The last few months have been busy for Dolby Laboratories. As well as initiating various enforcement campaigns against licensees across several markets, the company helped launch Via Licensing Alliance’s new Voice Codec pool (December 10, 2024 ip fray article) and divested thousands of non-core patents to a major IP firm. At Via LA’s Business Summit in Shanghai, ip fray sat down with Dolby’s General Counsel Andy Sherman to reflect on the past six months and where Dolby is headed next, including the opportunities and challenges that China, and the greater Asian region, present for the company.
The Thursday before last, the news broke that Dolby was suing Finnish mobile phone manufacturer HMD in the Delhi High Court over H.264 video codec patents that implementers commonly license through Via LA (March 20, 2025 ip fray article). As well as HMD, the company has been actively pursuing enforcement campaigns against BLU (November 12, 2024 ip fray article), HP (June 26, 2024 ip fray article), Roku (March 5, 2025 ip fray article), Lava, and Asus. “We are dedicated to making sure there is an even playing field and we’re protecting our IP – and we ultimately hope to welcome the folks with whom we have dispute resolution to our community of licensees,” Mr Sherman said.
In Asia in particular, Dolby’s General Counsel sees mostly “very exciting” opportunities. Major, leading Chinese innovators contribute more and more to important standards at a global level – whether it’s 5G, audio, or wireless power – there is greater contribution, presence and investment in innovation in those spaces, he commented.
He also noted the increasing participation of Chinese companies in pool structures:
“The opportunity for us there is to continue to partner with these companies both in the creation of next-gen technology but also in bringing leadership to the way these technologies are accessed and implemented through these collaborative structures.”
Of course, expanding partnerships in Asia comes with its challenges. And, according to Mr. Sherman, the inconsistency in legal standards across the continent is a big one. “So when you are a global licensor, having a holistic view across territories is important,” he noted. Another “headwind” is differences in the way standard-essential patents (SEPs) are addressed, while a third is greater geopolitical tension:
“It creates complexities, although the good news is patent pools are uniquely suited to bring folks across the globe together across borders. These programs are inherently global – licensors are from every region of the world, and so are licensees, and these structures are really intended to create a bridge between licensors and licensees independent of region.”
As these pool structures expand, however, it becomes more difficult to get alignment among licensors, he added. “You’ve got different diverging interests.”
The good news though is that if a pool is doing its job, it’s able to produce a consensus. Sherman is clearly a fan of patent pools – and so is Dolby. The company is close partners with Via LA in its AVC and Voice Codec programs, Access Advance in its HEVC and VVC programs, Sisvel in its VP9, AV1, and Cellular IoT programs, and Vectis in its Opus program.
Leveraging collaborative, multi-party licensing structures is a core way in which Dolby runs its business, Mr. Sherman noted.
The GE Licensing acquisition and the future of media standards
Last August, Dolby successfully completed its $429 million acquisition of GE Licensing (June 6, 2024 ip fray article). That integration has gone well, according to Mr. Sherman, and it’s beginning to generate value very consistently with what was anticipated. “Maybe even better than we thought,” he noted.
He is particularly excited about the people who joined his team, and are now a part of the fabric of the patent licensing business, all of whom are “very talented”.
Last month, Dolby also divested a substantial majority of the non-core patent assets it had assumed following the GE Licensing – a mammoth 2,500 patents that “were not really going to generate value at Dolby” to Dominion Harbor. The “overwhelming” value of the GE Licensing deal was in the video assets, Mr. Sherman emphasized, but because of the conditions associated with the acquisition, the timing constraints, and the need for simplicity in the execution, Dolby took on some assets that were not part of its core focus. Some of these included patents related to advanced display, battery, vehicle, and semiconductor technologies.
Now with that transaction in the bag, Mr. Sherman said the company will be “catching its breath” and looking out over the horizon and thinking about how to focus on new opportunities going forward.
But what does the horizon look like for the video and audio codec space? Mr. Sherman noted that it’s an “exciting” time for media as the demand for quality – high dynamic range, frame rate, bit depth, and resolution – is growing and growing, and there is a much greater need for real-time encoding and live content streaming (like major sports events). That creates great demand for compression and efficiency and the need to be able to address newer media experiences, like volumetric experiences, so this is where AI could come in. He said:
“Whether it’s in a lab or in a collaborative global standard, we’re beginning to see a huge amount of experimentation around pre-processing, post-processing, and replacing traditional coding methods with AI or machine learning.”
How soon that will start happening depends on who you ask, he believes. While some believe it will play out over a long period of time due to the complexity of the computation requirements, others think it is imminent.
As for Dolby’s own future, Mr. Sherman said that the company is constantly evaluating opportunities through its organic innovation through contributions and standards in media and other areas, as well as through inorganic acquisitions.
What has predominantly helped Dolby grow the scale and profitability of the business over the last several years, he believes, is a combination of a few things:
- Always focusing on high-value, big-impact contributions mainly through standards, but areas of technology that really make a difference and represent significant contributions of high quality.
- Being part of the community of people and companies that are dedicated over the long term to bringing these technologies to the marketplace through collaborative structures that create the equilibrium between licensees and licensors that support the industry, that is set by the industry, and is overseen by the industry.
- Areas that fit with our focus in research, so places where we have deep research in media and other places tend to be where we can really contribute – and then go to market and have the standing to be able to successfully license.
These are three guiding principles that have replicated success over the years across many programmes, he added.