Submitted by GristyMcFisty:
MPEG LA today announced that essential H.264/MPEG-4
AVC patent and patent application holders have reached agreement on the terms of
a joint patent license for implementation and use of ITU-T H.264 and MPEG-4 Part
10 AVC ('AVC Standard").
'For essential intellectual property holders of
such wide diversity to agree on the terms of a joint license in just a matter of
months is a remarkable achievement, giving testimony to their support for the
AVC standard and their desire to make this promising new technology widely
available to the market in the fastest time possible," said MPEG LA CEO Baryn S.
Futa. 'MPEG LA congratulates each of them for their extraordinary
diligence and cooperation, despite differences, in coming together for the
benefit of the marketplace. We also thank potential users across all
market sectors for their forthrightness in sharing with us their concern for
licensing terms that are simple, reasonable and easy to administer. This
helped immensely in the group's efforts to make the license terms responsive to
marketplace needs."
Following is a brief summary of the licensing
terms, which are yet to be incorporated into definitive license agreements and
therefore, provided for information purposes only. These terms cover the
entire AVC Standard regardless of which Profile(s) are used:
Decoder-Encoder
Royalties
- Royalties to be paid by end product
manufacturers for an encoder, a decoder or both ('unit") begin at US $ 0.20
per unit after the first 100,000 units each year. There are no royalties
on the first 100,000 units each year. Above 5 million units per year,
the royalty is US $ 0.10 per unit. - The maximum royalty for these rights payable by
an Enterprise (company and greater than 50% owned subsidiaries) is $ 3.5
million per year in 2005-2006, $ 4.25 million per year in 2007-08 and $ 5
million per year in 2009-10. - In addition, in recognition of existing
distribution channels, under certain circumstances an Enterprise selling
decoders or encoders both (i) as end products under its own brand name to end
users for use in personal computers and (ii) for incorporation under its brand
name into personal computers sold to end users by other licensees, also may
pay royalties on behalf of the other licensees for the decoder and encoder
products incorporated in (ii) limited to $ 10.5 million per year in 2005-2006,
$ 11 million per year in 2007-2008 and $ 11.5 million per year in
2009-2010. - The initial term of the license is through
December 31, 2010. To encourage early market adoption and start-up, the
License will provide a grace period in which no royalties will be payable on
decoders and encoders sold before January 1, 2005.
Participation Fees
- Title-by-Title '“ For AVC video (either on
physical media or ordered and paid for on title-by-title basis, e.g., PPV,
VOD, or digital download, where viewer determines titles to be viewed or
number of viewable titles are otherwise limited), there are no royalties up to
12 minutes in length. For AVC video greater than 12 minutes in length,
royalties are the lower of (a) 2% of the price paid to the licensee from
licensee's first arms length sale or (b) $ 0.02 per title. Categories of
licensees include (i) replicators of physical media, and (ii) service/content
providers (e.g., cable, satellite, video DSL, internet and mobile) of VOD, PPV
and electronic downloads to end users. - Subscription '“ For AVC video provided on a
subscription basis (not ordered title-by-title), no royalties are payable by a
system (satellite, internet, local mobile or local cable franchise) consisting
of 100,000 or fewer subscribers in a year. For systems with greater than
100,000 AVC video subscribers, the annual participation fee is $ 25,000 per
year up to 250,000 subscribers, $ 50,000 per year for greater than 250,000 AVC
video subscribers up to 500,000 subscribers, $ 75,000 per year for greater
than 500,000 AVC video subscribers up to 1,000,000 subscribers, and $ 100,000
per year for greater than 1,000,000 AVC video subscribers. - Over-the-air free broadcast '“ There are no
royalties for over-the-air free broadcast AVC video to markets of 100,000 or
fewer households. For over-the-air free broadcast AVC video to markets
of greater than 100,000 households, royalties are $ 10,000 per year per local
market service (by a transmitter or transmitter simultaneously with repeaters,
e.g., multiple transmitters serving one station). - Internet broadcast (non-subscription, not
title-by-title) '“ Since this market is still developing, no royalties will be
payable for internet broadcast services (non-subscription, not title-by-title)
during the initial term of the license (which runs through December 31, 2010)
and then shall not exceed the over-the-air free broadcast TV encoding fee
during the renewal term. - The maximum royalty for Participation rights
payable by an Enterprise (company and greater than 50% owned subsidiaries) is
$ 3.5 million per year in 2006-2007, $ 4.25 million in 2008-09 and $ 5 million
in 2010. - As noted above, the initial term of the license
is through December 31, 2010. To encourage early marketplace adoption
and start-up, the License will provide for a grace period in which no
Participation Fees will be payable for products or services sold before
January 1, 2006. - Owners of patents or patent applications
determined by MPEG LA's patent experts to be essential to the AVC Standard and
who have cooperated in the above terms include Columbia University,
Electronics and Telecommunications Research Institute of Korea (ETRI), France
Télécom, Fujitsu, LG Electronics, Matsushita, Mitsubishi, Microsoft, Motorola,
Nokia, Philips, Robert Bosch GmbH, Samsung, Sharp, Sony, Toshiba, and Victor
Company of Japan (JVC).
MPEG LA continues to welcome the submission of
patents and patent applications for an evaluation of their essentiality to the
AVC Standard in order to include as much essential intellectual property as
possible under one license for the benefit of the marketplace (only issued
patents will be included in the License). For each patent or patent
application submitted, an evaluation fee of US $8,500.00 to cover the outside
cost of the patent expert's evaluation is paid to MPEG LA. Additional fees
may be required to cover additional outside costs in the event of reevaluation
by patent experts. Submitting parties must confirm their agreement with
the terms and procedures governing the patent submission process which may be
obtained from Jane Tannenbaum, Director, Contract Administration (jtannenbaum@mpegla.com).
MPEG LA, LLC
MPEG LA successfully pioneered one-stop technology
standards licensing with a portfolio of essential patents for the international
digital video compression standard known as MPEG-2. One-stop technology
standards licensing enables widespread technological implementation,
interoperability and use of fundamental broad-based technologies covered by many
patents owned by many patent holders. MPEG LA provides users with fair,
reasonable, nondiscriminatory access to these essential patents on a worldwide
basis under a single license. MPEG LA is an independent licensing
administrator; it is not a patent holder and is not related to any standards
agency. In addition to MPEG-2, MPEG LA licenses portfolios of essential
patents for the IEEE 1394 Standard, the DVB-T Standard, the MPEG-4 Visual
Standard and the MPEG-4 Systems Standard. MPEG LA also has initiated a
license for digital rights management (DRM) technologies as described in DRM
Reference Model v1.0. For more information, please refer to http://www.mpegla.com, http://www.1394la.com and http://www.dvbla.com.
Source: MPEG LA
