The VP8 wars heat up ... again

Just when it seems like the Internet is done fighting about video codecs, another salvo is fired. Google recently announced an agreement with the codec patent holders at the MPEG Licensing Authority (MPEG LA) that allowed Google and all other third parties to use Google's VP8 codec without fear of MPEG LA's patent infringement claims. The agreement was a major win for VP8, and soon afterward momentum picked up to push for VP8's adoption in a variety of web standards. But shortly after the announcement, Nokia jumped into the fray, asserting that it had numerous patents on which VP8 infringed, and that it would not license them. There is no telling where the Nokia incident will head, but on the heels of its victory in the MPEG LA fight, Google may be unlikely to back down.

History lesson

As a refresher, MPEG LA is a consortium that sells licensing agreements for various multimedia codecs; member companies contribute their relevant patents to a "pool," then MPEG LA sells one-stop-indemnification against patent infringement lawsuits based on those contributions. Despite its confusingly-similar name, MPEG LA is not affiliated with the Motion Picture Experts Group (MPEG), which is a joint ISO/IEC working group that produces media compression specifications.

In recent years, MPEG LA's highest-profile cash cow has been the H.264 video codec. In 2009, H.264 proponents successfully lobbied to keep the open-source Theora video codec from being named as a "mandatory to implement" (MTI) part of the HTML5 standard. Arguably in response to the threat posed by Theora, MPEG LA agreed to make H.264 decoders royalty-free for video that is delivered over the Internet for free to end users. That meant that non-subscription services like YouTube can deliver H.264-encoded content to users without the users needing to shell out any cash, but it still left plenty of opportunities for royalty-collection by MPEG LA, including for-pay video services, physical media like Blu-Ray discs, and video encoders.

Theora was derived from a codec called VP3, which was developed by codec shop On2 Technologies and was released as open source in 2002. VP3's code was donated to the Xiph.org Foundation along with a royalty-free patent grant. In 2009, Theora was quite a bit older than H.264, but its real selling point was its royalty-free nature. Still, H.264 proponents included MPEG LA members who both profit from H.264 licensing and make web browsers (such as Microsoft and Apple), and they claimed that Theora was both technically inferior to H.264 and infringed on MPEG LA patents, too.

The HTML5 video codec argument ended in a stalemate with neither codec becoming enshrined in the specification, but Google changed the tenor of the entire debate in February 2010, when it purchased On2 for US $124 million. On2 had released several codecs since VP3/Theora, including one called VP7 that it claimed was superior to H.264. In May 2010, Google released the next generation codec VP8 under a BSD-style license, along with an irrevocable royalty-free patent grant to all of the company's VP8 patents, under the banner of the WebM media format (which uses VP8 for video and Vorbis for audio).

But the VP8 patent grant did not deter MPEG LA; immediately after Google's announcement, the group said that it was looking into forming a patent pool around VP8. In February 2012, it asked for contributions to a VP8 patent pool, and in May announced that 12 companies had responded.

March madness

Despite MPEG LA's triumphant announcement, it never actually unveiled a public VP8 patent pool (if that is what one does with a pool). Nor did it initiate any patent infringement litigation against Google or anyone else. Prior to March 2013, the only major news events around VP8 or H.264 was Mozilla's controversial decision to enable H.264 decoding on certain platforms by passing decoding duties down to hardware decoders. At the time, Mozilla's justification was that its efforts were better spent ensuring that royalty-free codecs would be adopted in newer standards like WebRTC. Indeed, WebRTC arrived in February 2013, with VP8-based interoperability implemented by Mozilla and Google.

Thus, it came as a bit of a surprise on March 7 when Google announced that it had reached an agreement with MPEG LA about VP8. The full terms were not made public, but the announcement said that Google had been granted licenses to the MPEG LA patents that "may be" essential to VP8, and that MPEG LA would discontinue its VP8 patent pool.

The terseness of the announcement led to considerable speculation online; some even assumed that Google had paid a licensing fee to MPEG LA for some or all of the infringing patents. But the language of the announcement is weighted entirely in Google's favor:

Specifically, the grant covers all of VP8's predecessors, covers its next iteration (which is already under development), applies to any implementation of VP8 (whether derived from Google's or not), and leaves Google free to sublicense the patents to third parties at will. Xiph.org's Christopher Montgomery summed up the agreement as "Google won. Full stop". After the announcement, Google's Serge Lachapelle elaborated on the agreement in an email to the W3C's rtcweb mailing list, saying that Google "intends to license the techniques under terms that are in line with the W3C’s definition of a Royalty Free License" in the coming weeks, and adding that the agreement with MPEG LA "is not an acknowledgment that the licensed techniques read on VP8."

