MPEG-LA Gearing Up To Go Patent Nuclear On Google's Decision To Release Open Video Standard

from the get-the-lawyers-ready dept

It's no secret that MPEG-LA, the private company that handles patent pools for a variety of digital video standards, including the widely used H.264 -- and recently began dabbling in patent trolling, has suggested that there can be no digital video without licensing patents from its patent pools. And, of course, there were just rumors (kicked off by a Steve Jobs email), that MPEG-LA was gearing up to sue any "open" video standard out of existence. Well, that whole story got a bit more complex this week when Google announced its plans to open up its VP8 video codec, and make it royalty free, under the WebM name.

Of course, you didn't think that MPEG-LA would take that calmly, did you? MPEG-LA's boss claims he's working to create a patent pool around VP8... meaning that what Google insists is now royalty free, might not end up being royalty free if MPEG-LA has its way. Of course, the good news here is that you now have Google's cash around to back up any potential patent fight, but it may take years (and years and years) before any resolution comes of it. And, in the end, for MPEG-LA, that might be the real goal. If it can just create enough uncertainty around VP8 through patent threats and lawsuits (even if it loses), it might hope that it can retain its hold on the market with H.264.

Filed Under: openness, patents, video
Companies: google, mpeg-la

Why Is MPEG-LA Getting Into The Patent Trolling Game?

from the questions-worth-asking dept

Joe Mullin has a great blog post, looking in detail at MobileMedia, a recently launched "company" that fits all the traditional characteristics of a "patent troll" or "non-practicing entity" (if you'd prefer). It doesn't appear to do anything but hold patents, demand licensing fees and sue. So what's so interesting about this one? Well, it's a subsidiary of MPEG-LA, the company that manages some important digital video standards, and manages the patent pools related to them -- and both companies have the same CEO. In some cases, it seems like there's a clear conflict here:

Even more unusual is that one of the companies targeted in MobileMedia's initial batch of suits is Apple (the others were BlackBerry maker Research in Motion and HTC). Apple happens to be among the companies that has contributed patents to MPEG-LA patent pools, including those covering the MPEG-4 and the IEEE 1394 (Firewire) standards. That puts Horn in the position of collecting money for Apple on behalf of MPEG-LA while at the same time trying to wring money out of the company on behalf of MobileMedia. Considering the breadth of MobileMedia's patent claims--the company claims to hold patents relating to all the central functions of "call handling, speed dial functions, database searches, audio download and playback, and still picture and video processing"--it's easy to imagine that Apple won't be the last company to wind up on both sides of Larry Horn.

While some may claim that MPEG-LA and MobileMedia are basically in the same business, Mullin notes the important distinctions:

But there are big differences between the MPEG-LA licensing operation and the nascent MobileMedia campaign. First of all, MPEG-LA's patent pools are widely recognized as vital to digital video technology throughout the industry. And they're accepted as covering industry standards. MobileMedia, on the other hand, holds patents that cover phone features but not industry standards.

Second, MPEG-LA's licensing rates are relatively low--$2.50 per device for those that want to make a DVD player using MPEG-2 standards, for example, down from $4 back in 2002. And the pool is controlled by a large group of competitors with a shared incentive to keep those rates low (lower licensing costs means more devices made means more revenue for pool contributors).

Finally, MPEG-LA doesn't file enforcement lawsuits on its own. If a user of the MPEG-2 standard, for example, refuses to pay to license patents from the company's pools, MPEG-LA notifies the patent-holders that they may want to file suit. MPEG-LA simply plays an administrative role.

By contrast, MobileMedia owns its 122 U.S. patents (and related foreign patents) outright, and so can enforce them directly. And its majority owner is a pure patent-licensing company that doesn't make products. That gives it an incentive structure more like those of typical "non-practicing entities"--also known as "patent trolls"--that use the threat of litigation to collect settlement cash without concern for the actual market in question.

Mullin has much more detail in the article, including some quotes from the CEO, and also some more details on the patents in question -- including the fact that they came from Nokia and Sony, opening up more questions about why MobileMedia targeted Apple, RIM and HTC in its early lawsuits.

