Saturday, March 23, 2013

Setback for Google's VP8: Nokia refuses to commit patents to royalty-free or FRAND licensing

Not only does Nokia own a patent on tethering (and has already defeated Google on claim construction in an ITC investigation) but its strong intellectual property position is also of growing concern to Google in connection with its initiative to make the allegedly royalty-free VP8 codec (part of the WebM Project) an Internet Engineering Task Force (IETF) video standard. I reported on a German VP8 patent infringement trial held two weeks ago and found out about another one coming up in mid-June. The latest news is that Nokia has made an official IPR (intellectual property rights) declaration to the IETF with respect to the VP8 Data Format and Decoding Guide listing 64 granted patents and 22 pending patent applications (I've reformatted the list further below).

Obviously those 86 declared IPRs aren't 86 different inventions: these are a few patent families with multiple international registrations per patent. Still, the number is significant, especially because a patent that is, for example, declared invalid in one jurisdiction may still be enforced successfully in another. Or a judge in one country may find it not to be infringed, while a judge in another country will.

This declaration would be just perfect for Google's purposes if Nokia had committed to royalty-free licensing. And if Nokia had not been that generous but had at least made a FRAND licensing commitment, VP8 still wouldn't be "free", but at least there would be a guarantee that licenses to Nokia's relevant patents are available at all (and that they are available on prices that won't be excessive). But in Section IV, Licensing Declaration, Nokia bluntly says the following:

Unwilling to Commit to the Provisions of a), b), or c) Above

This couldn't be clearer. The precise meaning of a), b) and c) can be found in Section 6.5 of the relevant IETF document, RFC 3979:

Specifically, it is helpful to indicate whether, upon approval by the IESG for publication as RFCs of the relevant IETF specification(s), all persons will be able to obtain the right to implement, use, distribute and exercise other rights with respect to an Implementing Technology

  • a) under a royalty-free and otherwise reasonable and non-discriminatory license, or

  • b) under a license that contains reasonable and non-discriminatory terms and conditions, including a reasonable royalty or other payment, or

  • c) without the need to obtain a license from the IPR holder.

    • (emphasis and bullet points added)

So option a) is what is called "RAND-0" ("RAND-ZERO"), meaning it's a royalty-free license and any non-monetary terms (such as grant-back obligations) must be FRAND, option b) is FRAND with royalties, and option c) is so permissive that a right holder doesn't even require the conclusion of a license agreement. Nokia rejects all three. And given that it's already seeking injunctions against HTC in Germany over two VP8 patents, there can be no doubt that it means business and that a no is a no. They're not just saying they have patents that read on VP8; they're actually suing.

Nokia doesn't have an obligation to make a FRAND promise with respect to VP8. It wasn't involved in VP8 standard-setting. VP8 was and in practical terms (even if not in formal terms) still is a single-company project (when Google says "open", it usually means "control"), and that's why no one can be forced to support it. By contrast, H.264 was an industry-wide initiative and everyone sitting at the standard-setting table agreed to FRAND licensing from the beginning.

What Nokia is doing here is simply the normal course of business if a patent holder (Nokia) does not share the vision of another company (Google) with respect to a proposed standard and reserves all rights. What motivation could Nokia possibly have to donate something to a Google initiative? None. No motivation, no obligation, no license. Simple as that.

This doesn't mean that Nokia will categorically rule out granting licenses to someone like HTC. If the price is right, it can always do so. But there won't be any freebies, and in licensing negotiations it can ask for any amount of money because there's no FRAND promise that it could possibly breach by making a blatantly non-FRAND demand, while Google (Motorola) does have a FRAND licensing obligation with respect to H.264.

Again, it's the normal course of business, and if Google had not acquired Motorola Mobility, then (apart from saving Google $12.5 billion for a patent portfolio that consistently fails to give its acquirer any leverage) Motorola would certainly have done the same thing. Motorola never joined the VP8 initiative before Google decided to buy it. Motorola, too, reserved the right to enforce any VP8-related patents it might own: to seek injunctions or to demand any royalty it wants.

It would be interesting to know where AT&T stands. AT&T was involved in H.264 standard-setting but didn't contribute its patents to the MPEG LA AVC/H.264 pool. If any AT&T video codec patents read on VP8, then AT&T, like Nokia, doesn't have a FRAND licensing obligation.

