Ensuring the world can communicate in the same language is hard, even more when the language is coding. Innovation requires collaboration: each coded video must play on each enabled device. That’s why international and independent standard-setting bodies are so important within the innovation ecosystem: their work makes the interoperability between content and devices possible, resulting in products which are able to talk to each other.
Standard-setting bodies, like ISO and ITU, include experts from firms, users, interest groups and governments. Their scope is to create open, interoperable and universal international standards for a large variety of industries, from food safety to technology.
ISO and ITU have also specific branches dedicated to the creation of new video codec standards, respectively MPEG (Moving Picture Expert Group) and VCEG (Video Coding Experts Group), and their work over decades (both alone and as part of joint teams) brought to life the most used video codecs, from MPEG-2 to H.265/HEVC.

Innovation takes years. In the case of video codecs, it may take up to a decade from preliminary work to publications and the patentable technologies that result from innovation, with expenditures of substantial resources.
It is well-recognized that patenting is extremely important in the innovation process, since filing a patent provides incentives and protection to inventors, allowing them to seek compensation for the use of their patented ideas. Patents, as with all Intellectual Property (IP) rights, can be “leased” through patent licensing, offering the chance to the owners to generate profits (licensing out) and to the “lessees” to implement new ground-breaking inventions into their products (licensing in). It is this possibility of licensing income that encourages inventors to disclose their inventions, allowing others to use them for appropriate fees and making it possible that others will build on and improve the inventions that have been disclosed.
Managing IP means supporting innovation. Revenues from patent licensing can be and regularly are re-invested in R&D; activities. This creates a self-sustaining cycle in which the fruits of previous innovation can fund new research, generating an inventive loop in which the intangible assets acquire real economic value.
Innovation is a long and expensive process, it requires the possibility of substantial returns to be worth pursuing.

This system has been working so far. Investments in innovation, R&D;, patent licensing and standardisation have been fuelling an innovative and healthy ecosystem with new products and services , ensuring technology development, economic growth and a tangible benefit to society.
If innovation is not fairly and reasonably rewarded, there will be no incentive to innovate further and technological progress will stop. Innovation needs protection, otherwise only companies with revenue streams other than licensing will be able to fund R&D; investments. This will exclude small players and non-for-profit innovators, like universities and R&D; centres, which are also very important contributors to technological progress. In other words: only those innovators with an established and ever-growing market power would continue thriving, causing the model of collaborative, standard based innovation which benefits all to break down.