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DOJ Anti-trust Investigation of MPEG-LA 149

Posted by Unknown Lamer
from the pay-the-fees-or-else dept.
thomst writes "The Wall Street Journal's Thomas Catan reports that the Department of Justice has launched an anti-trust investigation of MPEG-LA's purported efforts to prevent Google's VP8 codec from widespread adoption. According to the article, the California Stare Attorney General's office is also investigating MPEG-LA for possible restraint of trade practices."
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DOJ Anti-trust Investigation of MPEG-LA

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  • by hoggoth (414195) on Friday March 04, 2011 @09:44AM (#35379164) Journal

    When the parties come to a quiet settlement out of the public eye, I can't wait for Thomas Catan's headline: "Settlers of Catan"

  • The US Department of Justice is going after the International Oraganisation for Standardization (ISO)'s Moving Picture Experts Group (MPEG) Licensing Agency (LA)?

    Am I the only person who sees a problem here?

    • by Plombo (1914028) on Friday March 04, 2011 @10:01AM (#35379350)
      The MPEG-LA is not actually affiliated with MPEG or ISO.
      • by drinkypoo (153816)

        The MPEG-LA is not actually affiliated with MPEG or ISO.

        Well, that's what they say. It's easy to get a list of MPEG-LA members but not so easy for MPEG. How many MPEG-LA members aren't members of the MPEG committee?

        • by mbone (558574)

          I actually don't think that there is that much connection.

          I certainly know of MPEG participants who do not approve of MPEG-LA, and there are certainly also patents that the MPEG has to deal with, whether they want to or not.

          • by drinkypoo (153816)

            I certainly know of MPEG participants who do not approve of MPEG-LA,

            That is unsurprising given that MPEG is larger than MPEG-LA (in terms of number of members) but absent a list of MPEG members it's difficult to make any kind of real comparison.

    • by airfoobar (1853132) on Friday March 04, 2011 @10:05AM (#35379386)
      The MPEG LA is *NOT* affiliated with the MPEG committee. They are a separate *COMPANY* that puts together patent pools for MPEG standards -- basically they are a bunch of parasite lawyers living off software patents, at least in my opinion.
      • basically they are a bunch of parasite lawyers living off software patents

        But that still doesn't necessarily make them "trolls" in the sense of nonpracticing entities. A lot of MPEG-LA members sell copies of encoders that they have developed. I'd bet a lot of MPEG-LA members are also in MPEG itself.

        • That said, trolls operate under a bunch of different business models and with a number of overlapping motivations, including the motivation of excluding or taxing small competitors who need to implement standards. Moreover, anyone who tries to create a patent pool that supposedly covers OGG, VP8 etc just as they are released as royalty-free totally deserves that description, if you ask me.

        • by peragrin (659227) on Friday March 04, 2011 @11:16AM (#35380264)

          No they are trolls, because every year they say how thankful we should be they decided not to charge us this year for the stuff they gave away for free last year.

          Next year they will say the same thing. They have said it the last 2 years now that I know of. Oddly enough 2 years ago was when Google started dealing with VP8, and actually opening up those codecs.

          Right now you have to pay to use H.264 every time you, encode, decode, stream, move, or look at the file. Only because MPEG-LA are such nice people they actually only charge you for encode, decode, and stream.

          If you think your not paying, then you might want to take a closer look someone is paying it for you then raising the cost of doing business along the way.

      • Something being international doesn't mean it is outside of the law of a given country. Heck for that matter most large companies are international, they have offices all over the world. That doesn't mean they get to say "You can't pass any laws on us or take us to court! We are International!" Do business in the US, you are subject to US law. Same deal with MS and EU anti-trust rulings.

        However the parent is completely correct. MPEG is the group that designs compression formats and so on. MPEG-LA is a group

        • by Kjella (173770)

          Has nothing at all to do with the development of anything.

          That is exceedingly kind, I'm fairly sure the patent holders in various ways try influencing the development to make their patents essential to the format. Formally the MPEG-LA has nothing to do with MPEG, but I'm sure many of the companies have both experts on the MPEG group and license income from MPEG-LA.

