by <A href="http://www.pcmag.com/article2/0,1895,1923218,00.asp#" s_oc="null">Bary Alyssa Johnson and Mark Hachman</A itxtvisited="1">
AT&T has begun to name names in its hunt to license its MPEG video compression patents.
AT&T possesses several patents related to video compression, which the company says are an essential component of the MPEG-4 video technology. In a bid to drive its global licensing program, AT&T has targeted Apple Computer, Inc., CyberLink Corp., DivX, Inc., InterVideo, Inc., and Sonic Solutions as unlicensed companies whose products and software utilize the MPEG-4 technology.
AT&T has also contacted national retailers that distribute products from the companies listed above, to let them know that they may be held liable for infringement.
"Each of these companies has been advised that they are offering infringing products, that AT&T can provide proof of infringement, and that AT&T is offering a license under reasonable on non-discriminatory terms," Michael J. Robinson, licensing director of AT&T Intellectual Property Management, wrote in a letter sent in December 2005, and obtained by PC Magazine.
"If your company obtains MPEG-4 products or software from any of these companies, or any other unlicensed company, you are responsible for obtaining a license directly from AT&T or run the risk of distributing infringing products," Robinson wrote. "Damages resulting from the distribution of infringing products can include AT&T's lost profits, royalties and, in the case of willful infringement, treble damages and attorneys fees and costs."
Representatives from the companies named in AT&T's letter, including Apple, said they weren't aware of any notification from AT&T about possible infringement of its patents. "We believe that we have all necessary rights and licenses with respect to all of our products," a spokesman for Sonic Solutions replied. AT&T and MPEG
For its part, AT&T has maintained that its patents underlie the MPEG-4 technology. PC Magazine attempted to contact Robinson for confirmation of the letter, but his office referred him to spokesman Jason Hillary for comment.
"The intellectual property developed by AT&T is a core component of MPEG-4 capability," AT&T's Hillary said, who declined to specifically confirm the letter's contents. "We are actively discussing and working out terms with each company for the licensing of that intellectual property, to enable them to fully take advantage of the technology."
"AT&T has intellectual property in the MPEG-4 area and are actively discussing licensing terms with a number of organizations," Hillary added. "We've announced and finalized agreements with two companies. We are having discussions with other companies but we can not provide details."
In the letter, AT&T said it can provide proof of the infringements, which could result in potential damages including lost profits, royalties and – assuming willful action – treble damages and attorneys' fees.
MPEG-4 technology is used mainly in streaming media applications and is made up of several parts. The "parts" or standards are responsible for regulating multiple multimedia units, including audio, and in this case, video profiles.
The MPEG Licensing Association (MPEG LA) oversees a patent licensing program for MPEG-2 and MPEG-4 technologies, with which AT&T is not affiliated. The separate MPEG standard falls under the auspices of the International Standards Organization (ISO) committee, which requires any company which participates in the committee to submit a letter saying they will license their patents on reasonable non-discriminatory terms, known as a RAND letter. AT&T's letter apparently doesn't cover the MPEG-2 AAC audio patents, which are administered -- along with patents from Dolby, Fraunhofer IIS, and Sony -- by Via Licensing Corp.
The MPEG-LA's MPEG-4 program is based upon patents that are essential to the standard. Licensing is voluntary, and patent holders are responsible for submitting their technology to be evaluated. If it is not deemed crucial for MPEG-4 implementation, it is not included in the MPEG LA's program.
Even if a patent is not essential to the MPEG-4 standard, it could still be important to particular product implementations, said Larry Horn, the president of licensing and businesss development for MPEG LA. Horn said he was not aware whether or not AT&T owned an essential patent.
"There could be many reasons that AT&T is not part of the program, maybe they didn't want to be included," Horn said. "We, as a company, don't make any assurances that all essential patents are included."
All of the companies named in the letter are involved with the editing, processing, or playback of video. With its video-enabled iPod, Apple is a high-profile target.
"This is all standard stuff, the only thing that makes it sexy is the fact that Video iPods [and similar products] are now very popular," said Greg Aharonian, editor of the Internet Patent News Service. "So if any of those companies are using this technology, they may have a problem."
Last year, AT&T announced that Pentax Corp. and Nero are among the latest licensees of its MPEG-4 patent package, allowing the two licensed companies to move ahead unencumbered by patent restrictions.
"Nero7 supports [MPEG-4 Part 2 Visual] and we needed a license in order for us to be able to include it and to sell our products to customers for OEM," a spokesperson for Nero said.
"Nero is a software maker, so they would provide encoding capabilities in their software," Hillary said. "Pentax would provide the ability to play back these types of files in the hardware that they create." Pay-for-patents underlie standards