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Institute for Legal Questions on Free and Open Source Software

Google´s VP8 Patent Cross License Agreement: not as unencumbered as it seems?

by Sylvia F. Jakob

Google wishes to establish VP8 as a widely deployed video format on the Internet. To assist companies and developers in the adoption and use of VP8, Google is proposing a royalty-free patent cross license for VP8 technology: the VP8 Patent Cross License Agreement and invites interested parties to provide feedback on its terms.

Background

VP8 is a video compression format, first released by On2 Technologies on 13th September, 2008. It was acquired by Google on 2nd February 2010.

Ever since, Google was encouraged to release the VP8 source code. Most notably, the Free Software Foundation issued an open letter on March 12, 2010, asking Google to gradually replace the usage of Adobe Flash Player and the licensed industry standard H.264 on Youtube with a mixture of HTML5 and a freed VP8.

On 19th May 2010, Google launched WebM, an alternative to H.264 and released the VP8 codec software under a BSD-like License and the VP8 bitstream format specification under an irrevocable free patent license. In June 2010, Google amended the VP8 codec software license to the 3 – clause BSD license.

In February 2011 MPEG LA, a patent licensing company, invited patent holders to identify patents that might be essential to VP8. Its aim was to form a joint VP8 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. By July 2011, MPEG LA revealed it had 12 parties with essential WebM patents. On 7th March 2013 Google reached a license agreement with MPEG LA and 11 major technology companies that "might be essential" for VP8 implementation. These companies granted Google the right to sub-license these patents to any third-party user of VP8 or VP9.

Notwithstanding this development, there might still be companies holding patents that read on VP8, which were not revealed to MPEG LA or which do not want to license its patents to Google such as Nokia.

In fact, on 8th March 2013 Nokia successfully started a worldwide patent litigiation saga “Nokia v. HTC” in which it sued HTC over its VP8 – compatible Android devices.

Google´s Draft Patent License Agreement

Against these ominous developments Google pursues the goal of promoting VP8´s technology as a quasi – open standard by introducing a VP8 Patent Cross license, which provides interested developers with the opportunity to obtain a non-assignable, non-transferable, non-sublicenseable, worldwide, royalty-free, non-exclusive license to make, use, sell (including the licensing of software), offer for sale (including the offer of a software license) and import licensed products in the licensed field of use (§ 3). In turn every developer, expressly grants back a non-assignable, non-transferable, non-sublicenseable, worldwide, royalty-free, non-exclusive license to exploit licensed products in the licensed field of use under any patent claims, owned or licenseable by the developer or his affiliates, to each of their respective direct and indirect vendors, suppliers,licensors, contractors, resellers, distributors, costumers, licensees, lessies and endusers(§5):

Whilst Simon Phips had  argued that § 3 might not conform to the FOSS definition, Aaron Williamson, a counselor of the SFLC, maintained that it did not restrict the freedoms enjoyed under a FOSS license: „No developer who accepts the VP8 Draft Cross licensing terms is required to pass on any restrictions limiting user´s rights to copy, modify, and redistribute free programms.“

Yet, it may be argued that § 5 contains limitations, that might not be acceptable to the FOSS community. On a closer reading, the FOSS developers undertake to license back „Licensed Products“ including already developed FOSS products, under a BSD – like license not only to Google, but to all of its affiliates and sub-affiliates. These terms prove that Google´s underlying concept is the propagation of BSD-licensing for further developments as it effectively reverses the promise of §3 to be able to license the ensuing software under any freely chosen software license such as a copyleft license.

Thus the question remains: will FOSS developers want to rely on a patent licensing agreement that is not as “unencumbered“  as it seems?