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New MPEG-4 Licensing Scheme 336

morcheeba writes: "EETimes is reporting that the licensing of MPEG-4 patents will be substantially different than the existing MPEG-2 licenses. The per-player fee will be substantially cheaper ($0.25 instead of $2.50), but a new "use fee" component of $0.02/hour will be charged to service providers. More on MPEG-4 in general at MacWeek; The MPEG-4 Industry Forum and MPEG LA are handling the licenses."
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New MPEG-4 Licensing Scheme

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  • $0.02/hr? How are they going to oversee that?
    • Did anybody bother to read the article? Yeah, I know, stupid question around here.

      Under the new scheme, a "use fee" will be charged to service providers based on the time or duration of MPEG-4 video stream playback.

      Looks like people (and only those) who use MPEG4 to stream video will have to pay this use fee - unless they get their customers to do it for them.

    • If I set up a MPEG4 streaming server in a country who does not recognize software patents (like mine ;) I can solemny ignore patent holders, right?

      And if they complain that citizens of the USA can view my videos, I'll just say (or rather instruct my lawyer to say) "Do you... Yahoo?"
  • MPEG2, then (Score:3, Insightful)

    by 1010011010 ( 53039 ) on Friday February 01, 2002 @11:00AM (#2937133) Homepage
    It looks like they are breathing more life into MPEG2, then. "Use fee" for a data format? That's supposedly a standard? Right.
    • Re:MPEG2, then (Score:3, Interesting)

      by sacherjj ( 7595 )
      One thing I haven't seen asked is how does this affect DivX? That is MPEG4, right? Just a freely developed version... Why doesn't everyone just switch to DivX?
      • by yerricde ( 125198 ) on Friday February 01, 2002 @12:19PM (#2937605) Homepage Journal

        One thing I haven't seen asked is how does this affect DivX? That is MPEG4, right?

        But MPEG4 algorithms are independent of the particular implementation. If the licensing terms for MPEG4 do not permit licensing end-user products as free software [], then open DivX [] as we know it will cease to exist in the United States, and some of the developers will move on to Ogg Tarkin [].

        Just a freely developed version

        That doesn't matter. Unisys has publicly declared [] that it will not license the LZW patents to developers of free software: "For example, the typical Unisys license for standalone software does NOT permit copying, modification, resale, use on a server or in a network, or use for Internet/Intranet/Extranet or Web site operation."

        • About the LZW patent and Unisys, doesn't their patent expire in 2005? (I went and found the patent (using the number provided from the Unisys page you linked to in the parent) and noted that the patent was granted in 1985.) Of course this doesn't affect MPEG4 I imagine (has a patent even been awarded yet for that?) but I'm just curious when Unisys's monopoly will end. ;)
        • That's not necessarily true. They state that they require a written agreement to use LZW. To whit,

          The answer is simple. In all cases, a written license agreement or statement signed by an authorized Unisys representative is required from Unisys for all use, sale or distribution of any software (including so-called "freeware") and/or hardware providing LZW conversion capability (for example, downloaded software used for creating/displaying GIF images). In certain cases, no license fees may be required, but this needs to be evidenced by a written agreement or written statement signed by an authorized Unisys representative.

      • Re:MPEG2, then (Score:3, Interesting)

        by Whelkman ( 58482 )
        Why doesn't everyone just switch to DivX?

        The legality of DivX is questionable. First off, it was orignally based on Microsoft's ASF format (a simple hack to put the codec into an AVI file). Next, Project Mayo re-developed it into their own implementation, complete with an "open source" license. However, once the project got far enough, Project Mayo shut down the CVS. Soon after they made a commercial product out of it. Yes, you can still download 4.0 alpha 50, but it's a year old.

        So, not only does DivX use (or did use) "stolen technology" from Microsoft, the project centers around stolen code garnered from lies and deception. On top of that, it is an MPEG4 implementation of sorts, so usage of it probably requires licensing fees.

        That's why "everyone doesn't just switch to DivX."
  • by Dutchmaan ( 442553 ) on Friday February 01, 2002 @11:05AM (#2937170) Homepage
    I'm wondering in the next 10 years how many things we'll no longer own, but be charged as we use them.

    I think there was a word for this kind of situation...


    Only this time we pay to a CEO instead of a "Lord"
    • by Proaxiom ( 544639 ) on Friday February 01, 2002 @11:14AM (#2937225)
      The flip side of this is that patents aren't like copyrights. They expire after 20 years or so, and become public domain.

      At that point all you have to do is write your own piece of software that implements the algorithm, and you don't have to pay anybody anything.

      Presumably by then there will be new and improved patented algorithms, but it's nice to know that you will always have free technology to use, although sometimes a little outdated. (Or not, the RSA patent has expired and it is still the most popular public-key cryptosystem)

      • by ( 450073 ) <[xanadu] [at] []> on Friday February 01, 2002 @11:22AM (#2937272) Homepage Journal
        Although I understand your point, you failed to consider one little thing:

        20 years ago, 20K of RAM in a "Personal Computer" was a REAL big deal. Do you still have people hacking out apps for a Vic-20? No. 10 years ago, "who will ever need more than 640k of RAM" was still somewhat in fashion. 20 years from now we'll be laughing at MP4's.

        So I'm sorry man, but your solution or proposal or whatever is really not an option. By any means. By the time the coders get their hands on the inards of the thing, we'll be bitching about MP15's.
        • 20 years ago, 20K of RAM in a "Personal Computer" was a REAL big deal.

          No it wasn't. Even cheap, consumer-grade Atari computers had that much, and even the "stripped down" version had 16K.

