Tag: OMS Video

Much of the initial commentary on Google’s open sourcing of the VP8 codec it acquired in purchasing On2 has breathlessly, and uncritically, centered on the purported game-changing impact of the move.

But unfortunately, these commentaries miss an essential point that Google has studiously avoided mentioning the need to standardize royalty free codecs (not just release an open source snapshot).

But since forward motion is good simply because it is forward motion, shouldn’t one hesitate to look this gift horse in the mouth?

Unfortunately, in the case of multimedia codecs and technologies, ignoring open standards and instead presenting open sourcing as a fait accompli solution just works to the detriment of the entire open community.

The open Web needs royalty free standards (true, multi-stakeholder run standards, not unilateral actions) — that is its essential genius.  And without them, proprietary, vendor-controlled projects, even those that self-label as “open”, do little good and more likely more harm than good.  We all have the right to expect, and demand, that the Web’s current beneficiaries and leaders stay true to this fundamental open standards proposition, and not just forget it when convenient.  And this includes Google.

It is well known that many experts consider it now feasible to standardize serviceable royalty-free codecs.  MPEG (the standards group, not the unaffiliated license administrator MPEG LA) has even put out a resolution to that effect, and IETF has recently launched a royalty free codec activity in a similar spirit.  Google should get on board on this important trend, not undermine it with studied avoidance.  So far they have not.

It is important to understand that patent claims are typically handled under confidential non-disclosure agreements.  So unless there is a forcing function (litigation or standardization-required disclosure and review), there is no effective way to know who is actually claiming, and who is paying, what.  And there are documented cases of this going on for literally years.  So leaving VP8 code out in the open with nothing but a mutual non-assert license leaves the patent issue not only unaddressed, but up for capture by those with uncharitable agendas, and on their turf and time frame (let’s at least hope that’s sooner rather than later — but remember, forming patent pools rarely disclose all their patents up front).

Not a smart move, and hopefully one Google will realize the error of and correct quickly (here’s a useful cover story: we intended to smoke out patent holders all along, and we were going to get around to working with standards groups when we had the chance).  Contributing VP8 to a standards group with a strong patent disclosure policy would be a good corrective move; it would force lurking patent holders to come fully into the public. Not perfect, but a step forward.

Google’s open sourcing of VP8 is very different from Sun’s Open Media Stack codec work, and for that matter other responsible open video initiatives, which have based their work on identifiable IPR foundations, documented their patent strategy, and have been willing to work with bona-fide standards groups to address and resolve IPR issues.  When companies like Google ignore standards and go on their own in such important areas as video codec standards, they just undermine the very standards groups the open Web needs to thrive and grow.

We’d never accept a brand name company unilaterally declaring control of the next version of TCP/IP, HTML, or any other of a host of foundational Internet and Web standards simply by open sourcing something they’d bought.  Codecs will also be such a foundational component, a critically important one.  Just because the technology of codecs might be less familiar than some other technologies is no reason to abandon the royalty-free standardization philosophy that has built the Web.

Certainly not based on the complete feel-good-marketing non-explanation for this radical abandonment that Google has offered so far.   Because patent pool licensing is out of control?  No argument about that from me (or antitrust complainants Nero, VIZIO, and others).  Because Google “must have done its patent homework”?  OK, if so why not hand that homework in as a contribution to a standards group where it could get some expert scrutiny?

So I would encourage Google to do the right open standards thing — join and contribute to responsible standards groups that are working to solve the royalty-free open standards need.  Be a part of the royalty-free, open-standards solution, not part of the problem.

UPDATE

Tip of the hat to Xiph’s leader, Chris Montgomery, for good tongue-in-cheek humor:

“I, FOR ONE, WELCOME OUR NEW WEBM OVERLORDS“

Not to confuse: Xiph is wholeheartedly supporting WebM, but another interesting remark by Montgomery:

“But Monty isn’t worried about the MPEG-LA suing him or anyone at the WebM Project.

“The recent saber-rattling by Jobs felt more like a message to his own troops than
a warning shot to ours,” he says. “MPEG itself has always has an internal contingent
that has pushed hard for royalty-free baselines from MPEG, and the missives about
video codecs and patents were probably meant for them, not us.”

It is very exciting to see the “Open Video” movement taking off and finding voice with the upcoming Open Video Conference.

