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Nokia Corporation (ADR) (NOK), Google Inc. (GOOG): No VP8 Licensing

Nokia Corporation (ADR) (NYSE:NOK), believe it or not, owns  several patents that involve the implementation of a video-compression technology known as VP8. The technology was bought by Google Inc. (NASDAQ:GOOG) in 2010, and the company is now trying to make VP8 a new worldwide standard. However, part of that process will involve using some of the technology that is patented by Nokia.

Nokia Corporation (ADR) (NOK), Microsoft Corporation (MSFT)Nokia Corporation (ADR) (NYSE:NOK) could license the technology and get royalties for its use as a standard-essential patent. But at this point, at least, Nokia is saying no. But it’s not just no; the company has filed intellectual-property rights disclosure with the Internet Engineering Task Force (IETF), listing the patents that the company claims are infringed by VP8 as an effort to prevent VP8 from becoming a standard. Google Inc. (NASDAQ:GOOG) has stopped supporting the H.264 codec and is looking to more open-source codecs like WebM. Nokia indicated in its IETF filing that it is not open to allowing VP8 to use its intellectual property under any terms.

While Nokia Corporation (ADR) (NYSE:NOK) says it embracing freedom and open collaboration when it comes to standardization, but in an e-mail by company spokesman Mark Durrant about the IETF filing, “we are now witnessing one company attempting to force the adoption of its proprietary technology, which offers no advantages over existing, widely deployed standards such as H.264 and infringes Nokia’s intellectual property … As a result, we have taken the unusual step of declaring to the (IETF) that we are not prepared to license any Nokia patents which may be needed to implement its RFC6386 specification for VP8, or for derivative codecs.”

Nokia Corporation (ADR) (NYSE:NOK)What do you think? Should Nokia Corporation (ADR) (NYSE:NOK) play hardball with its patents? Or should it work with Google Inc. (NASDAQ:GOOG) to establish VP8 as a new standard in digital video compressing? Do you think Google Inc. (NASDAQ:GOOG) is trying to bully Nokia? Give us your thoughts in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

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