Can You Legally Use H.264 for Professional Video?

In the context of the Flash - HTML5 controversy, Jan Ozer has been comparing the Ogg and h.264 codecs recently -- see Google Closes On2 acquision - Better check your wallet and Ogg, MPEG-LA and Submarine Patents -- and warns against the cost of encoding and storage for multiple codecs.

[Update: ReadWriteWeb summarizes some of Ozer's benchmarks in Does HTML5 Really Beat Flash? The Surprising Results of New Tests]

Now, Larry Jordan and Philip Hodgetts have dealt with a related issue -- Can You Legally Use H.264 for Professional Video?

You can listen to their discussion on Digital Production Buzz, of March 4 2010, plus Larry has provided a summary on his blog:

"Note: This is not legal advice - for that, see your lawyer. However, this is our understanding of the problem, with a link to learn more. A license fee for H.264 use is probably required for professional use if ALL the following conditions are all met:

1. The video program must be encoded using the H.264 codec. (Other codecs are not covered by this license agreement.)
2. You sell the program. (If no money changes hands, no license fee is required.)
3. The program is sold to the ultimate end user. (If you are compressing files for use by someone else, say, digital dailies, no license fee is due.)
4. These programs must be in excess of 12 minutes. (Shorter programs do not require a license fee.)

If required, the license fee is very small: $0.02 per disc sold or about 2% of gross revenue, whichever is smaller."