MPEG-4 Licensing Reply

arn

macrumors god
Original poster
Staff member
Apr 9, 2001
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Jeremiah Bornemann writes in with the generic reply to those who emailed the MPEG-LA regarding the MPEG-4 license terms:

This is just the beginning. The licensing terms were just announced on January 31, and the details of the MPEG-4 Visual license agreement are still being worked out. Because of the challenge posed by the effort to produce a joint licensing program requiring a consensus among at least 18 different patent owners and the yet undetermined future implementations and applications of the emerging MPEG-4 Visual technology, this may take several months to complete. There will be much discussion before all of this is sorted out, and changes may be expected. Again, we appreciate your contribution to this process and will keep you informed.


Full text included in the comments.
 

arn

macrumors god
Original poster
Staff member
Apr 9, 2001
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Thanks for sharing your views with us regarding the reported MPEG-4 Visual licensing terms and your interest in using the MPEG-4 Visual Standard. I know this email may sound like a canned response, but since you took the time to write to us and others who wrote us raised similar concerns, we wanted to get back to you (and the others) to explain the situation. We understand that you have strong feelings about the MPEG-4 Visual licensing terms based on what you\'ve heard, and we welcome your feedback. The license agreement is still in the process of being worked out, your views are important to us, and they will be taken into consideration. Similarly, I hope you will allow us this opportunity to clarify a few things that may have been misunderstood and to explain where this goes from here.

First, we would like to clarify the role of MPEG LA. MPEG LA's business is to make it possible for new technologies (like MPEG-4 Video) to enter the marketplace by making the essential intellectual property rights owned by many patent owners accessible to everyone on fair, reasonable, nondiscriminatory terms under a single license. If there were no MPEG LA, the essential patent rights that made the MPEG-4 Visual technology possible would still have to be dealt with, but instead of having the opportunity to deal with one company for a single license that includes those rights, users' only option would be to deal with each patent holder individually. With MPEG LA, the marketplace is assured of ready access to MPEG-4 Visual essential patents owned by 18 different companies (soon there will be more, but our goal is to include as many essential patents as possible in one license; therefore, royalty rates will not increase during the term of the agreement even as new patent owners and more patents are included). What you've seen is the first step in that process.

We understand that the success of a licensing program relies on the success of the underlying technology. Therefore, our goal, like yours, is to promote the widest possible use of the MPEG-4 Visual standard, and we are sensitive to the need to structure a reasonable license that is consistent with marketplace conditions. To that end, we continue to work with the patent owners to assure that the license is responsive. Everything is in a state of constant review. If something isn't right, every effort is made to fix it. Because of MPEG LA's role, you have the opportunity to discuss your concerns with us, and we in turn can communicate them to the patent owners. We note that there are many different views to be considered, however, and that ultimately the marketplace will decide. We note also that there may be many reasons (having nothing to do with licensing terms) why someone may delay a product introduction or choose among competing alternatives. And, it would be a mistake to assume that any alternative is or will be free of patent licensing obligations or without additional charges of its own.
Finally, we understand that you do not agree with the implementation of a use fee. Given the nature of MPEG-4 Visual technology and the importance of encouraging the wide availability of MPEG-4 Visualdecoders and encoders in the market, the patent owners' intention was that reasonable royalties should be shared among industry participants across the entire product chain and applies equally to both wired and wireless services (especially as the ability to distinguish between them disappears). The philosophy underlying the use fee was intended to be consistent with the expected flow of MPEG-4 video transactions so that those who can pay will and those who can't aren't expected to: thus, the use royalties to be paid by service providers are tied to remuneration - if service providers or content providers are paid for offering or providing MPEG-4 video, then patent holders are paid for the use of their patents; if service providers or content providers are not paid for offering or providing MPEG-4 video, then patent owners are not paid for the use of their patents. The entire license including the use fee, its application to broadcast/cablecast/multichannel environments, etc., is under study and will be the subject of further discussion.

This is just the beginning. The licensing terms were just announced on January 31, and the details of the MPEG-4 Visual license agreement are still being worked out. Because of the challenge posed by the effort to produce a joint licensing program requiring a consensus among at least 18 different patent owners and the yet undetermined future implementations and applications of the emerging MPEG-4 Visual technology, this may take several months to complete. There will be much discussion before all of this is sorted out, and changes may be expected. Again, we appreciate your contribution to this process and will keep you informed.

Sincerely,
Larry Horn
Vice President, Licensing
 

G4scott

macrumors 68020
Jan 9, 2002
2,219
2
Austin, TX
I wonder if those MPEG LA people would pay to do videoconfrencing over their own local network, or talk to their parents or children, or watch a movie preview... MPEG 4 isn't just for pros selling their media, it's the media for everyone!
 

arn

macrumors god
Original poster
Staff member
Apr 9, 2001
14,502
1,785
Originally posted by G4scott
I wonder if those MPEG LA people would pay to do videoconfrencing over their own local network, or talk to their parents or children, or watch a movie preview... MPEG 4 isn't just for pros selling their media, it's the media for everyone!
actually the stream-license charge is only for commercial streaming...

arn
 

Gelfin

macrumors 68020
Sep 18, 2001
2,166
4
Denver, CO
Originally posted by arn
We note also that there may be many reasons (having nothing to do with licensing terms) why someone may delay a product introduction or choose among competing alternatives.
Well, you know, except in this case that's EXACTLY the reason.

And, it would be a mistake to assume that any alternative is or will be free of patent licensing obligations or without additional charges of its own.
Well, you know, except for those alternatives which ARE free of recurring fees.

Finally, we understand that you do not agree with the implementation of a use fee.
...but, you see, charging a use fee will make us very, very wealthy. Therefore not charging a use fee would violate the laws of physics, and furthermore *THBTBTBT*.

The philosophy underlying the use fee was intended to be consistent with the expected flow of MPEG-4 video transactions so that those who can pay will and those who can't aren't expected to: thus, the use royalties to be paid by service providers are tied to remuneration
That's just how things are done, you silly person. You know, like how if you buy a doorknob with patented features and affix it to the front door of a place of business, you must pay the patentholder a use fee when a customer uses the door. Or how telemarketers pay their regular ongoing license fees to those who hold patents on telephone technology. It's a perfectly reasonable practice. Happens all the time.

This is just the beginning.
(insert ominous music here)

In case you can't tell, I don't trust these guys an inch.
 

Rower_CPU

Moderator emeritus
Oct 5, 2001
11,219
0
San Diego, CA
I think the real problem is going to come when they have to decide who pays and who doesn't. I work at a university, and we have a small QuickTime streaming server for some content we create. We're non-profit so we wouldn't be affected under the current licensing scheme. What worries me is the line "those who can pay will and those who can't aren't expected to" .
Who decides who can and can't pay? Will a small company providing streaming services for one client at an extremely low rate still be forced to pay the same per stream/per minute rate that a large company with many clients and a larger budget would? Doesn't sound fair to me.

Besides I think one of Apple's main points in having people contact MPEGLA was to bring up the simple point that simply keeping track of all this would be a logistical nightmare. How are you supposed to track number of streams and time each streamed? How are you supposed to report this to MPEGLA so that they would be "fairly remunerated"? All this nickel-and-diming is going to kill the simplicity and elegance that we Mac users demand and expect of Apple technology.
 

Xapplimatic

macrumors 6502
Oct 23, 2001
417
0
California
MPEGLA blows..

I got the same form letter as arn posted.. verbatim... It is totally canned...
:( ... PR spin machine is in motion!... now they only need some blond teenager to act dopey on TV and say, you're gonna pay per view DUDE!