    • by Compaqt (1758360)

      LA == 'Licensing Agency'?

      I always vaguely thought of Los Angeles (Hollyood) when I read that.

    • by DarkOx (621550)

      Probably not but you should be.

      At least where hightech is concerned this so called standards organizations have devolved into little more of substance than East Texan Patent trolls, they just hide behind their names and history for the sake of keeping a better face on it.

      All MPEG-LA is really about is deciding who gets to play and who has to pay based on if you are lucky enough to be 1, a Mega Multinational, 2 part of their chosen boys club, and 3 friendly to their business interests. These organizations a

    • by hkmwbz (531650)
      The MPEG-LA is not a standards group, and not affiliated with the MPEG. It is an industry cartel which is now trying to gain control over its main competitor (VP8) through the use of patent threats, and by setting up a patent pool for the competing technology.
  • by Mystiq (101361) on Friday March 04, 2011 @09:58AM (#35379322)
    Now can someone in government put two and two together and see the absurd situation software patents has caused? VP8 is supposed to be patent-free but everyone on the H264 side is calling it patent-encumbered anyway. The mere existence of patent trolls should be reason enough to get rid of the idea. You should be able to patent implementations, not ideas.

    The point of software patents was to protect innovation. This should be a clear example that it is not, as VP8's adoption is supposedly slow because of the risk of violating other patents whose owners won't come out of the woodwork until VP8 has enough market share to make a lawsuit nicely profitable. The whole thing is patently ridiculous.

    The sheer amount of patent lawsuits and now that even Google and Apple are teaming up against a troll is very telling. Software patents are not serving their intended purpose and it is obvious because no one wants to adopt VP8 because of the unknown threat. This is the stifling of innovation and is not protecting the patents of the 10 companies that may own patents to VP8 because no one wants to use them so they just become dead weight. What good is an idea if it can't be used?

    Software is a fickle thing. Your idea may have also been invented by someone and you just didn't patent it. This is the problem with software patents. The patents themselves can be very vague and cover a whole host of ideas. If the patent office has to pass more patents just to get rid of a backlog, perhaps it isn't the fault of the filers but the fault of the law.
    • by Anonymous Coward
      In theory software patents are quite specific. But you;re right. The situation is ridiculous. A video specification will be about 100-200 pages. A chunk of that is examples, contents pages, explanatory notes. Another chunk will cover material that was in previous versions of the standard since at least some of the basic technology from MPEG1 and 2 is duplicated. This is all no longer covered by a patent.

      So the remaining technology - all the innovations that make h264 more advanced than MPEG2 - accou
    • by minorDistraction (1594683) on Friday March 04, 2011 @10:26AM (#35379572)
      VP8 is not patent-free. Google has the patents, but it won't be charging money for it. If H264 wasn't covered by a bunch of expensive patents, VP8 would not be needed. People could put effort in improving H264 instead.
      • Re: (Score:3, Informative)

        by Mystiq (101361)
        Er, my intention was there, even if the wording wasn't. :) Replace "patent" with "royalty" where appropriate if you like.
      • by westlake (615356)

        If H264 wasn't covered by a bunch of expensive patents, VP8 would not be needed. People could put effort in improving H264 instead.

        They are.

        HEVC (aka H.265) should be ready in about a year or two.

        Current indications are that the new standard could provide 2x better video compression performance (i.e. around half the bitrate for a similar quality level) at the expense of significantly higher computational complexity, compared with H.264/AVC.

        High Efficiency Video Coding / HEVC / H.265 : Beyond H.264 [vcodex.com]

        HEVC like H.264 is not a exclusively - or even primarily - a "web codec." The target markets include next generation HDTVs and services like Netflix and OnLive gaming.

        Netflix doesn't need the PC.

        It doesn't need the browser.

        What it need is the content protection demanded by the major providers,

        What it needs is placement of its "app" on very tablet and smartphone, Internet-enabl

    • You should be able to patent implementations, not ideas.

