So, because of a request i got in my job, i had to contact the famous MPEG LA.
That is the company that owns the patent for mpeg2, mpeg4, h264 codecs and for some other codecs. In one word for MPEG video codecs.
Basically if you deal with videos there is a chance that your project, either web application, stand alone software or video hardware is using a codec that has been copyrighted by them.
Their patents cover four categories and you can find infos on their website www.mpegla.com .
That’s where you can find also a contact page with a phone number. First of all, they list numbers for several US areas but the same person answers for each of them, they require you to disclose at least your first name before they can handle the call and transfer you to the proper department. I bet the department is pretty much one big incoming call basket for companies using their codecs without even knowing that, i think big manufacturers (windows media player for microsoft, video players in general, etc.) have some kind of special channel, plus of course some other offices.
My situation was easy, i called on behalf of someone that was working on a project that uses their h264 and mpeg2 codecs. I explained to them that the patent has been initially ignored but in good faith and that there was the willing to disclose the books for the past years in case they needed that. On the other hand we were talking more about a problem of quality of the violation rather than quantity.
What i understood is the following:
- with the exception of mpeg2, all the other licenses they can give you, will trigger royalties only if the commercial distribution goes over the 100,000 pieces per year. For mpeg2 there is no threshold and you must pay for each unit supporting that codec.
- You are supposed to pay reotractively, $2.50 per unit that utilizes the codec and that you distributed commercially before you signed the agreements that will give you access to the licenses
- you have to pay a royalty of $2.00 for each unit that you will distribute after the signature
- a discount on the past royalty is possible, can be discussed, but there is no guarantee until they know who you are, where you live and how much you own them
- they rely on the licensed business to report royalties
My personal comment is that $2.00 is a lot and is a royalty very likely established with hardware in mind. They have a lower fee for video streaming, few cents or so, but in terms of commercial unit, either software or hardware, you are supposed to take out $2.00 out of your sales per each unit. It’s a lot.
Beside that, i have been constantly thinking of what i heard in the past about mpegla, their legal fire power, their capacity to run after businesses that are not licensed, hunting them till they pay. Sorry guys, your reputation might even make you feel proud but will not help your business.
Surely people call in also because of such a reputation, but that does not help business relationships.
Personal impression: for the contact itself is that they sound reasonable, flexible, open to discuss, but that’s how they sound, not how they look like when they ask you 5 times in a row in 2 days for your business mailing address… But getting to the point is not that hard, if you know what you are doing and what you need it is simple to get licensed.
I will add some more info in the next days, can’t disclose communication for a mere business fairness but can surely publish common interest information.