Commercial Issues, Digital Rights Management, and Licensing - A Practical Guide to Video and Audio Compression - page 325

Read the licenses on your more recent software carefully to know whether you have
permission to distribute the encoded files you create. On installing Squeeze 4, the licenses
are presented and you are warned that certain codecs must not be used to create distrib-
utable copies of your content without seeking a further license from the encoder manu-
facturer. You may have to shell out some more cash, and that doesn't even count any
clearance fees you will have to pay for your content replication. Such hidden costs will kill
your business model if you don't know about them at the outset.
Newer codecs such as H.264 definitely have terms that could include your activity
within the community of fee-paying users. It will generally come down to whether you are
deriving commercial benefit from broadcasting or selling the content.
The two organizations whose licensing terms you should consult are MPEG LA and
Via Licensing. The MPEGIF organization also has much useful information on this topic.

18.16.1 Multiple Licenses

You may not realize the extent of this licensing complexity. If you use H.264 codecs, you
may be liable to pay a license fee to MPEG LA (the licensing authority) to satisfy the hold-
ers of the patents that they administer in their patent pool. This will not cover you for the
licenses in the patent pool administered by Via Licensing. You must consider both licens-
ing pools independently of one another. Their terms are different and so are their qualify-
ing thresholds. Your administration will have to run two audit trails to ensure both
licenses are covered.

18.16.2 Audio Licensing Is Not Covered by Video Licenses

So you've been diligent and have covered the necessary licensing for your H.264 encoded
video. This allows you to ship a silent movie! What about the audio?
If you want to add a sound track coded using the AAC technology, you come under
another licensing scheme that you must also administer. Via Licensing also handles this
license pool. And licensing AAC does not include the SBR support in AAC plus. You have
to license that separately as well.
So where you thought you might have to pay 50 cents on every copy you ship, you
might find you have to pay $1.50, plus you may also have to employ someone to admin-
ister your licensing process because it is three times as complex as you thought.

18.16.3 It Gets Really Crazy Sometimes

This will get even worse as you deploy more diverse kinds of multimedia. A BIFS-based
presentation containing several kinds of media might fall foul of a half-dozen different

MPEG LA: http://www.mpegla.com/index1.cfm
Via licensing org: http://www.vialicensing.com/
MPEGIF: http://www.mpegif.org/patents/