Are We Violating the MP3 Patent?

I sent another followup question to the Thomson and received a response that they are working on a final answer. Below is my latest question and their response.

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MY 3rd QUESTION
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Gary,

Thanks for chatting with me on the telephone today. Unfortunately, I'm still puzzled on all this. When I read the Macromedia EULA for Flash, the only thing it has about MP3 is as follows,

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Fraunhofer IIS and Thomson Multimedia
MPEG Layer-3 audio compression technology licensed by Fraunhofer IIS and Thomson Multimedia (www.iis.fhg.de/amm/). You cannot use the MP3 compressed audio within the Software for real time or live broadcasts. If you require an MP3 decoder for real time or live broadcasts, you are responsible for obtaining this MP3 technology license.
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From that statement it sounds like the only time I need any additional license from you is when I am doing real time or broadcast use of MP3. It would seem that their license with you includes all other uses of MP3 when used within their Flash player.

Can you please elevate this and get a definitive response on this issue for me? I would be interested in whether a) you believe Macromedia has incorrectly or incompletely stated their users' rights or b) if you interpret their statement to mean their users cannot use MP3 within Flash.

Thanks.


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THE ANSWER I RECEIVED
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I am working on getting a final answer. Will let you know ASAP.

Cheers, gj

OK. I guess I got their best and final response! And it is not one I like! :(

The bottom line is they believe you need to buy a license from them if you use MP3 audio in Flash and your company has revenues over $100,000. And, if you are working for a client, and they have revenues over $100,000 then they too must pay for a license.

I think this is absurd!


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THE FOLLOW-UP ANSWER I RECEIVED from MY 3rd Question
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I have reviewed this internally and my earlier assessment is correct. Any commercial use of content requires a separate license if the provider has annual revenues of $100,000.00 or more.

You could read it from their notice below, since a website's flash activity is "real time" though I don't know how it could be anything else.

Cheers, gj

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We've found a good local patent/ip lawyer who is willing to look at the mp3/flash patent issues for us. He's also agreed to allow us to publish his answers "interview style"! I'm compiling a list of questions for him now. I'll reply here when we have answers with a link to the "interview". Stay tuned...

FYI,

This issue has been picked up over at ActionScript.com.

http://www.actionscript.com/archives/00000579.html

back in October Northcode was going to "interview" a patent/ip lawyer about the mp3/flash patent issues discussed in this thread.

anything new on this?

I collected all the information but the lawyer we spoke to is actually very good and thus quite busy. I'm sure it's no secret that the law talking guys always follow the $ signs. I'll bring this up with him again and see if he can squeeze in some time for us. In fact, I know he lectures so I'll see if he'd be willing to prepare something for a talk at our local MMUG meeting.

I came down to this for me (I'm not a lawyer and I'm only guessing and certainly not giving advice, your milage may vary, etc.). The eula states: You cannot use the MP3 compressed audio within the Software for real time or live broadcasts.

So what is considered "real time or live broadcasts"?

My own feeling which counts for nothing is that real time and live broadcasts are when you are using mp3 encoding on the fly. For instance, when you are using Flash Communcation Server to do encoding and play of something on the fly, and I thought FCS came with a license for that.

However if you ask at mp3licensing.com you get the answer that MM provides a warning notice on their software that states:
"Supply of this product does not convey a license nor imply any right to distribute content created with this product in revenue-generating broadcast systems (terrestrial, satellite, cable and/or other distribution channels), streaming applications (via Internet, intranets and/or other networks), other content distribution systems (pay-audio or audio-on-demand applications and the like) or on physical media (compact discs, digital versatile discs, semiconductor chips, hard drives, memory cards and the like). An independent license for such use is required."

Perhaps the license MM got only allows them to distribute software that is encoding/decoding MP3, but doesn't cover the customer, hense the warning: "Supply of this product does not convey a license".

The "You cannot use the MP3 compressed audio within the Software for real time or live broadcasts." starts to stink like a red herring in light of the previous statement. (Maybe unintentional but I think it throws most folks to MM's advantage) It is only further clarifying what you don't have for a license but makes it sound like anything other than real time and live broadcasts and you are covered by MM's own license.

I have sent two emails to MM about this a week ago and have not received a reply yet.

My impression is that this whole thing is much like GIF. It was allowed to be distributed like crazy without anyone saying anything and in the end you are beholding to the patent owner's whim. They ride a line between allowing MP3's to become popular and distributed everywhere so you almost have to use it as a standard and jumping in to get their money out of it where they see a fair amount of cash changing hands, like over 100,000 I guess in this case.

The one thing we can do as an organization is visibly promote using an alternative to mp3 and make it clear why. That won't make MP3 free, they will still want their money like anyone else, but it might make the licensing a little more reasonable, like a set reasonably affordable fee rather than a large percentage.

Did anyone get any clarification from Macromedia? Does the license they bought allow developers to decode MP3's on the client side wit Flash and encode/decode with Flash Communication server on the server side? That might help to have a clear statement from them. (I tried but haven't got an answer so far).

Quote:

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Originally posted by mrRooDog
Did anyone get any clarification from Macromedia? Does the license they bought allow developers to decode MP3's on the client side wit Flash and encode/decode with Flash Communication server on the server side? That might help to have a clear statement from them. (I tried but haven't got an answer so far).

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I've never been able to get anyone to comment on it. Northcode offered help in October last year but nothing came of that. our company decided to simply use WAV since most of our work in this area is for CD distribution. We just built a shell that starts/stops the WAV based on commands from the SWF. It is kinda kludgy but the end product is good and we don't have the exposure of violating the MP3 patent!