MPEG litigation frenzy starts

There is now probably less money to be made from selling MPEG-enabled technology than from sueing others who do, if recent legal activity is anything to go by. Seemingly set off by the enormous headline damages figure against Microsoft (reported here), other companies have started making threatening noises and pursuing legal action.

EE Times reports that MPEG LA, the agency set up to license MPEG technology from an industry-wide patent pool, is getting fed up with Chinese manufacturers who refuse to pay the required $15 to $20 for each DVD player sold. Given the number of Chinese DVD players sold in recent years, the theoretical numbers involved could be very large indeed. MPEG technology is also used in cable and digital terrestrial broadcasts, and consequently in set-top boxes, which are being sold in China in rapidly increasing numbers, as well as for export all round the world. Here is a telling quote from a Chinese manufacturer: "Since Chinese companies did use their technology [in set-top boxes], it's reasonable for the MPEG-2 organization to charge the fee, although they charge too much". As the earlier post here implies, perhaps attitudes towards patents in China lag a little behind those relating to trade marks.

A second indicator is the lawsuit filed in Marshall, Texas by new company Texas MP3 Technologies (see for example reports here or here), who recently acquired a patent originating from South Korea which claims to cover basic features of digital music players such as iPods. Apple, Samsung and SanDisk are the targets of the lawsuit. The granted US patent in question (US 7,065,417) describes a "portable audio device suitable for reproducing MPEG encoded data" that sounds remarkably similar to an Apple iPod in its claimed features.

Since MPEG technology has now become properly widespread, not to say essential in many consumer electronic devices, the time now appears ripe for all those patent claims to come out of the woodwork. There may be more to come after Alcatel v Microsoft, and the more interesting developments may well be in China as manufacturers there start to feel the pressure from (mostly) US companies wanting some of the money that China is busy making.