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EXHIBIT 4.a(1)
MPEG-2 PATENT PORTFOLIO LICENSE
This Agreement is made this 29th day of July, 1999, by and between MPEG LA,
L.L.C., a limited liability company of Delaware having a principal place of
business in Denver, Colorado, U.S.A. (hereinafter "Licensing Administrator");
and Pioneer Corporation, having a principal place of business at 4-1, Meguro
1-chome, Meguro-ku, Tokyo, 153 Japan (hereinafter "Licensee").
WHEREAS, ISO/IEC JTC 1 and The International Telecommunications Union have
jointly adopted an international standard relating to video data compression and
data transport, formally known as ISO/IEC 13818-1 and 13818-2, and referred to
in this Agreement as the "MPEG-2 Standard" (as more fully defined herein below);
WHEREAS, The Trustees of Columbia University in the City of New York, a
not-for-profit corporation of New York, U.S.A., having a principal place of
business in New York City, New York, U.S.A.; France Telecom, societe anonyme, a
corporation of France, having a principal place of business in Issy les
Moulineaux, France; Fujitsu Limited, a corporation of Japan, having a principal
place of business in Kawasaki, Japan; General Instrument Corporation, a
corporation of Delaware, U.S.A., having a principal place of business in
Horsham, Pennsylvania, U.S.A.; KDD Corporation, a corporation of Japan, having a
principal place of business in Tokyo, Japan; Koninklijke Philips Electronics
N.V. ("PENV"), a corporation of The Netherlands, having a principal place of
business in Eindhoven, The Netherlands, and U.S. Philips Corporation ("USPC"), a
corporation of Delaware, U.S.A., having a principal place of business in
Tarrytown, N.Y., USA (PENV and USPC being hereinafter referred to, individually
or collectively, as "Philips"); Matsushita Electric Industrial Co., Ltd., a
corporation of Japan, having a principal place of business in Osaka, Japan;
Mitsubishi Electric Corporation, a corporation of Japan, having a principal
place of business in Tokyo, Japan; Nippon Telegraph and Telephone Corporation, a
corporation of Japan, having a principal place of business in Tokyo, Japan;
Samsung Electronics Co., Ltd., a corporation of Korea, having a principal place
of business in Seoul, Korea; Scientific-Atlanta, Inc., a corporation of Georgia,
U.S.A., having a principal place of business in Norcross, Georgia, U.S.A.; Sony
Corporation, a corporation of Japan, having a principal place of business in
Tokyo, Japan; Toshiba Corporation, a corporation of Japan, having a principal
place of business in Tokyo, Japan; and Victor Company of Japan, Limited, a
corporation of Japan, having a principal place of business in Yokohama, Japan
(hereinafter collectively the "Licensors" or individually "Licensor," as more
fully defined in this Agreement), each own and have the right to license, or
have the right to sublicense one or more patents, utility models and/or allowed
patent or utility model applications published for opposition which claim
apparatus and/or methods necessary for compliance with the MPEG-2 Standard
(hereinafter referred to as "MPEG-2 Essential Patent(s)");
WHEREAS, each Licensor believes that the MPEG-2 Standard represents a
significant advance in the field of digital video data compression for
transmission and storage, which will make available innovative new products and
services to the public, and for this reason desires to encourage
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widespread adoption of the MPEG-2 Standard by video product and video service
industries throughout the world;
WHEREAS, each Licensor has signed an ISO undertaking to make available licenses
and/or sublicenses under any and all MPEG-2 Essential Patents licensable or
sublicensable by the Licensor to any individual, company or other entity
desiring such a license and/or sublicense on fair, reasonable and
nondiscriminatory terms and conditions;
WHEREAS, each Licensor has granted the Licensing Administrator a worldwide,
nonexclusive license and/or sublicense under all MPEG-2 Essential Patents
licensable or sublicensable by the Licensor to allow the Licensing
Administrator to grant worldwide, non-exclusive sublicenses under all such
MPEG-2 Essential Patent(s) under the terms hereof;
WHEREAS, the Licensors desire to make available through the Licensing
Administrator, license rights under their respective MPEG-2 Essential Patents in
a single sublicense for the convenience of any individual, company or other
entity desirous of acquiring such rights, thereby avoiding the need of such
individual, company or other entity to obtain a separate license from each of
the Licensors under its MPEG-2 Essential Patent(s);
WHEREAS, the Licensing Administrator desires to grant MPEG-2 Patent Portfolio
Licenses to all individuals, companies and other entities desiring such a
license under the terms and conditions set forth herein;
WHEREAS, nothing in this Agreement precludes the respective Licensors from
licensing or sublicensing rights under individual MPEG-2 Essential Patent(s) to
make, use, sell, or offer to sell products or processes including but not
limited to the rights licensed in the MPEG-2 Patent Portfolio License; and
WHEREAS, Licensee understands that this MPEG-2 Patent Portfolio License is
offered for the convenience of Licensee and that Licensee is free to contact
any Licensor to negotiate a license for any patent offered herein on terms and
conditions different from those set forth herein which may be mutually
acceptable to such Licensee and Licensor;
WHEREAS, Licensee desires for its own convenience to obtain rights under the
MPEG-2 Essential Patent(s) of all the Licensors in a single sublicense from the
Licensing Administrator under the terms hereof.
