A History of Success – A Future In Innovation

Revolutionizing Intellectual Property Rights Management

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, thereby impeding the technology’s adoption, interoperability and use.

In the 1990s the single biggest challenge to adoption of the MPEG-2 standard required for digital television applications including DVD 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 to address the market’s need for transactional efficiency (US DOJ Business Review Letter).  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.

The MPEG LA® Licensing Model is the template for addressing standards that are among the most successful in consumer electronics history.  MPEG LA also has developed patent pools for biotechnology, telecommunications infrastructure, and electric vehicles, and has established licensing ventures for molecular diagnostics and oligonucleotide therapeutics.

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.