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AV1 and Legal Challenges: Does the Codec Have a Future?
Some of the best minds in the streaming industry say AV1 will be challenged by infringement claims, but some of the best minds could be wrong.
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Following the state of intellectual property (IP)-related strategies is part of the job of any encoding professional. Here’s an update on two issues and my thoughts on the IP status of the AOMedia Video 1 (AV1) codec.

One scary litigation from last year was Nokia suing Apple for H.264 infringement, as Nokia was pursuing an interesting strategy that might have excluded encoder-related patents from fair, reasonable, and non-discriminatory (FRAND) pricing restrictions that apply to technologies included as part of a standard. Apple and Nokia settled that litigation in May, with Apple paying Nokia an undisclosed sum. For most of us small producers, this is meaningless, but if you’re shipping boatloads of H.264 encoders, decoders, or both, and you’re not currently writing a check to Nokia, expect a call soon.

Another IP-related turn from late 2016 was the MPEG LA-sponsored DASH (dynamic adaptive streaming over HTTP) group. What I’ve heard from several sources is that most large companies intend to ignore the group unless and until one or more of the group members files an infringement suit. The collective thought is that DASH is, in essence, a scheme involving text-based manifest files, which is not particularly impressive to begin with, and that most of the heavy lifting was done by Cisco, Qualcomm, and Microsoft, which aren’t part of the royalty group and aren’t seeking royalties. With proposed royalties totaling $30 million per year, the larger companies seem willing to roll the dice to invalidate the patents rather than ponying up voluntarily. Interestingly, the MPEG LA licensee list for this group had zero entries when I checked the list on June 8. So we’ll see.

Regarding the legal status of the Alliance for Open Media’s AV1 codec, there’s a general feeling that AV1 will be challenged and will likely lose because there “must” be some infringing technology in the codec. This is typified by comments from Joe Inzerillo, CTO of BAMTech, who, during a keynote talk at Streaming Media East, said that “serious companies” shouldn’t waste time with a “free” technology that ultimately is unproven legally. In my view, Joe is one of the brightest stars in our universe, and certainly has access to better lawyers than I do, but I’m going to disagree.

First of all, the Alliance includes members like Adobe, Amazon, AMD, ARM, Bitmovin, Broadcom, Chips&Media, Cisco, Google, Intel, Ittiam Systems, Microsoft, Mozilla, Netflix, NVIDIA, and Realtek, which are, in anyone’s view, some pretty serious companies.

Second, before Google acquired On2, the early VPx codecs had achieved significant success without any patent claims. This includes VP6, which was the “it” codec for Flash before H.264, and VP7, which was used in Skype and by Move Networks. Then Google bought On2 and released VP8 and VP9, both used very extensively by YouTube. Nokia made a patent claim in Germany and lost, and that was it.

True, Google licensed H.264 patents for VP8/ VP9 when MPEG LA formed a VP9 patent pool, but my discussions with people at Google indicate that this was window dressing to avoid protracted IP issues, not a legal necessity.

Regarding the Alliance, I assume that each member performed its own due diligence relating to the underlying codec technology. All these companies will be deploying the codec, giving rise to potential royalties if the technology does infringe. During codec development, all contributions to AV1 are being double-vetted for IP claims, first by the company making the contribution, then by an outside law firm and other experts.

Assuming that AV1 will wither due to IP claims from the H.264/HEVC camp also assumes that Google and all members of the Alliance bought a pig in a poke, a potential problem they felt they couldn’t defend in court or otherwise negotiate away. Serious companies don’t do that.

I haven’t studied the underlying IP, so I can’t render an informed decision. From my perspective, assuming companies with a combined market share of multiple billions are making a silly IP-related decision is almost always an incorrect assumption.

[This article appears in the July/August 2017 issue of Streaming Media Magazine as "AV1: Follow the Money."]

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