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VVC Patent Pools: And Then There Were Two

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The 49 VVC IP owners assembled by the Media Coding Industry Forum (MC-IF) have chosen two patent pool administrators to form VVC-related pools: Access Advance and MPEG LA. While this is undoubtedly a positive move, it's merely the first step towards clarifying how much it will cost to license VVC.

As previously reported, the Media Coding Industry Forum (MC-IF) pursued patent fostering activities with 49 owners of patents relating to VVC. While the goal was to choose a single patent pool administrator, MC-IF ultimately chose two, Access Advance and MPEG LA. In their announcement, Jud Cary, President of MC-IF, said, "Although it was an MC-IF objective, consensus around a single administrator was elusive. If the result is two pools, this is better than the prospect of an implementer seeking out a license from each of the 49 holders of VVC-essential patents."

Reacting to the MC-IF decision, MPEG LA announced the "Development of VVC (Versatile Video Coding) Pool License," a step that Access Advance took last August.

What This Means

Forming a pool involves several steps; identifying companies with patent rights relevant to VVC, hiring third-party examiners to confirm that the patents are "essential" to VVC, and—once a core group of companies join the pool—setting royalty terms. While we don't know how much progress Access Advance has made since August, it's clear that MPEG LA is just starting, as the release states, "To participate in the initial VVC license development meeting, parties that believe they have patents essential to the VVC standard are invited to submit them to MPEG LA in accordance with the submission procedures at https://www.mpegla.com/vvc/."

Note that two pools aren't necessarily a bad thing; many successful technology standards involve multiple pools. However, irrespective of how much progress Access Advance has made, potential licensees won't know total VVC royalty costs until both pools release their royalty terms. That is, since the pools will contain different collections of IP, companies implementing VVC will have to take a license from both pools. At this point, it feels unlikely that we'll know royalty terms from both pools before the end of June 2021, and it wouldn't be shocking if this extended to early 2022.

The other detail potential VVC implementors will be watching is how much of the VVC IP is contained in the two pools. If many IP owners don't join either pool, it will raise concerns that another pool may launch (a la Velos), or that owners of substantial IP may seek royalties from large implementors directly like Nokia did with Apple.

The bottom line is that the MC-IF decision is like the bell that starts a race, with the finish line being reasonable certainty as to what VVC IP owners will consider royalty-bearing (encoders? decoders? content? all of the above?) and what VVC royalties will cost. While the contestants can now start moving towards this finish line, at this point we don't know if we're looking at a quarter-mile sprint or an ultra-marathon. In the interim, it remains to be seen if the lack of royalty certainty discourages companies from implementing VVC.

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