Access Advance LLC
What trends do you see emerging in FRAND licensing and how can companies best prepare to take advantage of these?
In some ways, FRAND licensing and particularly pool licensing has remained consistent since the first video codec pools were developed in the late 1990s and early 2000s. The market continues almost universally to accept pools as an efficient and convenient tool for licensing, specifically FRAND licensing of SEPs.
One trend we’ve observed, especially within our Versatile Video Coding (VVC) pool, is the desire from the market for early clarity around licensing terms for a newly promulgated codec. Early pool formation facilitates implementers’ ability to understand their potential royalty obligation sooner, which can allow for earlier technology adoption. The Media Coding Industry Forum and its pool-fostering initiative has helped to accelerate early consideration of licencing terms. Of course, our successful HEVC pool provided an exemplary model for our VVC pool and validated our view that the market will support a pool structure that fairly balances the interests and concerns of both patent-holders and implementers.
Another trend we are seeing is pool consolidation and the desire for more efficient multi-codec licences. With the substantial consolidation of licensors in our HEVC and VVC pools, along with our Multi-Codec Bridging Agreement (MCBA), we are well-positioned to lead this trend.
What changes has your organisation observed in the international licensing landscape over the past 10 years – and how has this affected the services that Access Advance offers?
We have noticed several significant changes over the past decade, including uncertainty over governmental policies about the availability of injunctions relating to SEPs. We have also seen policy changes or outright reversals by industry organisations like the IEEE, which has generated a fair amount of coverage and can unsettle expectations. However, one consistent theme is the viability of patent pools to address competition and fairness concerns over SEP licensing. We hope and expect this to continue. Of course, Advance will adapt to laws and regulations around SEP licensing as they evolve.
Another significant development from the perspectives of both licensees and patent owners is the increasing prominence and sophistication of Chinese licensors. Advance is proud that significant Chinese licensors are represented in its pools. For example, Huawei was an influential licensor in our HEVC pool, which encouraged others like Oppo and ZTE to join. Further, several first-time pool licensors like Alibaba, ByteDance, Kuaishou and Tencent, who collectively own a significant portion of VVC SEPs, have recently joined a pool for the first time.
The litigation landscape continues to evolve worldwide, so both pools and licensors must adapt. For example, the UPC in Europe recently went live, which represents an exciting opportunity for more efficient dispute resolution. Additionally, patent holders are beginning to look at jurisdictions beyond Germany, such as Brazil and India, to advance licence negotiations where necessary. Meanwhile, decisions in other jurisdictions such as the United Kingdom may cause patent holders to reconsider litigating there. Kim Chotkowski leads Advance’s litigation efforts.
What are some of the biggest challenges that clients face in the video codec space?
Licensing can be a challenging endeavour that involves building trust and seeking common understanding around complex legal and commercial issues.
A major challenge for pool and individual licensors is holdout by individual licensees or collectively by industry segments based on an efficient infringement philosophy. Unfortunately, there are still too many companies who don’t respect intellectual property and seek an unfair advantage over their competitors with endless holdout. While some courts support efforts to create a legal landscape that prevents companies from benefiting from continued infringement, there is more to be done - especially in cases that involve patents pools. Pools provide an established, transparent and efficient option for licensees to resolve licensing needs to multiple licensors with a single agreement that provides certainty and consistency. Our HEVC pool has over 300 licensees - representing the majority of implementers across most industries - yet we still spend significant resources and time on litigation with unwilling licensees.
A big challenge for licensees involves choosing between various video codecs that feature different technical and commercial trade-offs. Many factors affect codec adoption, such as content availability, decoding availability in consumer devices, and licensing terms. Certain codecs have falsely promoted themselves as royalty free, when not only is this inaccurate but many of the patents involved are not licensed under FRAND terms. For an implementer unfamiliar with the intricacies of such issues, it can be difficult to make an informed decision.
Access Advance is known for its modern approach to patent pool licensing. Can you tell us more about this approach, and why does this make you unique?
Advance originated from the concern that video codec licensing of SEPs had shifted from an appropriate balance between licensors and implementers to one that primarily favoured implementers. Our approach seeks to rebalance this with a tailored royalty structure that accounts for licensees’ product type, country-of-sale and compliance, rather than a one-size-fits-all regime that will undervalue multiple product types. The significant success of our HEVC pool is a testament to this approach.
