DASH Patent Pool—Criticized From the Start—Might Cease Operations
MPEG LA announced a patent pool for MPEG-DASH on November 17, 2016. The pool was wildly unpopular from the start, and in the ensuing 33 months accumulated only 26 licensees, including some big names like CBS Interactive and Telekom Deutschland Gmbh, but none of the largest companies thought to be using DASH like YouTube and Microsoft. Now, according to an apparent draft letter from MPEG LA to the DASH Licensors in the pool, MPEG LA may cease offering licenses under the pool.
Royalties on DASH?
Many readers will likely be surprised that a DASH patent pool exists in the first place, since DASH has been consistently marketed as open-source and the pool has seemingly flown under the radar. By way of background, the pool claimed royalties on DASH Clients, which would include browsers that played DASH directly and players that parsed DASH bitstreams and played the video. The pool also claimed royalties on DASH initiators, which were DASH apps loaded on portable and OTT devices and smart TVs. The terms were $0.05/unit after the first 100,000 units per legal entity with an annual cap of $30 million.
Royalties were owed by the company that actually supplied the client or initiator to the end user. So, if you downloaded and installed a YouTube app on your phone, tablet, smart TV, and Roku player, YouTube would owe four separate royalties. If your smart TV came with multiple apps that included DASH playback, the TV manufacturer would owe the royalty. Here's a deep dive on the license terms and applications.
The pool was loudly criticized when initiated, not only because DASH was consistently presented as open source, but also because Microsoft, Cisco, and Qualcomm, which all supplied substantial IP to the DASH standard, had pledged that they wouldn’t seek royalties. The royalties were really the first on free internet video, so publishers like ESPN and CNN would owe a royalty for the first time (there is a royalty for H.264 video distributed via pay-per-view or subscription in the MPEG LA H.264 pool). There were no exclusions, so if your church or university distributed more than 100,000 clients or initiators in a year, they had to write a check.
The Pool Disbanding? What We Know
On August 2, I received what appears to be a draft letter from MPEG LA to the DASH Pool licenses from a reputable colleague. I emailed the author of the letter and the MPEG LA press contact multiple times and got no responses, so I can’t confirm the letter’s authenticity.
The gist of the letter is in the first paragraph, which reads, “Regrettably, with more than one year’s experience marketing the DASH License according to its revised terms, we have concluded that it is not a viable pool license in its present state. The patent list is perceived as too thin, and many principal patent holders are missing. Although we have had some success marketing the license to smaller DASH licensees, large DASH users show little interest and we believe they will continue to pursue alternatives. We also understand that the current patents may be the subject of an invalidation campaign at possible cost to individual patent holders.”
The letter mentions scheduling a time to discuss this decision, so even if the letter is authentic, you shouldn’t assume that the pool will cease licensing operation. But the letter does make three points clear. First, just because a pool is formed doesn’t mean that it will succeed. Second, that the perceived breadth and depth of the IP in the pool is critical to its success, and third, that deep pockets to defend IP in the pool also matter.
Of course, these aren’t the only factors that determine a pool’s success; there are many other intangibles. But the DASH pool, alive or dead, presents an interesting backdrop to evaluate the Sisvel pools for AV1 and VP9. We’ll know a lot more when Sisvel announces its patent list for the pools later in 2019.
In the interest of full disclosure, I worked with Sisvel briefly in the early summer to help announce the pool, and now am working with them again in a marketing role. For this reason, I won’t be writing about Sisvel in Streaming Media during the term of the engagement and for a reasonable period thereafter.
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