      Unfortunately it is not as simple as that. The reason we have software patents is because lawyers were able to twist a series of patent cases into a questionable conclusion that says something like 'when this software idea is combined with the hardware of a computer it transforms the hardware into a new machine and therefore the software itself is patentable as part of the implementation.'

      There are a number of people who make a great deal of money ensu

    • by phantomfive (622387) on Friday March 04, 2011 @01:08PM (#35381796) Journal

      You should be able to patent implementations, not ideas.

      We already have protection for implementations, it's called copyright.

      Now can someone in government put two and two together and see the absurd situation software patents has caused? VP8 is supposed to be patent-free but everyone on the H264 side is calling it patent-encumbered anyway.

      I am personally opposed to software patents, especially for things like 1-click purchase, but you need to be able to see both sides of the issue. Look at it a different way:

      VP8 was developed over the course of 10 years by a company called On2 Technologies. They paid their programmers lots of money, and got lots of money from investors to do so, because they thought they could make a lot of money in return. And they did. In 2004, for example, Macromedia paid them lots of money to license their VP6 codec. Now, to be interoperable, you need to let other people know what the format is, so if it weren't for patents, Macromedia wouldn't have needed to pay them. They could have just rewritten the codec on their own and avoided licensing costs.

      If patents weren't around, On2 wouldn't have been able to get licensing fees. Thus they wouldn't have been able to make money, and they wouldn't have gotten funding to pay their programmers. It is arguably only because of patents that VP8 even exists today.

      See how it is? Patents aren't a clear evil. Life is nuanced and there are shades of grey.

      • There is nothing in life that says that investors should be guaranteed a return on their work via government intervention in the market. The problem is not the ethical notion that researchers and the investors who finance them should be rewarded for their work and risk taking. The problem, as you are well aware, is that software patents are patents on math.

        Besides, as you said, On2 made a lot of money on their patents. How much money did they make from implementation and support of the software they wr
        • I have no idea why you are against software patents. As far as I can tell, you don't like them because you like to use the efforts of other people's work for free. Meh.
          • You're kidding, right? If anything, it's the other way around. Many patentees are attempting to use the work of others by claiming infringement and seeking royalties or injunctive relief to stop other people from practicing the patents. The problem I have with patents is that they allow a patentee to tell me what I can or cannot do with my own property. That is hardly a free market idea.

            You might want to read up on Jefferson [uchicago.edu]. Here is a relevant quote: "If nature has made any one thing less susceptible
      • by melikamp (631205)

        If patents weren't around, On2 wouldn't have been able to get licensing fees.

        That's right, and that's because On2, like anyone who tries to monopolize math, does not deserve our business. Without software patents, an open codec(s) would be developed just as well by a hardware alliance in collaboration with the FLOSS community and the cost would be passed on to consumers of hardware devices. The total development costs would be an order of magnitude smaller and no one would have a monopoly on using a class of mathematical functions. Where is the freaking downside? I could run your ar

        • Without software patents, an open codec(s) would be developed just as well by a hardware alliance in collaboration with the FLOSS community and the cost would be passed on to consumers of hardware devices

          And it would suck, like the open source codecs that are already in existence.

      • If patents weren't around, On2 wouldn't have been able to get licensing fees. Thus they wouldn't have been able to make money, and they wouldn't have gotten funding to pay their programmers.

        Since there is absolutely no way you could possibly verify this let alone 'know' this (unless you created an alternate reality where patents didn't exist and that only difference caused this one company to fail), your entire argument is predicated on something that is untestable.

        But, it's a good thing we have patents, or

        • What exactly was my argument? Read it again and see if you can figure out what my main point was.
          • by lpq (583377)

            You were saying there were 'shades of grey', and how even though you were against SWPatents, in general, that in some specific instance, it allowed developed of a subsequent product further down the line.

            My take was that using the supposition that SWP enabled the further development was predicated on 1) the untestable presumption that SWP's were required for the development and payouts on the first product and 2) that the 2nd product wouldn't have been developed independently by the original developers in t

            • There is no doubt that profit motivates many inventors, including some in that particular niche. Patents are a legal framework which enable people to profit from their inventions (and really, I see no reason people shouldn't be able to profit from their inventions in general).

