Swimming with Sharks in the Patent Pool

In any case where a company owns patents that are included as part of a standard, that company collects royalty payments on its part of the standard's licensing fees. For example, every time you buy a compact disk or the hardware to play one, you can be sure that the manufacturer paid money to Philips and Sony, via the patent pool and the license of the technology. In theory, the manufacturer recoups the license fee from the sale of the media or the hardware.

Clearly Apple Computer will benefit from the widespread adoption of MPEG-4, as the proposed specification is based on its QuickTime-4 technology. But Apple is far from alone. Numerous developers of compression technology, multimedia formats and other technologies are also in the patent mix. While the list of technologies included in MPEG-4 has not been finalized, history can give us a sense of scale.

"MPEG-2 has more than 300 patents associated with it and more are possible," says Michael Casey, president of streaming server developer GMV Networks and a member of the MPEG-4 Industry Forum board.

MPEG-4 will clearly outstrip MPEG-2 in the number of patents involved. And that increases the potential for complexity in licensing. "MPEG-4 hopes to present the right to license and provide these technologies on a fair and reasonable basis. As an independent software vendor we want to make darn certain that our products are licensed properly and look down the path for upcoming versions," says Casey.

Because streaming media, as it exists today, runs off freely distributed copies of player software, it's no surprise that software developers have some concerns about paying royalty fees. At even a penny per player, there could be a pretty big price to be paid for buying into MPEG-4.

"If you are a patent holder, it does you no good to have MPEG-4 fail. You can't have exorbitant prices associated with free players," says Tim Schaaff, of Apple's QuickTime engineering team, who also serves on the M4IF board. "I think we'll be able to develop licenses. We're pretty confident that the industry will be sensitive to that concern."

The MPEG-4 Profiler

One mechanism the M4IF will employ to ease the pain of licensing is the creation of profiles. Since the scope of MPEG-4 is so broad, the standard will provide for several approved implementations.

"Profiles are conformance points implemented so that a vendor would not have to pay for all the functionality of MPEG-4," says Casey. "It's a kind of ‘pay-per-implementation' scheme, so there'll be a simple profile for scalable video and audio only."

This simple profile will ensure a base level of interoperability, according to Jim Brailean, president, chief technology officer and co-founder of wireless solutions provider PacketVideo. "So profiles in MPEG-4 are like concentric circles with the simple profile in the center," he says. "No matter what [player or device] you're in, you can always communicate over the simple profile. They overlap and communicate quite a bit."

Such a profile would leave out some of the more exotic aspects of MPEG-4, like the BIFFS (MPEG-4's interactive technologies), Java and 2-D/3-D animation technologies. But it would be very affordable to license.

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