After asking the Norwegian Broadcasting Company (NRK) why they can broadcast and stream H.264 video without an agreement with the MPEG LA, I was wiser, but still confused. So I asked MPEG LA if their understanding matched that of NRK. As far as I can tell, it does not.
I started by asking for more information about the various licensing classes and what exactly is covered by the "Internet Broadcast AVC Video" class that NRK pointed me at to explain why NRK did not need a license for streaming H.264 video:
According to a MPEG LA press release dated 2010-02-02, there is no charge when using MPEG AVC/H.264 according to the terms of "Internet Broadcast AVC Video". I am trying to understand exactly what the terms of "Internet Broadcast AVC Video" is, and wondered if you could help me. What exactly is covered by these terms, and what is not?
The only source of more information I have been able to find is a PDF named AVC Patent Portfolio License Briefing, which states this about the fees:
- Where End User pays for AVC Video
- Subscription (not limited by title) – 100,000 or fewer subscribers/yr = no royalty; > 100,000 to 250,000 subscribers/yr = $25,000; >250,000 to 500,000 subscribers/yr = $50,000; >500,000 to 1M subscribers/yr = $75,000; >1M subscribers/yr = $100,000
- Title-by-Title - 12 minutes or less = no royalty; >12 minutes in length = lower of (a) 2% or (b) $0.02 per title
- Where remuneration is from other sources
- Free Television - (a) one-time $2,500 per transmission encoder or (b) annual fee starting at $2,500 for > 100,000 HH rising to maximum $10,000 for >1,000,000 HH
- Internet Broadcast AVC Video (not title-by-title, not subscription) – no royalty for life of the AVC Patent Portfolio License
Am I correct in assuming that the four categories listed is the categories used when selecting licensing terms, and that "Internet Broadcast AVC Video" is the category for things that do not fall into one of the other three categories? Can you point me to a good source explaining what is ment by "title-by-title" and "Free Television" in the license terms for AVC/H.264?
Will a web service providing H.264 encoded video content in a "video on demand" fashing similar to Youtube and Vimeo, where no subscription is required and no payment is required from end users to get access to the videos, fall under the terms of the "Internet Broadcast AVC Video", ie no royalty for life of the AVC Patent Portfolio license? Does it matter if some users are subscribed to get access to personalized services?
Note, this request and all answers will be published on the Internet.
The answer came quickly from Benjamin J. Myers, Licensing Associate with the MPEG LA:
Thank you for your message and for your interest in MPEG LA. We appreciate hearing from you and I will be happy to assist you.
As you are aware, MPEG LA offers our AVC Patent Portfolio License which provides coverage under patents that are essential for use of the AVC/H.264 Standard (MPEG-4 Part 10). Specifically, coverage is provided for end products and video content that make use of AVC/H.264 technology. Accordingly, the party offering such end products and video to End Users concludes the AVC License and is responsible for paying the applicable royalties.
Regarding Internet Broadcast AVC Video, the AVC License generally defines such content to be video that is distributed to End Users over the Internet free-of-charge. Therefore, if a party offers a service which allows users to upload AVC/H.264 video to its website, and such AVC Video is delivered to End Users for free, then such video would receive coverage under the sublicense for Internet Broadcast AVC Video, which is not subject to any royalties for the life of the AVC License. This would also apply in the scenario where a user creates a free online account in order to receive a customized offering of free AVC Video content. In other words, as long as the End User is given access to or views AVC Video content at no cost to the End User, then no royalties would be payable under our AVC License.
On the other hand, if End Users pay for access to AVC Video for a specific period of time (e.g., one month, one year, etc.), then such video would constitute Subscription AVC Video. In cases where AVC Video is delivered to End Users on a pay-per-view basis, then such content would constitute Title-by-Title AVC Video. If a party offers Subscription or Title-by-Title AVC Video to End Users, then they would be responsible for paying the applicable royalties you noted below.
Finally, in the case where AVC Video is distributed for free through an "over-the-air, satellite and/or cable transmission", then such content would constitute Free Television AVC Video and would be subject to the applicable royalties.
For your reference, I have attached a .pdf copy of the AVC License. You will find the relevant sublicense information regarding AVC Video in Sections 2.2 through 2.5, and the corresponding royalties in Section 3.1.2 through 3.1.4. You will also find the definitions of Title-by-Title AVC Video, Subscription AVC Video, Free Television AVC Video, and Internet Broadcast AVC Video in Section 1 of the License. Please note that the electronic copy is provided for informational purposes only and cannot be used for execution.
I hope the above information is helpful. If you have additional questions or need further assistance with the AVC License, please feel free to contact me directly.
