The free and open video codec AV1, which is developed by the Alliance for Open Media, an alliance of companies such as Amazon, Apple, ARM, Cisco, Facebook, Google, IBM, Intel, Microsoft, Mozilla, Netflix and Nvidia, is now widely used and is supported by streaming portals such as YouTube, Vimeo and Netflix as well as on the hardware side by set-top boxes and some new smart TVs.
But now problems are looming: the well-known patent administrator Sisvel, which holds video codec-specific patents from various companies such as Dolby, JVC, Philips, Toshiba, NTT Docomo and IP Bridge, has announced to demand license fees for the use of AV1 (and its predecessor VP9).
All companies that have joined the Alliance for Open Media have waived their right to charge royalties on their codec related patents. This has caused displeasure among other companies that are not members of the Alliance but also hold patents on technologies used in VP9 or AV1. Therefore they have asked Sisvel to collect royalties for their collected patents.
Sisvel claims to now have a pool of over 650 VP9 codecs (currently used for example by YouTube) and nearly 2,000 AV1 codec related patents and is charging royalties of 0.32€ for implementation on consumer devices such as smartphones, TVs, cameras and computers) and 0.11€ for devices without a display such as set-top boxes, GPUs, game consoles. So far Sisvel does not impose licensing requirements on content encoded with AV1 and on software that uses the AV1 codec via software, but this could change in the future.
Actually the Alliance for Open Media had developed the license-free AV1 (AOMedia Video Codec 1.0) to protect manufacturers (and users) from such license claims. Especially video portals like Amazon, Netflix and Google (YouTube) have a great interest in saving data with the help of the new codec not only because of its efficiency (40% better than HEVC/H.265), but also because of license fees for its use - an interest that hardware manufacturers like ARM, Cisco, IBM and Nvidia share. For the use of AVC/H.264 or HEVC/H.265, however, license fees must be paid.
Hardware manufacturers who want to use AV1 are now facing the decision to pay license fees or to be sued by Sisvel. AOMedia&s reaction is interesting: will they negotiate with Sisvel or challenge their patents in court?