              It's possible this company could have made a profit without using software patents. Hard to know. William Rosen makes an argument [thedailyshow.com] that patents do drive invention and innovation. I don't have the breadth of knowledge to know if he is
              • by lpq (583377)

                There's a very interesting paper [ssrn.com] that documents that extrinsic rewards (like profits) actually hinder the creative process in some areas. The paper documents the origins of the copyright/patent system as being a replacement for an earlier system where 'patents' were given as 'rewards' by monarchy, based on 'favoritism' rather than on anything to do with creativity -- somewhat akin to the modern day 'knighthood's being granted as a reward by monarchy to some individuals who 'please the monarchy' (in these d

                • You aren't by any chance the one who wrote that paper, are you? :)

                  The paper affirms that in some industries, patents are very important in protecting profit, while in others, it doesn't. This is not surprising. I wouldn't disagree that most software patents I've read are obvious (though sometimes profitable for their authors). These are certainly going to stifle innovation. But even in the computer industry, some companies, like Qualcomm, are motivated by patents and profits. Maybe their technologies woul
                  • by lpq (583377)

                    You aren't by any chance the one who wrote that paper, are you? :)

                    That'd be cool, but not quite so clear in my writing...

                    As for qualcomm -- while it does make real products, it has quite a few patents that it hasn't used itself or allowed to be licensed. It's these 'dormant' patents that are a problem. Qualcomm's practices haven't left others wondering if they are starting to move more towards being a patent troll.

                    I've no prob with inventors getting paid for their inventions, but if they create 'patents'

                    • Indeed. I will not argue that patents are all good or do not cause harm. Only that the issue is not so black and white.
  • I thought that the DOJ anti-trust division had all been frozen in carbonite. Now, it appears that they are awake and may actually do some good. When they are done with this, there is a certain search engine they might want to look at...

    • by jd2112 (1535857)
      A certian G. Lucas, citing his patent 'A method for placing objects and persons in stasis by means of encasing in Carbonite' demanded payment for patent infringement and the un-freezing of 'unnecessary' government workers was required as part of the settlement.
  • The point is to give their holders a preference. True, it was intended for individuals who needs a while to ramp an idea up to a business, not multinational corporate conglomerates who house thousands like a weapons stockpile. Perhaps, the answer is that we do not afford corporations the same rights as individuals. The Supreme Court recently ruled to that effect.
  • by Curunir_wolf (588405) on Friday March 04, 2011 @10:29AM (#35379638) Homepage Journal

    I told you Google was working with the government! This just proves it.

    --- Glenn Beck

    • by Mystiq (101361)
      I sincerely hope you don't mean that. Glenn Beck is about as ridiculous as they come. He offers no discussion, only bait. He's like a 13 year old on a forum starting a flame war then watching everything burn while pouring more gasoline. There may be valid points in there but the amount of noise that comes with it makes it hard to find the signal.
      • Meh. It was supposed to be funny. Looks like I failed miserably.
        • I laughed.

          It just seems that as soon as the name Glenn Beck is mentioned on slashdot, some 'dotters shit their pants in an unholy crusade against him, without entertaining the notion that the whole thing may just be one finely done parody.
  • by Elbereth (58257) on Friday March 04, 2011 @10:43AM (#35379764) Journal

    "All video codecs are covered by patents," Mr. Jobs wrote. "Unfortunately, just because something is open-source, it doesn't mean or guarantee that it doesn't infringe on others patents."

    This seems like a reasonable statement, at first, but then I wondered what makes video codecs so special. I mean, why single them out, when almost anything has at least the possibility of infringing on a patent? I think that's pretty much the point of having a patent pool, these days. If someone claims that you're infringing on their patents, you can search through your collection of thousands of patents, in order to find something that they are infringing upon.

    Now, I'm not necessarily an anarchist wanting to abolish intellectual property, but I do believe that patents have become an embarrassing travesty, thanks to the past fifteen or twenty years' worth of crappy patents (which are just now beginning to fall out of protection). When you can't even write an open video codec without industry insiders calling into question your very algorithms, there's something wrong, be it with the insiders (spreading FUD in order to kill the competition) or the laws (which have made competition impossible).

