Unfortunately Steve Jobs may have a point when he says "All video codecs are covered by patents." The CEO of MPEG-LA (the organization that owns the H.264 patents with an assortment of companies including Apple and Microsoft) Larry Horn thinks that virtually every video codec falls under some of their patents. He might be right about that when it comes to VP8, according to a third-year college student named Jason Garrett-Glaser, who works on the open source x264 project (a free software library for encoding video in H.264).
Garrett-Glaser wrote up an in-depth technical analysis of VP8 on the day it was open sourced and gave his thoughts on the issue of patents:
"VP8 is simply way too similar to H.264: a pithy, if slightly inaccurate, description of VP8 would be “H.264 Baseline Profile with a better entropy coder”. Though I am not a lawyer, I simply cannot believe that they will be able to get away with this, especially in today’s overly litigious day and age. Until we get some hard evidence that VP8 is safe, I would be extremely cautious. Since Google is not indemnifying users of VP8 from patent lawsuits, this is even more of a potential problem."
Now a report, which includes an email conversation with Larry Horn, confirms that MPEG-LA is going to assemble a patent pool against VP8. When asked if he was creating a patent pool license for VP8 and WebM, Horn responded:
Larry Horn: "Yes, in view of the marketplace uncertainties regarding patent licensing needs for such technologies, there have been expressions of interest from the market urging us to facilitate formation of licenses that would address the market’s need for a convenient one-stop marketplace alternative to negotiating separate licenses with individual patent holders in accessing essential patent rights for VP8 as well as other codecs, and we are looking into the prospects of doing so." - All Things Digital
Another report got ahold of an email from Steve Jobs, sent at 4:30AM PST (because gods don't sleep :) ), that responded simply with a URL to Garrett-Glaser's post after the emailer asked "What did you make of the recent VP8 announcement?" Of course, it was expected that Apple would be on MPEG-LA's side in this issue (being one of the patent holders).
Google hasn't remained silent. Google product manager Mike Jazayeri said in another report that Google has done "a pretty through analysis of VP8 and On2 Technologies prior to the acquisition and since then, and we are very confident with the technology and that's why we're open sourcing." Thom Holwerda of OS News is confident in Google's due diligence during the On2 acquisition, and he says that this latest threat from MPEG-LA is "The classic fear, uncertainly, and doubt tactic," aimed at stunting adoption. Even if MPEG-LA does have the patents to back up potential litigation, the organization will be up against a portfolio of defensive patents from an army of high-profile tech firms (Google, NVIDIA, AMD, ARM, Qualcomm, and several others) who support VP8 and the WebM initiative.
Another major concern though, is the technical merits of VP8. Although Garrett-Glaser says that VP8 is certainly "better compression-wise" than Ogg Theora, he says the VP8 spec is a mess and "consists largely of C code copy-pasted from the VP8 source code. They aren’t even ready to finalize the bitstream format… With the lack of a real spec, the VP8 software basically is the spec – and with the spec being “final”, any bugs are now set in stone. Such bugs have already been found and Google has rejected fixes… It's not even close to competitive with H.264 Main or High Profile."
To be sure, VP8 fulfills many of the desires that web developers wanted in an open standard - complete (and hopefully, certain) freedom from royalties and better performance than Ogg Theora. However, HTML5 users who want to use a completely royalty-free video codec won't get performance like the current H.264.