Codec licensing: Applicable intellectual property rights

By Jeremy Speres on 12 October 2012

The IP rights governing codecs depend to a large extent on the form a codec takes. Generally, codecs take two forms. Firstly, at the most basic level, they are algorithms for the compression and decompression/coding and decoding of data streams. Secondly, a codec can refer to software that is used to implement the codec algorithm, i.e. software used to compress and decompress or code and decode data streams. We use codecs in our everyday lives – one example is the popular MP3 audio codec which was invented and patented by the Fraunhofer Society in Germany and which generates hundreds of millions in licensing fees.

The law of copyright protects the material expression of an idea, for example the code of software, or the words of a book.  It does not protect the underlying idea or invention.  No formalities are required to obtain copyright protection, which arises automatically on generation of the work in question.  Generally, if the material expression of an idea is reproduced without the copyright owner’s permission, the owner’s copyright will be infringed.  Most countries are members of the Berne Convention which extends copyright protection for the same work to all member countries.  The code and other material expressions of a specific software implementation of a codec developed by a licensor would be protected by copyright, but not the underlying algorithm.

Patents on the other hand do, to some extent, protect underlying ideas or inventions.  For example, in the USA one can protect an algorithm for use in specific practical applications, as well as software.  Codec patents therefore tend to protect the algorithm or method employed by a codec and are known as “process” patents.  See for example US Reissue Patent no. 32,580 (available here: which concerns a speech codec and which was the subject of well publicised litigation between AT&T and Microsoft (see here:  Patent protection is obtained by filing a patent application with the relevant patent registry.  The protection offered by a patent is limited geographically to the country/region covered by the patent – there is no such thing as a global patent.

In many countries however, software and mathematical methods (including algorithms) as such are specifically excluded from being patentable inventions, for example in South Africa and the UK.  In South Africa, we have had no case law interpreting the relevant provisions of the Patents Act that exclude “computer programs” from being patentable inventions, however there is a general understanding amongst patent practitioners that our courts will follow the approach of the courts in the United Kingdom and Europe, which generally hold that  software will not be patentable unless it has the potential to cause some “further technical effect” which must go beyond the inherent technical interactions between hardware and software.  The European Patent Office uses the following example to describe the distinction in practice:

A patent application for an Internet auction system was not granted because the system used conventional computer technology and computer networks - which meant it made no inventive technical contribution to the level of existing technology. Such a system may provide business advancement to its users, but that is not the type of advancement required by the EPO…On the flip side, the problem of improving signal strengths between mobile phones is a technical problem, even if it is solved by modifications to the phone software rather than its hardware. Such an invention would obtain a patent, provided that the solution is also novel and inventive (

Despite the fact that software/algorithms as such are excluded from patentability in certain countries, that does not mean that patents for software/algorithms aren’t filed and even granted in such countries.  Furthermore, some countries like South Africa do not conduct substantive examinations of patent applications and simply check that formalities have been complied with before granting a patent.  The European Patent Office for example has granted a patent for the G.723.1 audio codec (see here:  The South Africa patent register also contains a number of granted patents referencing codecs, including one entitled “AUDIO CODEC WITH AGC CONTROLLED BY A VOCODER”.  Of course the validity of these patents and whether they would withstand a cancellation challenge is open to question. 

In light of the above, whether or not you are required in law to obtain a licence to use a codec will therefore depend on the form of the codec you intend using and whether any patent covering the codec has been granted in the specific country in which you intend using the codec.

If you are using a specific software implementation of a codec not developed by yourselves and which is not licensed under an open or free license, then the codec is in all likelihood protected by the law of copyright in the country in question and you would require a copyright licence to use/reproduce the software/implementation.

In addition, if a patent covering that codec has been granted in that specific country, then a patent license would also be required.  Of course it would be open to you to challenge the validity of the patent, but whether or not this makes commercial sense, as opposed to simply paying a license fee, should be considered.

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