Patent Notice

[Don Palomaki]

Noted an interesting if unusual MPEG-2 patent notice on the bottom of page 5 (in ALL CAPS no less) of the USA manual.

Wonder what the real meaning and intent of that notice is in plain speak?

[Mike Marriage]

What does it say?

[Steve Montoto]

Any Use Of This Product Other Than Consumer Personal Use In Any Manner That Complies With The Mpeg-2 Standard For Encoding Video Information For Packaged Media Is Expressly Prohibited Without A License Under Applicable Patents In The Mpeg-2 Patent Portfolio, Which License Is Available From A Mpeg La, L.l.c., 250 Street, Suite 300, Denver, Colorado 80206

[Don Palomaki]

And I wonder if something like this accounts for the substantially higher cost of the G1 - paying some patent holder(s) high sums for rights to incorporate the additional feature in the camcorder? The additinal parts alone would only add perhaps $100 or so the the cost of the camcorder.

[Boyd Ostroff]

I think this is pretty standard text from MPEG LA. For example, take a look at the Final Cut Pro license:

http://images.apple.com/legal/sla/finalcutpro51.pdf

This product is licensed under the MPEG-4 Visual Patent Portfolio License for the personal and non-commercial use of a consumer for (i) encoding video in
compliance with the MPEG-4 Visual Standard (“MPEG-4 Video”) and/or (ii) decoding MPEG-4 video that was encoded by a consumer engaged in a personal
and non-commercial activity and/or was obtained from a video provider licensed by MPEG LA to provide MPEG-4 video. No license is granted or shall be
implied for any other use.

and the DVD Studio Pro license agreement:

http://images.apple.com/legal/sla/dvdstudiopro41.pdf

This product is licensed under the MPEG-4 Visual Patent Portfolio License for the personal and non-commercial use of a
consumer for (i) encoding video in compliance with the MPEG-4 Visual Standard (“MPEG-4 Video”) and/or (ii) decoding
MPEG-4 video that was encoded by a consumer engaged in a personal and non-commercial activity and/or was obtained
from a video provider licensed by MPEG LA to provide MPEG-4 video. No license is granted or shall be implied for any
other use.

[John Miller]

In plain speak?

If you are using any HDV camcorders for commercial use, you have to get a license from the licensing authority....

In other words, if you make your living shooting weddings in HDV and authoring to DVD, you are probably doing so illegally unless you have paid the rather considerable license fee.

Sounds like a rather tricky area to get involved with.

[Bill Pryor]

That would make every 1/3' chip HDV camera out there totally worthless, wouldn't it.

[John Miller]

Not really. It means that, legally, there is an extra and overlooked cost involved with creating MPEG2 content for commercial distribution in a packaged format.

Last time I looked at the MPEGLA fees, I was astonished. (I *was* considering developing some HDV-based software, but the licensing costs for the encoding aspect soon put paid to that idea...)

[Boyd Ostroff]

Originally Posted by John F Miller

In other words, if you make your living shooting weddings in HDV and authoring to DVD, you are probably doing so illegally unless you have paid the rather considerable license fee.

I think it's actually a lot worse than that... look more closely at the DVD Studio Pro license in the link above (and I'm sure you will find similar language in the license of any other DVD authoring software). If you're burning DVD's of weddings shot with a standard definition camcorder then it appears you're in the same boat also...

13. MPEG-2 Notice. To the extent that the Apple Software contains MPEG-2 functionality, the following provision applies:
ANY USE OF THIS PRODUCT OTHER THAN CONSUMER PERSONAL USE IN ANY MANNER THAT COMPLIES WITH THE MPEG-2
STANDARD FOR ENCODING VIDEO INFORMATION FOR PACKAGED MEDIA IS EXPRESSLY PROHIBITED WITHOUT A LICENSE
UNDER APPLICABLE PATENTS IN THE MPEG-2 PATENT PORTFOLIO, WHICH LICENSE IS AVAILABLE FROM MPEG LA, L.L.C, 250
STEELE STREET, SUITE 300, DENVER, COLORADO 80206.

