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From: (Michael Simmons)
Newsgroups: comp.multimedia
Subject: ANNOUNCE:Status Report Regarding MPEG IPR (Intellectual Property Rights) Group Efforts
Date: 9 Dec 1994 01:17:34 GMT
Organization: ECEL,The Uni of WA
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Message-ID: <3c8b7e$>
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Forwarded with permission. Please send any correspondence to

To:		Interested Readers

From:		Baryn S. Futa
		Cable Television Laboratories, Inc.
		Louisville, Colorado, USA
Date:		November 29, 1994

Subject:	Status Report Regarding MPEG IPR (Intellectual Property Rights)
		Group Efforts

The effort known as the MPEG IPR Group continues to make good progress towards
development of a solution that will provide for the fair, reasonable and
nondiscriminatory access to much of the relevant IPR needed for MPEG
implementation.  This effort, commenced outside of the MPEG process, is in the
spirit of international harmonization that is the hallmark of ISO/JTC 1/SC
29/WG 11's achievement.

In order that the reader be aware of the progress made by this effort, this
memorandum provides a progress report.  The next steps include the goal of
establishment of a licensing pool entity to begin the process of creating a
licensing source for all relevant MPEG IPR (video, audio and systems; MPEG 1
and 2) by March of 1995.  The MPEG IPR Group's next meeting (its fifth) is
tentatively scheduled for the Thursday AM of the week of the next MPEG meeting
in Lausanne, Switzerland.

At the MPEG meeting in New York in July 1993, a decision was taken by WG11 to
acknowledge the commencement of an outside of MPEG discussion to deal with the
complexity of the international patent rights issues related to MPEG
implementation.  Pursuant to that decision, individuals and the appropriate
licensing expert(s) representing companies that believe that they hold patent
rights related to the technology and techniques utilized in MPEG, the
appropriate licensing expert(s) representing companies that intend to
manufacture MPEG hardware and/or utilize MPEG technology were invited to attend
an informational briefing regarding international patent rights involved in
MPEG implementation had in Brussels (during the time of the September 1993 WG
11 meeting in Brussels.)

Since then, numerous meetings have been held and a report on each is presented

Further, prior to the New York MPEG meeting, MPEG had established an AHG that
mandate of which was to explore the MPEG IPR situation  (See WG11 N0434.)  This
exploration was based upon the informal meetings held regarding the IPR topic
at the MPEG meetings in London (November 1992), Rome (January 1993), in Sidney
(March 1993) and in New York (July 1993.)  For seek of completeness, a brief
report on these activities is also provided below.


In the London meeting, many MPEG participants have expressed concerns regarding
the effective and timely access to licenses associated with the rights
necessary for the implementation of MPEG 2.  These concerns stem, in large
part, from the large number of patent rights involved in the MPEG 2.  Further,
many felt that the obtaining of the familiar ISO patent statement does not
alleviate these concerns.  In Rome, Sydney and New York, informal meetings were
convened to discuss these issues.

In Rome, it was reported that strictly from an ISO perspective, working groups
request to obtain patent statements at the time of approval of a WD.  ISO does
not require that companies disclose which patents they actually claim nor does
ISO determine whether the terms and conditions of licenses are fair and

Essentially, therefore, within the ISO context, it was reported that the only
vehicle that ISO has available to assure the availability of rights associated
with any standard is that companies participating in standard making provide to
ISO the familiar patent statement.  (See, Annex IV to Rome meeting report.)

In Sydney, two informal meetings contemplated several scenarios for effective
rights access. (See, N0386 (MPEG 93/452) ,  source:  Convenor, title:  Report
of informal meeting on IPR in MPEG-2.)  In the work of the AHG between Sidney
and New York and at the New York informal meeting as well, the consensus was
that an outside of MPEG activity involving the business and IPR representatives
of interested companies should commence.  That finding was acknowledged by WG
11 at the closing plenary of its New York meeting as reported above.
	The MPEG IPR Group

Report of the Brussels Meeting
After the MPEG meeting in Brussels, a briefing for licensing experts regarding
MPEG 2 was held on September 11, 1993.  At that meeting, we discussed the
status of the MPEG 2 technical work and the discussions of the IPR issue held
as of that date within the MPEG 2 standard setting process.  

A presentation by CableLabs' patent attorney and engineering consultant
followed.  In essence, their findings confirmed that the implementation of the
MPEG 2 would require multiple licenses from many companies and that no one
company would be able to implement the standard absent licenses from other
companies.  That presentation then lead to a discussion as to whether the group
should continue:   (1)  as a forum for further discussion of these issues and
(2) as venue for attempts at cooperative solutions to the above stated problem.

The consensus was affirmative as to both (1) and (2).  Further, the group
agreed that I would put forward a "strawman" proposal for the group's
consideration at its next meeting in Seoul.  The "strawman" would be a starting
point for discussion of possible solutions to the complex
multi-patent/multi-company environment that surrounds any attempt to implement
the MPEG 2 standard.  Finally, we discussed how the CableLabs patent search
effort would continue.

The "Strawman"
The "strawman" proposal I put forth for the group's consideration in Seoul was
very simple:  interested companies agree to form a consortium, association,
pool - whichever title/name is deemed to be appropriate.  This proposed entity
would be given, by each participating company, a license to sub license all of
each participating companies' patent rights relevant to MPEG 2 video and system

Further, all of the licenses so received by the proposed entity would then be
bundled and licensed back for a fee by the proposed entity to these same
participating companies.  The licensing fee would be set as a percentage of a
participating companies' sales of devices utilizing MPEG 2 or MPEG 2- related
video and/or system technology.  The percentage would be the same for all
participating companies and would be assessed at the "box" or "device" level 
at the FOB price.