IPRs listed in Nokia's VP8-related declaration to the IETF

I took the list published by the IETF and reformatted it:

  1. Country:DE:Filing date:22.05.1998, Filing number:98660050.0, Pub.number:0884911, Grant number:69825220
  2. Country:FR:Filing date:22.05.1998, Filing number:98660050.0, Pub.number:0884911, Grant number:0884911
  3. Country:GB:Filing date:22.05.1998, Filing number:98660050.0, Pub.number:0884911, Grant number:0884911
  4. Country:NL:Filing date:22.05.1998, Filing number:98660050.0, Pub.number:0884911, Grant number:0884911
  5. Country:US:Filing date:09.06.1998, Filing number:09/094177, Pub.number:NA, Grant number:6504873
  6. Country:CN:Filing date:10.08.2000, Filing number:00814037.5, Pub.number:1378750, Grant number:ZL00814037.5
  7. Country:DE:Filing date:10.08.2000, Filing number:00957359.3, Pub.number:1206881, Grant number:60015566.8
  8. Country:FI:Filing date:10.08.2000, Filing number:00957359.3, Pub.number:1206881, Grant number:1206881
  9. Country:FR:Filing date:10.08.2000, Filing number:00957359.3, Pub.number:1206881, Grant number:1206881
  10. Country:GB:Filing date:10.08.2000, Filing number:00957359.3, Pub.number:1206881, Grant number:1206881
  11. Country:IT:Filing date:10.08.2000, Filing number:00957359.3, Pub.number:1206881, Grant number:1206881
  12. Country:NL:Filing date:10.08.2000, Filing number:00957359.3, Pub.number:1206881, Grant number:1206881
  13. Country:US:Filing date:11.08.1999, Filing number:09/371641, Pub.number:NA, Grant number:6735249
  14. Country:US:Filing date:13.02.2004, Filing number:10/778449, Pub.number:20040165664, Grant number:7149251
  15. Country:US:Filing date:12.12.2006, Filing number:11/609873, Pub.number:20070140342, Grant number:NA
  16. Country:JP:Filing date:09.04.2008, Filing number:2008-101068, Pub.number:2008-178149, Grant number:NA
  17. Country:AU:Filing date:22.01.2001, Filing number:30275/01, Pub.number:NA, Grant number:778990
  18. Country:CA:Filing date:22.01.2001, Filing number:2374523, Pub.number:NA, Grant number:2374523
  19. Country:CN:Filing date:22.01.2001, Filing number:01800565.9, Pub.number:1365575, Grant number:ZL01800565.9
  20. Country:CN:Filing date:06.10.2005, Filing number:200510113767.6, Pub.number:1756362, Grant number:NA
  21. Country:FI:Filing date:20.01.2000, Filing number:20000120, Pub.number:NA, Grant number:117533
  22. Country:HK:Filing date:10.01.2003, Filing number:03100263.7, Pub.number:1048411, Grant number:1048411
  23. Country:HK:Filing date:17.08.2006, Filing number:06109148.6, Pub.number:1089030, Grant number:NA
  24. Country:RU:Filing date:22.01.2001, Filing number:2002100648, Pub.number:NA, Grant number:2295203
  25. Country:RU:Filing date:10.11.2006, Filing number:2006139951, Pub.number:2006139951, Grant number:2358410
  26. Country:SG:Filing date:22.01.2001, Filing number:200107086.1, Pub.number:NA, Grant number:84926
  27. Country:SG:Filing date:17.09.2004, Filing number:200405663.6, Pub.number:128476, Grant number:128476
  28. Country:US:Filing date:19.01.2001, Filing number:09/766035, Pub.number:20010017944, Grant number:NA
  29. Country:AT:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:1186177
  30. Country:FR:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:1186177
  31. Country:DE:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:60145194.5
  32. Country:IE:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:1186177
  33. Country:IT:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:1186177
  34. Country:NL:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:1186177
  35. Country:ES:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:1186177
  36. Country:SE:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:1186177
  37. Country:TR:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:1186177
  38. Country:GB:Filing date:22.01.2001, Filing number:01902442.1, Pub.number:1186177, Grant number:1186177
  39. Country:BR:Filing date:22.01.2001, Filing number:PI0107706.6, Pub.number:0107706, Grant number:NA
  40. Country:CA:Filing date:22.01.2001, Filing number:2397090, Pub.number:NA, Grant number:2397090
  41. Country:CA:Filing date:15.01.2007, Filing number:2572566, Pub.number:NA, Grant number:2572566
  42. Country:CN:Filing date:22.01.2001, Filing number:01806682.8, Pub.number:1418436, Grant number:ZL01806682.8
  43. Country:CN:Filing date:11.03.2005, Filing number:200510056330.3, Pub.number:1658677, Grant number:200510056330.3
  44. Country:FI:Filing date:21.01.2000, Filing number:20000131, Pub.number:NA, Grant number:116819
