In a position paper sent to the US Justice Department, the 50 State Attorneys General and selected Congressional House and Senate committees, New York-based On2 Technologies, has challenged the right of MPEG-4 to exist as a legitimate patent pool.
MPEG is the Moving Picture Experts Group and it develops compression standards for audio and video technologies under the auspices of the International Organisation for Standardisation (ISO).
On2, which markets a competing video standard, claims in the paper that the Justice Department's approval for a previous standard’s patent pooling (MPEG-2) does not and should not extend to MPEG-4. The best known standard is a variation of MPEG-1, called “MPEG-1, Audio Layer 3”, but better known by its abbreviation, MP3.
MPEG-4 is aiming to become the international standard for interactive video compression in three fields: digital television, interactive graphics applications, and interactive multimedia, i.e. the internet.
The controversy over MPEG-4 focuses on the plans of the MPEG-2 licensing body, MPEG LA, which represents 18 patent holders. If MPEG LA wins approval from the Department of Justice for its new patent pool, licensees such as media companies would be required to pay a proposed 25 cents for each MPEG-4 product and 2 cents per hour of encoded material.
“The MPEG LA patent holders are using a Trojan Horse manoeuvre by trying to extend an approval of one patent pool (MPEG-2) to cover another pool of different patents (MPEG-4) held by a different group of patent holders for a related but very different technology for which no lawful patent pool should exist,” states the paper from On2.
The paper further contends that MPEG-4 does not have the capacity to advance video compression by creating a “standard”.
Peter Berger, patent counsel to On2, said: “It would be contrary to existing antitrust and prior Justice Department standards to automatically shift approval for an existing approved patent pool (MPEG-2) to a different group of patents (MPEG-4).”