NOW, THEREFORE, the Licensing Administrator AND Licensee AGREE AS FOLLOWS:
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0. EFFECTIVE DATE
0.1 This License Agreement shall be deemed effective as of
January 1, 2000.
1. DEFINITIONS
The definitions set forth in this Article shall apply to the following
terms when used with initial capital letters in this Agreement, its
attachments, and amendments hereto.
1.1 Affiliate - shall mean a corporation, company, or other entity which
now or hereinafter, directly or indirectly, controls, is controlled by
or is under common control with a party. The term "control" as used in
this Section 1.1 shall mean ownership of more than 50% of the
outstanding shares representing the right to vote for directors or
other managing officers of such corporation, company or other entity,
or for a corporation, company or other entity which does not have
outstanding shares, more than 50% of the ownership interest
representing the right to make decisions for such corporation, company
or other entity; provided, however, such corporation, company or other
entity shall be deemed an Affiliate only so long as such "control"
exists.
1.2 Agreement - shall mean this sublicense between the Licensing
Administrator and Licensee, including exhibits, attachments,
amendments and modifications hereto.
1.3 Channel(Channels) - shall mean a single path for transmitting
signals, including by way of example and without limitation, a path
which is separated from another path by frequency division or time
division.
1.4 Confidential Information - shall mean any information given to the
Licensing Administrator pursuant to Article 5 of this Agreement which
is designated "confidential" by Licensee.
1.5 Consumer Product - shall mean a Licensed Product, which is not an
MPEG-2 Intermediate Product, Sold directly to an end user primarily
for personal, family, or household use, including without limitation
a cable television "set top box", a direct satellite broadcast
converter, and a personal computer having a manufacturer's suggested
retail price of less than $15,000 U.S. or the equivalent in the
currency of another country. For purposes of this Agreement, an
MPEG-2 Packaged Medium shall not be considered a Consumer Product.
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1.6 Days - shall mean calendar days unless otherwise specifically stated
in this Agreement.
1.7 Licensed Product(Licensed Products) - shall mean any product,
including software, licensed under Article 2 of this Agreement.
1.8 Licensors(individually Licensor) - shall mean The Trustees of Columbia
University in the City of New York; France Telecom, societe anonyme;
Fujitsu Limited; General Instrument Corporation; KDD Corporation;
Koninklijke Philips Electronics N.V.; U.S. Philips Corporation;
Matsushita Electric Industrial Co., Ltd.; Mitsubishi Electric
Corporation; Nippon Telegraph and Telephone Corporation; Samsung
Electronics Co., Ltd.; Scientific-Atlanta, Inc.; Sony Corporation;
Toshiba Corporation; and Victor Company of Japan, Limited subject to
additions and deletions from time to time, identified in Attachment 1
hereto.
1.9 Manufacture(Manufactured) - shall mean fabrication, assembly, or
otherwise making of substantially the entire finished MPEG-2 Royalty
Product.
1.10 Movie - shall mean a single motion picture as well as related video
materials typically packaged with the motion picture including,
without limitation, previews of other motion pictures, information
about the making of the motion picture or the artists appearing
therein. Movie shall not include a second motion picture regardless
of whether such second motion picture is related to the first.
