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MPEG Licensing Authority invites royalty land rush

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The MPEG Licensing Authority (MPEGLA) has called forward any firm that thinks it has a patent essential for the VC-9 Codec which runs in Windows Media 9.

The call is a first step in taking over the management and collection of royalties for the codec and running them at arms length from Microsoft. But there is every chance that a number of companies will respond and claim that their technology forms part an essential building block for the VC-9 codec as long as they have had a chance to look at the source code and the standards application which Microsoft has already submitted to the Society of Motion Picture Television Engineers Technology Committee, last September.

Within 30 to 45 days of this call for essential patents, the MPEGLA will call a meeting where patent expert Dr Kenneth Rubenstein and his team at Proskauer Rose in New York will decide which patents are essential and which will be combined through discussion with Microsoft into a single licensing platform.

Only the companies offering technology that Rubenstein thinks are overlapping and essential, will be invited to the meeting so that invite list will almost certainly determine if VC-9 will share royalties as a standard or if it is just Microsoft's alone.

An initial group of patent holders whose patents are determined to be essential will be convened within 30-45 days to begin considering terms of a joint license, but the process will remain open and submissions will continue to be welcome even after that date.

The MPEGLA says that it always offers licenses on fair, reasonable, non-discriminatory terms - in other words the same for everyone, not more expensive for strong competitors. This move by Microsoft to use the MPEGLA is key to making any of its proprietary digital media products licensable at arms length.

Once the license is agreed, an MPEGLA licensing administrator will be chosen by the initial group of patent holders and granted non-exclusive sublicensing rights to the codec, actively promote the program and distribute collected royalties to the patent owners.

In the meantime the MPEGLA has also announced that six Japanese broadcasters NHK, TBS, NTV, TV Asahi, Fuji TV and TV Tokyo have said they have reached terms under which they will use the H.264 Advanced Video Codec in the new digital terrestrial TV broadcasting in Japan, which will also be picked up by mobile personal receivers. The codec will also be used in cable TV and satellite TV broadcasts.

Under the deal the broadcasters can either pay a one-time fee of US $2,500 for each encoder, or it can opt for annual fees. Negotiations had been going on for over a year and at one point it was considered that the charges would always been too high and contain usage payments.

These mobile personal receivers can now go through their final design stages and will be launched in the first quarter of 2006, built into phones and other portable players.

The licensees include NHK, Japan's sole public broadcaster with 54 stations; TBS which reaches 120 million Japanese people; and TV Tokyo reaching 32 million Japanese homes.

© Copyright 2004 Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of events that have happened each week in the world of digital media. Faultline is where media meets technology. Subscription details here.

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