Google and MPEG LA make a deal over VP8 codec - Update
Google and the MPEG LA patent licensing company have come to an agreement regarding patents related to the VP8 codec, the core component of Google's WebM video technology. Google has licensed techniques that "may be essential to VP8 and earlier generation VPx video compression technologies," which were apparently covered by patents held by 11 patent holders.
The deal enables Google to sub-license those patents to any user of VP8. Given that Google already grants a patent licence for all patents it owns, it would be reasonable to assume this new set of patents would be added to the IP rights grants for WebM. Google has also won the right to sub-license the same patents in one next-generation version of the VP codecs, presumably a VP9.
In return, the MPEG LA has called off its long-running effort to form a VP8 patent pool. Google's deputy general counsel for patents, Allen Lo, called the deal a "significant milestone in Google’s efforts to establish VP8 as a widely deployed web video format" and thanked MPEG LA for its cooperation. MPEG LA President Larry Horm said the organisation was pleased to have been able to "facilitate agreements with Google to make VP8 widely available to users". What wasn't disclosed was any financial terms to the agreement.
Google open sourced VP8 when it launched WebM in 2010 as an alternative to the licensed industry standard H.264 to provide an open codec for video on the web. Almost immediately, MPEG LA was reported to be planning to create a patent pool that could charge users of WebM a royalty for the use of the codec. MPEG LA already ran a patent pool for H.264 and many other video standards. But the MPEG LA made little progress on getting a pool together; in February 2011 it began a search for relevant patents, while in March 2011 there were claims that the MPEG LA was being investigated by the US Department of Justice over their patent licensing operation. By July 2011, the MPEG LA revealed it had 12 parties with essential WebM patents but still failed to form a patent pool.
In the meantime, despite support from Mozilla and the FSF, WebM failed to dislodge H.264 from its position as the dominant format for video on the web. Even Skype switched to VP8 for video calls in 2011 and Google has advocated VP8 as a baseline standard for internet video. But even the most fervent of supporters have softened their stance; last year Mozilla moved to also support H.264 where it was available in the underlying operating system.
The deal between Google and MPEG LA removes the worries about possible royalties for VP8 and WebM, the question is whether internet standards groups will be quicker to adopt it as their baseline standard. ISO/IEC MPEG are still looking to produce a royalty free codec standard (IVC) but progress is slow, giving WebM at least a window of opportunity.
Update - In the announcement by the WebM project it says "We anticipate having the terms of our sublicense ready in the next few weeks".