1.11 MPEG-1 Standard - shall mean the MPEG-1 video standard as defined in
ISO document IS 11172.
1.12 MPEG-2 Bundled Decoding Software - shall mean (i) any storage medium,
including by way of example and without limitation, magnetic tape,
magnetic disk and CD ROM, storing an operating system having one or
more computer programs for decoding video information in accordance
with the MPEG-2 Standard, and which is Sold; or (ii) an operating
system having one or more computer programs for decoding video
information in accordance with the MPEG-2 Standard, and which is
directly distributed to an end user through the electronic
communication means. For purposes of this Agreement, MPEG-2 Bundled
Decoding Software licensed or sold to a computer manufacturer and
loaded in a computer product Sold by the computer manufacturer shall
be deemed an MPEG-2 Intermediate Product.
1.13 MPEG-2 Bundled Encoding Software - shall mean (i) any storage medium,
incorporating an operating system having one or more computer
programs for
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encoding video information into a format in compliance with the MPEG-2
Standard, and which in Sold, including by way of example and without
limitation, magnetic tape, magnetic disk and CD ROM; or (ii) an
operating system having one or more computer programs for encoding
video information into a format in compliance with the MPEG-2
Standard, and which is directly distributed to an end user through
electronic communication means. For purposes of this Agreement, MPEG-2
Bundled Encoding Software licensed or sold to a computer manufacturer
and loaded in a computer product Sold by the computer manufacturer
shall be deemed an MPEG-2 Intermediate Product.
1.14 MPEG-2 Decoding Product - shall mean any instrumentality or
combination of instrumentalities, including by way of example and
without limitation: a television receiver; cable, terrestrial
broadcast and satellite broadcast receiving equipment; a computer
card; a camcorder; video telecommunications equipment; video packaged
media playback equipment; and video game equipment, which is primarily
designed in whole or in part for decoding video information in
accordance with the MPEG-2 Standard, and which is Sold. For purposes
of this Agreement, a computer or digital processor loaded with MPEG-2
Decoding Software or MPEG-2 Bundled Decoding Software shall be deemed
an MPEG-2 Decoding Product.
1.15 MPEG-2 Decoding Software - shall mean: (i) any storage medium,
including by way of example and without limitation, magnetic tape,
magnetic disk and CD ROM, storing one or more computer programs
designed in whole or in part for decoding video information in
accordance with the MPEG-2 Standard, and which is Sold; (ii) one or
more computer programs designed in whole or in part for decoding video
information in accordance with the MPEG-2 Standard and which is
directly distributed to an end user through electronic communication
means; or (iii) one or more computer programs designed in whole or in
part for decoding video information in accordance with the MPEG-2
Standard that are included in an MPEG-2 Packaged Medium together with
video information in a format in compliance with the MPEG-2 Standard.
MPEG-2 Decoding Software shall not mean software which is part of an
operating system. For purposes of this Agreement, MPEG-2 Decoding
Software licensed or sold to a computer manufacturer and loaded in a
computer product Sold by the computer manufacturer shall be deemed an
MPEG-2 Intermediate Product.
1.16 MPEG-2 Distribution Encoding Product - shall mean an MPEG-2 Encoding
Product which is primarily designed for encoding video information
into a format in compliance with the MPEG-2 Standard and for
commercial distribution of such encoded video information, including
by way of example and without limitation, distribution by terrestrial
broadcast, satellite broadcast, and cable transmission. For
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purposes of this Section 1.16, the term "distribution" shall not be
construed to include distribution by way of MPEG-2 Packaged Medium.
1.17 MPEG-2 Encoding Product - shall mean any instrumentality or
combination of instrumentalities, including by way of example and
without limitation, television signal transmitting equipment, a
computer card, a camcorder, video telecommunications equipment and
consumer video recording equipment, which is primarily designed in
whole or in part for encoding video information into a format in
compliance with the MPEG-2 Standard, and which is Sold. For purposes
of this Agreement, a computer or digital processor loaded with MPEG-2
Encoding Software or MPEG-2 Bundled Encoding Software shall be deemed
an MPEG-2 Encoding Product.
