Can MPEG-LA change their minds in 2015?

In Uncategorized on January 16, 2011 by Matt Giuca

We know that the MPEG-LA famously promised not to charge distributors of H.264 content after December 31, 2015. But are they really (legally) held to that promise?

In law (and I am not a lawyer), you can make a statement to the effect of “so-and-so grants a worldwide, perpetual, irrevocable, royalty-free license to do such-and-such.” Typically words like “perpetual” and/or “irrevocable” are used. Such a statement has legal weight. You can’t just make such a promise and then turn around and start charging royalties. For example, the WebM codec is patented and those patents are owned by Google. The reason we (the open web) like WebM is because:

Google hereby grants to you a perpetual, worldwide, non-exclusive, no-charge, royalty-free, irrevocable … patent license to [infringe VP8 patents owned by Google].

(The full text is more complicated than that, but you can read it here and as far as I can tell, it has that effect. Note that this isn’t to say someone won’t discover other non-Google owned patents on WebM, but at least you can’t be sued for any known patents.)

Now MPEG-LA has promised (PDF) a much smaller set of patent exemptions (specifically, for Internet broadcasters distributing using H.264 video and not charging a fee) with the following statement:

In the case of Internet Broadcast AVC Video (AVC Video that is delivered via the Worldwide Internet to an End User for which the End User does not pay remuneration for the right to receive or view, i.e., neither Title-by-Title nor Subscription), there will be no royalty for the life of the License.

Now firstly, this is not the legal text of the license. This is a summary. I would quote the actual license that MPEG-LA is forcing upon all H.264 users (and thanks to Apple and friends, potentially forced upon the web in perpetuity), but … it is not available online. MPEG-LA’s “Agreement” page contains a link to the summary PDF I linked above, and a request to “e-mail your name, company and address to our Licensing Department and a hardcopy of the AVC Patent Portfolio License will be sent to you promptly”. I can’t find an up-to-date copy of the license anywhere online. I see no reason why they don’t have a PDF copy of this “open standard”‘s patent license online, except that perhaps they don’t want us reading it. Instead, we must deal with summaries and press releases. Anyway, the sentence of the summary quoted above refers to section 3.1.5 of the secret patent portfolio.

Anyway, going by the summary, you’ll notice that it contains no such language as “irrevocable” or “perpetual”. And it uses the phrase “for the life of the license“. The press release uses the same curious phrase. Now I’m speculating here. I haven’t read the license and I am not a lawyer, but as I read it, the life of the license is not the same thing as the life of the patent pool. As far as I am aware, this license was initially made through to 2010. The MPEG-LA renewed the license in 2010 and now extends to 2015. Therefore, have they actually promised anything new? Legally, as I read it, they are not bound to this “promise” at all, nor have they even promised a perpetual license. If H.264 is indeed the standard for web video by the end of 2015, we (or at least, those who serve video) could find ourselves with no choice but to pay up in 2015.

While Engadget may trust the words of MPEG-LA (“Yes, the license terms are worded poorly, but those are the answers straight from the patent horse’s mouth. Everyone can breathe again, ‘kay?”), I don’t trust a shady, vague promise written by a company whose sole means of existence is to extract patent royalties in a license I can’t even see — only a properly worded legal document ensuring a perpetual, irrevocable patent license.

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