This well-earned “open breakthrough” has been a long time coming.  After all, open standards, and particularly royalty-free standards, are the very foundation of the Open Internet as we know it, and Internet leaders are vocal that open and royalty free standards are essential to its future.

But where are the open standards for open video?  Why don’t we already have them?

Hint:  business guru W. Edwards Deming once said: “If you control an industry’s standards, you control that industry lock, stock, and ledger”.

This bitter pill of insight points to the first thing you should know about open video and open standards:

1) Open Video is Collateral Damage
of the Digital TV Standards Wars

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It’s not hard to figure out that if you could quietly bake your patents into a standard and then name your price after the standard becomes widely deployed, you could make a lot of money and wield a lot of control.

Great work if you can get it, and that’s pretty much the story of a set of international video and digital TV standards that got going in the 1990s, with MPEG the poster child of modern patent-pooled standards.

Of course this is a tale of big bucks.  Think $26 to $40 per TV, billions of dollars in royalties on billions of devices, vendor shoot-outs, litigation, dueling industry groups, back-room deals, claims of abuse, and consumer groups pushing for public disclosure of confidential patent licensing practices hidden behind claims they are “reasonable and nondiscriminatory”  — “RAND” in standards-speak.

So it is hardly surprising that RAND licensing practices and such developed through the DTV experience have done little to nothing to contribute royalty-free video technologies or standards now needed for broadband deployments, which today are essentially captured by proprietary solutions.

2) Standards Aren’t Just a “Techy Topic”
— They’re a Policy Problem

–
In fact, scratch almost any network policy issue and you’re likely to find a standards issue lurking inside.  Indeed, America’s broadband plan needs a standards policy.

Turns out country after country has a national “standards strategy”.

UK, France, Germany, Canada, and Korea to name a few.  Some closely tie international standards advantage to IPR & patents, as in Japan (“Intellectual Property Strategy Headquarters decided the International Standardization Comprehensive Strategy, with the aim of enhancing the international competitiveness of Japanese industries and contributing to setting global rules”) and China (“[the] Trade Barrier Treaty [TBT] can be used under the mask of standardization, patents and intellectual-property rights to obtain most world trade advantages.”).

And those that don’t, like Taiwan, have vendors crying foul.

Even in the U.S., a prescient 1992 Congressional report warned:

“The United States has been fortunate to have a pluralistic, industry-led standards setting process that has served us well in the past. Whether it will continue to do so in the future in the face of bruising international economic competition is uncertain.”

So if you think standards are for geeks and not wonks, think again.  As a Toyo University professor recently put the blunt zen to it:

“Standardization activities are political negotiations and not a forum for assessing which technologies excel over others.”

3) Open Source Doesn’t Solve
the Open Standards Problem

–
I don’t actually know anyone who is really confused or bent out shape about the difference between “open source” and “open standard” or believes that one is a good substitute for the other.  They are of course different things (one’s a license, one’s a specification, and so on).

But if you are inclined to dig in to this, check here or search the Web for “open source v. open standards’ and you’ll find numerous nice explanations.

4) Don’t Confuse Patent Reform with
Patent Licensing (They’re Different)

–
Another potential source of confusion is the distinction between patent reform — various proposals to make it more difficult to get a patent, to assure that patents are of appropriate quality, to tighten definitions of obviousness and so forth — and patent licensing — the rules and practices of patent pool licensing, disclosure, and IPR (Intellectual Property Rights) policies of standards groups.

Patents have been around for centuries, and so have patent pools, but the regulatory and policy linkages between the two are less than it might seem.  In fact, for a long time patent pools were rare and highly frowned upon by regulators (they weren’t even mentioned in the 1992 Congressional report on standards).  Then in the late 1990s many would trace the beginning of  the “modern” patent pool era to the U.S. Department of Justice’s authorization of the MPEG patent pool.

Pools and patents serve very different policy needs, raise different policy concerns, and by and large are even regulated by different entities.

So unless you are counting on a major scaling back of the patent system that somehow just makes patent issues go away (and few people are), it makes more sense to find a way, as many have, to achieve business model results.

5) “RAND” Isn’t

–
So what does the term “reasonable and nondiscriminatory” actually mean?

In theory it’s the commitment to fair licensing required of patent holders in standards groups that — unlike the W3C which defines HTML — are open to patents.

