On2 TrueMotion VP3 is a (royalty-free) lossy video compression format and video codec. It is an incarnation of the TrueMotion video codec, a series of video codecs developed by On2 Technologies.
There is no formal specification for the VP3 bitstream format beyond the VP3 source code published by On2 Technologies. In 2003, Mike Melanson created an incomplete description of the VP3 bitstream format and decoding process at a higher level than source code, with some help from On2 and the Xiph.Org Foundation.
VP3 was originally a proprietary and patented video codec. On2 TrueMotion VP3.1 was introduced in May 2000 followed three months later by the VP3.2 release. Later that year, On2 announced VP3 plugins for QuickTime and RealPlayer. In May 2001, On2 released the beta version of its new VP4 proprietary codec. In June 2001, On2 also released a VP3 codec implementation for Microsoft Windows where the encoder was priced at $39.95 for personal use, and $2,995 for limited commercial use. In August 2001, On2 Technologies announced that they would be releasing an open source version of their VP3.2 video compression algorithm. In September 2001 they published the source code and open source license for VP3.2 video compression algorithm at www.vp3.com. The VP3.2 Public License 0.1 granted the right to modify the source code only if the resulting larger work continued to support playback of VP3.2 data.
In September, 2001 it was donated to the public as open source, and On2 irrevocably disclaimed all rights to it, granting a royalty-free license grant for any patent claims it might have over the software and any derivatives, allowing anyone to use any VP3-derived codec for any purpose. In March 2002, On2 altered licensing terms required to download the source code for VP3 to LGPL.