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VP3 was originally a proprietary video codec developed by On2 Technologies (http://www.on2.com/). It is closely comparable in quality and bitrate to MPEG-4 video codecs.
In September, 2001 it was donated to the public as open source, and On2 disclaimed all rights to it, including their patents on the technology. In 2002, they entered into an agreement with the Xiph.org Foundation to make VP3 the base of a new, free video codec, Ogg Theora. It will operate alongside Ogg Vorbis to provide a set of patent and royalty free open source multimedia codecs. Theora is currently still in alpha stage, as of May 2004.
See also: VP6
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