestel and China's Xiaomi, they have all had disputes with the rights holders of HEVC Advance in Germany.
At a court hearing in Düsseldorf, Germany, last October, the judge also challenged this point:
(1) The obligation to refund the fee shall not pass to the licensee, and how the refund should be made shall be reflected in the license agreement;
(2) The duplicate rate is only a policy, not a mandatory binding force of the contract, and cannot guarantee that the licensor will implement it;
(3) The calculation of the refund is not transparent and clear.
Finally, at the end of last year, a court in Düsseldorf, Germany, rejected HEVC Advance's request for injunctive relief against Vestel. The licensee who found Vestel to be bona fide, found that Vestel infringed the SEP patent, but did not issue an injunction because of the HEVC Advance patent pool rules.
The court's judgment can be said to be a determination that there is no FRAND situation in the group pool management of the HEVC Advance patent pool. It was for this reason that Access Advance subsequently had to issue a statement announcing changes to some policies.
Therefore, returning to look at the MPEG LA's choice to sue Samsung, what is behind it is actually not simple.
Because there are not many cases of active prosecution from MPEG's decades of development, the fosspatent blogger listed the data in one of his blogs:
I have studied 32 video codec patent enforcement actions (27 against MPEG-2 and 5 against AVC) that began in Düsseldorf and were initiated each time by multiple MPEG LA licensors against some of the large complex defendants, even Huawei. Compared to MPEG LA's more than 7,000 license agreements without litigation, 32 is only a rounding error for such a large enough sample.
At least six of these disputes have been injuncted. Time and time again, from the Düsseldorf District Court (where all these cases are filed) all the way to the Federal Court, the provisions of MPEG LA are considered FRAND.
32 lawsuits, 30 years, equivalent to MPEG LA's enforcement of about 1 case per year, if indeed compared with 7,000 agreements, the proportion is about 0.46%.
It also mentioned the lawsuit between MPEG LA and Huawei, in fact, there has always been a preconceived impression in China that the person who comes to collect the license fee must be a "bad person". However, if you dig deeper into the details of the double plan of this dispute, it is really difficult to say who hijacked whom. Therefore, sometimes it is not possible to completely attach unconfirmed subjective impressions to MPEG LA.
In contrast, in recent years, Access Advance's explicit and invisible actions in patent enforcement are actually quite a few, one is that its enforcement actions can be discovered through litigation data, and the other is that in recent years, it can be used in China, the United States and Europe, and the main invalid data of HEVC Advance patent pools such as General GE, Mitsubishi, Dolby, Philips and Korea Electronics and Communications Research Institute, such as Unified Patent in the United States is a major invalid HEVC The institution of the Advance patentee's patent can see that there are still many "resistance forces" hidden behind the HEVC Advance patent pool.
Looking at the motivation of Samsung to withdraw from MPEG LA to join Access Advance, FOSSPATENT bloggers have expressed a view that because some projects in the HEVC Advance patent pool charge four times that of MPEG LA, one of the purposes of Samsung's conversion is not to get more royalty income as a licensor, but to join HEVC Advance was able to obtain other patents in the pool at a very low cost (note: no or less fees are far more attractive to a large consumer electronics manufacturer like Samsung than to obtain licensing revenue). This may be the main reason why AA attracted Samsung to join at that time, that is, as an implementer, you can reduce the cost of patent fees.
This may be one of the reasons.
I would rather guess the problems behind the patent pool from the perspective of management, interests and rights.
Before I officially throw out my idea, let's take a look at the current structure of the HEVC patent pool. HEVC Advance is undoubtedly the largest patent pool, claiming to aggregate about 70% of HEVC patents. What remains is the pool of MEPG LA, as well as Velos and a number of other independent rights holders.
HEVC Patent Landscape
The patent pool is played in a somewhat similar way to political and economic alliances, such as the European Union, ASEAN, the African Union, the Shanghai Cooperation Organization, etc., some of which are dominant. This is similar to the management of patent pools, although patent pools like Access Advance and Avaci have gathered dozens of rights holders, but the real dominance may be a small number of enterprises, such as Access Advance, mainly General GE, Dolby, Philips and Mitsubishi.