          Keep in mind how much MPEG1 is still in use and how old that is. It's getting dated, but not many are "laughing at it." MPEG4 may be the hot new thing, but it can't boast the ubiquity, stability, and portability that its ancestor can. Granted it's only twelve years old or so (compared to 17-20), but I really doubt MPEG4 will be on the scale of MPEG1 this year, next year, or the year after that.
      • by cpt kangarooski ( 3773 ) on Friday February 01, 2002 @12:46PM (#2937744) Homepage
        Patents aren't like copyrights... yet.
        If there's little that prevents Congress from having insanely long copyright terms, there's just as little preventing the same with patent terms.
    • No, it's called renting (or leasing) something.
      • Yeah... ever hear of the term "landlord"

        ...and from what origin is that term derived?
        • Yes, but I never heard of the term carlord. And since most Americans buy most things on credit, those things probably belong to their banklord and creditcardlord.
        • When you buy a car with a credit card you still own the car unless you can't pay your bills... in which case you get sued and the government decides wether you have to give up your property.

          There is leasing a vehicle which is more of the "carlord" you speak of.

          In todays society leasing or renting is usually a choice. My concern comes from the erosion of the choice we have as to wether or not we "own" something.
    • (Score: 5? Are you kidding me? In the absence of any mod points this week, I reply.)

      I'm wondering in the next 10 years how many things we'll no longer own, but be charged as we use them. I think there was a word for this kind of situation... serfdom.

      Here I illustrate the use of the "Mad-Libs" method of argument analysis: replace the significant noun and verb in the sentence with other similar words. If the argument sounds silly, draw your own conclusion.

      "I'm wondering in the next 10 years how many roads we'll no longer own, but be charged as we drive on them. I think there was a word for this kind of situation... serfdom."

      If you don't want to pay the toll, don't drive on the MPEG-4 parkway. It's that simple. There's no need for this sort of hyperbole. If we're talking about wrongful imprisonment or illegal taxation or something, get as morally indignant as you want. But don't dilute that kind of rhetoric by using it on mundane issues like this one.
      • I'm sorry you feel that this isn't all that important.

        Everything that happens in this world that is malevolent in nature usually has very small beginnings. How often I've heard "If we had only known sooner we could have done something about it." I wasn't raising a black flag a declaring war, I was pointing out a similarity between our economic trends and serfdom. If you feel it's not important fine... others apparently do feel it's a subject worth discussing.
        • Everything that happens in this world that is malevolent in nature....

          Are you kidding me? Malevolent? Are you sitting there at your computer with a serious face telling me that the MPEG-4 Forum's licensing scheme is evil?

          Of all thing, I would have thought that the events of the past four months would have given us all a sense of perspective. Blowing up buildings is malevolent. Killing people is malevolent. Charging a per-use-hour fee to your customers is business.

          Get a grip.
          • "Are you kidding me? Malevolent? Are you sitting there at your computer with a serious face telling me that the MPEG-4 Forum's licensing scheme is evil?"

            Depends on your defenition of evil now doesn't it.

            Is MPEG-4's licensing scheme evil? Probably not.
            Can it be a part of a larger corporate ideology that I would view as "evil" .. possibly.

            Try looking at things from a perspective that isn't your own once in a while...and quite frankly from the condescending tone of your posts, I would imagine that you don't possess the ability to see things from any other perspective than the one that puts your nose at the center.

            "Blowing up buildings is malevolent. Killing people is malevolent. Charging a per-use-hour fee to your customers is business."

            Agreed...however it is in my view that business in regards to revenue acquisition and preservation in it's ultimate nature is entirely self-serving and therefore, in my opinion, "evil".

            A business and some point in it's life crosses a line where the focus of the company is no longer on the products it produces, but rather the aquistion of revenue.

            It's the very subtle difference in taking pride in products, offering them to the public, who in turn pay you for said products. As opposed to looking at the public merely as a source of revenue where your main objective is to get the most for giving the least.

            It's a subtle difference and not surprising that it would escape your comprehension.
          • But why can't charing a per-use-hour fee to customers be consider malevolent to some? Not every business is malevolent, but I think with this issue people don't agree with the motives behind the MPEG-4 licensing fees.

            Since they made it, they want to profit from it. That is perfectable exceptable seeing how they did all the work.

            I doubt many people will be seriously harmed because of the fees they are levying. What effects will it have other than causing people to whine, I don't know.

            And if people are upset with the licensing fee, support an open source effort. Give your time or money along with complaining. Someone needs to do the work cause you are not getting something for free here.

            What do the people who are doing the work want in the end? I know what the MPEG-4 people want.
        • And those 'others' feel better with tinfoil on their heads. Golly it's IMPRESSIVE how forthright us nerds are. It's equally impressive how much rhetoric we can spew.
    • Well, Microsoft and Panasonic have already developed a Pay-Per-Use DVD player []. It should be the wave of the future.
  • Luckily, there's already quicktime, with no licsensing fee. While I'd like to check out MPEG-4, there's absolutly no way we're gonna pay a per hour charge to broadcast our own stuff.
    • Re:quicktime (Score:4, Interesting)

      by SComps ( 455760 ) on Friday February 01, 2002 @11:14AM (#2937227) Homepage
      People tend to vote with their feet. This is evident with Windows XP (sales may be good but they're definitely not what Bill expected). With the current system, it'll be easy to just stay with what I've got. I don't need to change, or pay by the hour. The installed software base is already there; on both the server and client side. While they may want to make us pay for MPEG-4, they can't force us to use it...

      I may be way overly simplistic in this, but we don't *need* to blast off into the future unless we actually *want* to. Nothing is stopping us from doing this stuff now, and hell standards are only standards if we accept them.
    • Re:quicktime (Score:2, Interesting)

      by billvinson ( 135790 )
      You do realize that the next version of Quicktime is to be based on MPEG-4 right? They are already testing it from what I understand. Now, I don't know how Apple will deal with this per-use fee...

      • Re:quicktime (Score:5, Insightful)

        by alannon ( 54117 ) on Friday February 01, 2002 @11:33AM (#2937334)
        Actually, it's the other way around. The MPEG group went shopping around for a base file format to use for MPEG-4 and they chose the Quicktime file format as the basis for all MPEG-4 files. I believe they chose it because it is a simple, flexible and (most importantly) free and well-documented standard. Note that this has nothing to do with any of the Quicktime codecs (I know the Sorenson codec is a particular point of contention here on /.) but instead the base file format for all quicktime media. An analogous file format would be the .avi file format. It's simply a wrapper.

