MP3 war in Europe - patents revisited

You want to tap into the vast market for mp3, right? Intoxicated by the success of Apple's iTunes and the irresistible iPod, your company either produces or sells mp3 decoding audio equipment. Then be aware!

You must have encountered Sisvel by now. Sisvel has offices in Italy as well we in the US, and call themselves "a company working in the field of technological innovations". Well, so much for innovation. The truth is that Sisvel actually has nothing to do with innovation, unless you call the art of patent trolls "innovative". They are simply a licensing vehicle, used by companies like Philips and France Telecom, to enforce patents these companies have on mp2 and mp3 audio technologies. They use unprecedented and aggressive methods of extorting money from users of mp3 players and mp3 enabled mobile phones. They have been able to get big companies on their knees, like Thomson of France (a powerful player themselves in the mp3 world), Samsung, and the like.

Their tactics are aggressive. A popular tool for Sisvel is using so called Border Detention Orders or BDO's against those parties that import mp3 enabled devices into Europe. Customs, now particularly known for their patent expertise, can be simply persuaded to seize any product labeled "mp3". Sisvel, backed by Philips and other mp3 patent holders, base themselves on a made up story that the patents they represent (the Philips & Co patents) are in fact part of the the mp3 audio codecs standard, governed by a 1994 ISO/IEC standard.


At the IFA 2005, held in Berlin, many smaller Chinese manufacturers of audio equipment did not even dare to enter the EU market, scared off by the demands for royalties and upfront payments. The demands are so excessive that many decide not to even try to enter the market. Talking about IP as a means not to innovate but to stifle innovation and market access, something the EU says it promotes. Well take a second look!