Google called the MPEG-LA's bluff, and won

A few days ago, Google and the MPEG-LA announced that they had come to an agreement under which Google received a license for techniques in VP8 that may infringe upon MPEG-LA patents (note the 'if any'). Only a few days later, we learn the real reason behind Google and the MPEG-LA striking a deal, thanks to The H Open, making it clear that the MPEG-LA has lost. Big time. Update:Chris Montgomery: "The wording suggests Google paid some money to grease this along, and the agreement wording is interesting [and instructive] but make no mistake: Google won. Full stop."

From The H Open:

MPEG-LA, led by its patent troll CEO, has been lobbing threats towards On2, the company behind Theora and VP8 Google bought, for almost 13 years now. Even though On2 repeatedly asked for the MPEG-LA to put its money where its mouth is, it never actually did so. Still, the threats kept on coming, so much so that the MPEG-LA even started asking for possible patent contributions to a VP8 licensing pool.

No wonder, then, that the announcement of an agreement between Google and the MPEG-LA comes as a surprise - it's a massive about-face for an organisation with such a long history of patent threats. While an agreement between the two is reason enough to be surprised, an even bigger surprise lies within the agreement press release: not only does Google get a license to use VP8 itself, but also a license for the next generation of VPx, as well as the ability to sublicense to all users, whether they use Google products or third party VP8 products.

Why is this surprising? Well, because this means that VP8 is a hell of lot safer and more free from possible legal repercussions than H.264 itself. What many H.264 proponents do not understand, either wilfully or out of sheer ignorance, is that those H.264 licenses embedded in Windows, OS X, iOS, your 'professional' camera, and so on, do not cover commercial use. If you shoot a video with your camera in H.264, upload it to YouTube, and get some income from advertisements, you're in violation of the H.264 license (and the MPEG-LA made it clear they had no qualms about going after individual users). The extension the MPEG-LA announced (under pressure from VP8 and WebM) changed nothing about that serious legal limitation.

This makes it clear that Google won big time with this agreement, since the restriction on commercial use does not seem to apply to VP8; there's no mention of it in the press release, and the proposal mentioned above affirms it, so it's pretty safe to assume that VP8 is now far safer and better protected than H.264. This agreement is the MPEG-LA running, tail between its legs, because even after 13 years of patent threats and asking for patent contributions, they knew they didn't have a leg to stand on. If the MPEG-LA had gained access to patents that VP8 violated, they would never have ceded their position this easily and this substantially.

Still, the MPEG-LA's 'fear, uncertainty, and doubt' did work, and it's only prudent that the MPEG (which is entirely unrelated to the MPEG-LA!) wants to make absolutely sure that there's no legal uncertainty regarding a possible 'mandatory-to-implement' video standard. This is the reason Google signed an agreement with the MPEG-LA, and the MPEG-LA's position was so weak they had to give up everything.

It was already pretty telling that the MPEG-LA never filed any lawsuit regarding On2's technologies and never pointed to any patents On2 supposedly violated, even after 13 years of threats. Just as many of us suspected, the MPEG-LA engaged in nothing but 'fear, uncertainty, and doubt'; empty bluster from a patent troll CEO.

Google called the MPEG-LA's bluff, and won.