MPEG-LA-owned Patent Troll Sues Smartphone Makers

While Eugenia has already detailed just how intricate and impressive the MPEG-LA’s efforts have been to basically set up the foundations that would allow them to sue just about everyone – their vague and unclear licenses are used in everything from DVD players to digital camcorders, and as such, it’s hard to avoid them. Many others claim that the MPEG-LA won’t ever go rogue (or this, take your pick). I think those people will be interested to know that one of the MPEG-LA’s subsidiaries, a cut-and-clear patent troll, has launched several patent infringement suits earlier this year. This patent troll’s CEO? Larry Horn – yes, the same Larry Horn who’s also CEO of the MPEG-LA.

The connection was ‘discovered’ by The Prior Art’s Joe Mullin, back in late April. The company in question is MobileMedia Ideas LLC, a company without any products of its own. It acquired a number of patents from Nokia and Sony, 122 to be exact, and is now using those patents to sue several smartphone makers earlier this year, including Apple, HTC, and Research In Motion. MobileMedia Ideas is owned by the MPEG-LA, and its CEO is Larry Horn, who also happens to be the CEO of the MPEG-LA.

MobileMedia Ideas owns patents covering “call handling, speed dial functions, database searches, audio download and playback, and still picture and video processing”, which is pretty broad when you think about it. Interestingly enough, this allows the MPEG-LA to collect money from companies like Apple, who is part of the MPEG-LA, in two different ways: through licensing fees, and by suing them through subsidiaries like this one. Of course, Apple, as a licensor, also receives money back from the MPEG-LA, but we don’t know how much that is.

The Prior Art interviewed Larry Horn about this, but the CEO doesn’t see any conflicts of interest arise from him being CEO of both the MPEG-LA as well as of the patent troll. “We’ve been threading that needle for 14 years,” he told The Prior Art, “[At MPEG-LA], we’ve run eight patent pools. Some companies are owners of patents in one pool and not in another. Some are users – licensees – in one pool, and not in another. Our mission in each pool is to proactively and vigorously license the patents to the market, on behalf of our licensors.”

“At MPEG-LA, we’ve always gone after anybody in need of a license, to offer them one,” Horn continued, “You get no favoritism just because you happen to be a licensor in one program. If somebody gives us the right to license their IP in one context, they have to expect we’re going to license someone else’s IP in another context. Our credibility is based on that.”

Mullin explains, however, that MobileMedia Ideas and the MPEG-LA are very different in structure and intent. The MPEG-LA only governs its several patent pools – it doesn’t actually own the patents in question, since ownership remains with the licensors. MobileMedia Ideas, on the other hand, is a classic patent troll, owning patents it bought from other companies, without actually having any products of its own.

Another interesting aspect is that Nokia and Sony each hold a 10% stake in the patent troll, which raises the question whether or not the company might be part of a proxy war against Apple considering the Apple vs. Nokia troubles. Horn claims the company is not part of a proxy war, since it owns its patents outright, and decides for itself what to do with them.

What this story illustrates – apart from the idiocy of the US patent system, obviously – is that despite the reassuring cuddles from Apple, Microsoft, and its supporters, the MPEG-LA is anything but afraid of playing dirty patent games. It would be one thing if the patent troll was merely owned by the MPEG-LA, but having the same CEO only makes it all the more clear.

The MPEG-LA is shackling the web (and beyond) to H264 and its patents, so that it will be able to collect royalties until the end of time, and sue anyone who dares to step out of line. Their behaviour is harming innovation, and a direct threat to the freedom of the web. MobileMedia Ideas’ patent troll behaviour is only a taste of what’s to come if we allow H264 to ruin the web even further.

You’d almost start to prefer video over Flash. Almost.


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