One-Blue patent pool seeks to enforce Bluray, other IP
Junko Yoshida - April 23, 2012
NEW YORK – After more than a decade striving to untangle proprietary claims among the IP
juggernauts of CD, DVD and Blu-ray technologies, 15 companies with essential patents have finally
forged a patent pool called One-Blue, LLC.
One-Blue CEO Roel Kramer, a retired former Philips executive, said in a recent interview with EE
Times that One-Blue’s one-stop licensing program covers “the vast majority of Blu-ray and optical
patents that include DVD and CD.”
One-Blue is asking for royalty rates ranging from $12 for a Blu-ray Disk recorder and $9 for a BD
player to $7 for a BD playback drive in a PC and 9¾ cents per pre-recorded BD movie disk.
It remains to be seen whether this is asking too much too late for emerging consumer OEMs in
China and India. Kramer, a former CTO for Philips Semiconductors and later CTO and executive vice
president at Philips Consumer Electronics, said he is confident that One-Blue will offer enough
carrots and sticks to make it a viable joint licensing program for the global industry.
One-Blue reflects fundamental changes in the consumer electronics industry. Leading system brands
in the West and in Japan no longer make their own DVD/Blu-ray players or disks. Instead, they
source their products from China or elsewhere. Established Western and Japanese brands also face
much tougher competition from a growing number of new Chinese vendors with their own brand
names. Whether such emerging OEMs are paying royalties to DVDs and Blu-Ray, however, is
another matter.
Traditional IP powerhouses seem to agree that now is the time to end long-running disputes in order
to protect and enforce their IP against industry newcomers.
The initial breakthrough for One-Blue came when three long-time rivals with competitive histories
and cross-licensing agreements came together. In February 2009, Panasonic agreed to join with
Philips and Sony to launch a patent pool. The pool expanded when Hitachi, Samsung and Cyberlink
joined. Since August, 2011 when One-Blue officially rolled out its licensing program, others have
joined, including Dell, Fujitsu, JVC Kenwood, Hewlett-Packard, LG Electronics, Pioneer, Sharp, Taiyo
Yuden and Yamaha.
Source: One-Blue, LLC
One-Blue, however, isn’t exactly a “one-stop shop” for those seeking a Blu-ray license. Another joint
licensing program called Premier BD Columbia Technology Ventures, Disney Enterprises,
Mitsubishi Electric, Technicolor, Toshiba and Warner Bros. Home Entertainment.
Patent coverage
One-Blue’s patent pool is said to cover not just IP related to Blu-ray but also DVDs and CDs. Many
patents specific to CDs have expired as utility patents last only 20 years, said Bill Lenihan, OneBlue’s director of IP licensing. Nonetheless, there are still some valid patents covering CD playback
format for text characters, he added.
One-Blue’s patent program covers hardware (players, recorders, drives), PC software and disks
(read-only, recordable, rewritable and high capacity). In hardware and PC software, the program
includes essential patents for Blu-ray disk, DVD and CD standards. The program also includes
essential patents for the Blu-ray disk Standards.
Corralling various parties has been no easy task since they filed patents under different national
patent laws and created a rats’ nest of cross licensing agreements among themselves. Patent pool
with new twists
After exhaustive research and negotiations, Kramer said One-Blue has devised a patent pool with
three unique characteristics that he argued are fundamentally different from other patent pools such
as MPEG.
First, One-Blue has enabled a practice called “pre-netting.” It allows patent holders to subtract from
the new licensing program financial arrangements created through cross-licensing agreements
predating the new patent pool.
Second, divisional patents are treated differently under One-Blue. Unlike MPEG, in which each party
with essential patent is treated equally (thus royalties are divided equally), patents under One-Blue’s
program are weighted, ensuring that bigger inventions more highly valued.
Third, One-Blue offers a “product license” rather than a format license. Called “per batch” licensing,
“You pay for what you ship,” said One-Blue’s Lenihan. “Getting a license for what you ship, per
batch” means tighter control and enforcement of patents, explained Lenihan.
Previously, many existing programs offered a license for total production for the lifetime of the
essential patents, where products are in a state of “being licensed” without royalty payments.
Under the new program, licensees are required to use a label with a barcode containing anticounterfeiting holographic marks, “like a banknote,” explained Lenihan. Labels must be placed on
retail cartons of all players/recorders destined for retail. Further, all pre-recorded and recordable
BD disc products must display the registration logo.
IP enforcement
While companies say that they have essential IP to certain technologies, they don’t like litigation
because of the time and resources involved, observed Kramer.
One-Blue hopes to enforce licensors’ IP through its joint licensing program which it claims has teeth.
For one, One-Blue officials say that they will ask custom officials in various countries to intercept
unlicensed products with the aim to create a level playing field.
Through the combination with border seizures, labels and logos on BD products, One-Blue expects
that retailers can now easily determine whether products they sell are licensed or not. If it is
discovered that a manufacturer is unlicensed, One-Blue said it reserves the right to enforce against
retailers and others
throughout the distribution chain.
Ultimately, the success of One-Blue will be measured by how many OEMs it can sign up. Kramer
said a number of “major” Chinese OEMs are already One-Blue’s licensees.
Those in China who have gotten on board thus far are: BBK AV Electronics Group; China Hualu
Group Co.; Dongguan Contel Electronics Co.; Huizhou Desay A&V Science and Technology Co.;
Shenzhen Maxmade Technology Co.; Shenzhen Sea Star Technology Co.; TCL Technoly Electronics
(Huizhou) Co.; Guangzhou OPPO Mobile Telecommunications Corp.; and Guangzhou Panyu Juda Car
Audio Equipment Co.
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Royalty dispute foils one-stop DVD patent licensing plan