1.18 MPEG-2 Encoding Software - shall mean: (i) any storage medium,
including by way of example and without limitation, magnetic tape,
magnetic disk and CD ROM, storing one or more computer programs
designed for encoding video information into a format in compliance
with the MPEG-2 Standard, and which is Sold; or (ii) one or more
computer programs designed for encoding video information in
compliance with the MPEG-2 Standard, and which is directly distributed
to an end user through electronic communication means. MPEG-2 Encoding
Software shall not mean software which is part of an operating system.
For purposes of this Agreement, MPEG-2 Encoding Software licensed or
sold to a computer manufacturer and loaded in a computer product Sold
by the computer manufacturer shall be deemed an MPEG-2 Intermediate
Product.
1.19 MPEG-2 Essential Patent - shall mean any Patent claiming an apparatus
and/or method necessary for compliance with the MPEG-2 Standard under
the laws of the country which issued or published the Patent.
1.20 MPEG-2 Intermediate Product - shall mean any instrumentality or
combination of instrumentalities, including by way of example and
without limitation an integrated circuit chip or chip set, subsystem
circuit board(s), firmware, and software, which is primarily designed
to be used, alone or with other instrumentalities, to encode or decode
video information in a format in compliance with the MPEG-2 Standard,
or to produce a transport stream or program stream in accordance with
the MPEG-2 Standard, but which is not a product that is Sold.
1.21 MPEG-2 Packaged Medium (Media) - shall mean any storage medium,
including by way of example and without limitation magnetic tape,
magnetic disk and optical disk, storing one or more MPEG-2 Video
Events.
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1.22 MPEG-2 Patent Portfolio - shall mean the portfolio of MPEG-2
Essential Patent(s) identified in Attachment 1 hereto, which
portfolio may be supplemented or reduced from time to time in
accordance with the provisions of this Agreement.
1.23 MPEG-2 Patent Portfolio Patent - shall mean an MPEG-2 Essential
Patent under which a Licensor has the right to grant a license or
sublicense to a third party with the right of such third party to
grant sublicenses, and which is included in the MPEG-2 Patent
Portfolio.
1.24 MPEG-2 Related Patent - shall mean any Patent which is not an MPEG-2
Essential Patent but which has one or more claims directed to an
apparatus or a method that may be used in the implementation of a
product or a service designed in whole or in part to exploit the
MPEG-2 Standard under the laws of the country which issued or
published the Patent.
1.25 MPEG-2 Royalty Product - shall mean a hardware and/or software
product for which a royalty is payable to the Licensing Administrator
hereunder.
1.26 MPEG-2 Standard - shall mean the MPEG-2 video standard as defined in
ISO documents IS 13818-1 (including annexes C, D, F, K and L), IS
13818-2 (including annexes A, B, C and D, but excluding scalable
extensions), and IS 13818-4 (only as it is needed to clarify IS
13818-2).
1.27 MPEG-2 Transport or Program Stream Product - shall mean any
instrumentality or combination of instrumentalities for use alone or
with other instrumentalities, which is primarily designed in whole or
in part for generating and/or processing video information to provide
an MPEG-2 transport stream or an MPEG-2 program stream as defined by
the MPEG-2 Standard, and which is Sold. The term MPEG-2 Transport or
Program Stream Product shall not be construed to include one or more
MPEG-2 Encoding Products.
1.28 MPEG-2 Video Event - shall mean video information having a normal
playing time of any length up to and including 133 minutes encoded
into a format in compliance with the MPEG-2 Standard that comprises
video programming, including by way of example and without
limitation, one or more Movies, television shows, video games, video
advertisements, music videos and short subject video clips, or any
compilation of any of the foregoing.
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1.29 Patent - shall mean any issued patent or issued utility model of any
country, or any allowed patent application or allowed utility model
application, published for opposition in any country.
1.30 Sale (Sold) - shall mean any sale, rental, lease, license or other
form of distribution of an MPEG-2 Royalty Product to an end user,
either directly or through a chain of distribution. For purposes of
this Agreement, a Sale under this Section 1.30 shall be deemed to
take place in the country where an end user takes delivery of the
MPEG-2 Royalty Product which is the subject of the "Sale,"
irrespective of the manner in which the "Sale" takes place.
