A History of Success – A Future in Innovation
A patent is the grant of a property right
covering an invention. The right conferred by the patent
gives its owner the right to exclude others from making,
using, offering for sale, selling or importing the invention
in the absence of a license. Where standards and other
technology platforms consist of many patents owned by many
patent owners, the number of licenses required of users may
be too costly and inefficient for users to negotiate. This
is often referred to as a patent thicket. By increasing
uncertainty and conflict and restricting freedom of movement
surrounding use of a technology, a patent thicket may impede
the technology's adoption, interoperability and use.
In the 1990s, the MPEG-2 standard, which is
required for digital television applications including DVD,
faced a patent thicket. The single biggest challenge to
MPEG-2 adoption was access to essential patents. Many MPEG-2
patents owned by many parties made it virtually impossible
for most users to negotiate the number of licenses necessary
to use the standard. MPEG LA offered an alternative - the
first modern-day patent pool - as a solution by addressing
the market's need for transactional efficiency. (view link) To resolve
uncertainty and conflict in the use of MPEG-2 intellectual
property, as a convenience to users, the licensing model
pioneered and employed by MPEG LA revolutionized
intellectual property rights management by enabling multiple
MPEG-2 users to acquire essential patent rights from
multiple patent holders in a single transaction as an
alternative to negotiating separate licenses. MPEG-2 became
the most successful standard in consumer electronics
history, and the MPEG LA® Licensing Model has become the
template for addressing other patent thickets. Today MPEG LA operates licensing programs consisting of more than 5000 patents in 70 countries with over 130 licensors and 5000 licensees.
Wherever an independently administered one-stop
patent license may provide a convenient alternative to
assist users with implementation of their technology
choices, the MPEG LA® Licensing Model may provide a
solution. By balancing patent users’ interest in reasonable
access to intellectual property with patent owners’ interest
in reasonable return, MPEG LA creates the opportunity for
wide technology adoption and fuels innovation.
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