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It was a stupid, misguided effort from the beginning. Due to the way patents work, there is no such thing as a patent-free video library. You can't make one. It's impossible. Any non-trivial program will have some kind of infringement and if someone's trolling for "infringements" then they will find them.

They should've worked instead to get proper buy-in from the various parties supporting the current standards to ensure that another GIF incident doesn't happen.

The difference between H.264 and "any video codec ever" that may have an infringement charge brought is that H.264 has a large, well-organized overlord in the form of MPEG-LA. They are actively looking for violations, and threats of suits from them are credible and realistic. "Any non-trivial program" may have an incidental patent infringement claim filed against its authors, but with MPEG-LA and especially a violator as big as Mozilla, you can expect a claim if you don't purchase a license ahead of time.

What I mean more specifically is that a group like MPEG-LA could be lobbied more effectively by Firefox to produce some kind of acceptable licensing model for open-source software and end-users if Firefox had stayed in the game instead of taking their ball and going home.

I think you're confusing MPEG and MPEG-LA, but either way you're mistaken.

MPEG claimed they were going to create royalty-free profiles of H.264 and then went back on that (possibly due to cunning political moves by Microsoft) and now claim to be evaluating a couple of ways forward for royalty-free codecs (a profile of H.264 again, or building on older MPEG 2 tech). It's fairly obvious that it was pressure from (primarily) Google & Mozilla that put RF codecs back on the table for them.

MPEG-LA reduced the uncertainty around their future codec licence payments, and as a result their maximum profits. Again almost certainly due to Google and Mozilla.

They didn't take their ball and go home, they negotiated and competed and as a result won valuable concessions that continue to have value as the next round of codec development begins.

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