Vendors may have filed as many as 500 patents relating to the H.265 HEVC technology. But so far just who owns what and how much they expect in royalties is unclear.

The current video codec, H.264, has been the basis of digital video products such as cameraphones and digital video recorders for eight years. Thanks to a patent pool created by the MPEG Licensing Authority, the royalty rate was a flat 25 cents per chip, capped at about $12 million per vendor.

“That’s 40 million chips, but for cellphone chip vendors, that’s not much volume,” said an executive at one chip company who asked to remain anonymous.

The MPEG LA claims it is working on a follow on. “We plan to begin facilitation of an H.265 patent pool this summer,” said an MPEG LA spokesman.

But chip vendors say the group is having trouble getting support for the new pool. The new standard has many new patent holders not involved in the prior pool including Mediatek, Qualcomm and Samsung who do not want to join the group but prefer collecting royalties on their own, said the semiconductor executive.

The scenario is already playing out in other areas. Via Licensing recently said it will have this fall a 20-company patent pool for Long Term Evolution, the dominant 4G cellular technology. However, big patent holders including Ericsson, Nokia and Qualcomm are said to not be participating in the pool.

Chip makers expect the H.265 HEVC standard could be ratified within two months. That would open the door for them to start taping out their chip designs—if the royalty situation is clear.

“HEVC has so many patent holders and some of them say they will not be part of the pool but want to collect royalties themselves,” said the chip exec. “If say 20 people all want to collect royalties it will kill the standard—we need a fixed cost, it cannot be variable,” he added.

“People hate paying MPEG LA, but they were the only ones to collect royalties on H.264, so at least the business model was simple and clean,” said the source.

H.265 HEVC is expected to offer 30 to 50 percent boosts in compression efficiency over today’s codecs, lowering the bit rate needed to support quality video transmissions. The technology could be a big enabler for a new generation of compact, wearable cameras. It will also enable a new generation of 4K resolution TVs and monitors.

Engineers envision wearable cameras the size of postage stamps. The lower bit rates of H.265 HEVC could enable such cameras more easily to send video wirelessly so their output could be monitored on remote smartphones or PCs and tablets via cloud services.

Thus the standard is “very important for us, we will enable it as soon as possible,” said the chip exec. “I think 4K TVs and monitors are coming on strong, and will be a reality in two years,” he added.

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