        Also, note that they said 'service providers'. I would assume this would mean providers that use MPEG-4 for content delivery, such as VOD, much like MPEG-1 and MPEG-2 are used for VOD right now.

        I could hardly believe they would so horribly cripple the usefulness of the format by making it so that any player that used the codec would have to report back the time used to some organization so that someone can be billed for it. That's just dumb and I don't see why anyone would touch it with a 10-foot pole if that was the case.
        • I think you might be surprised how quick a company is willing to shell out money for something that comes in a pretty package. I had to fight pretty hard to keep my company from buying a service to transfer files across the internet to clients and vendors. They were going to pay hundreds of dollars a month for something that essentially does file sends over http, and makes Acrobat PDFs. Both of these tasks we already have the capability in house.

          If it's marketted well, it will catch on, and when people see that they have to upgrade their software to keep fullfilling their video needs, they'll jump on it. I wouldn't be surprised if this takes off without a snag.

          But like another comment pointed out, the article is over a year old. I wonder where this stands now?

        • Quoth the article:

          By reducing frame rates to 15 or 12 frames per second or lower, a compressor immediately saves bandwidth, and as long as the frames are smooth the human eye tends to adjust.

          Ten frames per second was real smooth about 100 years ago.

  • Confused (Score:3, Interesting)

    by DarkEdgeX ( 212110 ) on Friday February 01, 2002 @11:11AM (#2937204) Journal

    How will this affect things such as DivX [] which use MPEG4 in their CODEC(s)? Wouldn't such a fee system preclude them from giving away the encoder/decoder (or atleast the encoder)?

    • Re:Confused (Score:2, Interesting)

      by Anonymous Coward
      It affects it. DivX has been rewritten to avoid the copyright issues with the original ripped MS code, but it still is affected by the patents mentioned.

      Basically, projects like mplayer could probably be shut down, but the industry may not consider it worthwhile to do so -- a la lame.

      Take a look at this [] interesting little tidbit on the MPEG-4 Industry Forum site. (Warning, .doc format -- sorry) Look at section 4.1.2. Basically, they're saying that *any free MPEG-4 player* must pay its royalties by including spyware.
  • What we need is an OSS hardware circumvention of MPEG, period. MPEG is great but why should we have to pay to use a freaking format? It's not like we're being given a choice. A hardware solution I'd propose would be a player capable of reading current DVD/VCD/CD/RW but also of playing many formats (.avi,.mov,.whatever) from either a disk, ethernet, external streaming source (USB?). While this can be easily implememnted using a computer as the center of your Home Entertainment, a more consumer-friendly version needs to be available. Considering the hardware requirements of this machine, you could definitely add a hard drive for time-shifting. Also, the OS (Linux?) would need to be flexible enough to allow for patches/updates/plugins toa llow for the new video formats this would definitely spawn. If MPEG had a market saturated with cheaper and free formats of comparable/better quality, this "use fee" would be much more of an intelligent shopper's choice than a force-fed, proprietary, DMCA-creating....rant rant rant.
    • Move the codec from the player to the content. Hardware manufacturers would get together and establish an Open Player Platform or something, which essentially standardizes the instruction set and capabilities of the player and the image format of the codec executable. When you insert a medium and hit play, the player first examines the content file for the required codec, which must also reside on the same medium. It then loads the codec image from the medium and executes it against the content file.

      This approach would have several advantages: allow content creators to use different codecs optimized for the content (e.g. action/animation/quality-vs-runtime etc.), eliminate codec costs to the manufacturer, and future-proof the players to a certain extent. Currently, the main disadvantage would be the high(er) cost of the player.

  • To quote Barney... (Score:4, Insightful)

    by Dan Crash ( 22904 ) on Friday February 01, 2002 @11:14AM (#2937223) Journal
    "It begins."

    It only takes tiny steps to walk off the edge of a cliff. I'm sure eventually they'll propose we pay a small monthly fee (just a trifle, really!) for every .MP? we have sitting on our hard drives.

    I get a little more militant about this stuff every day. But I don't think I'm wrong, either.
  • old article (Score:5, Insightful)

    by rschroeder ( 186919 ) <> on Friday February 01, 2002 @11:14AM (#2937226) Homepage
    I know the tech world doesn't change that fast, and we have been waiting for mpeg4 for a while, But that MacWeek article is dated Nov. 2000. Somethings might of changed since then
  • $.02 per hour.... (Score:5, Insightful)

    by Anonymous Coward on Friday February 01, 2002 @11:14AM (#2937228)
    Doesn't sound like much, but after just 125 hours of use, they'll make more money off of this then they ever did off of MPEG-2.

    125 hours may sound like a lot, but it's less then 2.5 hours a week for a year. Or just over 20 minutes a day for a year.... I could go on, but I think you get the point.
  • by Lysander Luddite ( 64349 ) on Friday February 01, 2002 @11:22AM (#2937277)
    So know the distributors/providers of content have to pay a charge based on the length of material. Won't this charge be passed onto the content creators? How does this encourage people to use this format?

    And if content creators have to pay more (raising their costs) won't there be a shift to more centralized content ownership? It'll be the big guys (MPAA and RIAA) that can pay these fees.

    $.02/hour doesn't sound much but is that per stream? So I am paying more for being popular? How does that help amateurs or people who want to create content professionally?

    I swear paying more for "pro" equipment that is hobbled simply to allow recording in digital formats is criminal enough. Now I have to pay another group simply because I use an "open" file format?
    • Surprised? (Score:2, Informative)

      by hendridm ( 302246 )
      > So I am paying more for being popular?

