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HEVC Advance Patent Pool Creates Confusion, Lacks Transparency

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In March, a new group called HEVC Advance announced the formation of a new HEVC patent pool, with the goal of compiling more than 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 chance that another HEVC pool might be formed.

What caught people off-guard—and what I don’t like about HEVC Advance’s approach—is the group’s lack of concrete details and clarity of their intentions. Peter Moller, managing director of IP equality at GE (one of the pool’s backers) and spokesperson for HEVC Advance, would not give me any details on what patents HEVC Advance has, what the licensing terms are, or which HEVC applications they might impact. He 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. The initial companies in the pool are “expected to include GE, Technicolor, Dolby, Philips, and Mitsubishi Electric” but no list—or even specific number—of patents has been released.

Moller said HEVC Advance will have more details to share in the coming months, yet he acknowledges 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 standard specification (in this case, HEVC), and if one claim or more is necessarily infringed upon 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—which is what HEVC Advance is—are a threat to everyone. Before launching, HEVC Advance should have been more mature, specific, and decisive if it is trying to position itself as a significant and industry-enabling HEVC patent pool.

Patent licensing and IP uncertainty are risks involved with any new video compression technology. 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 learned 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 smartphones from Apple and powered by Android offering built-in HEVC decoding capability. Around the world, 4K trials are also underway, most recently by Tata Sky for the Cricket World Cup, powered by Ericsson and Elemental.

The recent announcement by HEVC Advance throws a roadblock up against that momentum for several reasons. First, it offers no 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 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, such as 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 the latter is indeed the case, expect some heavyweights to resolve the mess quickly and decisively.

You would think HEVC Advance would offer more details, but so far, it refuses to. Moller did tell me that the patents were “core” and “essential” to HEVC deployments, but didn’t define exactly what that meant.

Of the five companies HEVC Advance expects to have in the pool at launch, none would speak to me but GE, 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 might have to license them. Of course HEVC Advance puts a positive spin on it, saying it’s good for the entire industry, as it allows you to go to one place to license many patents, but there’s nothing positive about it if the licensing is cost-prohibitive.

One has to wonder why 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. We won’t know how much money until we see their licensing terms. If you want a breakdown on MPEG LA’s HEVC licensing costs, you can find them in a great article Jan Ozer wrote for StreamingMedia.com.

In a press release, Moller said 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 there 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 it has come into the market.

Note: Frost & Sullivan Analyst Avni Rambhia contributed to this column.

This article appears in the July/August 2015 issue of Streaming Media magazine as “New HEVC Patent Pool Creates Confusion,” and previously appeared on StreamingMediaBlog.com.

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