Petter Reinholdtsen: MPEG LA on "Internet Broadcast AVC Video" licensing and non-private use

MPEG LA on "Internet Broadcast AVC Video" licensing and non-private use

7th July 2015

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) â 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) + â 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?

+ +

Tags: english, h264, multimedia, opphavsrett, standard, video, web.

+ + +

The answer came quickly from Benjamin J. Myers, Licensing Associate +with the MPEG LA:

According to the answer, MPEG LA believe those using such tools for +non-personal or commercial use need a license with them:

The mentioning of Norwegian patents made me a bit confused, so I +asked for more information:

Again, the quick answer explained how to read the list of patents +in that list:

+ Petter Reinholdtsen + +

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