[M4IF Discuss] Use Fees (Was FW: MPEG-4 Audio Licensing begins)

[Larry Horn]

Hello, Mikael, Holger and Rob,
Under the MPEG-4 Systems License the royalties for the right to make, sell and use MPEG-4 Systems data decoders and MPEG-4 Systems data encoders are included (with one exception) in the royalties paid by the product manufacturers ($0.15 per decoder subject to a $100,000 annual cap per legal entity and $0.25 per encoder subject to a $100,000 annual cap per legal entity).  The exception is for the MPEG-4 Systems Stored Data Encoder which refers specifically to the composition of MPEG-4 Systems Data which is paid for on a title by title basis and which is either (i) stored, replicated or recorded onto one or more physical media or (ii)  Transmitted to an End User in a form which allows the End User, either by affirmative act of the Licensee or otherwise to view, hear or use such data (a) at least 20 times and (b) for a period of at least 365 Days from the date of Transmission.  In that case, the royalties to make, sell and use (Sections 2.10 and 3.1.10 of the License) (a) fall upon the Transmitter of MPEG-4 Stored Data and/or encoder and/or replicator of MPEG-4 Stored Data onto packaged media and (b) are based upon the normal playing time of the Stored Data disc or Stored Data electronic transmission as it is intended to be viewed or used by an End User.  Therefore, in the limited case where an MPEG-4 Systems Stored Data Encoder is used to create a loop of the kind you mention, the royalty under the MPEG-4 Systems License would be based upon the normal playing time of the Stored Data disc or Stored Data electronic transmission.
I hope this is helpful.
Best regards,
Larry Horn
-----Original Message-----
From: Rob Koenen (M4IF) [mailto:rob.koenen   m4if.org]
Sent: Monday, June 16, 2023 2:28 PM
To: 'Mikael Bourges-Sevenier'; 'Holger Grahn - Bitmanagement'; 'M4IF Discussion List'
Subject: [M4IF Discuss] Use Fees (Was FW: MPEG-4 Audio Licensing begins)
Those are good questions indeed. Note that the use fee is *much* more limited in the case of Systems than in the case of Visual, and in many cases it doesn't apply - such as your downloading example (I *believe* - MPEG LA to confirm or refute)
Interestingly MPEG-4 Systems can be used to loop an MPEG-4 Visual clip - and the same question *is* pertinent. 
I have asked similar questions in the past, such as what with two videos that are meant to run in parallel in two windows, but can also run sequentially. 
Holger's question seems to contain a misunderstanding on the use fee, namely that it applies to encoding. As I understand the license, this is not the case. Rather, the use fee applies to the content being transmitted, served, packaged, etc. Again, MPEG LA to confirm or correct.
Rob
-----Original Message-----
From: Mikael Bourges-Sevenier [mailto:mikael   sevenier.com] 
Sent: Monday, June 16, 2023 11:19
To: rob.koenen   m4if.org; 'Holger Grahn - Bitmanagement'; 'M4IF Discussion List'
Subject: RE: [M4IF Discuss] FW: MPEG-4 Audio Licensing begins
Rob,
even if we can't answer for the licensing fees, Holger asks an important question (that was asked since early last year) regarding Systems licensing.