      Doesn't that make sense? "Popular" web sites/companies generally have to pay more for equipment because they get more hits, and thus (hopefully) more revenue. The little guys who are less popular pay less because they don't need an Enterprise/Oracle solution - they can stick to the cheaper stuff.

      Everyone pays more for success, and hopefully also makes more money in the process. A popular site costs more to build/maintain/license/etc. This is included in that cost.
  • In a couple of years nobody will remember the DivX-era. Everybody will leech DVD:s and burn them with their DVD-burners. Okay, both the burners and the mediums are still expensive (and true DVD-VOBs are not that common out there) but this will change and then nobody will ever want to download DivXs. Btw...WHY ON EARTH is every pr0n-movie releases as a .mpg when there exists better formats?? Comon you rippers...mpeg1 sucks as much as those girls in it.
  • An open source Video codec Might be just what we need. Development has started recently

    Tarkin is at the bottom

    -- Tim
    • I've been 'lurking' on the Tarkin-dev mailing list for a few months now, and it's pretty quiet, unfortunately. The sparse messages on the list indicate that Tarkin is STILL in the stage where the developers are discussing techniques that they MIGHT use when they get started writing code. The GOOD news is that to me, this indicates that serious thought is going into the design, and the final result will kick butt, but the bad news is it's still quite some time in the future.

      On the other hand, as I understand it, the Ogg file format already supports having video streams embedded in it (i.e. it wouldn't have to be Tarkin-codec video). I've been ITCHING to see somebody add Ogg format support to a video encoder like ffmpeg (and I suspect MPlayer would have support for playback within days afterwards).

      I could cope with e.g. OpenDivx/mpeg1/h.263 video with vorbis audio in Ogg format until Tarkin becomes useable. It'd at least give the Ogg file format more visibility, and perhaps attract some more developers to the Tarkin project...

  • by drkich ( 305460 ) <dkichline@gmail. ... minus herbivore> on Friday February 01, 2002 @11:43AM (#2937393) Homepage
    US $0.00033/minute or portion (equivalent to US $0.02/hour) based on playback/normal running time for every stream, download or other use of MPEG-4 video data in connection with which a service provider or content owner receives remuneration as a result of offering/providing the video for viewing or having the video viewed (including without limitation pay-per-view, subscription and advertiser/underwriter-supported services(

    If you are getting paid for the download of your MPEG-4 video data, then you have to pay. Otherwise you can distribute the video for free.

    Now of course the devil's in the details, they say at the end, "(including without limitation pay-per-view, subscription and advertiser/underwriter-supported services)" Which could be taken to mean that if you have ANY advertising on your site, you have to pay.

  • Ogg Tarkin (Score:4, Interesting)

    by MenTaLguY ( 5483 ) on Friday February 01, 2002 @11:45AM (#2937402) Homepage

    I suppose this licensing descision will provide more impetus for the development of Ogg Tarkin [].

  • Don't worry! This isn't going to affect your file swapping in mpeg4 format. This applies mainly to digital cable providers, and also to online providers. Basically, if you're getting paid for the video, you have to pay MPEG LA. If you're just the average joe swapping files, it's free. This is just like the cable company paying HBO so they can broadcast it. Same deal.
  • by rutledjw ( 447990 ) on Friday February 01, 2002 @11:53AM (#2937462) Homepage
    Between this absurdity and the W3C (talk about yet another organization which has become utterly worthless) trying to implment licensing fees on thier stuff we're going to end up in an open world.

    Am I a zealot? Perhaps. But, think of it this way - why did TCP/IP become "the" networking standard? Because IBM was sucking the life out of people with SNA. The same will happen here.

    There is no "value added" (nice little overused consulting term) when people use a technology that has this kind of licensing scheme. In the end, technology like this is used to support a service. In this case: Streaming Video. If there's an Open or free (as in beer) alternative, why not use that technology instead?

    These guys are setting the precedent for their own demise. They do not have the clout to demand such license arrangements and maintain market share. Such an absurd tactic will only add fuel to the fire to use other standards, perhaps such as the Ogg Vorbis effort...

    Not wanting to needlessly bring up the Beast here, but they too have been trying to establish a similar control over electronic media through their wma (is that right?) standard. This is NOT a one front attack, but one with many seperate, but similar, efforts to control and hence, bill a new industry (eletronic &| streaming media).

    I'm not anti-captialistic, quite the contrary, but I don't see the need to pay for something where it brings little or no value to me...

    • So how is JPEG-2000 doing these days, anyway?
    • Just curious, but when has the W3C tried to implement licensing fees? AFAIK all they've done so far is work on drafts to define their patent policy.

      • As I recall, there were numerous stories on both /. and the Reg about W3C planning on implementing a licensing fee for those whoimplement patents owned by the W3C.

        Isn't that the same thing? We have put together this great new standard in an open forum, but to actually implement it, you have to pay, even a MINOR fee. This would effectively knock out every OSS-type implementation. The $$$ wouldn't be a problem for MS, IBM, Oracle, etc. But for Linux and others it's a deal-killer.

        It's my personal opinion that to develop a standard in the open forums and then charge for them is self-defeating. It's not really helped the OMG group very much.

        My other beef with the W3C is that I feel they have "lost their edge". How long have various XML standards been sitting on desks? Where is SOAP as a standard? I really don't know. I became irritated and stopped watching last year. They may be done with 1.0, but is there any provision for security? Validation? Or is this to be left to the implementor exclusively?

        I've seen this with other groups as well. As a Java code-monkey, I've watched the Java Community Process grind to a near halt as well. The Java SOAP spec is not yet finished, JAXM is farther along, but still not at 1.0. Is there any coherency between JAXM and message-driven EJBs?

        Sorry about that long-winded response/rant, but I feel that as these standards organizations embrace more-and-more of a corporate influence they adopt more-and-more of the beurocratic overhead and other issues associated with these corporations. Ultimately they lose their effectiveness.

        To the other responder, I really don't know much about JPEG2000. I don't know if your post was a real question or a statement.