Among these key managers, there may be a leading big brother, and the leadership status of the United States determines that companies such as GE and Dolby may have a higher voice in similar patent pools. This positioning is a pattern laid down as early as the MPEG and DVD era thirty years ago.
Korean companies like Samsung can be considered an extension of the interests of American companies. Just as three lithium batteries in South Korea have been asked by American companies to share technology by us, it is basically difficult for Korean companies to escape the control of the United States. So it's no surprise that Samsung chose the American Access Advance patent pool.
Secondly, as can be seen from the above figure, some large rights holders are no longer in the patent pool of MPEG HEVC, but enterprises such as Apple that appear as implementers are in the MPEG HEVC pool.
This may also explain a certain problem, that is, all the big rights holders who advocate patent fees do not recognize MPEG LA's practice on HEVC, so they did not join the pool, and even like Qualcomm and Ericsson in the early years of the establishment of Velos, the main purpose is also to increase the license rate.
The most notable of these is Apple's position, which is that it is the licensor and licensee of MPEG LA, and there is currently no contract with the other two HEVC patent pools, and one of the important reasons for the resistance is the issue of the rate structure, which is a foreign journalist Jan Ozer's article, which also specifically mentioned that HEVC has made a mess of (rate) things.
For Apple, unreasonable rates are resistant in many cases, and the pool of MPEG HEVC has become the best weapon apple uses to resist.
Because in the vertical field of video codec, unlike the mobile phone industry, when calculating rates, there will be a top-down and comparable rate model, because the judge ruled on a total cap on the license fee.
Therefore, in the field of video codec, there is no top price capped by the entire industry, which means that "comparable rates" have become a very important reference for determining whether the rate is FRAND. At this time, the low rate of MPEG relative to the two HEVC patent pools of other classes becomes a very important reference.
Therefore, this seems to be a contest between the two rights holder entities of MPEG LA and Samsung, and behind it I would rather see a contest between the two long-standing opponents of the "implementer" and the strong "right holder".
That is to say, at this time, MPEG LA cannot be simply regarded as representing only the interests of the patentee of the pool, but also the interests of large implementers such as Apple.
That's a lot of fun.
In fact, the current situation has also spawned a series of problems that need to be solved, mainly two points:
The first is whether MPEG HEVC, which is gradually weakening, can still support the current rate base. If a patent pool has a large number of right holders transferred or withdrawn, whether the rates currently implemented by it can support the question of FRAND if it does not change.
In fact, this can be seen from MPEG LA when it established VVC, and the strength of the MPEG rights holders of the first batch of VVCs in the pool is relatively not prominent, but it is not cheap from the perspective of the rate, which is a problem in itself.
Second, because there has never been a judge ruling on the entire industry to cap the top cumulative rate in the field of video codec, resulting in the patent pool and right holders in this field facing division and uncertainty at any time, some newly separated right holders adopt the mode of individual charges or group charges, which invisibly increases the stacking rate of the entire industry. Whether this is fair to the implementer is also a difficult problem to be solved.
European and American courts have no precedents to support in this regard, mainly because the managers of these patent pools are mainly European and American companies, and no matter how they split and stack costs, they actually benefit Western companies. But for the vast number of companies in China that are mainly implementers, this cumulative stacking rate is increasing year by year.
How to deal with such problems? Among them, the new patent pool and more decentralized rights holders that are constantly splitting up, whether there are problems that hinder competition, increase consumer costs and anti-monopoly, need to be considered as a whole from the perspective of legislation and adjudication, this issue cannot wait for foreign courts to take the lead, and China's judiciary and administration should take the initiative to think. This problem wants to rely on the enterprise itself to solve, basically insoluble, only by relying on the administrative and judicial criteria for FRAND, it is possible to form a truly benign licensing environment.
This may be the right hand to establish global IP governance rules.