Moving Picture Experts Group

Patents are ammo in YouTube and Netflix's video wars

March 4, 2011: 10:30 AM ET

The Justice Department is investigating whether a "patent pool" is abusing the system to try and cripple a new Google-developed open-source video standard.

Google's (GOOG) YouTube and other video downloading websites like Netflix (NFLX) license the video streaming technology for the video they provide (called H.264) from a consortium of companies that collectively operate a LLC Patent pool called MPEG LA.  The group says that they are a patent pool or "convenience store" for companies that wish to license video software.  But for those on the outside however, MPEG LA seems more like a monopoly.

In May of last year, a German Software company called Nero filed an antitrust suit against MPEG LA, claiming it "unlawfully extended its patent pools by adding non-essential patents to the MPEG-2 patent pool" and has been inconsistent in charging royalty fees.

A report today says that there could be more legal trouble on the way for MPEG LA. More

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