    • Did you even read the fscking article?

      If you make money of a mpeg-4 feed then you are required to pay a royalty. That seems rather fair considering these people took enormous amounts of time and effort to create an awesome compression scheme that works not only in software but has also been implemented in hardware(try to have some "free" alternatives implemented in hardware).

      Yet.. If you don't make any money of the feed you are not required to pay anything. If it brings no value to you I suppose you wouldn't pay for it anyway..

      Don't like it, fine don't use it. If you pay for it they get a small share. If you're not paying for it nobody's getting anything(except maybe an extra value to the end-user). What did these people not get again?
  • by InfoVore ( 98438 ) on Friday February 01, 2002 @12:01PM (#2937518) Homepage
    I found the following news release with the licensing terms here []:

    For Immediate Release
    Lawrence Horn
    MPEG LA®
    301.986.8575 Fax [mailto]

    Terms of MPEG-4 Visual Patent Portfolio License Announced

    (Denver, Colorado, US - 31 January 2002) - MPEG LA, LLC today announced that it will offer fair, reasonable, nondiscriminatory, worldwide access to patents that are essential to the MPEG-4 Visual (Simple and Core) digital compression standard under a single license to be known as the MPEG-4 (Visual) Patent Portfolio License ("License"). The License currently includes patents owned by the following companies: Canon Inc.; France Télécom; Fujitsu Limited; Hitachi, Ltd.; Hyundai Curitel, Inc.; KDDI Corporation; Matsushita Electric Industrial Co., Ltd.; Microsoft Corporation; Mitsubishi Electric Corporation; Oki Electric Industry Co., Ltd.; Philips Electronics; Samsung Electronics Co., Ltd.; Sanyo Electric Co., Ltd.; Sharp Kabushiki Kaisha; Sony Corporation; Telenor AS; Toshiba Corporation; and Victor Company of Japan, Limited. MPEG LA convened these patent owners in December 2000 following an independent patent expert's finding that each of them owns one or more patents essential to the international MPEG-4 Visual Standard. The objective of the License is to include as much essential MPEG-4 Visual (Simple and Core) intellectual property as possible in one license for the convenience of all users. Patent holders are required to include all of their essential MPEG-4 Visual (Simple and Core) patents worldwide. In addition, new patent holders and their essential patents will continue to be added following a determination of essentiality.

    "The essential patent owners are pleased that their intellectual property has made a substantial and essential contribution to the development of this exciting new technology," said MPEG LA Chief Executive Officer Baryn S. Futa. "The MPEG-4 (Visual) Patent Portfolio License manifests their desire to 'partner' with other industry participants to encourage widespread adoption of MPEG-4. The patent owners understand the risks inherent in a startup technology in which companies large and small are asked to make a pioneering investment and are sensitive to the role that their licensing model will play in that process. Therefore, the License has been specially designed so that reasonable royalties are shared fairly by a variety of industry participants in order to stimulate early, rapid and widespread MPEG-4 product investment, development, deployment and use."

    Under the License terms, Licensees will pay the following royalty rates for MPEG-4 Simple or Core Products:
    US $0.25 per decoder (in hardware or software) for a license to make and sell and for personal use in receiving private video (i.e., not video for which a service provider or content owner receives remuneration as a result of offering/providing the video for viewing or having the video viewed), subject to a cap of $1,000,000 per year/per legal entity.
    US $0.25 per encoder (in hardware or software) for a license for personal use only to create private video data (i.e., not video for which a service provider or content owner receives remuneration as a result of offering/providing the video for viewing or having the video viewed), subject to a cap of $1,000,000 per year/per legal entity.
    US $0.00033/minute or portion (equivalent to US $0.02/hour) based on playback/normal running time for every stream, download or other use of MPEG-4 video data in connection with which a service provider or content owner receives remuneration as a result of offering/providing the video for viewing or having the video viewed (including without limitation pay-per-view, subscription and advertiser/underwriter-supported services). This royalty, to be paid by entities that disseminate the MPEG-4 video data, is not subject to a cap. (In the case of MPEG-4 video for which the number of uses cannot be directly determined (e.g., video supplied as part of a basic cable service or to a transmitter for broadcasting), a surrogate (e.g., standard industry audience measurement) is under consideration.)
    US $0.00033/minute or part (equivalent to US $0.02/hour) based on playback/normal running time of MPEG-4 video data encoded (for other than personal use) on each copy of packaged medium. This royalty, to be paid by the packaged medium replicator, is not subject to a cap.
    For one year from the start date of the license program, parties that sign the license (or a memorandum of intent to sign a license) will be forgiven their payment of royalties for all MPEG-4 Visual Simple and Core products during and before that one year period.
    The initial term of the License has not yet been finalized but when decided, will be subject to renewal on reasonable terms and conditions for the useful life of any patents in the Portfolio.

    In agreeing to the foregoing terms, the patent holders considered the need for simplicity, promoting the widest possible use of MPEG-4, maximizing the opportunity for full efficient compliance with intellectual property licensing requirements and recognition of the likely business models for deploying MPEG-4 Visual Standard technology so as to assure that the License is aligned with the real-world flow of MPEG-4 commerce.
    As the objective of the MPEG-4 (Visual) Patent Portfolio License is to include as much essential MPEG-4 Visual (Simple and Core) intellectual property as possible in one license, MPEG LA reiterates that any party that believes it has essential patents (Sections 9, 9.1 and 9.2 and Tables 9-1 and 9-2 of ISO\IEC 14496-2 Information Technology - Coding of Audio-Visual Objects - Part 2: Visual) and wishes to join upon successful evaluation, is invited to submit such patents to the independent Patent Evaluator together with a statement confirming its agreement with the objectives and intention to abide by terms and procedures governing the patent submission process, which may be obtained from Lawrence A. Horn, Vice President, Licensing and Business Development, MPEG LA, LLC (, phone 1-301-986-6660, fax 1-301-986-8575).

