[Originally a comment on hacker news on 29th May]
H.264 / MPEG4 part 10 / AVC
Yes it is patented which is a definite disadvantage compared with a theoretical[4] patent free codec but it has some real advantages.
1) The standard is controlled and defined by a collective industry group under the auspices of ISO. [1]
2) Most of the major players in video technology at the time took part in the standardisation so are committed to FRAND patent licensing terms. [2]
3) In almost all cases and commercial business models (that do not involve Free software) the MPEG-LA H.264 patent license is really very reasonable and unlikely to cause problems to an otherwise healthy business. Note that the license Google has to the MPEG-LA pool of patents while free is NOT compatible with Free software.
4) Any companies not in the MPEG-LA pool that popped up now with demands really would trolls in the original sense that they have sat under the bridge for a long time waiting for a juicy opportunity rather than being upfront earlier. I don't think that this would help them in a legal case although there is no guarantee that they don't exist. [3]
5) H.264 is really quite good although the latest codecs are showing what can be done with further development and processing power.
6) H.264 decoding (and often encoding) is cooked into a massive amount of existing and deployed devices in ways that cannot be adapted to VP8/VP9 by a software update.
For now H.264 is the no brainer option for any commercial system although multi codec support may be worthwhile in some cases. If you want patent free I recommend MPEG1 as I believe any patents on it should now be expired or at least expiring very soon if they were granted a long time after filing. I'm glad that Firefox has backed down and will now use the OS codecs to allow playback of H.264.
[1] The OOXML case shows that this isn't foolproof but in my view it is a better option than the standard being controlled by a single company even if the controlling company publishes the source code. This applied to Microsoft when they offered VC-1 as a free alternative to H.264 (there is now an MPEG-LA pool) and to Google now with VP8 and VP9 now. Google is the new Microsoft and has fully learnt the lessons of "Embrace, extend and extinguish".
[2] Not Free software compatible but better than nothing. And even Google's license to the VP8 patents from the MPEG-LA pool does not seem to grant Free software compatible rights.
[3] There is a greater risk of people popping up with claims against VP8 or VP9 as they are newer and less prominent. The MPEG-LA's call for a pool of patents has helped draw out those patent owners and many have joined the pool and reached terms with Google (although Nokia and maybe others haven't.
[4] Realistically for patent free greater than 20 years old is the answer so it probably needs to be MPEG1.