    Anyways, I'm sure a hundred other people will say the same thing, since this is Slashdot, and we looove to complain about intellectual property laws, so I'll add a little something extra: what I've thought about as a replacement for our current system. How's this sound?

    • First, let's upgrade the patent clerks to "patent engineers", because that's what they should be, with appropriate qualifications and salary. I'm sure we can find the funds to lure some qualified engineers away from big business, and, if we can't, we could always steal a few away from the Armed Forces. Sounds like a pretty comfy retirement for a knowledgeable engineer, to me.
    • Second, let's remove all the legalese and obfuscation from the applications. If it's not clear and concise, reject it. If it doesn't narrow down the scope to laser precision, reject it. If it sounds like a lawyer wrote it, rather than an engineer, reject it. The default action should generally be to reject, seeing as patent are supposed to be novel.
    • I was always told you couldn't patent an idea. Well, it seems as though you can... if it's implemented on the internet! Come on. That's stupid. I'm willing to compromise on algorithms, formulas, and other mathematical discoveries (though I dispute their status as inventions), in order to fight against patents that are even more offensive than algorithms, but they should be, again, so narrowly focused that you'd know you were infringing on someone's patent, rather than stumbling on it by accident. One doesn't accidentally re-implement LZW, MP3, or JPEG compression. On the other hand, everyone has, at one point, thought, "If I had a single click checkout button, that would make this whole process much easier." Bezos was simply enough of an asshole to go to the bother of patenting his idea. LZW? Patentable. One click checkout? Not patentable. As distasteful as I might find patenting algorithms, it does force people to stop patenting stupidity like Amazon's patent portfolio, which is composed of "good ideas", not machines or algorithms. Since patented algorithms are probably here to stay, we might as well use them to purge the even more offensive patents.
    • Patents should have a clear owner. No owner means no patent. If you make a good faith effort to contact the owner of a patent, with the intention of licensing it, then I'd say you've done all you can. Keeping your patent documentation up-to-date is your burden, not anyone else's.
    • Patents should be encouraged to have a short lifetime. The amount of protection offered should be inversely related to how much freedom is reserved by the patent holder. For example, a patent on a new type of electronic lock might last 3
    • by Jahava (946858)

      Here's my patent reform plan:

      • At the time a patent is submitted, the total research cost invested in creating the patent (specifically) is also registered alongside this patent. This cost must be justifiable and subject to some set of reasonable constraints. Alternatively, the patent submitter can choose to omit a cost, and the cost will default to something like $50,000.
      • The patent, once granted, functions as usual.
      • At any time during the patent's lifetime, money can be paid towards it (by any party, group
      • by Jiro (131519)

        That doesn't work even if it's actually a reasonable patent. What if the research cost is $50000, but the research only has a 5% chance of producing something useful and the company had to do twenty such research projects in order to get one patent? Certainly not every anti-cancer research project is going to produce a cure for cancer, after all--a lot of them won't pan out.

      • by Rysc (136391) *

        I like your idea, but 110% is awfully low. Patents really do need to allow for a reasonable profit. Let's set it at 200%, so you double your investment. That is pretty fair.

        Better yet, I'd like to include a clause that lets a third party assert that the patent has paid for itself. At such a time a court would examine the situation in a trial-like fashion and if it found that the patent had generated a gross profit of some reasonable multiple of its registered cost--say ten times as much--then the patent be

      • I'm not fan of the current patent system, but they're not just about protecting the money spent developing the patented concept but the profit that can be obtained from exclusive access to it.

        The money invested in developing a patentable idea is just that, for the most part -- a business investment. People with money to invest are looking for some kind of return on their investment -- not just the money they invested, but MORE than they invested, an interest percentage.