    # # #
    Overview of the MPEG-4 Standard

    MPEG-4 is an ISO/IEC multi-media representation standard developed by its Moving Picture Experts Group (MPEG). MPEG also developed MPEG-1, which makes possible interactive video on CD-ROM and is present on virtually every personal computer, and MPEG-2, the core compression technology underlying the efficient transmission, storage and display of digitized moving images and sound tracks on which high definition television (HDTV), Digital Video Broadcasting (DVB), direct broadcast by satellite (DBS), digital cable television systems, multichannel-multipoint distribution services (MMDS), personal computer video, digital versatile discs (DVD), interactive media and other forms of digital video delivery, storage, transport and display are based.

    MPEG-4 is the result of yet another international effort involving hundreds of researchers and engineers from all over the world. Building on the successes of MPEG's earlier standards, MPEG-4 enables integration of the production, distribution and content access features of digital television, interactive graphics applications and interactive multimedia across internet protocol, wireless, low bitrate, broadcast, satellite, cable and mobile environments. With MPEG-4, all content elements can be maintained as discrete objects enabling richer interactivity and use across many different devices More information about MPEG-4 can be found at MPEG's home page [] and at the home page of the MPEG-4 Industry Forum [].


    MPEG LA successfully pioneered one-stop technology standards licensing, starting with a portfolio of essential patents for the international digital video compression standard known as MPEG-2, which it began licensing in 1997. One-stop technology standards licensing enables widespread technological implementation, interoperability and use of fundamental broad-based technologies covered by many patents owned by many different patent holders. MPEG LA provides users with fair, reasonable, nondiscriminatory access to these essential patents on a worldwide basis under a single license. The MPEG-2 Patent Portfolio License now has more than 360 licensees and includes more than 400 MPEG-2 essential patents in 39 countries owned by 20 patent holders. As the legal and business template for one-stop technology standards licensing, MPEG LA also provides an innovative way to achieve fair, reasonable, nondiscriminatory access to patent rights for other technology standards - the high-speed transfer digital interconnect standard known as IEEE 1394 and the terrestrial digital television standard used in Europe and Asia known as DVB-T. In addition, MPEG LA has been asked to facilitate the development of joint licenses for other MPEG-4 technologies. The company is based in Denver, CO and has offices in Chevy Chase, MD (Washington DC metropolitan area), the greater San Francisco area and London, England. For more information, please refer to [], [], and [].

  • Here is my rant: I think that pay-per-use (and subscription) is a big fqat cop-out by the people that write the software. And I think that eventualy people will be less likely develope new and better software because they lose the financial motivatiion.

    Let's say you write a program like Zone Alarm that people will use all the time. Let's also say that you charge $20 a copy. You will probably sell a ton of units and you end up making $1 million. You could live off that profit for a while, but eventualy the money would decrese and you might have a finantial insentive to write version 2 of your software and you would include new features that would give consumers an insentive to upgrade and pay you another $20 for the new program. This is good for the consumers because programers would want keep makeing money.

    In the subscription model, one could write a program and if it's a good and robust program it could be "in service" for a long time. (I've been using the same copy of Win98 for 3 years, and I don't plan on upgrading for a long time). M$ would have to come up with something with enough cool new fetures before I would pay them any more money.* The point is that I am not paying the software developers any money. But what if I had to send them $50/year to keep using it. They would keep earning money weather they developed new stuff or not.

    *I am not trolling for a shouting match over the marits of Win98 v. Win2000 v. WinXP v. WinNT v. MacOS v. Linux. And yes I AM considering moving to a different OS.

  • Stright from the license (emphasis mine):

    US $0.00033/minute or portion (equivalent to US $0.02/hour) based on playback/normal running time for every stream, download or other use of MPEG-4 video data in connection with which a service provider or content owner
    receives remuneration as a result of offering/providing the video for viewing or having the video viewed

    Well I think that pretty much makes if "free for free usage" in terms of providing streams.

  • Artificial Scarcity (Score:5, Interesting)

    by renehollan ( 138013 ) <rhollan.clearwire@net> on Friday February 01, 2002 @12:33PM (#2937689) Homepage Journal
    I've been thinking about these kinds of things for a while now, and while I haven't examined the ramifications of the ideas that I'm about to share with any great rigor, I still think they are worth sharing.

    RMS believes that software should be free, that agreeing to not share code one has, or to not be able to study and modify it is immoral. Basically, the world is a better place with free software than without. As a libertarian, I have a strong sense of property rights so I don't accept this view outright. Yet, because I am a libertarian, I also accept the idea that those who wish to produce free software not be impeded from doing so, and note that this is indeed helpful. So, I ask myself, "In what kind of society are restrictions on software use and distribution clearly wrong"?

    The answer is a post-scarcity society (well, not really, but I'll get to that and why) -- one where no one wants for anything: replicators (for example) run on abundant (i.e. more than enough) solar power and employ nano-technology to make whatever anyone desires: food, clothing, shelter.

    O.K. This is an artificial construct, to be sure, but bear with me.

    In such a society, hoarding software, or licensing it under restrictive terms clearly harms those who want it, but can't have it. Why would one do this? To exact some price for it? But that is meaningless: one can already have anything one wants, and any price exacted could be met for the same reason. To deprive others of something that costs one nothing, and anyone could afford is not nice: its like throwing away perfectly good scraps of food that one can't eat or save when others are starving and it is no effort to give it away to them.

    So, the only justification for restrictions on software, or the creation of an artificial scarcity of it (or anything else, for that matter: information in general) is the need to compensate for a natural scarcity -- if I write code for free, I can't earn a traditional living, and so can't affort scarce goods, like food. Writing free code costs me, in other words, and that cost needs to be mitigated.

    So, the justification for artificial scarcity is a compensation for natural scarcity: if one can produce something in abundance for themselves, but limit its availability to others, one can avoid seeking other scarce things, through a mechanism of trade.

