Japan Leads H.264 Video Coding Revolution

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Continued from H.264 – The leading video coding standard

Since the first version of H.264 standard was released in 2003, a large number of H.264 essential patents have already been disclosed to the JVT and to MPEG LA by parties… Featured image has been sourced from http://maxpixel.freegreatpicture.com/Notebook-Cellphone-Blogger-Business-Office-336371 & https://pixabay.com/p-1613995/?no_redirect. The two images have been edited & modified to suit the requirement.

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Continued from H.264 – The leading video coding standard

Since the first version of H.264 standard was released in 2003, a large number of H.264 essential patents have already been disclosed to the JVT and to MPEG LA by parties who own them for the purpose of adding it to the MPEG LA’s AVC patent pool. Most companies that disclosed patents to the JVT are also part of the MPEG LA’s AVC patent pool. Based on the 2016 list of AVC patents, MPEG LA’s AVC patent portfolio has over 4,100 patents.

Although the patent filing activity of H.264 SEPs in the AVC patent pool started in 1992, the patent filing activity actually peaked in 2003 i.e. around the time when the first version of the standard was formulated by the JVT. There was a slight increase in the filing trend from 2006 to 2009 after a fall from 2003, which can be attributed to major amendments for Scalable Video coding that were added to the standard in 2007.

The filing trend is in constant decline after 2012, likely due to the release of the first version of the High Efficiency Video Coding (HEVC) standard published in 2013, a potential successor of the H.264 standard which was developed by the JCT-VC i.e. Joint Collaborative Team on Video Coding, a group of the same organizations (VCEG, MPEG) that developed the H.264 standard.

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Filing trend of MPEG LA’s AVC patents

Japanese corporations form a majority of the top 10 assignees in the AVC portfolio with at least five companies figuring in this global list and holding an average cumulative 57% of the total patents in the portfolio. Interestingly Sony and Samsung, two leading players in video and display technology from Japan and Korea, are absent from the top 10 assignee list of the AVC portfolio because of their relatively smaller portfolios of H.264 SEPs.

Top 10 assignees in MPEG LA’s AVC Portfolio

Top 10 assignees in MPEG LA’s AVC Portfolio

Top 10 geographies owning large AVC Portfolios as per MPEG-LA data

Top 10 geographies owning large AVC Portfolios as per MPEG-LA data

H.264 SEPs have a good overall geographical distribution. This is not surprising considering the fact that majority of the patents in the MPEG LA’s AVC patent pool are filed in the US and Japan given the sheer dominance of Japanese firms in the patent pool.

Patent term of MPEG LA’s AVC patents Note: Terminal disclaimers and patent term adjustments have not been taken into account while calculating the patent term expiry.

Patent term of MPEG LA’s AVC patents
Note: Terminal disclaimers and patent term adjustments have not been taken into account while calculating the patent term expiry.

A majority of the H.264 SEPs held by MPEG LA are expiring in 2023. Since H.264 was formulated in 2003, it is reasonable to believe that majority of H.264 SEPs that are not part of the MPEG LA’s AVC patent pool could also expire around 2023. This may lead to an increase in licensing/litigation activity in the coming years from corporations looking to monetize their patents before they expire. Also, some of the patents are not expiring until 2034, which is a long time before anyone can make royalty free use of H.264 patents. Although, on certain conditions royalty free use of H.264 is currently possible, especially for internet videos that are free to end users.

In the last couple of years, advocates of a royalty free model for video codec like Firefox and Theora have been receiving increasing support from technology giants such as Google and Cisco. Google acquired On2 Technologies and launched its video codec VP8 on an irrevocable royalty free public license in 2010. In the same year, MPEG-LA pool also allowed royalty-free usage of the H.264/AVC patents for Internet Videos which were available for free to end users. Cisco open sourced its source and binary versions of H.264 codec implementation in 2013. Further, it allowed the royalty free usage of its binary version by bearing the cost of the MPEG-LA license.

H.264 is heavily guarded by patents which have given rise to some interesting patent litigation involving standard and competing technologies. One such litigation ensued in 2007 between Qualcomm and Broadcom, where the former accused the latter of infringing on its patents essential to the H.264 standard. The district court found Qualcomm’s patents to be non-infringing and also determined that Qualcomm’s patents were unenforceable because it had breached its duty to disclose the standard essential patents (patents in suit) to the JVT. Another case which further highlighted the importance of FRAND terms in licensing of standard essential patents was fought between Microsoft and Motorola in 2012. Microsoft filed a case against Motorola claiming that the latter violated its agreement with the ITU and IEEE, by asking Microsoft for a royalty rate higher than the rates set through reasonable and non-discriminatory (RAND) terms of licensing. In a landmark FRAND rate-setting decision the court ruled that, despite being a third party in the agreement between Motorola and the standard setting committees, Microsoft has the right to enforce the contract and license Motorola’s patents on RAND terms.

Another interesting situation developed after Google released its open source video codec (a competing technology to H.264) in 2010, and announced it as royalty free. In 2011, MPEG-LA called for a pool of VP8 patents alleging that it may not be completely free and some of the patents from its H.264 pool might be essential to the VP8 standard. In the end, Google reached an agreement with MPEG-LA members for licensing patents essential to VP8.

In recent times, as the need of a successor for H.264 is gaining traction, with H.265/HEVC (High Efficiency Video Coding) as the frontrunner, several alternatives have started hitting the industry. With patent pools like HEVC advance and Technicolor SA are being created other than MPEG-LA for licensing of essential patents to the technology, HEVC is suffering with the problem of rising licensing costs. Meanwhile, several open source projects like VP9 (developed by Google) and Thor (developed by Cisco) are taking place hinting at possible royalty free alternatives. However, having conquered majority of the market, H.264 still is the most dominant format in the media encoding technology today, and will dominate the market in the near future.

Vikas Sharma
Vikas Sharma

Vikas is an intellectual property expert with over nine years of experience in the industry. He has been an official advisor on various high stakes patent litigation, leading multi geography teams to deliver successful outcomes to clients.


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