Having a fresh copy of the license text was useful, and knowing that the definition of Title-by-Title required payment per title made me aware that my earlier understanding of that phrase had been wrong. But I still had a few questions:
I have a small followup question. Would it be possible for me to get a license with MPEG LA even if there are no royalties to be paid? The reason I ask, is that some video related products have a copyright clause limiting their use without a license with MPEG LA. The clauses typically look similar to this:This product is licensed under the AVC patent portfolio license for the personal and non-commercial use of a consumer to (a) encode video in compliance with the AVC standard ("AVC video") and/or (b) decode AVC video that was encoded by a consumer engaged in a personal and non-commercial activity and/or AVC video that was obtained from a video provider licensed to provide AVC video. No license is granted or shall be implied for any other use. additional information may be obtained from MPEG LA L.L.C.
It is unclear to me if this clause mean that I need to enter into an agreement with MPEG LA to use the product in question, even if there are no royalties to be paid to MPEG LA. I suspect it will differ depending on the jurisdiction, and mine is Norway. What is MPEG LAs view on this?
According to the answer, MPEG LA believe those using such tools for non-personal or commercial use need a license with them:
With regard to the Notice to Customers, I would like to begin by clarifying that the Notice from Section 7.1 of the AVC License reads:
THIS PRODUCT IS LICENSED UNDER THE AVC PATENT PORTFOLIO LICENSE FOR THE PERSONAL USE OF A CONSUMER OR OTHER USES IN WHICH IT DOES NOT RECEIVE REMUNERATION TO (i) ENCODE VIDEO IN COMPLIANCE WITH THE AVC STANDARD ("AVC VIDEO") AND/OR (ii) DECODE AVC VIDEO THAT WAS ENCODED BY A CONSUMER ENGAGED IN A PERSONAL ACTIVITY AND/OR WAS OBTAINED FROM A VIDEO PROVIDER LICENSED TO PROVIDE AVC VIDEO. NO LICENSE IS GRANTED OR SHALL BE IMPLIED FOR ANY OTHER USE. ADDITIONAL INFORMATION MAY BE OBTAINED FROM MPEG LA, L.L.C. SEE HTTP://WWW.MPEGLA.COM
The Notice to Customers is intended to inform End Users of the personal usage rights (for example, to watch video content) included with the product they purchased, and to encourage any party using the product for commercial purposes to contact MPEG LA in order to become licensed for such use (for example, when they use an AVC Product to deliver Title-by-Title, Subscription, Free Television or Internet Broadcast AVC Video to End Users, or to re-Sell a third party's AVC Product as their own branded AVC Product).
Therefore, if a party is to be licensed for its use of an AVC Product to Sell AVC Video on a Title-by-Title, Subscription, Free Television or Internet Broadcast basis, that party would need to conclude the AVC License, even in the case where no royalties were payable under the License. On the other hand, if that party (either a Consumer or business customer) simply uses an AVC Product for their own internal purposes and not for the commercial purposes referenced above, then such use would be included in the royalty paid for the AVC Products by the licensed supplier.
Finally, I note that our AVC License provides worldwide coverage in countries that have AVC Patent Portfolio Patents, including Norway.
I hope this clarification is helpful. If I may be of any further assistance, just let me know.
The mentioning of Norwegian patents made me a bit confused, so I asked for more information:
But one minor question at the end. If I understand you correctly, you state in the quote above that there are patents in the AVC Patent Portfolio that are valid in Norway. This make me believe I read the list available from <URL: http://www.mpegla.com/main/programs/AVC/Pages/PatentList.aspx > incorrectly, as I believed the "NO" prefix in front of patents were Norwegian patents, and the only one I could find under Mitsubishi Electric Corporation expired in 2012. Which patents are you referring to that are relevant for Norway?
Again, the quick answer explained how to read the list of patents in that list:
Your understanding is correct that the last AVC Patent Portfolio Patent in Norway expired on 21 October 2012. Therefore, where AVC Video is both made and Sold in Norway after that date, then no royalties would be payable for such AVC Video under the AVC License. With that said, our AVC License provides historic coverage for AVC Products and AVC Video that may have been manufactured or Sold before the last Norwegian AVC patent expired. I would also like to clarify that coverage is provided for the country of manufacture and the country of Sale that has active AVC Patent Portfolio Patents.
Therefore, if a party offers AVC Products or AVC Video for Sale in a country with active AVC Patent Portfolio Patents (for example, Sweden, Denmark, Finland, etc.), then that party would still need coverage under the AVC License even if such products or video are initially made in a country without active AVC Patent Portfolio Patents (for example, Norway). Similarly, a party would need to conclude the AVC License if they make AVC Products or AVC Video in a country with active AVC Patent Portfolio Patents, but eventually Sell such AVC Products or AVC Video in a country without active AVC Patent Portfolio Patents.
As far as I understand it, MPEG LA believe anyone using Adobe Premiere and other video related software with a H.264 distribution license need a license agreement with MPEG LA to use such tools for anything non-private or commercial, while it is OK to set up a Youtube-like service as long as no-one pays to get access to the content. I still have no clear idea how this applies to Norway, where none of the patents MPEG LA is licensing are valid. Will the copyright terms take precedence or can those terms be ignored because the patents are not valid in Norway?