ZDNet UK reports that InterTrust, ContentGuard, Sony, Matsushita Electric Industrial and Philips Electronics have, "grouped together essential anti-piracy patents for a standard set by the Open Mobile Alliance (OMA), an organisation of handset makers and mobile telecom operators", according to MPEG LA, which has a grip on just about all the essential patents for MPEG-2. This means that independent mobile phone makers will have to pay a dollar to put the OMA's Digital Rights Management (DRM) 1.0 standard into a mobile phone, while content owners who want to use the OMA DRM will pay royalties representing 1% of the consumer selling price of their service, says the report. According to ZDNet:
"The pooling should also make clear that everyone who uses OMA's DRM needs to pay royalties. ContentGuard said in October that OMA had not informed its members properly and that many handset makers thought the anti-piracy standard was free".ContentGuard is now more or less owned by Time Warner and Microsoft, who recently teamed up to buy most of Xerox Corp's interests in the company. Under their joint ownership, says the European Commission: “ContentGuard may have both the incentives and the ability to use its IPR portfolio to put Microsoft's rivals in the DRM solutions market at a competitive disadvantage". The Commission has however halted an antitrust investigation into the company. Says ZDNet:
"The mobile phone industry is the first market where all players have agreed to use a single DRM standard for control of digital content, in stark contrast with the media services available to Internet users on personal computers. These services, such as Apple's iTunes, Sony's Connect and Microsoft's MSN Music Club, all have their own proprietary systems to protect songs, despite the fact that they have been built with much of the same technology".However, entertainment industry DRM applications are cracked as soon as they're developed, acting as little more than challenges to the members of the many and various hacker fraternities. According to Andrew Orlowski, writing in The Register,
"Agreement has been rapid, taking less than four months. But it's nevertheless a considerable burden to cost-sensitive manufacturers, which often balk at paying more than a few cents for essential software. Handset vendors only pay around $5 to license the air interface. The costs will indirectly be born by the consumers, who as always in a lock-down regime, end up paying more for less".
The IPKat's comments on patent pooling in the telecoms sector are well-known. There generally seem to be excuses for it that escape the investigation and censure of the European Commission. Oh for a genuine means of establishing open-to-all industry-wide technical standards that can be used at a reasonable price.
ETSI and European telecoms standards here
Phones for pools here and here