VOL. 23, NO. 4	September 26, 1997

By Bob Nelson

  Columbia and eight companies together hold 33 patents that now comprise MPEG-2, which allows the transmission of high-quality video and audio signals over limited bandwidth. Dimitris Anastassiou, professor of electrical engineering at Columbia's School of Engineering and Applied Science and director of the Columbia New Media Technology Center, developed one of the MPEG-2 compression technologies with one of his graduate students.

  "We believe the patent pool approach offers Columbia an excellent opportunity to receive significant royalty payments over the next few years," said Jack Granowitz, executive director of the Columbia Innovation Enterprise (CIE), the University's technology licensing office. Granowitz, along with Fred Kant, director of the CIE, helped formulate the patent pool in meetings with the other patent holders that took place over the last three years.

  On June 26, antitrust lawyers at the U.S. Department of Justice for the first time approved an arrangement under which all related patents for a single innovation—MPEG-2—would be licensed under the direction of a single administrator. Under the agreement, firms that wish to manufacture electronic equipment that stores or transmits compressed video data will seek a single license from a Denver company, MPEG Licensing Administrator, or MPEG LA, to be jointly owned by the patent holders.

  MPEG LA is expected to begin seeking licensing fees from companies that already use MPEG-2 in their products. Worldwide sales of digital video products over the next decade are expected to range in the billions of dollars.

  A portion of the licensing fees from Columbia innovations is channeled into a Strategic Research Fund administered by the Office of the Vice Provost. The income is used to back promising new research from Columbia laboratories that has the potential to save lives or provide other benefits to consumers.

  MPEG-2 technology is already widely in use in all forms of digital video transmission, including digital television, direct broadcast by satellite, digital cable systems, personal computer video, digital versatile disk (DVD), compact disks and various interactive media. The technology eliminates redundant information, such as backgrounds that do not change, reducing the amount of data storage or transmission required to reproduce video sequences.

  "Our aim was to develop sophisticated algorithms that would achieve as much compression as possible, with as little loss of quality as possible, and with as little computational burden as possible," Anastassiou said.

  Acting Assistant Attorney General Joel I. Klein said in a business review letter that the licensing program was well designed to capture all the efficiencies that can come from joint licensing of complementary technologies. Under the department's business review procedure, an organization may submit a proposed action to the antitrust division and receive a statement as to whether the division will challenge the action under the antitrust laws.