Patent Pools Covering Digital Media Content Delivery Platforms DIGITAL SPARK IP Conference...

Patent Pools Covering Digital MediaContent Delivery Platforms

DIGITAL SPARK IP ConferenceUniversity of Albertay Dundee

Bill Geary2 September 2010

Overview

• MPEG LA Background• Overview of MPEG LA Patent Pools• Identify Technologies and Market

Conditions Suitable for Patent Pools• Patent Pool Facilitation Process• Biotech and the Licensing

Supermarket• Questions?

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MPEG LA Background

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MPEG LA Background

• MPEG LA pioneered modern patent pool licensing

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MPEG LA Background • A “Patent Pool” is a voluntary jointly

administered licensing programme including patents essential to a technology*o “voluntary”: the participation of each

licensor is based on its own commercial decision

o “jointly administered”: the participants select a single Licensing Administrator to handle the licensing, collection, royalty distribution and taxes

o “patents”: only issued patents are included in the programme offered for licence

o “essential”: each of the patents is necessary – from a technical or commercial point of view – to implement the technology

5* Definition by Carter Eltzroth, Legal Director of DVB, Geneva

MPEG LA Background

• The MPEG-2 standard was an inflection point that marked the change from delivering consumer video content in analog form to a standardized digital formato But companies who created the MPEG-2

standard were hesitant to develop products and deliver content because they were concerned about an MPEG-2 patent thicket

• Biggest challenge to MPEG-2 was access to essential patents o IPR of many parties created risk and

potential for conflict if Standard could be used at all given the patent thicket

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MPEG LA Background • In 1997 after US DOJ Business Review (EC

Comfort letter Dec 1998), MPEG LA revolutionized intellectual property rights licensing by offering an alternative patent pool as a licensing solution http://www.usdoj.gov/atr/public/busreview/215742.htmo MPEG-2 License grew from initial 8 to 26

patent holders with 159 patent families consisting of more than 900 patents in 57 countries. Not only have MPEG-2 royalty rates not increased, but they have been reduced five times.

o 1500+ Licensees accounting for most MPEG-2 products (TVs, DVD players/recorders, Blu-ray Disc™ players, set-top boxes, PCs, DVD Video discs, game machines, cameras) in the current world market

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MPEG LA Background

• MPEG-2 became the most successful standard in consumer electronics historyo ~ 4.2 billion deviceso ~ 44 billion video discso ~ $3 trillion in product sales

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MPEG LA Background

• The solution - known as the MPEG LA® Licensing Model - has become the template for addressing patent thickets

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MPEG LA Background

• Independenceo MPEG LA is neither Licensor nor

Licenseeo Fair, impartial administrationo Each licensing program separately

administered

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MPEG LA Patent Pools

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MPEG LA Patent PoolsJune 22, 2010 Data

MPEG-2Program started in 1997

Started with 8 patent owners 102 patents

● Currently 26 patent owners● 905 patents in 57 countries● 1586 Licensees

ATSCProgram started in 2007



AVC/H.264 a/k/a MPEG-4 part 10Program started in 2005



VC-1Program started in 2007

Started with 16 patent owners130 patents


MPEG-4 Visual part 2Program started in 2004


● Currently 29 patent owners● 1015 patents in 52 countries ● 656 Licensees

MPEG-2 SystemsProgram started in 2006



IEEE 1394Program started in 1999



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MPEG LA Patent PoolsLicensors in MPEG LA Pools Alcatel LucentApple Inc.British TelecommunicationsCanon, Inc.CIF Licensing, LLCCompetitive Technologies, Inc.Columbia UniversityDAEWOO ElectronicsDolby Laboratories Licensing CorporationETRI (Korea)France Télécom Fraunhofer-GesellschaftFujitsu LimitedGeneral Instrument Corp./Motorola

GE Technology Development, Inc.Hewlett-Packard CompanyHitachi, Ltd.KDDI CorporationKoninklijke Philips Electronics N.V.LG Electronics Inc.Microsoft CorporationMitsubishi Electric CorporationNippon Telegraph and Telephone CorporationNTT DOCOMOOki Electric Industry Co., Ltd.Oracle America, Inc.Panasonic Corporation