But in reality, since price isn’t set until after the standard comes out (sometimes years later), RAND ends up meaning whatever the patent holders want it to mean.

Studies of RAND licensing typically conclude:

“few SSOs [standard-setting organizations] define the term ‘reasonable and nondiscriminatory’ or have mechanisms to resolve disputes about its interpretation”

So Richard Stallman said it well:

“half of “RAND” is deceptive and the other half is prejudiced”

Still, sincere efforts have been made to give the term “reasonable and nondiscriminatory” a meaning  in standards IPR policies. For example the American Bar Association’s Standards Development Patent Policy Manual is a good source.  But good luck if you hope to wade through lawyerly weighing of “multiple factors” to get any particular practice declared unreasonable or discriminatory.

6) Don’t Fall For FUD — There Is a Solution

–
Finally, it seems there is a never-ending version of Fear, Uncertainty and Doubt that goes something like “you can never really be sure that someone might have a patent so there is no way to ever be sure a standard is truly royalty free”.

To be blunt — this is nonsense, and don’t believe it.  Not only are there thousands of royalty-free standards in the world, and although the number of patent disclosures started to accelerate in the 1990s, the vast majority of standards have no particular IPR or patent issues to speak of.

And even in areas of particular patent thickets and patent controversies, standards organizations with a determined and specific royalty-free policy and process (Khronos and Web3D are a couple of examples) have successfully established their royalty-free credentials.  Sure it takes diligence, a “Freedom-to-Operate” analytical approach, proactive patent reading, time and determination.  Dirac is already making good progress down this path.

So get going Open Video-ers — let’s get some truly open, truly royalty-free standards initiatives going!


References

“The Internet is fundamentally based on the existence of open, non-proprietary standards” Vint Cerf, “the father of the Internet” cited in The Importance of Open Standards in Interoperability, OFE Onepage Brief No.1 (31.10.08.) Available at http://www.openforumeurope.org/library/onepage-briefs/ofe-open-standards-onepage-2008.pdf.

“It was the standardisation around HTML that allowed the web to take off. It was not only the fact that it is standard but the fact that it is open and royalty-free. If HTML had not been free, if it had been proprietary technology, then there would have been the business of actually selling HTML and the competing JTML, LTML, MTML products.”

Tim Berners-Lee, quoted in Standards and the Future of the Internet, Declaration 25th February 2008, at http://www.openforumeurope.org/press-room/press-releases/standards-and-the-future-of-the-internet/

Sun’s OMS Video codec work was mentioned in Matt Raible’s notes from the “The State of the Web 2009” session at this week’s Web Directions North conference:

“Very specifically, there’s no royalty-free codec for video. This is nothing that standards bodies can solve. The most promising is that Sun Microsystems is developing an open codec and spending money to make sure they’re not infringing on patents.”

omsvideo

Also, “open video codec” topped the panelists’ biggest-thing lists:

“After each panelist talked, John asked them questions about what’s the biggest thing they’d like to see implemented by everyone (open video codec, geo location api were the winners).”

(emphasis added)

The whole write-up is worth reading here.

Updating market information in this post on the release of the royalty-free OMS Video draft specification, here are data points about MPEG released at the MPEG 20th Year Anniversary Commemoration in Tokyo in November 2008.

Importantly, Lawrence A. Horn, CEO of the license administration company, affirmed the:

“Freedom of Licensors and Licensees to develop competing products and standards”

(Note: the US Department of Justice required as much in its 1997 antitrust review of proposed MPEG patent licensing:

”We understand this to mean that licensees are free also to develop technological alternatives to the MPEG-2 compression standard.’)

Specific market info:

  • “~ 3.5 Billion MPEG-2 Devices
  • More than 1 million people working 40 hrs/week, 52 wks/year for 15 yrs (1994-2008)
  • ~ 40 Billion MPEG-2 Video (DVD) Discs
  • $2.5 Trillion in MPEG-2 Product Sales
  • In 2008 each of the world’s ~ 6.7 billion people will spend an average of $66.46 on MPEG-2 product”

Some interesting observations were made by Leonardo Chiariglione, the convenor of the MPEG committee:

  • “the MPEG-4 Visual licensing killed half of the standard
  • The “use fee” licensing model facilitated the widespread use of proprietary codecs
  • In the second half of the 1990s MPEG repeatedly invited ITU-T to collaborate on MPEG-4 Visual. The lack of collaboration produced the alternative H.263 Recommendation, similar – but not quite – to MPEG-4
  • 20 years after MPEG was born There are just too many video codecs…
    Compression technology has advanced
    The entry level to make video codecs is getting lower
    Many devices have to support many different codecs”

All the presentations of the commemoration are located here.

