Google may face legal challenges if it open-sources VP8 codec

Last February, at the time Google completed its purchase of On2 Technologies, the video technology patent holder and maker of the VPx series of video codecs, the Free Software Foundation posted an open letter urging Google to release the latest version, VP8, to the open source community. Though Google has been pretty vocal since then about what it has perceived as the bright prospects for On2 under its wing, the volume was turned down to low on Tuesday, immediately after the digital television news service NewTeeVee cited anonymous sources as saying Google intends to do just as FSF asked.

Google declined official comment on the story to Betanews, but the tone of the spokesperson's declination speaks volumes, especially from this characteristically forthcoming company: "We're excited to be working with the On2 team to continue to improve the video experience on the Web, but we have nothing to announce at this time."

Theoretically, opening up the VP8 codec to the community would enable not only Google but other browser manufacturers, including Mozilla and Opera, to include the codec inside their browsers rather than as add-ons, or forcing users to download add-ons from other sources. Such a development could enable the originally intended use of the <VIDEO> element in HTML 5: a way for individuals to freely share Web video with some assurance that its viewers will be able to see and hear it.

Based on the information Betanews has already been receiving since last August, when the On2 buyout deal was first announced, it appears possible, at the very least, that if Google were to attempt to release a version of On2's VP8 codec under an open source license, rights holders and patent owners could mount a legal challenge. Although On2 is a patent holder for three principal video compression technologies, all of which were intentionally presented as alternatives to other proprietary technologies such as H.264, codecs are developed around several bedrock technologies. Companies that either have claims to those technologies, or at least believe they do, could very well file suit if they believe Google was never licensed to give away methodologies they contend they have created, and thus own.

Today, Betanews asked a video technology business source whether our theory held water -- whether technology owners could legally challenge Google, or other users, if it attempts to offer a free license for technology without the owners' consent or license. The source replied affirmatively. While Google may very well own rights to a proprietary version of VP8 for its own sale and licensing purposes, outside of On2's own patents, if Google and other users are not licensed under applicable patents, the "patent-free" state of that codec could be challenged in court, Betanews was told.

The key to the viability of whatever move Google makes, Betanews research has determined and our source is confirming, is the nature of the license under which the codec is offered. Rather than an open source license, which entitles users to also acquire the source code, Google may instead offer the codec royalty-free. You could use it, but you couldn't take it apart. Also last February, the licensing body for H.264 and AVC, MPEG LA, pledged to extend the term of free licensing to 2015 to individuals who used H.264 codecs for which royalties were already paid, for producing freely distributed Internet videos. That move could potentially set an example for Google to do something similar, providing free Web users with a way to use VP8 in a manner that rights holders may not object to.

But there's already historical precedent for a company attempting to offer a royalty-free license for a codec whose underlying technologies it didn't completely own. In 2005, Microsoft offered its WMV9 technologies as the royalty-free standard VC-1. As Microsoft soon discovered, WMV9 was not "patent-free" outside of Microsoft, and its underlying technologies were not royalty-free either. Today, Microsoft's service agreement on VC-1 includes a notice saying, among other things, that AVC -- one of the bedrock encoding technologies claimed by other rights holders -- may be used in the VC-1 codec, under a license granted to Microsoft by MPEG LA. That license covers Microsoft when it, in turn, licenses the use of VC-1's three essential encoding technologies, for non-commercial purposes.

"The software may include H.264/MPEG-4 AVC and/or VC-1 decoding technology," the agreement reads, prior to the addition of a paragraph the agreement itself says MPEG LA requires.

In an e-mail interview with StreamingMedia.com last February, MPEG LA CEO Larry Horn explained why such clauses continue to exist in license agreements. The newly extended H.264 agreement, for example, charges royalties for all deployments of H.264, but refrains from charging royalties for its free use on the Internet.

"Virtually all codecs are based on patented technology, and many of the essential patents may be the same as those that are essential to AVC/H.264," Horn told reporter Jan Ozer. "Therefore, users should be aware that a license and payment of applicable royalties is likely required to use these technologies developed by others, too. MPEG LA would consider offering additional licenses that would make these rights conveniently available to the market under a single license as an alternative to negotiating separate licenses with individual patent holders."

Again that month, the principal developer of the free x264 encoder for H.264 video, Jason Garrett-Glaser, reminded readers of his own blog of the history of Microsoft's attempt to offer a royalty-free codec: "A few years ago, Microsoft re-released the proprietary WMV9 as the open VC-1, which they claimed to be royalty-free. Only months later, dozens of companies had come out of the woodwork claiming patents on VC-1. Within a year, a VC-1 licensing company was set up, and the 'patent-free' was no more. Any assumption that VP8 is completely free of patents is likely a bit premature. Even if this does not immediately happen, many companies will not want to blindly include VP8 decoders in their software until they are confident that it isn't infringing. Theora has been around for six years and there are still many companies (notably Nokia and Apple) who still refuse to include it! Of course this attitude may seem absurd, but one must understand who one is marketing to. One cannot get rid of businesspeople scared of patents by ignoring them."

Technically, a new "licensing company" was not set up, though Microsoft's licensing arrangement did give users the impression that one sprung up overnight. But even with all that, Garrett-Glaser went on, there may be one completely unexpected reason why a Google attempt to offer VP8 under an open source license may fail miserably: You might not want it even if it is free.

"VP8 is proprietary, and thus even if opened, would still have many of the problems of a proprietary format. There may be bugs in the format that were never uncovered because only one implementation was ever written (see RealVideo for an atrocious example of this)," he wrote. "And given the quality of On2's source releases in the past, I don't have much hope for the actual source code of VP8; it will likely have to be completely rewritten to get a top-quality free software implementation."