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Yes, a completely open-sourced, royalty free and patent-free WebM is "proprietary".

Patent-laden format for which you have to pay multi-million royalties is "industry standard".

It is not "patent-free". If it was I am sure Google would indemnify users from patent infringement lawsuits.

Fact is that at least 12 organisations have already said that WebM infringes on their patents.

Is there any open-source, royalty-free technology you can think of that comes with a legal indemnity against patent lawsuits?

Many providers of Linux and Java products indemnify their users e.g. RedHat, Novell.

s/users/customers/ ?