What I find interesting, of course, is that many patent system folks have said that patent pools are the "answer" to issues like non-practicing entities filing crazy lawsuits. And yet, here we have an example of one of the major patent pooling administrators apparently deciding it's more lucrative to get into the other side of the business instead...

In the meantime, while all this has been going on, it's worth noting that Steve Jobs -- one of the targets in this lawsuit -- has apparently been telling people that MPEG-LA is getting ready to sue open video codecs, such as Theora, for patent infringement. Of course, such threats have been made before and never carried out -- but if MPEG-LA now thinks that suing for patent infringement (rather than just alerting the patent holders to possible infringement) is the way to go these days, perhaps the lawsuits above were an opening salvo.

On top of that, a whole bunch of you have been submitting this somewhat speculative story that notes that MPEG-LA has structured its licensing program in such a way that pretty much any video camera you buy -- even the so-called "professional" ones -- includes a clause saying that it's only for "personal and non-commercial use," because MPEG-LA's licensing terms for anything else are ridiculously high. It appears that this clause has been almost universally ignored by... well... pretty much everyone. But if MPEG-LA is suddenly moving into more questionable means of bringing in revenue... it could get more troubling quickly.

Filed Under: mpeg-la, patents, video
Companies: mpeg-la

How Not To Handle A Parody Video: Threatening Legal Action

from the hello-ms.-streisand dept

A whole bunch of people have sent in variations on this story, which involves scientist Michael Mann, one of the main figures involved in the recent (misleading and totally blown out of proportion) controversy over climate change research, threatening legal action against people who made a satire video, which includes his image. Honestly, it's hard to think of a move more likely to backfire than this. His lawyers should have done everything in their power to talk him out of making such a threat. Think about it:

• You have groups who want publicity making fun of him
• These groups also want a legal battle with him where they might be able to gather additional info from him
• They made a clearly legally protected video

Sending a legal threat here not only doesn't work, because the legal basis is suspect, but it plays perfectly into the hands of those who made the video in the first place. No matter what you think of Mann's work, it's hard not to think that it's an incredibly dumb thing to threaten legal action in this situation. The actual cease & desist letter also raises some legal threats that have little basis in the law. It threatens the group that posted the video for using Dr. Mann's likeness, claiming that it was pulled off the Penn State website, and "is not authorized, and infringes on various copyrights." First of all, merely making use of a publicity photo in the video is unlikely to actually infringe on anyone's copyrights, but more to the point, it almost certainly does not infringe on Mann's copyrights. If anyone holds a copyright on that image, it would be the photographer who took the image or (more likely) Penn State. The lawyers do cc a photographer -- so perhaps they're suggesting he holds the copyrights, but they make no claim that they represent him.

Either way, it's hard not to see the video as protected free speech. The use of his likeness is not (as the letter claims) for commercial purposes, but to mock him. It clearly hurts his feelings, but that's not illegal. The claims of defamation are also ridiculous. Even if you believe that Mann's infamous comments were taken out of context, there's a widespread discussion over what happened with the data in question, and arguing that it's defamatory to make such a claim is a stretch.

Yet again, we see a legal cease & desist threat being used not for an actual legal reason, but because someone doesn't like something on the internet... and the result, in true "Streisand Effect" fashion, is to call significantly more attention to the content they hoped would disappear. This video wasn't going to convince people one way or the other in this debate. People who want to believe that climate change data was falsified were going to believe it no matter what. Those who feel otherwise aren't going to have their mind changed by a silly video. Threatening legal action does nothing but draw more attention to the the issue.

