AT&T threatens lawsuits against MPEG-4 licensees, including Apple, DivX
San Antonio (TX) - In a report released yesterday, PC Magazine revealed it had learned that in December 2005, legal representatives of the new AT&T Inc. sent letters to several companies that utilize video encoding standards, including Apple, DivX, Nero, and Sonic Solutions, warning them that their use of the MPEG-4 codec may be infringing on its intellectual property rights.
PC Magazine obtained a copy of this letter, other copies of which were also sent to national retailers who sell products with these brands, clearly threatening the manufacturers with lawsuits if they do not enter into a licensing agreement with AT&T. A spokesperson for Nero told the magazine that Nero complied with AT&T's request.
Yesterday's news probably came as a shock to the MPEG Licensing Authority, which is the principal source for video software and hardware firms to license the broad portfolio of patents that are necessary for any program or device to play MPEG videos. AT&T is not a member of this consortium, nor has it given any indication in the past that it is separately entitled to royalties from innovations not covered by the MPEG LA portfolio.
AT&T's threatening letters may be particularly distressing for Apple, whose QuickTime standard is a derivative of MPEG-4 - up until now, it was considered a legal derivative. The extent to AT&T's threats will impact the burgeoning video iPod economy is unknown, except to say that Apple's customers will probably be impacted in some fashion. But also conceivably, anyone who produces and distributes a digital MPEG-4 video - including consumers - may find themselves owing a small fee, just as Web sites that distributed GIF images found themselves owing Unisys several years ago.
It's a very familiar story for many blog authors who have witnessed the entire technology industry's slow degradation into one big intellectual property fracas. In a message entitled "Giant Trolls: Who Owns Your Home Videos?" the IP blog Right to Create commented:
Political author Dave Pell, on his blog Davenetics, tries to characterize AT&T using less hyperbolic language, but can't avoid reaching much the same conclusions:
Finally, a blog about data compression appropriately entitled The Data Compression News Blog, writes:
And suddenly, even this story seems to be headed toward another ironic full circle back to Microsoft.