Like it or not, many of the technologies that we use every day are patented, copyrighted, or both. A decade ago, the granting of a patent for the wheel, under revised Australian procedures, was a vivid demonstration of how complex and patently absurd the laws protecting intellectual property rights have become.
In the UK and the rest of Europe, patents have only been granted to protect inventions that could be expressed in the tangible. Software, like artistic productions, has been deemed more appropriate for the copyright process. The USA, with more patent lawyers than any other country, followed a different course, allowing if not encouraging all manner of intangibles to be protected by patent.
So we now see patent trolls, corporations whose purpose is to place bear-trap patents, with which to extract royalties from manufacturers who later come up with an innovative design that can be construed as falling within that patent. Instead of encouraging invention and innovation, US practice seems hell-bent on making patent and commercial law a major industry in its own right.
Now if I hire my services out to mow the lawns of my neighbours, the price that I pay for the mower that I use will include the cost of using patents licensed in the design and manufacture of the mower. If I hire a film to show to a fee-paying audience, then included in the hire charge will be the royalty paid to the owners of the copyright of that film.
The commercial mower of lawns does not have to pay a royalty for each lawn that he or she mows, nor does the projectionist have to pay royalties direct to those who hold patents for the movie projector.
If you thought that modern technologies such as video compression and decompression worked likewise, then you could be expensively surprised.
Logic suggests that the royalties for MPEG and similar CODECs would be paid by those selling systems for compressing and decompressing audio and video. Thus Apple would pay royalties on the sale of QuickTime licences, and buried within the total cost of Blu-ray and DVD players would be a royalty paid by the manufacturer of the decompression chipset. Whilst those are true, merely compressing your movie using a licensed CODEC can still require a licence, and the payment of a royalty to those holding the patents used in that CODEC.
Normally the royalty is small, 3 US cents per disk for MPEG-2 as used in DVD movies, and commonly collected as part of the cost of replication. This enables the patent-holders to minimise the number of licensees, and to collect their charges efficiently. It is also in spite of the fact that almost all of the patents involved in MPEG-2 have already expired.
But if you are thinking of providing compressed video over the Internet, you might first like to browse the MPEG LA site here. You will there learn that using H.264 (alias AVC) compression to deliver a commercial product could require a licence and payment of royalties, even if that product is delivered via the Internet.
I use the word ‘could’ with great care. The UK and Europe still do not accept the patenting of software algorithms, so provided that you remain subject only to UK or European law these patents should be ineffective. In the US, though, where the patents appear valid, operating any service which charges for H.264 encoded content is likely to require a commercial licence from MPEG LA.
In 2010, MPEG LA announced that Internet video which is free to end users will never be charged royalties, but apparently operators of free TV channels are still expected to pay for the privilege of using H.264 compression of their content.
I fail to understand how any system of justice can sanction the extraction of such levies, which would be unconscionable in other circumstances, such as the mowing of lawns.
Updated from the original, which was first published in MacUser volume 21 issue 22, 2005.