Company Sues MPEG-LA, Claiming Antitrust Violations Over Patents
from the this-could-be-interesting... dept
It's no secret (though certain copyright and patent system defenders insist otherwise) that copyrights and patents are monopoly privileges, granted by the government. In fact, some of our elected officials have made the argument that antitrust law should be used against the worst abuses of intellectual property law. While it's unclear how successfully that will play in courts, we may soon have a bit of a test case. Slashdot points us to the news that German company Nero AG is suing MPEG-LA, claiming abuse of monopoly power with its patent pools for licensing digital video codecs.As you may recall, MPEG-LA acts as a patent pool for many important patents related to digital video -- to the point that the organization appears to believe it is not possible to do digital video without infringing on those patents. Recently, the company has been getting more aggressive, first starting up a separate patent trolling subsidiary, and also threatening Google and others for trying to set up a new open video standard.
In this particular case, the details are important. OS News notes that MPEG-LA had approached the Justice Department back in the 90s to get an "all clear" against any antitrust problems, which the DoJ gave with some conditions. Nero suggests those conditions have not been met:
First, the MPEG-LA would engage with independent experts to ensure only essential patents would be placed in the MPEG-2 pool. They told the DOJ that the MPEG-2 pool constituted of 53 essential patents. Second, independent experts would "weed out nonessential patents" from the pool. Third, licensing terms would be "fair, reasonable, and nondiscriminatory".MPEG-LA has responded to the lawsuit by basically accusing Nero of being an infringer with sour grapes. Now let's see what the courts think...
Nero claims none of these safeguards were honoured, and here's where it gets juicy; "absolute power has corrupted the MPEG-LA absolutely", according to Nero. First of all, the so-called independent expert was anything but independent. The expert helped form the MPEG-LA, helped in drafting the first MPEG-LA licensing agreements, answers questions from licensees on behalf of the MPEG-LA, has attended business settlement meetings on behalf of the MPEG-LA, and has testified before US congress on behalf of the MPEG-LA. Heck, he is listed on the MPEG-LA website as "MPEG-LA's US patent counsel".
Nero also claims that the MPEG-LA has unlawfully extended its patent pools by adding non-essential patents to the MPEG-2 patent pool. Even though the MPEG-LA told the DOJ there were only 53 essential MPEG-2 patents, the non-independent expert added round and about 800 more patents to the pool, extending the duration of the patent pool, since the old, 53 essential patents expired....
Nero further claims that the MPEG-LA has "formulated and imposed licensing terms that are unfair, unreasonable, and discriminatory", by charging different royalty rates from licensees for the same MPEG-2 license and by not making any downward adjustment in line with the "rapid and dramatic" decrease in costs of implementing the MPEG-2 standard. In addition, the MPEG-LA collects royalties for the same device multiple times (internal hardware, software, monitor, etc.), and the licensing body has failed to "communicate its policies equally to all licensees".
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Filed Under: antitrust, patents, video
Companies: mpeg-la, nero
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Which is the point after all
Idea Patents... Really? Does that sound like a good idea? This system of intellectual property is an artifact of corruption. If there were no lobby this mess would have been cleaned up years ago.
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Re: Which is the point after all
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Re: Re: Which is the point after all
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The definition of a monopoly ....
That one line from the people at MPEG-LA says they know they are a monopoly.
Between this and the case before SCOUS on software patents and business methods. This should be interesting.
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Re: The definition of a monopoly ....
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Re: Re: The definition of a monopoly ....
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I don't see how our government simply gives into private interests so easily.
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Mike, you typically do an excellent job of presenting both sides to a story, even if you don't agree, but I find this story lacking.
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http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202458503025&MPEG_LA_Shrugs_Off_Anti trust_Allegations
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No, they fell from a broken patent office that needs to be disbarred. and I see no reason to believe that more patents = more invention/innovation.
"there seems to be a whole bunch of innovation here."
Where? Preventing others from implementing any idea possible without having them pay you? That's not innovation, that's extortion. Yes, there seems to be plenty of extortion here.
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there is a single section of fence in the middle of the field. only the truly stupid would be blocked by the fence for very long.
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except overly broad patents.
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Yes, a thousand times "Yes!". Broad and vague and useless.
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If they independently invent something that someone else already patented then that's just evidence that patents aren't needed. and when someone gets patents on every conceivable way of distributing video and encoding it, or at least every efficient and economical way of doing it, then there is no other way around it. Again, that's not innovation, it's extortion. It does absolutely nothing to promote the progress. Why should people have to go through a stupid retarded patent search before independently inventing something. Why should patents take away our right to independently invent? It's not innovation, it's extortion, the patent troll merely takes all the obvious ideas that everyone will come up with independently and tells them that they can't implement it without paying them. That's not innovation, it's an unfair restriction of our rights. Nothing more. Why can't the monopolist instead innovate and bring a competing product to market instead of failing and demanding money from those who do innovate?
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see mike, there is much more to the story than just slamming them. how about actually trying to get some facts as opposed to a one sided legal claim?
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What?
"it should be noted that since it has been 15 years, many of the original patents should be falling to the end of their time. what is the situation there?"
The situation is that patents are continuing to only hinder progress until they expire in which case new patents will continue to hinder progress.
"see mike, there is much more to the story than just slamming them. how about actually trying to get some facts as opposed to a one sided legal claim?"
TAM, you haven't shown that there is anything more, you are merely speculating that there might be something more. If there is something more, then why don't you present it?
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I also believe that TAM and Mike are the same person because I am a paranoid schizophrenic.
Who said that?
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Waiting.
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Don't hold your breath.
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The DOJ and MPEG-La recognized their violation of anti-trust laws and the DOJ gave them a pass on those violations with certain conditions that MPEG-LA has violated. That means (can mean) that MPEG-LA is in violation of anti-trust law AND is no longer protected by a pass from the DOJ.
That is what Nero is claiming in their suit. the validity of any one of those 800 additional patents has no bearing on this.
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Bigger Picture...
No matter what though, I'm glad to see someone standing up to the MPEG-LA - about time. This isn't about some person in a garage getting screwed after they come up with the next energy source, this is about a company playing the system in the hopes of being a leech on those that work very hard to get products into our hands.
Freedom
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The real issues which we don't seem to be addressing
See http://www.osnews.com/story/23236/Why_Our_Civilization_s_Video_Art_and_Culture_is_Threatened_by_the_ MPEG-LA and links therein for more information.
I would like to seem some discussion of MPEG-LA's policy of imposing downstream licensing conditions (surely in violation of the first sale doctrine) and their attempts to extract royalties from those who merely use MPEG equipment or software in a commercial context. (It is this policy and MPEG-LA's licensing doublespeak that lies behind the Nero case).
Another intersting issue is Google's attempts to throw a spanner in the patent works with their special open source license for VP8.
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rights
Close, but no cigar. The Constitution says....
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries
They are rights as in God given, not privileges granted by mere mortals like the federal government. The founders understood that, but you never will. As the Grateful Dead would say -keep on shilling.
Patent reform is a fraud on America. It is patently un-American.
Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
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Re: rights
So what religion are you and where does it say that these are rights in your religion?
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Re: rights
Amusingly, the founders said exactly the opposite. I'm wondering why someone on the payroll of Ronald Riley's company would so blatantly lie.
"If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property." -Thomas Jefferson
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