On2 Asks DOJ to Review MPEG LA Patents

By Clint Boulton

It’s not enough that the MPEG LA has faced upheaval over its proposed licensing terms for the MPEG-4 standard: now the body of patent
holders is being lambasted by a company claiming that the group is forging a monopoly on multimedia practices.

In a letter addressed to Charles James, assistant attorney general of the U.S. Department of Justice, video compression company On2 Technologies’ President and CEO Douglas A. McIntyre railed against the MPEG LA, asking that the consortium’s license be terminated on the grounds that it has
crafted a monopoly in the digital video broadcast market.

On2 makes video compression software like MPEG-4 and the New York-based firm’s CEO has been vocal about the body’s practices. For example, McIntyre fired off a letter to the Internet Streaming Media Association (ISMA), which works for MPEG-4 interoperability, not
long after he saw the MPEG LA’s licensing terms, which caused an uproar in the digital media sector.

McIntyre Thursday again raised the issue of licensing terms, but also attacked the 18-member group’s history of practice. He
acknowledged that although MPEG LA won approval of MPEG-2 in 1997 — the technology behind DVDs — the format is more of a pastiche
of video compression technologies than it is a standard. He noted that other players besides MPEG LA make similar technology,
including Microsoft Windows Media, RealNetworks and his own On2. It should be noted that Microsoft is an MPEG LA member.

MicIntyre wrote: “MPEG LA has, in essence, established a monopoly in the digital broadcast video compression market through the
Department’s 1997 approval of the MPEG-2 patent pool. It is now attempting to use this monopoly to ram unreasonable fees down the
throats of consumers and businesses that use the Internet or Internet related protocols for the delivery of video.”

The monopoly in question, according to McIntyre, is based on his claim that MPEG LA patent holders, through their ownership of
MPEG-2, now hold at least a 95 percent market share in the digital television video compression market. He said the same practice is
being applied to MPEG-4 licensing terms.

Larry Horn, vice president of licensing and business development for MPEG LA, told InternetNews.com that “baseless” wasn’t the
strongest word he could think of to describe the accusation, but it would do.

“From what I’ve seen it’s totally false,” Horn said, speaking from his Chevy Chase, Md. office. “Where to begin to refute something
like this? Frankly, I think this is a transparent attempt to promote his own company. [McIntyre] seems to be using the MPEG-4 debate
to sell his own products. There’s no monopoly here. We’re offering a license for the convenience of the marketplace. We’re not the
only way to get the technology.”

An On2 spokesman, Eddie Gillespie, said On2 does not charge a fee for its codec, unlike MPEG LA.

These kinds of “patent pools are illegal in the US, and that’s what this amounts to. They’re getting towards a point where it’s going to become a monopoly.”

Erin Joyce contributed to this story

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