“Patent and legal issues” topped, at least numerically, the community goals developed at the recently-held Foundations of Open Media 2009 workshop, a write-up of which was just posted here.

Also noted in “Patents and the bright future of open media codecs”, the FOMS group has set aside 15% of its budget to support patent analysis.

For those who haven’t seen it, check the interesting article “Patent Status of MPEG-1, H.261 and MPEG-2” and associated wiki here.  Comments on calculating expiration dates can be found in the responses to article here.

The “Open Media Stack – Video Specification V0.9” is now available for community review at the Open Media Commons website.

OMS, announced in April 2008, is a project of Sun Microsystems’ Open Media Commons initiative to define a complete, royalty-free media specification, including codecs and associated elements.

The OMS Video draft is a key milestone and a big deal, and not just because I am proud to have contributed to this effort at Sun.   This is the first public release of a video codec specification with a vetted royalty-free methodology that is a determined, bottom-up invent-around of the royalty-bearing interlocking and cross-coordinating set of MPEG codec licenses – MPEG-2, MPEG-4, and h.264/AVC (an orchestrated complex of licenses managed through the same license administrator, MPEG-LA, which is owned and controlled, no surprise, by MPEG patent holders themselves).

But do royalties on things like video codecs really matter?  Many people don’t even realize that royalties like these exist, or assume they are a just a nuisance cost-of-business borne somewhere in the value chain.

But consider — MPEG and their related royalties are:

– Big. Think on the order of over $2 billion per year, on some one billion or so MPEG integrated circuits a year and growing.  That’s royalties, not sales, so better to think of them on the profit side of the business equation — and that’s on the order of ten percent of the entire profit of the world’s 37 largest consumer electronics companies, calculated from a recent Deloitte study of consumer products industries.  And given that consumer electronics manufacturers are in a notoriously thin-margin business (according to the Deloitte study, average net profit margin of 3.3%, the second lowest profit in all consumer products industries, ahead of only tires) — the $2.50 per MPEG-2 device royalty alone likely exceeds the manufacturer profit on vast numbers of consumer electronics products.

– Applicable across the entire value chain of devices, content, and encoders.  Consider also the $100 million or more a year in royalties of 3 cents on “packaged content” on 90% of all DVD discs produced, collected through disc duplicators.  Or the reported 100M Euros in royalties in 2005 on MP3.  Or the temporary exemption on “Internet broadcast” royalties — expiring December 31, 2008 on MPEG-4 (perhaps to the chagrin of MPEG-4 licensee DiVX, who noted in a recent SEC filing “Our license agreement with MPEG LA, under its MPEG-4 Part 2 Visual Patent Portfolio will expire on December 31, 2008. MPEG LA has the right to renew the license agreement for successive terms of five years, upon notice to us.”), and expiring December 31, 2010 on AVC/h.264.

– Applicable to you (and virtually everyone else on the network connected planet).  Just check your iPhone EULA (“The iPhone Software and iPhone Software Updates contain AVC encoding and/or decoding functionality, commercial use of H.264/AVC requires additional licensing.”) or Flash licensing restrictions:

“The end-user license for Flash Player allows users to play back H.264 content for their own noncommercial use. Commercial applications of Flash Player to decode H.264 video may require a separate license…. Usage categories that may require a license and involve royalty fees include advanced video coding products, title-by-title video, and subscription video among others. Most categories apply to commercial use and implementation, but some are more broad”.

Sure, some will assert that this doesn’t really apply to “you”, just figure out a clever “not-me” work-around — but to quote Russell Long and countless others:  “Don’t tax you, don’t tax me. Tax that fellow behind the tree.”

Gosh, one can see how one study of consumer electronics patents/standards commented: “Standardization activities are political negotiations and not a forum for assessing which technologies excel over others”.

So here’s to hoping that OMS Video will add to the growing but still under-the-radar open media movement, including Xiph, Dirac, and more to come.  Please take a look at the OMS Video specification and provide comments if you are so inclined.