Section 1 – Decoders and Encoders
Decoders sold to end users (including fully functioning components for PCs)
| Volume (per decoder / annual reset) | Per Decoder Fee |
| For the first 1 to 50,000 decoders | No Royalty* |
| For decoders 50,001 and more | $ 0.25** |
| Annual cap per Legal Entity after December 31, 2010 | $1.25M |
| * Available to one legal entity in an affiliated group. | |
| ** A licensee may elect to pay US $0.24 for every product whether or not manufactured or sold in a patent country without reporting country of manufacture and country of sale | |
Encoders sold to end users (including fully functioning components for PCs)
| Volume (per encoder / annual reset) | Per Encoder Fee |
| For the first 1 to 50,000 encoders | No Royalty* |
| For encoders 50,001 and more | $ 0.25** |
| Annual cap per Legal Entity after December 31, 2010 | $1.25M |
| * Available to one legal entity in an affiliated group. | |
| ** A licensee may elect to pay US $0.24 for every product whether or not manufactured or sold in a patent country without reporting country of manufacture and country of sale | |
Enterprise cap: $3M per year prior to 2009; $3.3M in 2009; $3.6M in 2010; $3.75M after December 31, 2010
Section 2 – Participation Fees
Where End User pays for MPEG-4 Video
Subscription (Not Title-by-Title)
| Volume (per subscription) | Annual Fee |
| For the first 1 to 100,000 subscriptions | No Royalty |
| For subscription 100,001 to 250,000 | $ 25,000 |
| For subscription 250,001 to 500,000 | $ 50,000 |
| For subscription 500,001 to 1,000,000 | $ 75,000 |
| For subscription 1,000,001 to 5,000,000 | $ 100,000 |
| For subscription 5,000,001 to 25,000,000 | $ 200,000 |
| For subscription 25,000,001 and more | $ 300,000 |
Title-by-Title
| Length (per title) | Fee |
| 12 minutes or less | No Royalty |
| Longer than 12 minutes | Lower of (a) 2% of remuneration paid in licensee’s first Arm’s-Length Sale or (b) $0.02 per title. |
Where remuneration is from other sources
| Description | Fee |
| Free Internet Broadcast (not Title-by-Title, not Subscription) | No royalty through December 31, 2023 |
| Free Television (not Title-by-Title, Subscription or Free Internet Broadcast) | One-time fee of $2,500 per transmission encoder |
- Enterprise cap (applies cumulatively across the participation fee categories in this Section 2):
- $3M per year prior to 2009; $3.3M in 2009; $3.6M in 2010; $3.75M after December 31, 2010
Licensee could elect a combined $7.5M cap, which applies to the encoder and decoder cap and the participation fees cap noted above.
The actual License agreement provides the only definitive and reliable statement of license terms.
Effective date: January 1, 2000
Back royalty from January 1, 2004