Pantech Co., Ltd.Robert Bosch GmbHSamsung Electronics Co., Ltd.SANYO Electric Co., Ltd.Scientific-Atlanta, LLCScientific-Atlanta Vancouver Co.Sedna Patent Services, LLCSharp CorporationSiemens AGSony CorporationSTMicroelectronics N.V.Telefonaktiebolaget LM Ericsson Telenor ASAThomson LicensingToshiba CorporationVictor Company of Japan (JVC)Zenith Electronics, LLC

June 22, 2010 Data

Identify Suitable Pool Candidates

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• Identify technologies with “patent thickets” (interdependence of complementary patents owned by multiple patent owners)o Drive need for multiple transactionso Impede technology adoption, interoperability and

useo Restrict freedom of designo Increase potential for conflicto Create threat of holdouto Bilateral licenses may be inefficient for many

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IPR

Licensee Licensee

Licensee

“One-to-Many” “Many-to-One”

IPR IPR

Licensee

MPEG LA® “Many-to-Many” Licensing Model

IPR IPR IPR

IPR IPR

Licensee Licensee Licensee


IPR Thicket

IPRIPR


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MPEG LA® “Many-to-Many” Licensing Model

IPR IPR IPR

IPR IPR



MPEG LA

The MPEG LA® Licensing Model enables access to essential IPR owned by multiple IPR owners in a single transaction as an alternative to separate licenses

MPEG LA is granted a nonexclusive sublicensing right from essential IPR owners, collects and distributes royalties for the benefit of the essential IPR owners, and is paid an administrative fee from royalties collected


• To attract both patent owners and patent users, successful patent pools strike a balance between reasonable return on investment and reasonable access

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• For IPR users, the MPEG LA® Licensing Model meanso Convenienceo Accesso Time, cost and risk savingso Opportunity for level playing field o Freedom to designo Focus on products instead of patent

licensingo Competition

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• For IPR owners, it means o Opportunity for mass market

adoptiono Return on investmento Future innovation

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MPEG LA® Licensing Model Lessons Learned• Alternative licenses with potential for high percentage

compliance• Patent thickets favoring pool over bilateral licensing

solutions• Technology of value to mass market

o Many Licensors o Many Licensees

• Need for buyers and sellers – reasonable access/reasonable return

• Identifiable royalty products• Simple, nondiscriminatory license terms• Emphasis on marketability

o Value given for value receivedo Open to new business models o Price to sell across mass marketo Responsive to the marketplaceo Both Licensees and Licensors are customers

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Patent Pool Facilitation Process

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Patent Pool Facilitation Process

• STEP 1 – Determine what the market needs• STEP 2 – Define “essentiality” parameters

• STEP 3 – Call for patent submissions• STEP 4 – Initial patent evaluations• STEP 5 – Identify initial essential patents

and notify essential patent owners• STEP 6 – Meetings of essential patent

holders• STEP 7 – Design License• STEP 8 – Announce License terms, conclude

Licensor agreements and issue License

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Biotech andThe Licensing Supermarket

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The Licensing Supermarket

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• “One-size fits all“ solutions based on technology standards (e.g., MPEG-2 and others) may not be suitable for non-standards-based technologies

• Applying its independent “many-to-many” mass market licensing expertise, MPEG LA has developed a licensing supermarket to address biotechnology patent thickets, specifically gene patents for diagnostic testing

The Licensing Supermarket

• With the goal of clearing patent rights enabling researchers, laboratories and testing companies to design comprehensive diagnostic genetics test panels, thereby making such tests widely available to the public, a new business model is called for that can balance costs with incentives, and MPEG LA is prepared to deliver it (http://www.mpegla.com/Lists/MPEG%20LA%20News%20List/Attachments/230/n-10-04-08.pdf)

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http://www.mpegla.com/Lists/MPEG%20LA%20News%20List/Attachments/230/n-10-04-08.pdf



Questions?

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For more information, please contact

Bill Geary, VP Business Development

[email protected]+1-301-986-6660

Patent Pools Covering Digital Media Content Delivery Platforms DIGITAL SPARK IP Conference...

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