1.31 White Book Standard - shall mean the document entitled VIDEO CD
Specification version 2.0, published by Philips Consumer Electronics
B.V., and dated April, 1995.
2. LICENSING ADMINISTRATOR GRANT
2.1 MPEG-2 Intermediate Products. Subject to Paragraph 7.16.1 hereof and
to the other terms and conditions of this Agreement, the Licensing
Administrator hereby grants to Licensee a royalty-free, worldwide,
nonexclusive, nontransferable sublicense under all MPEG-2 Essential
Patent(s) in the MPEG-2 Patent Portfolio, to make, have made, use
only by Licensee solely for internal development and testing
purposes, and sell, offer for sale or otherwise distribute, MPEG-2
Intermediate Products. NO LICENSE IS GRANTED HEREIN, BY IMPLICATION
OR OTHERWISE, TO CUSTOMERS OF LICENSEE TO USE MPEG-2 INTERMEDIATE
PRODUCTS MANUFACTURED OR SOLD BY LICENSEE.
2.2 MPEG-2 Decoding Products, MPEG-2 Decoding Software, and MPEG-2
Bundled Decoding Software. Subject to the terms and conditions of
this Agreement, the Licensing Administrator hereby grants to Licensee
a royalty-bearing worldwide, nonexclusive, nontransferable sublicense
under all MPEG-2 Essential Patent(s) in the MPEG-2 Patent Portfolio
to make, have made, use, and sell, offer for sale or otherwise
distribute MPEG-2 Decoding Products, MPEG-2 Decoding Software, and
MPEG-2 Bundled Decoding Software.
2.3 MPEG-2 Encoding Products, MPEG-2 Distribution Encoding Products,
MPEG-2 Encoding Software, and MPEG-2 Bundled Encoding Software.
Subject to Paragraph 7.16.2 hereof and to the other terms and
conditions of this Agreement, the Licensing Administrator hereby
grants to Licensee a royalty-bearing worldwide, nonexclusive,
nontransferable sublicense under all MPEG-2 Essential Patent(s) in the
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MPEG-2 Patent Portfolio to make, have made, use for purposes other
than encoding an MPEG-2 Video Event for recording on an MPEG-2
Packaged Medium, and sell, offer for sale or otherwise distribute
MPEG-2 Encoding Products, MPEG-2 Distribution Encoding Products,
MPEG-2 Encoding Software, and MPEG-2 Bundled Encoding Software. NO
LICENSE IS GRANTED HEREIN, BY IMPLICATION OR OTHERWISE, TO CUSTOMERS
OF LICENSEE TO USE MPEG-2 ENCODING PRODUCTS, MPEG-2 DISTRIBUTION
ENCODING PRODUCTS, MPEG-2 ENCODING SOFTWARE, AND/OR MPEG-2 BUNDLED
ENCODING SOFTWARE FOR ENCODING OR HAVING ENCODED ONE OR MORE MPEG-2
VIDEO EVENTS FOR RECORDING ON AN MPEG-2 PACKAGED MEDIUM.
2.4 MPEG-2 Packaged Medium. Subject to the terms and conditions of this
Agreement, the Licensing Administrator hereby grants to Licensee a
royalty-bearing worldwide, nonexclusive, nontransferable sublicense
under all MPEG-2 Essential Patent(s) in the MPEG-2 Patent Portfolio to
use MPEG-2 Encoding Products, MPEG-2 Distribution Encoding Products,
MPEG-2 Encoding Software, and/or MPEG-2 Bundled Encoding Software, for
encoding or having encoded one or more MPEG-2 Video Events for
recording on an MPEG-2 Packaged Medium, and to sell, offer for sale or
otherwise distribute MPEG-2 Packaged Medium.
2.5 MPEG-2 Transport or Program Stream Products. Subject to the terms and
conditions of this Agreement, the Licensing Administrator hereby
grants to Licensee a royalty-bearing worldwide, nonexclusive,
nontransferable sublicense under all MPEG-2 Essential Patent(s) in the
MPEG-2 Patent Portfolio to make, have made, use except for the purpose
of generating a program stream or transport stream for recording on an
MPEG-2 Packaged Medium, and sell, offer for sale or otherwise
distribute MPEG-2 Transport or Program Stream Products.
