Alliance for Open Media

When Google, Amazon, Cisco, Microsoft and Mozilla announced their AV1 video compression technology five years ago, the allies were aiming to develop a way to shrink online videos while removing patent licensing barriers, which increase streaming video costs. Now, just as AV1 is set to arrive on mobile phones, a patent licensing company has detailed a vision for the technology that upends its original promise.

Sisvel, a Luxembourg-based company that traces its roots to an Italian manufacturer of refrigerators and televisions, said Tuesday it's now selling licenses to 1,050 patents it says are needed to use AV1. The idea, which the company had sketched out last year, is to offer a "patent pool" on behalf of the patent holders Sisvel represents. That's more convenient than licensing from individual patent holders, which in this case include companies like Philips, GE, NTT, Ericsson, Dolby and Toshiba. The company also announced new cooperating patent holders and a list of specific patents.

In other words, Sisvel and its partners think there needs to be a new toll on the streaming video road. It's yet not clear what the effects of Sisvel's licensing program will be, but you could end up paying more for gadgets like Android phones or Roku streaming boxes.

That's exactly what the AV1 backers -- the Alliance for Open Media (AOMedia for short), which now counts Netflix, Facebook and Apple as members -- were trying to avoid. "AOMedia was founded to leave behind the very environment that the announcement endorses -- one whose high patent royalty requirements and licensing uncertainty limit the potential of free and open online video technology," the group said in a 2019 statement after Sisvel announced its intent to offer an AV1 patent license.

AOMedia's criticism of patent licensing expense and uncertainty is a reference to HEVC, also known as H.265, a video compression technology designed to be the successor to the widely used H.264 standard. HEVC could have ushered in the era of 4K video without increasing network data usage much. Instead, HEVC patent holders proved to be a fractious bunch, with several competing licensing organizations. AV1 was founded partly in response to those difficulties.

AOMedia didn't immediately comment on the Sisvel license availability or details.

Open vs. proprietary

The tension has long existed in the world of video streaming and in the computing industry more broadly. Fans of open sharing -- such as those in the now dominant open-source software movement -- benefit from cooperative development and free use of the resulting products. The proprietary realm, where technology only may be used after fulfilling copyright and patent license agreements, is more restrictive.

Those in the proprietary camp argue innovation should be rewarded. But for the open camp benefits from a business that can move faster without spending as much on nuts and bolts.

Two decades ago, when the open-source world was represented by niche players like browser maker Mozilla and Linux company Red Hat, there wasn't much weight behind the collaborative camp. Now enormous companies like Google, Facebook and Microsoft are involved, and the amount of technology available for free is staggering.

Sisvel is asking for different payments rates for devices depending on whether they have a display. The royalty rate is about 37 cents for each TV, phone, laptop or other device with a display and about 13 cents for each set-top box, graphics card or other device that doesn't have a display. Cheaper rates are available for companies that comply with licensing terms or buy ahead of time for larger numbers of products.

Sisvel isn't charging fees for use of the technology in streaming video services, a point that had been contentious with H.264 and HEVC. However, it may add new fees for distribution of software, for example for downloads of a video app or an update that adds new video features, the company said.

The company also announced a separate pool of more than 650 patents for Google's VP9 video compression technology, a precursor to AV1.

Third-party law firms in China, Europe, Japan, South Korea and the United States evaluated which patents belonged on the AV1 and VP9 lists, but Sisvel declined to name the firms.

Sisvel said it's willing to pursue companies that don't pay its AV1 licensing fees.

The "free riders" who "decide to ignore the offer to take a license" can expect legal action, Sisvel said. For other licensing programs, Sisvel has worked to assert patent claims directly or worked with the original patent holders to do so, the company said.