Intertrust's scheme includes two types of licenses.  One is the Active Subscriber Domain License, for active content service provider accounts.  The fee of EUR 0.09 (US $0.12) per year covers each subscriber's domain, or group of associated devices (such as all of the devices attached to a subscriber's home network).  The other type of license applies to all users of a given carrier, regardless of whether they actively use a content service or not.  The advantage of this scheme is that it can be easier for wireless carriers to track.  Fees for this type of license start at EUR 0.015 ($0.02) per year through 2009 and ramp up to EUR 0.03 ($0.04) per year in 2016 and beyond.  Carriers with fewer than one million users would pay a fixed fee of EUR 20,000 (about $26,000) per year.

This announcement is especially significant in light of the patent pooling organization MPEG LA's attempts to create a blanket IP license for patents essential to OMA DRM 1.0 implementations.  Although MPEG LA's OMA DRM 1.0 pool still technically exists, this effort has been a failure, and Intertrust's announcement is merely further confirmation of that fact.

The problem, of course, is that the MPEG LA pool represented IP from companies other than Intertrust, Sony, and Philips -- such as ContentGuard, which is owned by Microsoft, Thomson, and Time Warner.  Intertrust is positioning its new license offer as an attempt to clear the logjam over DRM patent licensing that many wireless carriers and handset makers point to as the reason why OMA DRM 2.0 is stagnating in the market (although OMA DRM 1.0 has achieved a sizeable installed base). 

But will it clear the logjam?  Intertrust wants to suggest that its IP (together with that of Sony and Philips) is the only truly essential IP for OMA DRM implementations, and therefore by implication that other IP is nonessential or even invalid.  The GSM Association's rather tepid endorsement of the licensing program seems intended to bolster that suggestion, especially since the GSM Association was openly hostile to MPEG LA's pool, and even if it calls the new license a "first move towards" a solution.

The economics of Intertrust's license indicate the downward pricing pressure that, we suspect, forced the practical collapse of the MPEG LA OMA DRM pool: the members of the pool most likely felt, as Intertrust clearly does, that they could get better royalty rates by making deals by themselves.  The Active Subscriber Domain License is analogous to the last published terms from MPEG LA -- which date back almost two years -- of $0.25 per subscriber per year (plus fees for handset makers, which are not covered under the Intertrust license), i.e., double the Intertrust license fees. 

If other patent holders press their case on wireless carriers, their total bill could end up exceeding the MPEG LA terms.  Of course, it is possible that carriers and handset makers may take a calculated risk and pay Intertrust's fees in hopes that they can do without paying additional royalties or even mount legal challenges that make the other IP holders go away.  The GSM Association's endorsement -- plus, we imagine, private conversations that Intertrust has had with individual wireless carriers -- suggests that Intertrust has at least managed to convince carriers of the essentiality of its IP. 

So the answer to the question we posed three paragraphs ago is: probably not.  The controversy over OMA DRM patent licensing should continue.  A key piece of evidence of Intertrust's success will be any announcements of new OMA DRM 2.0-based content services at 3GSM.  Azita Arvani, who is covering the conference for DRM Watch, will report on any progress next week.

Intertrust's inclusion of Marlin in its licensing terms is another piece of evidence that two major "axes of power" in consumer electronics, the "handset" and "media player" axes, are converging on a common DRM strategy.  They are doing so in mutual competition against the other axes, which are Microsoft, Apple, and the set-top box axis (composed of NDS, Thomson, Nagra, Irdeto, and others).  Marlin is a creation of "media player" companies such as Sony, Philips, Panasonic, and Samsung, while OMA DRM primarily represents handset makers.  The Marlin spec includes built-in interchange with OMA DRM already.  Certainly a common patent licensing framework will make it easier for mobile content service providers to offer consumers seamless interoperability among OMA DRM and Marlin-speaking devices.

Get DRM Watch Newsletter

Click here to subscribe to DRM Watch