Of course, many participating companies may already have cross licensing
arrangements with each other.  Such arrangements need to be taken into account
by the proposed entity in terms of the entity's structure and fees since they
may prove to be beneficial to the entire effort.  For example, such cross
licensing arrangements may provide for, or be amended to allow, extension of
these cross licenses to the proposed entity.  Obviously, this would help all
participating companies.

Less the administrative cost associated with the proposed entity, fees would be
subsequently distributed to participating companies.  The methodology of
distribution would be agreed upon by the participating companies and, of
course, should include relevancy of a particular company's patent position as a
factor for distribution determination.   

Report of the Seoul Meeting
In Seoul, we discussed the "strawman" proposal and CableLabs' US patent search
efforts at length.  As noted above, the group's consensus was to form a working
group to further iterate the "strawman" and to report back to the larger group
at a third meeting of the larger group.  The working group met twice and
presented its findings at the third MPEG 2 IPR Group meeting in Paris on March
24, 1994.

Report of the Paris Meeting
The MPEG IPR group reached a consensus on an action plan for establishment of a
licensing entity.  The first phase of the effort was to determine which patent
holders were willing to participate in this effort and whether these interested
patent holders own any rights necessary for implementation of MPEG core
technology.  The second phase to follow includes determination of the
administrative structure of the entity as an ongoing effort that works with new
licensees and licensers, of the licensing structure as well as of allocation of
royalties, etc.

As to the first phase, the effort concentrated on determining which patent
holders were interested in joining this effort as licensers of their own
patents as well as which patent holders believe that they own or are likely to
own patents which in their own opinion are necessary to conform to the MPEG

To this end, interested patent holders were asked to complete a form letter
stating their interest in working towards establishment of a licensing entity
and to provide an annex listing their own patents they believe are necessary to
Mr. Futa.  Thereafter,  a compilation of the lists of patents provided to him
based upon the submission of such letters was made.  The compiled lists were
sent to all companies that have submitted this letter and appropriate list
along with an invitation (and required similar subsequent form letter to be
completed) to attend a first meeting regarding the formation of a licensing

All patent holders submitting such letters and lists were also asked to  commit
to license their essential patents on a reasonable, fair and nondiscriminatory
basis whether they join the pool or not.  Further, they were asked to agree
that submission of the letter and its attachment(s), as well as their company's
participation in this effort, does not constitute a "notice" from them to
anyone or any company, nor does it constitute a charge or basis for a charge of
patent infringement and related damages of any kind by them against anyone or
any company for any purpose under any applicable law.

Finally, it was decided that a meeting of such willing Licensors should be held
before the next meeting of the MPEG IPR Group in Singapore on November 10, 1994
and a new working group was established to plan the agenda for the first
Licensor meeting.  

Working Group for Agenda of First Licensors Meeting/First Licensors
Meeting/First Meeting of MPEG Licensing Entity Establishment Group
That group met in Eindhoven on June 6 and 7, 1994.  Based upon the
recommendations of that Group, the first Licensor meeting discussed above
occurred on September 29, 1994.  At this meeting, a MPEG Licensing Entity
Establishment Group was formed consisting of all licensors that compiled with
the formalities discussed above and, in to view of the CableLabs' patent
search, held relevant patents for the implementation of MPEG.  Those members
are:  ATT, Columbia University, General Instrument, Matsushita, Mitsubishi,
Sony, Philips and Thomson. ( It is important to note, however, that the
CableLabs' search was limited to US issued patents covering MPEG 2 video, main
level, main profile.  The effort is now being expanded to systems level patents
and will thereafter cover audio as well.  As a result, it is quite possible
that new members of this Group will be named as the effort expands.)

Further, at this meeting, the Licensor Group confirmed that the mission of the
effort was to "[t]o foster fair, reasonable and nondiscriminatory access to as
much relevant IPR as is possible for the implementation of digital television."

On September 30, 1994, the first meeting of the Entity Establishment Group was
held.  The Group adopted as its objective the creation of an ongoing effort
(i.e. a licensing entity) to aggregate as much of the relevant IPR as is
possible to implement MPEG, to determine appropriate measures to assure the
fair, reasonable and nondiscriminatory access of this IPR to all parties
desiring to be licensees and to implement the business structure necessary and
appropriate to fulfill these objectives.

This Entity Establishment Group plans to meet again in the January/February
1995 timeframe so as to meet the goal of establishment of an entity to begin
this work by March 1995.  The Group is meeting in a series of regional subgroup
between the September 30, 1994 and its planned whole Group next meeting.

Report of the Singapore Meeting
On November 10, 1994, the fourth meeting of the MPEG IPR Group was held. The
Group was briefed on the work undertaken and completed between this and its
fourth meeting.  The Group commented upon the work to date and their was
consensus on its general direction.  The Group also agreed to meet again (its
fifth meeting) on the Thursday AM of the next MPEG meeting in Lausanne,
Switzerland in March at which time it is anticipated that the MPEG Licensing
Entity Establishment Group will announce its progress to date and the
establishment of the licensing entity.


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