    On the other hand, does this mean that it is acceptable to others that the artificial scarcity ber permitted to last indefinately? After all, this means a gravy train for life for some while others struggle in a world of scarcity? Traditionally, most people have said "No," and have enacted laws to deal with such artificial scarcities.

    Before software, artificial scarcities existed for other things, like writings and the applications of inventions, namely copyrights, and patents. There was no infinite property right recognized for ideas by society, or its governing representatives -- the stable state is that of public domain, tending to lessen scarcity.

    Artificial scarcities, like copyright and patents, were inventions of government, granted and enforced for limited durations, in order to reflect the realities of living iin a naturally scarce world, yet to encourage the eventual lessening of scarcities, otherwise known as progress.

    While philosophically, I might object at the arbitrary imposition of a limit on copyright and patent, preferring instead to see a negotiation of terms acceptable creator and user, I nevertheless recognize that such intellectual property should not remain proprietary forever. Pragmatically, the "market force" of negotiation, civil or otherwise, establishes a flow from the haves to the have-nots: governments, empowered with the legal use of force, dictate terms, and mobs forcibly revolt when they have "enough" (distinguishing a mob from a government is left up to the reader).

    Note that this applies to anything that can be made artificially scare, or restricted by license: writings, software, drug formulas, etc. The bottom line is that artificial scarcity is justified only by overall scarcity and it is desirable to reduce scarcity overall. Thus, artificial scarcity is like debt: useful, but not something of which one wants an excess.

    Now, this analysis does break down to some extent in that there will never be a completely post-scarcity society: things that can be envisioned, but do not exist, will remain scarce, and artificial scarcity can encourage people to continue to try to invent. But, the principle that artificial scarcity be limited in duration remains.

    The natural state, then is public domain, and this is what we should strive toward. Note, that the GPL is not the same as public domain, in that free software can not be employed in non-free derived works. But the teeth behind that are the same teeth that generate copyright-based artificial scarcity to begin with. If copyright and patent protection were substantially weakened, would the GPL need to be so restrictive? I don't think so -- it is as protective of fighting artificial scarcity as copyright is of promoting it: a rather nice balance.

    So, what does all this mean? Instead of changing the free software mantra, we should be arguing for a recognition that artificial scarcity property rights, propped up by government should be temporary in nature, as a matter of principle, and shorter terms are better for society than longer terms. This is the exact opposite of recent trends. People need to be educated that the acceptance of artificial scarcities in their lives is like taking on debt.

    These are only partially-baked ideas, so I appologize for the roughness of thought, but I certainly welcome comments.

    • Gee, thanks for the mod points, but I'd really like to see discussion.

      A couple of observations I should have included, but forget are the following, relating classical economies to artificial scarcity.

      RMS has been accused of being a communist because of his notions about intellectual property. However, communism has one great flaw: it seeks to redistribute existing scarce goods without creating incentive to eliminate the scarcity to begin with. That's why it appears to work so well at the beginning: it corrects a terribly skewed distribution of scarce things. While RMS attacks artificial scarcity, communism lumps natural scarcity in there as well. Note that combating natural scarcity requires the incentive to overcome the scarcity of knowledge of knowing how: once know, this knowledge can be kept artificially scarce (or not).

      Capitalism, on the other hand, rewards those who can produce scarce goods. In theory, such goods will be delivered in the most efficient manner possible due to free market competition. The free market notion is nice because it does not create a have/have-not dichotomy, at least not in theory: anyone has the potential for success.

      Of course, temporary extremes in both these economic models lead to undesireable circumstances that result in some form of government intervention: in the United States, we therefore have a mixed economy (note: many of the injustices attributed to capitalism and free markets can probably be attributed to "mismanagement" of this mixed economy -- this is why libertarians want less government). Recently, China has been experimenting with capitalist incentives within a predominantly communist economy. So, as presently practiced, communism and capitalism (both vulnerable to government corruption, though those of us in capitalist countries tend to think of communist governments are more corrupt), both seek to address scarcity issues, but in different ways. Personally, my bets are on a more capitalist incentive approach, because it offers the possibility of benefiting from short-term scarcity relief (i.e. "getting rich") as well as addressing the long term issues.

      Finally, another way to look at the artificial scarcities is not as restrictions enforced by governments, but rather scarcities which do not remain so naturally: software is easy to copy. Heck, digital media in general is easy to copy. Information and knowledge are hard to keep secret. Such scarcities can only exist by the application of force or by concent. Absent concent, they are thus ultimately counterproductive to those who seek to exploit them too much.

    • Thesis (Score:3, Insightful)

      by jxqvg ( 472961 )
      You should consider posting an opinion piece like this as a link instead.
      • I was going too, but my ideas are still rough, and I wanted feedback before I made a more polished "fait acompli" version. The present discussion was an instance of the problems I'm addressing, so appeared as good a place as any to spring my ideas. OTOH, if you object to the front-page space it takes, complain to the moderators.

        Once I refine and extend them, I might do as you suggest.

    • To deprive others of something that costs one nothing, and anyone could afford is not nice: its like throwing away perfectly good scraps of food that one can't eat or save when others are starving and it is no effort to give it away to them.

      But it doesn't cost nothing to create, even in your utopian society where everyone's needs are met. It costs the time of the creator. And in your utopian society, time will be the most valuable commodity of all, since it will be the only limited resouce. (Limited for any single person, unless you add immortality to your list of pie-in-the-sky technological and social advances.)

      Patents, and copyright, are ultimately about rewarding the time invested by the creator. They've been perverted to funnel most of those rewards to the creator's employer, which may or may not be fair. (I figure they're about as fair as those places that will buy your long term lottery winnings for a lump sum... minus a big service fee.)

      As long as patents and copyrights are limited in duration, society is able to reward creators, and still acknowledge that intellectual property isn't real property by reclaiming it into the public domain. This is a very important (and apparently delicate) balance.

