MPEG LA Offers H.265/HEVC Patent Portfolio License - What does this mean?

As you may of seen on 29 September 2014 MPEG LA announced the HEVC Patent Portfolio License. We feel the pricing is reasonable due in part to the FRAND obligations of the standard group (JCT-VC).

23 companies were included and we estimate that that is approximately 50% of the essential IP in the H.265/HEVC standard. Some large companies have established IP licensing programs including cross licensing. Hence they do not want to participate in a MPEG patent pool. Due to the membership of the JCT-VC they must license their essential IP on FRAND terms.  The following companies choose to not join the HEVC patent pool and are likely to have H.265/HEVC essential IP:

  • Ericsson
  • MediaTek
  • Microsoft
  • Nokia
  • Panasonic
  • Qualcomm
  • Sony

H.265/HEVC had well over 2000 technical contributions and its has been estimated that there are over 20,000 patents filed on H.265/HEVC by members of the JCT-VC over the last 6 years!

The end result is that we expect the final fees to use H.265/HEVC will be approximately 2x the fees from the MPEG LA patent pool. I.e. US $0.40 per unit after first 100,000 units each year with a yearly cap of $50 Million per year. An unit of royalty is for either an encoder, an decoder or a combined codec per end user product.

As a small company, you probably only have to pay the MPEG LA, as its unlikely the essential IP owners outside the MPEG LA patent pool will have the resources to license you. You also get the first 100,000 royalty free and there are no separate royalties for H.265/HEVC content for anybody.

On the whole I think this is a pretty great result for the industry.