Based on this successful HEVC model, Advance launched its VVC pool with a parallel royalty structure. The two pools are independent of each other, but both choose to offer the MCBA as an incentive to licensees whose products include both codecs. This ultimately benefits consumers by making the most advanced codecs with the best performance and biggest bandwidth savings available sooner. On the licensor side, Advance has pioneered an innovative process for distributing royalties on dual-codec products in each pool, based on marketplace adoption of the respective codecs. The MCBA was designed to be scalable, so future codecs can be added under its umbrella.
You have offices in both the United States and Japan. How do these jurisdictions differ with regard to licensing, and how do you adapt strategies to cater for these?
Advance’s pools and licenses have a global scope, and different jurisdictions have different cultures, expectations, experience and education when it comes to patent licensing. Maintaining an office in Japan to cover Japan and Korea - both significant R&D hubs with many important and innovative licensors - just makes sense. Further, we have personnel based in the Greater China region and we are planning to expand our presence there. We’ve spent years building relationships and trust with our licensors and licensees in Asia, while maintaining local offices and promoting streamlined communication and negotiations. Our Tokyo-based colleague Hiro Seki is trusted and respected in the Japanese and Asian licensing community, having spent years working with our clients there.
How does the company approach recruitment and mentoring and working to retain the next generation of talent?
Advance is patient and measured when recruiting candidates for our team. We have retained a start-up mentality that values teamwork and entrepreneurial spirit, so a new team member’s fit is vital. We strive to provide effective mentorship that allows talented colleagues to learn on the job. Our organisation includes seasoned patent pool and licensing professionals who are deeply invested in teaching the business to the next generation, thereby promoting stability and long-term value to our licensors. Everyone assumes multiple roles and learns new skills in the process, which increases team cohesion and overall effectiveness.
What does inspiring leadership look like at Access Advance, and how has this evolved since the company’s inception?
Advance is a smaller company with exceptional team members, each bringing individual talent and experience. Leadership involves giving everyone the tools and support to succeed, then trusting them with Advance work. It’s about teamwork and ensuring that everyone understands the importance of their role and their place in the company’s success. We regularly solicit ideas and feedback from multiple stakeholders, which can be time-consuming and challenging, but the result is better strategies, better decisions and wider buy-ins. Finally, it’s about communication, and ensuring that everyone understands what’s happening elsewhere in the organisation, as well as the tasks ahead. For example, when the pandemic hit, we began weekly Wednesday one-hour video lunch meetings, where everyone gave an informal update about their ongoing projects. This practice continues today, even when everyone is in the office. It sounds simple, but good communication from committed leadership, while it is sometimes a challenge, pays off.
How do you expect the IP monetisation scene to develop over the next five years?
We expect the commercial and legal landscape to drive IP monetisation developments over the next several years. The UPC could be a game-changer for dispute resolution and licensing if the courts grant injunctions against unwilling licensees for infringing SEPs, and otherwise discourage efficient infringement. Additionally, dramatic changes in government policy could upend industry expectations and drive decision making. Advance closely monitors litigation as well as policy and market developments, and there is potential for new jurisdictions to become a more prominent part of the licensing scene.
For video codecs specifically, we are hopeful for further consolidation around Access Advance due to the market share of SEPs that is reflected in our pools, along with the benefits and efficiencies that are inherent to the MCBA.
What recent company achievements are you most proud of, and why?
First, I am most proud of the diverse and talented team we have built as our company has grown dramatically over the past few years, along with a culture that respects and strives to meet the needs and goals of every individual. We would not have achieved what we have without such a team and culture. Second, I’m proud of the trust that our licensors and licensees place in us to fairly and efficiently manage their patent assets. The success of our pools - both the number and significance of the licensors and licensees - provides validation for our approach. Our HEVC pool recently added several additional major licensees, and our VVC pool continues to grow. This trust has been critical in the formation of our MCBA, which we believe will have a long-standing positive impact in driving adoption of the latest video codecs. This will allow consumers to enjoy the latest video advancements sooner, while providing a springboard to greater consolidation of the video codec licensing ecosystem.
How have client demands changed over the past few years, and what impact has this had on your services?
Generally, licensees have fewer staff, often with less experience, than they might have had in previous years. This has led to less tolerance for inefficiencies, while simultaneously requiring Advance to provide more training and assistance. We have expanded our licensee operations with a dedicated team led by Jim DiGiorgio, one of our most experienced executives, to provide oversight and administrative assistance for all post-execution activities, along with our royalty collections team. In addition to assisting licensees, this initiative increases licence compliance, which reduces payment delays and underpayments.