But the group says it isn't acting to kill a competitor. It said it's simply offering a service for patent holders and is agnostic about which video format prevails. "We are effectively a convenience store" for licensing patents, said Larry Horn, MPEG LA's chief executive. "We have no dog in that fight."
So, MPEG LA has no interest in extracting maximum possible amount of royalties for its patent holders?
If you keep reading, it's clear that MPEG-LA believes it has patents in the portfolio that cover VP8. If they expect to extract licensing revenue from those patents it's altogether possible that they don't care which format ultimately wins.
Well, that claim is completely disingenuous. In reality MPEG-LA oversees licensing for a set of known codecs, the most prominent being H.264. When a somewhat-viable competitor comes to town they just claim they own the competitor and therefore don't even need to compete. Behind the "we're impartial" facade what they're really saying is, "you're going to have to pay us anyway, so why not just use H.264 instead?"
(By the way, I voted you up, I think you summarize their position better than I did.)
Actually Mr Horn, who is a lawyer, is very careful never to say that. He does regularly get quoted as saying things are covered by patents, but never says who they belong to.
I'm astonished that he might actually be talking about Google's own patents, knowing that he'll be quoted by the press in a way that turns a true, but pointless statement into FUD. Since most of his quotes sound like a Dickensian bad guy I think he might just be doing this. I mean who talks like this:
"In view of the marketplace uncertainties regarding patent licensing needs for such technologies, there have been expressions of interest from the market urging us to facilitate formation of licenses that would address the market's need for a convenient one-stop marketplace alternative to negotiating separate licenses with individual patent holders in accessing essential patent rights for VP8 as well as other codecs, and we are looking into the prospects of doing so."
I'm not an MPEG-LA booster by any means (was involved with VP8) but for the sake of clarity, they can't and don't charge arbitrary royalties. The agreement for being involved in H.264 was to provide a license under "RAND" terms, meaning Reasonable And Non-Discriminatory.
What that means in practice is that you cannot charge Apple $1 per copy and Google $10 just because you hate Google. You have to have terms that apply to everyone equally, and they have to be 'reasonable', which presumably 100% of your gross revenue would not be.
That said, I do believe the patent holders have the right to circumvent the pool and cross-license directly from each other. I'm not too clear on how that relates to the RAND policy, but my cynical guess would be that it can be used as cover for some pretty sweet deals.
While RAND terms are generally better than having Microsoft or Apple able to pull the rug out from under you at any time, they are very specific in what they mean by "reasonable" and "non-discriminatory".
The most obvious example of this is that it's not "reasonable" to charge usage royalties on FLOSS software. There is a school of thought that flat-rate royalties don't clash as badly since you don't need to track usage, but since we're talking about standards produced for the public good, obviously royalty-free would be better. Either way, by assuming and enforcing a business model from the hardware days, it is "discriminating" against certain busineses.
Similarly, they've dropped charges on free web video, which is a clear attempt to break into a market they've had trouble in before. So as a class of users at least they can charge you more if they think they can get away with it.
Finally, it appears that the (highly successful) video game industry thinks that royalties designed for the TV industry aren't particularly reasonable for them and so avoids MPEG audio and video formats whenever possible.
So while they perhaps made sense 20, or even 10, years ago, RAND terms are no longer RAND.
This isn't the case. See the HP and MPEG-LA testimony before the FTC.
The pool agreement isn't exclusive. The members are free to license their patents through other venues, including cross licensing.
In fact, one of the points MPEG-LA made in their initial review letter with the DOJ is that he pool would not be used to force anyone to pay for a license to a patent which they were already licensed for some other means.
So a pool member only has to pay royalties iff they've been unable to achieve complete cross-licensing with the other pool members.
That is not clear from the article. Their representatives said that they believe that there are patents that cover vp8, but they never said they control those patents or which patents those are.
At another place the article says that mpeg-la is asking people to submit patents that cover vp8 in order to form another patent pool. So it seems that they may not have the patents that cover vp8 but want other companies to give them to them.
But probably they aren't really 100% sure their patents will hold up against the scale of legal challenge that could be brought down by Google. Of course, they have 1700 of them so they could keep the legal trouble going indefinitely.
It would certainly be easier for them if the Google and the world continued to just cut them checks for ancient technology. But it will never be to their advantage to admit the extent to which they are bluffing and they probably don't even know themselves.
Video has been digitized and compressed for how many decades now?
So, MPEG LA has no interest in extracting maximum possible amount of royalties for its patent holders?