  45. Country:HK:Filing date:10.09.2003, Filing number:03106477.6, Pub.number:NA, Grant number:1054288
  46. Country:HK:Filing date:04.01.2006, Filing number:06100170.6, Pub.number:1080653, Grant number:1080653
  47. Country:JP:Filing date:22.01.2001, Filing number:2001-553307, Pub.number:2003-520531, Grant number:NA
  48. Country:KR:Filing date:22.01.2001, Filing number:2002-7009307, Pub.number:NA, Grant number:714355
  49. Country:SG:Filing date:22.01.2001, Filing number:200204136.6, Pub.number:NA, Grant number:90389
  50. Country:US:Filing date:19.01.2001, Filing number:09/766193, Pub.number:20010017942, Grant number:6907142
  51. Country:US:Filing date:06.06.2005, Filing number:11/146196, Pub.number:20050254717, Grant number:7295713
  52. Country:ZA:Filing date:22.01.2001, Filing number:2002/5506, Pub.number:NA, Grant number:2002/5506
  53. Country:JP:Filing date:20.09.2007, Filing number:2007-244456, Pub.number:2008-054335, Grant number:NA
  54. Country:CA:Filing date:17.12.2007, Filing number:2614571, Pub.number:NA, Grant number:NA
  55. Country:US:Filing date:09.10.2007, Filing number:11/869445, Pub.number:20080247657, Grant number:7567719
  56. Country:DE:Filing date:22.01.2001, Filing number:01902443.9, Pub.number:1249132, Grant number:60144513.9
  57. Country:NL:Filing date:22.01.2001, Filing number:01902443.9, Pub.number:1249132, Grant number:1249132
  58. Country:GB:Filing date:22.01.2001, Filing number:01902443.9, Pub.number:1249132, Grant number:1249132
  59. Country:JP:Filing date:20.04.2012, Filing number:2012-096255, Pub.number:2012-170122, Grant number:NA
  60. Country:BR:Filing date:08.05.2001, Filing number:PI0110627.9, Pub.number:0110627, Grant number:NA
  61. Country:CA:Filing date:08.05.2001, Filing number:2408364, Pub.number:NA, Grant number:2408364
  62. Country:CN:Filing date:08.05.2001, Filing number:01812464.X, Pub.number:1457606, Grant number:01812464.X
  63. Country:EE:Filing date:08.05.2001, Filing number:P200200627, Pub.number:P200200627, Grant number:5487
  64. Country:EP:Filing date:08.05.2001, Filing number:01931769.2, Pub.number:1282982, Grant number:NA
  65. Country:HU:Filing date:08.05.2001, Filing number:P0302617, Pub.number:P0302617, Grant number:NA
  66. Country:JP:Filing date:08.05.2001, Filing number:2001-583055, Pub.number:2003-533142, Grant number:4369090
  67. Country:KR:Filing date:08.05.2001, Filing number:2002-7014937, Pub.number:2003-11325, Grant number:772576
  68. Country:MX:Filing date:08.05.2001, Filing number:PA/A/2002/010964, Pub.number:NA, Grant number:229275
  69. Country:MX:Filing date:02.06.2005, Filing number:PA/A/05/005901, Pub.number:NA, Grant number:259781
  70. Country:SG:Filing date:08.05.2001, Filing number:200206648.8, Pub.number:NA, Grant number:92888
  71. Country:US:Filing date:08.05.2000, Filing number:09/566020, Pub.number:NA, Grant number:6711211
  72. Country:US:Filing date:03.02.2004, Filing number:10/770986, Pub.number:20040156437, Grant number:6954502
  73. Country:US:Filing date:07.09.2005, Filing number:11/219917, Pub.number:20060013317, Grant number:NA
  74. Country:ZA:Filing date:08.05.2001, Filing number:2002/8767, Pub.number:NA, Grant number:2002/8767
  75. Country:US:Filing date:17.04.2007, Filing number:11/736454, Pub.number:20080095228, Grant number:NA
  76. Country:AU:Filing date:29.08.2007, Filing number:2007311526, Pub.number:NA, Grant number:2007311526
  77. Country:BR:Filing date:29.08.2007, Filing number:PI0718205.8, Pub.number:NA, Grant number:NA
  78. Country:CN:Filing date:29.08.2007, Filing number:200780044601.0, Pub.number:101548548, Grant number:200780044601.0
  79. Country:EP:Filing date:29.08.2007, Filing number:07826205.2, Pub.number:2080375, Grant number:NA
  80. Country:IN:Filing date:29.08.2007, Filing number:2656/DELNP/2009, Pub.number:NA, Grant number:NA
  81. Country:JP:Filing date:29.08.2007, Filing number:2009-532920, Pub.number:2010-507310, Grant number:4903877
  82. Country:MX:Filing date:29.08.2007, Filing number:MX/a/2009/004123 , Pub.number:MX/a/2009/004123 , Grant number:NA
  83. Country:PH:Filing date:29.08.2007, Filing number:1-2009-500724, Pub.number:NA, Grant number:NA
  84. Country:RU:Filing date:29.08.2007, Filing number:2009117688, Pub.number:NA, Grant number:NA
  85. Country:SG:Filing date:29.08.2007, Filing number:200902620-4, Pub.number:NA, Grant number:151785
  86. Country:VN:Filing date:29.08.2007, Filing number:1-2009-00996, Pub.number:22209, Grant number:NA

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