Since patent licensing is MPEG LA's sole reason to be, it is indeed difficult to hypothesize a set of secret conditions that would amount to the agreement being a favorable outcome for its side. A lot of technology companies end their patent disputes with a "cross-licensing" agreement, which amounts to a pact to not sue each other over the patents, but allows both companies to continue to wield them against others. Google certainly has a patent portfolio; a Google–MPEG LA agreement of this form would be plausible, but there is no mention of cross-licensing. If it was part of the deal, it is strange that MPEG LA would not mention it, considering that its business hinges on such licensing deals. Similarly, it is unknown if a cash payment by Google was involved; if so, such a cash payment would have to be sizable indeed for MPEG LA to potentially undermine its own future business interests by walking away from the fight with nothing to show for it publicly.

Another possible scenario is that the primary reason for the agreement was that Google privately demonstrated something even more harmful to MPEG LA, such as invalidating some key MPEG LA patents, or disclosing patents of its own that pose a serious threat to one of MPEG LA's key properties. Cash might or might not have greased the wheels of deal-making. Alas, it is doubtful that we will ever know for sure so long as corporate lawyers roam the earth.

Many in the web standards bodies, meanwhile, were so relieved to hear of the deal that they quickly rallied to promote VP8 and WebM. Lachapelle proposed that VP8 be adopted as WebRTC's MTI codec. Codec expert Rob Glidden reported that Google had also submitted VP8 for consideration in MPEG's still-under-development Internet Video Coding (IVC) standard. Steve Faulkner even proposed reopening the issue of including an MTI video codec in HTML5.

Oh yeah; Nokia

VP8's rosy future hit an abrupt obstacle a few days later, however. As Pamela Jones at Groklaw reported, a Nokia representative interrupted a Google talk about VP8 at a recent IETF meeting to announce that Nokia owned a number of patents upon which VP8 was infringing, and that it would not license them. Nokia put its claim on file with the IETF, listing 64 patents in various jurisdictions (many of which are simply jurisdictional duplicates of the same invention claims) plus 22 pending patent applications. A few news sites noted that MPEG LA's tally of prospective VP8 patent-poolers was 12, and that only 11 companies were mentioned in the Google–MPEG LA agreement; perhaps, then, Nokia was the holdout.

Whether or not it was the missing party is tangential; the real questions are whether the claimed patent infringements are legitimate, and what Google will do about them. Jones broke down the list of patents and removed the duplicates, then called for a search to turn up prior art. That is certainly one approach that might yield results. Another would be for Google to perform a thorough investigation and decide that some or all of the patents do not apply; as Thom Holwerda at OSnews observed, that is the approach Xiph.org took when a similar patent infringement charge was raised over the Opus audio codec—which was subsequently cleared by the legal review team and approved as WebRTC's MTI audio codec.

The odds are that Google's legal department has already conducted a pretty detailed examination of VP8, of course. So it is hard to say what the next move will be. WebM project manager John Luther pointed out that there was never any lawsuit nor finding of infringement in the MPEG LA case. He called it a distraction, and said that the project unfortunately had to keep quiet while the talks were in progress. So we may not hear much more from Google on the subject of Nokia's claims until Nokia files a lawsuit or another surprise announcement reveals how it all turns out.

For the time being, arguably the most puzzling aspect of this latest development is the fact that Nokia is wading into the argument in the first place. There is plenty of speculation as to why—every theory from puppetry on behalf of Nokia's business partner (and H.264 proponent) Microsoft to a gamble that Google will pay the financially-troubled Finnish phone maker to make the problem go away.

Of course, Google already knows if Nokia was the mysterious twelfth member of the defunct MPEG LA patent pool, and, if it was, then Google has known about its patents for quite some time. But either way, nothing stops any other company from springing a similar attack on VP8 or any other codec. In the battle to make VP8 an MTI standard in any web specification, the parties that benefit from license sales of rival codecs have no incentive to cooperate. That goes for H.264 as well as for the next generation, and it is not merely a hypothetical problem. Apple's Maciej Stachowiak has already voiced his objection to making VP8 an MTI standard in HTML5. The agreement between MPEG LA and Google has smoothed over the issue of VP8's patent status, but it cannot perfectly resolve it, simply because nothing can.