Which then begs the question - why are video compression standards developed in the US at all? MPEG is obviously US based but Xiph is also a US nonprofit. The software patents should be hugely crippling the ability for Americans to develop competitive video codecs when every other nation doesn't have such nonsense. Why hasn't Europe invested in and developed better codecs that combine the techniques impossible to mix in the states?

Is it just basically the same mechanism that leads to so much drug development happening in the US despite how backwards its medical system is, because those regressive institutions create profit incentives not available elsewhere (to develop drugs or video codecs for profit) and thus the US already has capitalists throwing money at what could be profitable whereas everyone else would look at it as an investment cost for basically research infrastructure.

MPEG is not US-based.

https://en.wikipedia.org/wiki/Moving_Picture_Experts_Group

The article we are all commenting on is by a German research organization that has been a major contributor to video coding standards.

Perhaps you're confused by the patent issue? European companies are happy to file for US patents and collect the money.

This sounds like a somewhat obvious way to side-step the patent mechanism, so I would assume patents prevent this kind of a thing, when you develop patent-breaking technology abroad and then "just use" it wherever you want. You're probably not allowed to use the patented technology in any of the products you're building.