Filed Under: lawsuits, michael mann, parody, video

Because NBC Could Never Have Figured Out How To Put TV Shows On The Internet By Itself...

from the lawsuit-insanity dept

I've been pretty hard on NBC Universal and its partially owned subsidiary Hulu for some consistently poor strategic decisions making over the years, but this recent lawsuit against them seems pretty ridiculous. AdamR points us to the news that a company you probably haven't heard of called Hulavision (its founder is Errol Hula -- get it?) is suing NBC and Hulu claiming that they stole the idea for Hulu and the name. The details of the case don't look much more convincing:

Hulavision and principal Errol Hula claim that the company developed technology to deliver television programs directly to viewers online. Hula then met with NBCU business development exec Raymond Vergel de Dios at a Las Vegas trade show and was invited to have further discussions about working together. In the spring of 2006, Hula and NBCU allegedly signed a nondisclosure agreement, after which Hula revealed his company's business model, marketing strategy, product roadmap and a "shared revenue model chart" that included valuable trade secrets.

Yes. Apparently he seems to think that the concept, technology and business model of taking TV shows and putting them online is his and his alone. As if NBC wasn't likely to figure out how to take video and put it online. And, really, if they were going to take the name from Hula, you'd at least think they'd use a name that was a lot more indicative of video online. There is simply no benefit at all to NBC purposely trying to take Hula's name for Hulu.

Filed Under: online video, trade secrets, video
Companies: hulavision, hulu, nbc

Hulu Continues To Shoot Self In Foot: Blocks More Browsers

from the lemme-explain-how-the-internet-works... dept

Hulu, at the behest of its corporate masters, continues to shoot itself in the foot and make it an increasingly less useful platform. Last year, Hulu got a lot of attention for blocking Boxee, a specialized browser to show internet video on a computer-connected television. Hulu was apologetic about it, but admitted that it was pressured to do this by its owners (though, NBC boss Jeff Zucker appears to have lied to Congress about NBC's role in this). However, it didn't stop there. Hulu, it seems, is hellbent on trying to block any browser it doesn't like from showing its content. It's blocked the PS3's browser and mobile browsers as well.

The latest is that it wasted almost no time before blocking the new Kylo browser from Hillcrest labs that, like Boxee, was designed to better format the content for television.

This is typical short-sighted thinking from the likes of NBC bosses who are bizarrely afraid that people might watch authorized television shows on their television. Of course, the real fear is that if people start doing this, the cable and satellite companies might start losing business, meaning that they'll pay a lot less to NBC to carry their shows. This is such typical thinking from NBC execs, who seem to go out of their way to pretend that they can hold people back from doing what they want, because it doesn't agree with NBC's increasingly obsolete business model. So instead of letting people watch authorized content, with very high paying advertising, they're instead driving people to get the content through unauthorized means. It's bizarre that anyone could think this is a smart idea -- but, then again, we're talking about NBC management here. They think that downloading movies is hurting the American corn farmer... so logic has never really been a strong suit.

Filed Under: browsers, kylo, tv, video
Companies: boxee, hillcrest labs, hulu, nbc

Frost & Sullivan Analyst Apparently Has Never Heard Of Network TV: Says Video Can't Be Free To Consumers

from the this-is-why-fewer-and-fewer-people-trust-analysts dept

It's really stunning to see people who obviously should know better continually insisting that content can't possibly be free to consumers. We've been seeing a lot of it in the news business lately, as newspaper execs who have built up an ad business for many years seem oblivious to the fact that consumers have almost never paid directly for news. And now that same sort of ridiculous thinking is showing up in the video market. Christopher Schneider points us to an article written by Dan Rayburn, who apparently is an analyst at Frost & Sullivan, but who appears to be wholly unfamiliar with network TV in claiming that video content can't possibly be free:

Frankly, I don't see where this idea of "free" comes from. Video content costs money to produce, to distribute and to consume. Yet even with those costs, many seem hell-bent on the idea that business models can somehow survive based on the consumption of free video content supported solely by an ad model. But in reality, that simply can't happen.

It comes from basic economics, Dan, combined with knowledge of how network TV has worked for many decades. In some businesses consumers pay for stuff. In others, third parties do it. In network TV, advertisers have always paid the freight. You would think that a big-time analyst would be familiar with that. But, of course, it looks like Dan doesn't get the economics right either:

If people are not willing to pay a content owner for their content, then it's not worth anything. That's the bottom line.

