MPEG LA is guilty of abusing its patent pools by charging excessive royalties for technology that's no longer patent-protected, the Institute for Policy Innovation (IPI) alleged in a Thursday press release (http://bit.ly/15308l3). Patent pools were designed to save innovators time and money by establishing cross-licensing agreements for specific technologies, but patent pools can be abused by exploiting the system to maximize profits, said IPI.
Ninety percent of the patents within the MPEG-2 pool will expire by 2015 and half of those have already lapsed, said Bartlett Cleland, IPI policy counsel. MPEG LA locks in licenses for contractual periods that extend far beyond the life of the patent licensing, he said. MPEG LA "has become a rent seeker, an entity making money off government granted protection that was intended to benefit innovators and customers," said Cleland. "And by doing so it is inviting regulatory intervention, which threatens the whole patent pool system, which depreciates the intellectual property contribution to innovation and the next generation of technology."
An MPEG LA spokesman shot down Cleland's allegations. "What he wrote could not be more inaccurate and he knows better," the spokesman said. In a letter responding to Cleland's inquiry to the company in April, MPEG LA President Lawrence Horn wrote that the MPEG standard "is licensed fairly and pro-competitively in accordance with applicable competition laws" and neither the "fact nor the marketplace provide any support for the notion that consumers pay more and innovation has slowed."