MPEG LA Defines MPEG-4

Started by J.A.F._Doorhof, February 2, 2002, 04:24:23

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J.A.F._Doorhof

MPEG LA, LLC reported 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 Telecom; 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: $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; $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; $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). The $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.

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