Are Microsoft and Nokia Tightly Aligned Over VP8 Intellectual Properly Infringement?

On March 21, Nokia came out swinging directly at Google and indirectly at the emerging WebRTC standard when it claimed that VP8, the video codec within WebRTC, contains Nokia intellectual property. Nokia's action complicates the issue of the default video codec within WebRTC because Nokia has stated that it will not license any of its patented technology to the IETF.

In 2010, Google paid $123 million to buy On2 Technologies, which gave Google rights to the VP8 codec, and it promptly turned around and licensed the codec at no charge to the IETF for use in WebRTC. Later Google and the MPEG LA consortium agreed to terms that further unencumbered the VP8 codec for free distribution (no word on how much this cost Google).

Nokia's unwillingness to license its intellectual property threatens the use of VP8 in WebRTC. Nokia would prefer to see the royalty laden H.264 codec (and subsequent derivatives) used in WebRTC.

But, this is also what Microsoft would prefer. Microsoft has offered a CU-RTC-Web standard, which allows the use of other codecs besides VP8, to the standards bodies. However, CU-RTC-Web has been rejected by the IETF. Microsoft's motivation is, in part, to save its $8.5 billion investment in Skype, the usefulness of which WebRTC may seriously damage.

One has to believe there is alignment, or at least discussion, of some sort between Nokia and Microsoft on this issue. Stephen Elop, Nokia's current CEO, was the former president of Microsoft's Business Division. He joined Nokia in 2010, and shortly thereafter Nokia and Microsoft announced a partnership in which Nokia "bet the farm" by changing its smartphone operating system to Windows Phone software.  The two companies stand to lose big to Google if Google Chrome becomes widely accepted as an operating system and as Android continues its momentum as the market leading operating system on smartphones and tablets.

Large companies forming alliances to thwart other companies is not new, and Google is clearly doing this itself as it joined HTC in fighting against Nokia's lawsuit claiming intellectual property infringement in HTC's use of VP8 in its Android-based phones.

Microsoft's Derek Burney, Corporate VP Skype Division, told the audience at Enterprise Connect 2013 in March that Microsoft would adopt WebRTC as soon as the standard is ratified. Nokia's action further delays WebRTC ratification, giving Microsoft more time to suggest protocol alternatives to WebRTC and/or suggest the ability to place alternative codecs within the WebRTC framework.

Having had long experience in the video communications market, I have thought for some time that alternatives to VP8 need to be possible in WebRTC to make it a living standard. The reason is that every five years or so the video codecs get incrementally better, and it would be a shame not to be able to use the very best codecs as they become available. However, the downside of this approach is that new codecs typically have royalties associated with them and they would not be free for use in the browser. Proprietary extensions of WebRTC would certainly emerge, complicating widespread use of WebRTC. VP8 is intended to be an all-purpose video codec that is "good enough" for most video applications. Google is working on VP9, which will likely be licensed to the IETF for use in WebRTC at no charge, but overcoming the current hurdle Nokia just erected for VP8 is key to making this a reality.