Licensing Terms Announced for HEVC (aka H.265 and MPEG-H Part 2)

A group of 25 companies have agreed on license terms for the High Efficiency Video Coding (also known as H.265 and MPEG-H Part 2).

HEVC is designed to improve video coding efficiency for the benefit of Internet and mobile service providers. It is also expected to deliver next generation higher resolution HDTV video displays for 4K and 8K Ultra High Definition TV (UHDTV).

Some key elements of the HEVC Patent Portfolio License, which is expected in early 2014:

Decoder-Encoder Manufacturer Sublicenses

HEVC products sold by a legal entity to end users
0 – 100,000 units/year = no royalty (available to one legal entity in an affiliated group)
US $0.20 per unit after first 100,000 units each year
Maximum annual royalty payable by an enterprise (company and greater than 50% owned subsidiaries): initially starts at $25M
Includes right to make, use and sell
Royalties are payable for HEVC products from May 1, 2013 forward

“As contemplated, the HEVC license will utilize a modern streamlined pool licensing approach with simple easy-to-understand terms making the technology readily accessible to the largest possible market in the shortest possible time,” said MPEG LA President and CEO Larry Horn. “MPEG LA salutes the cooperation of patent owners who have worked hard to reach common ground in making a joint patent license available for the convenience of HEVC adopters. As a result of their efforts, consumers benefiting from a marketplace of competitive technology choices will be the clear winners.”

As work continues on evaluating patents for essentiality and concluding terms in final agreements, the license is currently supported by 25 prospective HEVC essential patent holders including the following: