By definition shouldn't a standard should be non-proprietary and non-discriminatory? Sounds like the vendor costs should be capped at the agreed upon $12 million unless there is some additional benefit provided that makes it worthwhile to negotiate an additional payment for some value added features.
I find it hard to believe that there are 500 key patents related to this standard. Many of those are probably extensions to the standard. Critical for some applications but not all. We have all seen what happens in the marketplace when standards stumble... they die fairly quickly while another one succeeds. It is in the best interest of all the parties involved in this standard to protect their investments to date by not being greedy. Otherwise they are at risk of losing any advantage or reasonable compensation gained by their efforts. The real issue is if some party is using a key patent to throw a monkey wrench into the works in order to gain an advantage elsewhere. Business is a cutthroat environment and most everyone has cards not visible.
One way to take the edge off of this is for a consortium to hold the key IP and license it for a single fee per use. How each consortium member gets reimbursed from that fee is then by agreement of the consortium members. Take the max limits off of the royalties and it would probably work better for everyone concerned as it would not give an advantage to the big number players. Let them profit from their IP investments instead. This promotes business harmony.
While this may be a noble goal, if there are 500 patents involved in this standard, can you imagine the massive amount of "human capital" that has been expended to come up with all the technologies that are needed to achieve the results of this standard?
To that end, the people involved in creating the intellectual property involved in those standards need to be paid as do the companies that invested the money, time, effort and risk in creating said standards.
It may seem like a noble thought "benefit and future of mankind", but really who will benefit? The companies that make the chips that include the compression? The companies that develop software and online services that use this compression in order to enable their business model? What makes them more worthy of the profit and spoils than the people who developed the underlying technology?
On a purely practical note, the odds of developing a complex standard such as this that is open source and not in the process violating patents is fairly slim. To that end, perhaps the best approach is to only include technology from companies willing to put their patents into a patent pool and/or at least set a fixed cost and standard legal agreement for said patents on submission so that their value could be weighed not only from a technical standpoint but economical and legal standpoint.
IEEE or Some other Standardization agency should come up with a open source variant of compression standard that can be accommodated easily and at less cost. It seems strange that all the chips are working day and night compressing the videos and the money goes to a single pocket from thought the world. The volume is so large that standardization agencies should work on it for the benefit and future of mankind.
"The H.265 High Efficiency Video Coding (HEVC) standard is about to be ratified, promising a new generation of higher resolution and more compact digital video products. The bad news is chip makers are afraid to design products using it."
The problem is that ratification process is heavily influenced by the companies who own these patents; so that no one else can get into designing/selling these devices or get a bite of the royalties. The simplest solution is that IEEE/Standard body should kick all these stupid companies and their technologies out of the ratification process, and only include technologies from companies who agree to the FRAND licensing terms.