      • Yes, of course, but what could you reward one with in a post-scarcity, or limited-scarcity society?

        Time would cease to have value because there's nothing it could be traded for -- you wouldn't loose work time because you would not have to work.

        The point is, having created a piece of software, there would be no justification for hoarding it because you couldn't get anything in exchange for it that you didn't already have.

        Actually, that isn't quite true: you could trade it for things that are promised, but don't exist -- other software. But you wouldn't need to trade it for food, clothing, or shelter.

        Artificial scarcity begets ongoing scarcity, and that is the argument for limiting it's duration.

  • by joeytsai ( 49613 ) on Friday February 01, 2002 @12:52PM (#2937777) Homepage
    The number of mpeg-4 implementations out there is pretty frightening, and so I wrote up a quick write-up of the most popular. Please let me know if you spot anything incorrect.

    The ASF file format is based on Microsoft's MPEG-4 V2 codec.

    The "DivX ;-)" codec is based off of Microsoft's MPEG-4 V3 codec. This is
    sometimes referred to as the 3.x codec. This is the format that requires
    Win32 DLLs. This is the format most people are talking about when they say
    "DivX". Most movies floating around the internet are encoded in this format.

    Project Mayo is developing an implementation called OpenDivX, which is GPL.
    This is a rewrite (to lose the dependency on the Win32 DLLs, trying to make it
    100% legal) and is sometimes referred to as the 4.x codec. This version is
    backward-compatible with 3.x, but 3.x is not forward-compatible with 4.x
    OpenDivX is under development, and still has quality and performance issues.

    DivX Advanced Research Centre (DARC) has an implentation called DivX4. DARC and
    Project Mayo are both part of a companly called DivXNetworks. Apparently,
    OpenDivX was a sort of sandbox where DARC figured out what worked and what
    didn't, and used that to create DivX4 from scratch. It is closed source, but
    freely downloadable. DivX4 is reported to have very high image quality.

    3ivx has a self-named MPEG-4 implementation. They also refer to it as DivX 2.0.
    Their implementation is closed source, and only the decoder is freely available
    (in Windows, as a Windows Media Player or QuickTime plug-in; in Linux, as an
    XAnim plug-in). You cannot play a DivX movie with the 3ivx codec.

    Nandub in an encoder which sports the Smart Bitrate Control (SBC) method of
    encoding DivX. Nandub is a modified version of the VirtualDub program (which is
    a general AVI editing and capture tool). Both Nandub and VirtualDub are
    released under the GPL. SBC is not a codec, it's an encoding method based from
    DivX 3.x which generally yields higher quality than normal.

    The FFmpeg project has another rewritten from scratch MPEG-4 codec. They are
    striving for real time encoding, and their code (GPLed) is written in ANSI C for
  • by IamTheRealMike ( 537420 ) on Friday February 01, 2002 @01:20PM (#2937961)
    You know, even though this is after all slashdot, I'm surprised that I haven't really seen anyone stick up for the MPEG consortium yet.

    After all, they have worked for years to bring together technology from all over the world and synthesise it into something that is truly useful.

    The kind of mathematics, science and engineering behind something like the MPEG standards isn't something you dream up in a bedroom - it takes a lot of time and money, and as time is money, this means money squared.

    If they don't get their money back, then there won't be any more MPEG standards. At the end of the day, this is going to let people make lots of cash off of streaming video to people (whether it be via the net/cable/sat/whatever) - the people who enabled that deserve a reward.

    I think it's pretty good of them to allow not-for-profit use of MPEG-4, which will allow people who aren't making money from their use of the technology to make as many MPEG-4 encoded videos as they like.

    Sure, maybe the time based charging is dumb and should be rethought, or maybe it's actually pretty sensible (given the markets in which it'll be used, ie digital tv/video etc). The MPEG group is made up of a lot of extremely smart people - don't write them off because they aren't giving away their work into the public domain.

    thanks -mike
    • Your right it does cost money.
      There are 14 million DSS customers, and probably lets say 10 million Digital Cable customers.

      That would make the mpeg 2 licenses so far on the line upwards of $50 MILLION dollars. That pays for ALOT of academic research.

      Now if those folks get transferred to mpeg4 (which there is a pretty high desireability from a consumer standpoint, more effective use of bandwidth means more and better channels), that goes from $50 million dollars of licensing fees to at the rate of lets say 8 cents a day to a licensing rate of 3 million dollars a day, or over a billion dollars a year.

      Oh yeah, everyone deserves a billion dollars a year for licensing fees.

      With fees as rich as that, no one will pay them. Either customers will not get access to mpeg4 technology, or a cheaper technology will be developed. Either way the mpeg folks won't get thier billions.
  • by blazin ( 119416 ) on Friday February 01, 2002 @02:24PM (#2938325) Homepage Journal
    According to the license info page [] the royalty scheme is determined by date, apparently starting on September 1, 1001 and going until March 1, 2003. Now I don't know a lot about patents, copyright law, and what not, but over 1001 years to be having all the rights on a patent seems a bit crazy...

    (5) For MPEG-2 Packaged Media, the royalty is US $0.04 before September 1, 2001/$0.035 from September 1, 1001 to March 1, 2003/$0.03 from March 1, 2003 for the first MPEG-2 Video Event, plus $0.01 for each additional 30 minutes or portion recorded on the same copy...
  • by gotan ( 60103 ) on Friday February 01, 2002 @02:27PM (#2938337) Homepage
    Apparently a lot of business types now get it into their heads, to implement some form of 'leasing' on their product, so they only have to work at it once, and then get paid untill hell freezes over (and with the amount of money you can make that way it'll be no problem to buy potential competition off before it can get big enough to stand a chance).

    There's two reasons, why potential buyers of such schemes should abstain: The money comes out of their pockets, and throwing so much money in one direction will most probably create a monopolistic structure more concerned with keeping itself in control than making a better product (see Microsoft).

If I had only known, I would have been a locksmith. -- Albert Einstein