In this post we explain why Non- Practicing Entities (NPEs) should not be demonized
Why did you launch the pool without publishing a patent list?
Patent licensing administrators like Sisvel typically announce a pool at any time from formal creation to when a list of patents is finalized, and there are pros and cons for any announcement date. In this case, we announced when we did so that those considering adopting AV1 would know that royalties will apply, and to inform others who may have applicable patents that the group was forming, which we hope will result in a single patent group representing all applicable IP.
AOM contributed the bulk of the technology to AV1 and they went royalty free – why are your companies trying to profit on AV1?
The Alliance for Open Media is legitimately granting royalty-free access to the intellectual property that has been contributed by its members and the Sisvel pool is not claiming royalties on this IP. However, the AV1 codec relies on many patented coding tools developed by companies not in the Alliance. Asking for a reasonable royalty is just a way to reward investments and developments carried out by parties not sharing the AOMedia business model.
AOM says they don’t infringe upon any third-party IP; why should we believe your claims?
We are available to discuss the claim charts for the patents as soon as the third-party evaluation is finished. We’re not making any unproven assertion, we’ll make the technical documentation available for evaluation when ready (which is also why we do not plan to start licensing discussion before the patent list becomes public).
Aren’t you just representing patent trolls; aren’t you a patent troll?
Trolls are those entities that bully the market by asserting, or threatening to assert, invalid or bogus patent portfolios to industry players that do not have the resources to defend themselves or for which it does not make economic sense to fight back in court. They seek quick settlements by asking for relatively small sums compared to the cost of defending against those patents in court.
One prominent example of a patent troll is a company, which after buying patents, attempted to shakedown coffee shops, restaurants, and other businesses for more than $2,000 per-location. After a long and expensive trial, the company settled for much less.
In contrast, firms like Sisvel, assist corporations, research centers, inventors and, more generally, the whole innovation ecosystem in three ways: first, making their intellectual property rights easily accessible to potential licensees; secondly, striving to eliminate all asymmetries in the market caused by companies who try to free ride on those intellectual property rights and lastly lowering transaction costs both for implementers and innovators, providing additional revenue stream that can be reinvested in further innovation.
Your pool members are all large companies and the overall royalties to be received will be fairly small. Why are they claiming these royalties? Why not follow the admirable goals of the Alliance for Open Media and contribute the IP on a royalty-free basis?
However large or small the revenue stream is, it will help sustain many jobs and fund many valuable development projects.
Companies invest in R&D for many reasons. Members of the Alliance for Open Media believe that their best monetization policy is to build products and services that use the AV1 codec. These companies charge for these products and services, like Microsoft for operating systems, Intel for CPUs, NVIDIA for graphics chips and SoCs, Apple for computers and mobile devices, and Amazon and Netflix with content. You can call their decision to make AV1 royalty free “admirable,” but that’s only because they charge for other products or services to sustain this R&D.
The members of the Sisvel pool believe the best way to monetize their investment is via licensing. Since they are the companies that invested in the R&D to produce the innovations, that is their right.