Lifting implementation of the discrete wavelet transform applied along motion trajectories has recently gained a lot of attention in video community as strong candidates to incoming scalable video coders. In this paper, we generalize the coding scheme for classical lifting-based motion compensation temporal filtering and permit codec to adaptively choose between original reference frames and new fading-compensated reference frames to predict residuals while maintaining the invertibility of the inter-frame transform. Experimental results show that the proposed algorithm not only significantly improves subjective visual quality of the temporal low-pass frames but also have the 0.15~0.3db gain in PSNR performance compared with the normal (5, 3) lifting schemes. � 1
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