![]() However, it seemed that not all parties who claimed to have essential patents for AVC were satisfied with the royalty structure established by MPEG-LA. Shortly thereafter, MPEG-LA released its licensing terms, which contained per-unit royalties and a ceiling on the amount that any one licensee must pay in a year. ![]() The successor codec to MPEG-2, MPEG-4 Advanced Video Coding (AVC), was completed in 2003. The royalty structure that MPEG-LA and the patent owners adopted for MPEG-2 was fairly simple: a one-time flat fee per codec. With over 600 patents from 27 different companies considered to be essential to MPEG-2, MPEG-LA simplified the process of negotiating licensing agreements from each patent owner by anyone wishing to develop products utilizing MPEG-2. The MPEG Licensing Authority (MPEG-LA) was established after the development of the MPEG-2 codec to manage patents essential to the standard and to create a sensible consolidated royalty structure through which intellectual property holders could be compensated. In the United States and in many other countries, this means patents and royalties. For better or for worse, along with these technologies comes the intellectual property of the individuals and organizations that created them. Since the early 90’s, the Moving Picture Expert Group (MPEG) has defined the formats and technologies for video compression that allow all those pixels and frames to be squeezed into smaller and smaller files. Since the dawn of digital video, royalty-bearing codecs have always been the gold standard for much of the distribution and consumption of our favorite TV shows, movies, and other personal and commercial content.
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