        I like your idea, but you would have

    • by LWATCDR (28044)

      "Second, let's remove all the legalese and obfuscation from the applications. If it's not clear and concise, reject it. If it doesn't narrow down the scope to laser precision, reject it. If it sounds like a lawyer wrote it, rather than an engineer, reject it. The default action should generally be to reject, seeing as patent are supposed to be novel."
      They are clear and concise to a lawyer.
      What it all comes down to is that writing any legal document is a lot like making a wish in DnD.
      To give you an example.

    • Variable-lifetime patents already exist to a certain extent (utility patents vs. design patents [wikipedia.org]). But it would be interesting to extend the idea further.

      As long as we can make arbitrary changes to patent law, I think the most valuable thing you could do is to mandate a periodic investigation into whether or not the current policies encourage innovation. Are algorithm patents slowing down innovation? Shorten their duration by a few years/be stricter about what you accept.

      • Frivolous lawsuits would be severely discouraged. And I mean severely.
      • The patent process now involves wrestling with a live bear. Anyone who successfully survives the experience is awarded the patent.

      I can only imagine the punishment y

    • by dkleinsc (563838)

      First, let's upgrade the patent clerks to "patent engineers", because that's what they should be, with appropriate qualifications and salary.

      Next thing, you're going to be saying that some well-qualified patent examiner [wikipedia.org] might be capable of producing top-notch research in physics or something!

    • by rsborg (111459)

      The patent process now involves wrestling with a live bear. Anyone who successfully survives the experience is awarded the patent.

      Are you a big fan of PLIF [courageunfettered.com]?

    • First, let's upgrade the patent clerks to "patent engineers", because that's what they should be, with appropriate qualifications and salary.

      Don't know about patent clerks. But I understand that patent lawyers are already required to also be engineers. Have been for some time.

  • It's about time the Justice Dept. gave value for money [google.com].

  • Absolutely! (Score:5, Funny)

    by kheldan (1460303) on Friday March 04, 2011 @01:05PM (#35381746) Journal
    Yes, we must break up the MPEG group's hegemony! There should be more than just MPEG-LA; I propose they break it up into smaller units, thusly:
    • MPEG-LV: Las Vegas
    • MPEG-NY: New York
    • MPEG-MI: Miami

    ..in addition to MPEG-LA (Los Angeles).

  • I am glad the DOJ and CA Attorney General are launching this anti-trust investigation, and I hope MPEG LA is prevented from any further action against the VP8 codec. Without open competition, capitalism does not work. No group should have the right to block alternative technology formats whether they are free & open source or not. We must be vigilant about this as citizens because otherwise monopolies will destroy our democracy and the ability of new companies to compete and innovate. After reading this
  • by TheSync (5291) on Friday March 04, 2011 @01:53PM (#35382414) Journal

    [this is my personal viewpoint]

    I'm all for people making money on their intellectual property (IP). And every modern standards development organization (SDO) requires the disclosure of IP by standards setting participants.

    But it is the IP held by non-participants unknowingly infringed upon by standards that are the big cause of FUD on the adoption of new standards.

    ANSI is the the official U.S. representative to ISO/IEC and accreditor of US SDOs . Not all US standards become ANSI "National Standards", but many important ones do.

    I believe that upon ANSI elevating a standard from one of its accredited SDOs to a National Standard, there should be a legally defined process that begins a time period wherein all IP owners must "put up or shut up" regarding the standard, i.e. they must declare whether their IP is potentially infringed by a National Standard.

    After that time window is over, patent or other IP infringement cases can not be brought for the use of that IP in applications of that National Standard.

    I'd be happy for that window to be 1 year or 2 years to ensure that IP holders have enough time to be able to monitor publication of National Standards and properly analyze them, but no more than that.

    I'm not a WIPO or international law expert, but it might be nice to extend this to at least a certain class of ISO/IEC standards as well (but perhaps only the important ones).

    • by TheSync (5291)

      By the way, in case I wasn't clear, I meant a 1-2 year time window for IP holders to "declare" their IP is in a standard. Standard users would still have to negotiate for licenses of declared IP, but at least they would know who to negotiate with, as opposed to the current situation where no one really knows what IP might be infringed upon by a standard.

  • I think it is high time the government stepped in to challenge what amounts to a video format cartel.

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