[Eric Weiss]

they make their billions two cents at a time.

[Peter Ferling]

Sounds like a sleeping giant just waiting for the fat paycheck. Kinda like what happened to RIM for their blackberry tech when NTP came with Patent papers in hand. Or Verizon with vonage, etc. I'd bet a lawyers counsel might suggest not shooting/distributing anything with HDV beyond home movies of juniors birthday. Scary stuff.

[Boyd Ostroff]

Originally Posted by Peter Ferling

I'd bet a lawyers counsel might suggest not shooting/distributing anything with HDV beyond home movies of juniors birthday. Scary stuff.

Look at my link above. It isn't just HDV, it's any form of MPEG. The same limitations apply to burning any kind of DVD. Obviously this is something which isn't being enforced...

[Peter Ferling]

Originally Posted by Boyd Ostroff

Look at my link above. It isn't just HDV, it's any form of MPEG. The same limitations apply to burning any kind of DVD. Obviously this is something which isn't being enforced...

I doubt it could or would be, and the legal jargon may be there just for declaration of rights to patent holders and for purely legal purposes.

[Jerome Marot]

Originally Posted by Don Palomaki

Noted an interesting if unusual MPEG-2 patent notice on the bottom of page 5 (in ALL CAPS no less) of the USA manual.

Wonder what the real meaning and intent of that notice is in plain speak?

There is no need to discuss endlessly about this, as the answer is easy to find on the mpegla site:

http://www.mpegla.com/m2/m2-agreement.cfm

and I will cite the relevant passages for your convenience:

"(2) For MPEG-2 encoding products in hardware or software, the royalty is US $2.50 from January 1, 2002 and $4.00 before January 1, 2002 for each encode unit (Sections 2.3 and 3.1.2). This does not grant a license to use MPEG-2 encoding products to encode/produce DVDs or other MPEG-2 packaged medium for other than personal use of Licensee’s customer, however; the grant to encode/produce DVDs or other MPEG-2 packaged medium for other than personal use of Licensee’s customer is covered by the sublicense for MPEG-2 packaged medium, and the royalties for that sublicense are assessed on the MPEG-2 packaged medium itself (see (5) below). Encoding product Licensees are required to give notice (covering the exclusion from the sublicense granted by Section 2.3) that encoding products may not be used in any manner for encoding MPEG-2 Packaged Media without a license under applicable patents "

and then, under point 5:

"(5) For MPEG-2 Packaged Media, the royalty is US $0.03 from March 1, 2003/$0.035 from September 1, 2001 to March 1, 2003/$0.04 before September 1, 2001 for the first MPEG-2 Video Event, plus $0.01 for each additional 30 minutes or portion recorded on the same copy, but not to exceed (a) US $0.03 from March 1, 2003/$0.035 from September 1, 2001 to March 1, 2003/$0.04 before September 1, 2001 for a single Movie, (b) US $0.02 for the second Movie recorded on the same copy as the first Movie, and (c) US $0.01 for each copy having a normal playing time up to and including but not more than 12 minutes of video programming encoded into an MPEG-2 compliant format (...)"

and

"To make it easier for MPEG LA’s customers to account for their MPEG-2 Packaged Medium royalties, effective September 1, 2005, Licensees may elect a simplified option for reporting MPEG-2 Packaged Medium royalties under which they pay US $0.03 for each MPEG-2 video disc regardless of its specific content or playing time (except where the playing time is 12 minutes or less in which case the royalty would continue to be $0.01)."


So the answer appears to be that people producing DVDs for sale need a license and should pay $0.03 per disc.


And if I may voice a personal opinion: I think that those license terms are reasonably fair. Developing powerfull encoding and insuring interoperability of various hardware and software is no trivial matter.

[Don Palomaki]

Interesting, thanks for the post. I agree, the terms are not unreasonable.

This mainly hits the folks doing commercial distribution size runs, i.e., thousands of DVDs or more a year. For an independent wedding shooter doing, say, 100 a year and delivering maybe 5 DVD of each wedding, it adds up to what, $15 a year. Would cost them more than that in acccounting labor to process the paperwork and cash the check.