Advanced Audio Coding (AAC)

An AAC patent license is needed by manufacturers or developers of end-user encoder and/or decoder products.

Licensee’s end-user products, when sold directly or through distribution to end users, are covered by the license. Licensee’s products that are not end-user products (e.g. components or implementations) are not covered by the license and would require that the party incorporating such a component or implementation into its end-user product obtain a license.

The license encompasses AAC Low Complexity (AAC-LC), High Efficiency AAC (HE-AAC, also sometimes known as aacPlus), MPEG-4 HE-AAC v2, xHE-AAC (Extended HE-AAC), and MPEG-D DRC (Dynamic Range Control). Also included in the license are patents essential to MPEG-4 AAC Scalable, MPEG-4 Low Delay AAC Profile (AAC-LD), MPEG-4 ER AAC ELD (AAC-ELD) and AAC-ELD v2. The license provides comprehensive coverage of those aspects of AAC that are in commercial practice. The License grants licensees the right to use the licensed patents solely for the purpose of practicing these technologies and not for use with any other audio technology.

xHE-AAC (Extended High Efficiency AAC) is the most recent upgrade to the AAC family of audio compression technologies standardized by ISO MPEG.

xHE-AAC is ideally suited for radio broadcasting, streaming, podcasting or any application that must accommodate a variety of audio content types, from purely talk, to voice-over-music or sound-effects, to music-only programming.

This ability to maintain audio quality with mixed content types at extremely low bit rates is why xHE-AAC has been selected as the mandatory audio coding format for Digital Radio Mondiale (DRM) [www.drm.org], the global ITU endorsed digital radio standard designed to work over existing analog radio broadcast infrastructure, from shortwave to the VHF bands.

With stereo bit rates as low as 12 kilobits per second, or 6 kbps for mono content, xHE-AAC enables reliable streaming audio services over 2G networks – for the first time, addressing up to 90% of mobile users in emerging markets. It also increases delivery reliability anywhere in the world over congested mobile networks or when suffering from fallback low-bitrate coverage outside metropolitan areas. The use of xHE-AAC can save significant streaming bandwidth and thus CDN costs for service providers. In addition, xHE-AAC helps consumers overcome concerns about overage charges when using limited data plans for streaming services.

For additional information about xHE-AAC technology, please see the material presented, here.

No. The xHE-AAC patents have been added to the AAC program at no additional cost to Licensees.

No. License fees are due on the sale of encoders and/or decoders only. There are no patent license fees due for the distribution of bit-streams encoded in AAC, whether such bit-streams are broadcast, streamed over a network, or provided on physical media.

The term of the license is five years, and can be renewed for additional five year terms.

It is common for certain jurisdictions to provide tax incentives to companies if they complete the final assembly of a product locally (e.g., “knockdown kits”). Royalties are still due, however, either because the large majority of manufacturing or final use of the product still occurs in a jurisdiction(s) where there is significant patent coverage.

There is an initial fee of $15,000 due upon execution of the license. This fee is a one-time charge and not an annual fee or an annual minimum. Small entities, defined as those with fifteen or fewer employees and with annual gross revenues of less than US $1 million, qualify for a reduced initial fee of $1,000. The initial fee will be waived for existing licensees that renew or update their AAC license.

No. The AAC Patent License offered through Via LA’s program does not cover this obligation for Android OEMs. Manufacturers of Android-based products must obtain their own AAC patent licenses either through the Via LA AAC patent pool or bilaterally with each of the individual patent owner/licensors.

Section five of the Android Compatibility Definition Document (available online) addresses this issue:

”Please note that neither Google nor the Open Handset Alliance make any representation that these codecs are free from third-party patents. Those intending to use this source code in hardware or software products are advised that implementations of this code, including in open source software or shareware, may require patent licenses from the relevant patent holders.”

Yes, PC Software pricing remains available for products that have been approved by Via LA for reporting in this category.

The set of companies granting rights to their essential AAC patents through the AAC patent license agreement is presented here.

A sample of the AAC patent license agreement can be provided in electronic form via email. You can request a sample license by completing the sample request form on the Via LA website.

After your review of the sample agreement, Via LA staff is available to answer any questions you may have. When you are ready to execute the agreement, Via will prepare two hard copies of the AAC Patent License Agreement with your company information added to the cover page and signature page. These copies will be shipped via courier for execution, or if you prefer Via LA can provide the executable agreement in electronic form via e-mail. When both copies are signed and returned to Via LA, they will be countersigned by Via LA and one copy returned to the licensee while the second copy is retained for Via LA’s records. The initial fee (except from existing licensees migrating to the AAC agreement) is due within four weeks of the effective date of the agreement, and as long as the licensee complies with the conditions of the license, the license remains in effect for a five-year (renewable) term.

Licensees must report the sales of licensed products on a quarterly basis, using a secure website. The specific information required in the quarterly reports is simply the product designation (name and/or model number) and the number of units of each product sold in the quarter. For licensees reporting products sold in R2 countries/regions under the Alternative Rate Schedule, the country of sale must also be reported.

A reset means that the per-unit fees are calculated from the quantity one price on a recurring basis. In the case of an annual reset, the royalties are calculated against the number of AAC products sold within a year starting at the quantity one price, regardless of the number of AAC products sold during the previous year. A year does not necessarily begin with the first calendar quarter, but is defined as four consecutive quarters starting with the first quarter for which a licensee reports.

Under the AAC Patent License Agreement, a stereo product is counted as a single unit while a multichannel product is counted as 1.5 units when calculating license fees.

A device is considered a multichannel product if it includes a decoder that receives an AAC signal and decodes that signal into three or more channels of a different (compressed or uncompressed) audio format. A device that includes an encoder which is capable of producing an encoded AAC signal that consists of three or more channels is also considered a multichannel product.

“Channel” here means an audio channel, as in left, right, center, back-left, etc., and not, for example a television broadcast channel. Examples of multichannel products include: a device that produces a six-channel PCM signal at the output stage of a decoder; a device that presents a six-channel analog signal at the back panel of an A/V receiver; or a device which transcodes a 5.1 channel AAC signal into a different (compressed or uncompressed) format.

As an exception to the above, a device that decodes a multichannel AAC signal and only down-mixes to stereo (either during or after decoding), without providing any multichannel output, would not be considered a multichannel product.

Yes, licensees can provide end users with products for a trial period of up to 30-days.

Licensees receive an agreement that has been executed by themselves and by Via LA acting in its capacity as an agent on behalf of the licensors. The agreement grants licensees the right to use the licensed patents for the sole purpose of practicing the AAC Standard as defined in the agreement. There are no additional deliverables (such as source code, compliance bit-streams, or technical support) under the AAC patent licensing program.