Dan, how much did you pay for the air you breathe? Ok. How much is it worth? Your "bottom line" is flat-out wrong. Value and price are two different things. Value plays into the demand curve, but price is set by the intersection of supply and demand. If something is priced at zero, it doesn't mean it's valued at zero.

In the comments, after people point out Dan's seeming blindspot for the largest distributor of video content for the past seven decades, Dan tries to redeem himself by pointing out that networks today get additional money from MSOs (cable/satellite providers) to get carried (you may have heard the recent battles over some of these). Of course, that's a recent phenomenon. For years, network TV was very much for free to users, despite the fact that "video content cost money to product, to distribute and to consume" and even as people were not willing to pay the content owner for it -- but it was still worth quite a bit to them.

And, of course, even in the case with cable and satellite fees, Dan's still wrong. People don't pay their cable provider for access to network TV (they can already get that for free). They pay for the bundle of channels, of which the network channels are not very important to most users, since those are accessible over the air (and, yes, in some cases people have trouble getting local stations). Hell, if we want to go by analogy, let's be direct: sure, people pay for cable TV, but they also pay for their ISP bill (sometimes to the same company).

Furthermore, Dan's analysis of YouTube's profitably seems woefully confused as well. He uses Viacom's filings in the YouTube case, which have already been shown to take statements out of context, and whose comments all refer back to a few years back rather than today. Yet, recent studies have suggested that YouTube may actually be profitable, or at least getting pretty close to it. Even Google has hinted at YouTube's profitability -- and some have pointed out that Google's dark fiber ownership could mean that its bandwidth bill is a lot lower than some analysts think.

Basically, there's proof that free-to-the-consumer video has worked in the past, and can work again. On top of that, there's growing evidence that Google is at least close to profitability with free-to-the-consumer video online, and the models that are working there are only likely to continue to grow. These are the sorts of points and trends you would expect an analyst following this market to know, so it's a bit surprising that this particular analysis seems to be lacking them. And people wonder why companies are looking to dump their analyst spend budgets lately...

Filed Under: economics, free, internet, network tv, video

Should YouTube Allow Artful Nudity?

from the but-think-of-the-commenters... dept

The EFF and the National Coalition Against Censorship are apparently asking YouTube to consider changing its policy with regards to nudity. Apparently, it will allow nudity if the video is from a film or TV show -- but not if it's user generated videos made for YouTube. Separately, YouTube suggests it will allow nudity with "some educational, documentary and scientific content, but only if that is the sole purpose of the video and it is not gratuitously graphic." The problem, according to the EFF and NCAC, is that there is no exception for work that is artistic in nature, and apparently YouTube recently removed the videos of a well-known artist, Amy Greenfield, for violating the "no nudity" policy. Now, this isn't actually a "censorship" issue, since YouTube is a private site, and not the government. So, honestly, I don't see any problem with YouTube deciding that it doesn't want that particular content on its site, but there is a separate issue raised here -- which is that, once again, the real issue is Google's lack of customer service -- something we've seen a lot of lately. One of the complaints is that Greenfield's videos were taken down with no recourse and no method for her to communicate with folks at YouTube to talk about getting them back online.

Filed Under: nudity, video, youtube
Companies: eff, google, ncac

YouTube Joins Hulu In Letting Content Holders Block Access For TV-Connected Devices

from the but-why? dept

We've already covered how Hulu has blocked Boxee and the PS3 from showing video content -- even though all they're really doing is using a different browser -- one that lives on your TV -- to access the same content you can freely access on your computer. techflaws.org writes in to let us know that users of a Western Digital media center recently discovered that the latest upgrade -- driven in large part by Google/YouTube demands -- added some features, but also began blocking content that the content creator deems "not available" for mobile phones or TV. Now it's not clear how long YouTube has offered this functionality -- just that it appears WD has just enabled it -- but it's pissing off some users, understandably.

After all, if it's just a browser, why should the content creators care -- and why is Google helping them out in this regard? The line is blurring between various devices anyway and setting a special toggle that lets users block access to videos seen in a perfectly legal fashion on different types of devices seems pretty backwards. It's too bad Google even makes this an option -- and that anyone actually pays attention to it.

Filed Under: browsers, connected devices, video
Companies: google, hulu, western digital, youtube

Veoh Shuts Down; What Happens To The Lawsuit?

from the that's-not-good dept

Veoh was one of a number of online video YouTube-wannabes that, despite being connected to Michael Eisner and raising money from Time Warner and Goldman Sachs, never got very much actual traction... and... got tangled up in a lawsuit with Universal Music pretty quickly over alleged copyright infringement, despite Veoh abiding by the DMCA. Every single step of the way, Veoh basically won big in the lawsuit. Time and time again, every trick that Universal Music tried -- including suing Veoh's investors directly, was rejected by the judge, and the final ruling late last year was that Veoh abided by the DMCA and was protected by its safe harbors from Universal Music's lawsuit. It was a complete victory.

The only problem? Veoh spent a lot of time, money and effort on this lawsuit, and no one was using Veoh.

I'd heard about a month ago that the company was flat broke, but that it had a good chance of raising more money to continue fighting the appeal from Universal Music... but it looks like that fell through. The company has laid off everyone and is shutting down. Those involved with the company are blaming Universal Music... and certainly it's tempting to blame UMG and this pointless lawsuit, which definitely sucked up a ton of resources. But, let's also face facts: no one was using Veoh. When was the last time you were sent a Veoh video? I get sent videos on YouTube, Hulu, Vimeo and even DailyMotion every so often. But I can't recall ever hearing about a Veoh video.

Still, with the company declaring bankruptcy, I'm not quite sure what this would mean for Universal's appeal in the lawsuit. While the company was a total flop, the district court ruling last year set a very important precedent in clearly stating that the DMCA's safe harbors did protect such sites (like YouTube) as long as they complied with the takedown process. Without a company to continue fighting what happens to the appeal? I'm not that familiar with how bankruptcy plays into such lawsuits, so any lawyers here want to chime in and let us know....

Update: Surprised that no one actually answered this question in the comments, but thankfully Eriq Gardner from THR, Esq. has a post explaining what happens to the lawsuit now in all probability:

If Veoh declares Chapter 7, a bankruptcy judge would issue an automatic stay in the case. UMG would likely file a motion with the bankruptcy court seeking relief from the stay to perfect its appeal. The trustee would engage legal counsel and make financial arrangements to cover the costs of defending the case before the 9th Circuit.

We're betting that all of this happens. The requiem on Veoh is now being written, but the company could continue to play a significant role in helping shape copyright liability for tech companies. (We wouldn't even be surprised to see Google acquire Veoh just so it could share in the fun of the action.)

Filed Under: copyright, dmca, lawsuits, video
Companies: universal music, veoh

Google Discovers -- Again, Though No One Remembers -- That People Don't Like Paying For Video Online

from the didn't-we-do-this-before dept

I have to say that I'm a bit perplexed at what appears like worldwide amnesia over the fact that when Google launched its Google Video platform, its main focus was on charging people to "rent" videos on its platform. There was a ton of press and excitement over it, with lots of people claiming that Google was going to remake the video market online, and lots of money would be made. And then... nope. People didn't pay. Instead, they all jumped over to an up-and-coming site called YouTube that didn't charge and Google eventually bought them out while quietly shutting down its pay-for-video efforts, which no one missed. And I guess because no one missed it, everyone seems to forget it exists, even though we try to remind people that Google tried this and failed.

But, instead, we get those professional journalists at the NY Times pointing out that this latest very poorly received pay-for-video trials are the company's "first forays" into charging for video content. Apparently the new test brought in a whopping $10,709.16 over the course of 10 days (and five movies). Google is trying to spin this as "exceeding expectations," but it's hard to see how that's the case. There may be models that get people to pay (Netflix's subscription model seems to get people to pay simply for the convenience factor), but I think direct charging like this is unlikely to get very far, and Google, of all companies, should know that, even if everyone else has forgotten.

Filed Under: google video, paying, video, youtube
Companies: google