2.6 No license or immunity is granted by either party hereto to the other
party hereto, either directly or by implication, estoppel or
otherwise, other than as expressly provided in Sections 2.1 through
2.5, 2.9, 7.3 and 7.4 of this Agreement.
2.7 Except as provided in Section 2.9 of this Agreement, the sublicenses
granted in Sections 2.1 to 2.5 of this Agreement do not include the
right of the Licensee to grant any further sublicenses.
2.8 IT IS UNDERSTOOD AND AGREED THAT ANY LICENSE GRANTED HEREIN SHALL NOT
INCLUDE ANY RIGHT TO MAKE, HAVE MADE, USE, OR SELL ANY PRODUCT OR
PROCESS CAPABLE OF COMPLYING SOLELY
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WITH THE MPEG-1 STANDARD AND NO OTHER PORTION OF THE MPEG-2 STANDARD,
INCLUDING BUT NOT LIMITED TO A VIDEO-CD WHICH COMPLIES WITH THE WHITE
BOOK STANDARD.
2.9 Extension of Sublicense to Affiliates. The sublicenses granted herein
by the Licensing Administrator shall include the right of Licensee
to grant further sublicenses to its Affiliates, subject to the
condition that any and all Affiliates of Licensee receiving such
further sublicenses be identified in an attachment to this sublicense
entitled "Licensed Affiliates." Each sublicensed Affiliate shall be
bound by the terms and conditions of this sublicense as if it were
named herein in the place of the Licensee; provided, however that
Licensee shall pay and account to the Licensing Administrator for
royalties hereunder payable as a result of the activities of any and
all sublicensed Affiliates. Any sublicense granted to an Affiliate
shall terminate automatically and without notice on the date such
Affiliate ceases to be an Affiliate.
2.9.1 Notice to Licensing Administrator of Sublicense Termination. In
the event that a sublicense to an Affiliate of Licensee is
terminated either as a result of the Affiliate ceasing to be an
Affiliate, or as a result of a termination of the sublicense of
the Affiliate by Licensee, Licensee shall notify the Licensing
Administrator of the termination within ten (10) Days of such
termination, and the attachment entitled "Licensed Affiliates"
shall be modified to reflect such termination of an Affiliate.
2.9.2 Notice to Licensing Administrator of New Sublicense. In the
event that Licensee grants a new further sublicense to either a
new Affiliate or an existing Affiliate not previously
sublicensed, such new further sublicense shall be effective
immediately upon the grant thereof; provided that Licensee
notifies the Licensing Administrator within ten (10) Days of
the grant of such new further sublicense, and the attachment
entitled "Licensed Affiliates" is modified to include the new
sublicensed Affiliate.
3. ROYALTY AND PAYMENTS
3.1 Royalty. Licensee shall pay to the Licensing Administrator a running
royalty throughout the term of this Agreement as follows:
3.1.1 MPEG-2 Decoding Product, MPEG-2 Decoding Software, MPEG-2
Bundled Decoding Software. The royalty for the sublicense
granted
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pursuant to Section 2.2 hereof shall be four United States
Dollars (U.S. $4.00) upon the Sale of each end product
Manufactured or Sold in a country in which one or more
MPEG-2 Patent Portfolio Patent(s) that would be infringed
absent a license thereunder, is in force, where the end
product is:
3.1.1.1 An MPEG-2 Decoding Product;
3.1.1.2 A copy of MPEG-2 Decoding Software; or
3.1.1.3 A copy of MPEG-2 Bundled Decoding Software.
3.1.2 MPEG-2 Encoding Product, MPEG-2 Encoding Software, and MPEG-2
Bundled Encoding Software. The royalty for the sublicense
granted pursuant to Section 2.3 hereof shall be four United
States Dollars (U.S. $4.00) upon the Sale of each end product
Manufactured or Sold in a country in which one or more MPEG-2
Patent Portfolio Patent(s) that would be infringed absent a
license thereunder, is in force, where the end product is:
3.1.2.1 An MPEG-2 Encoding Product;
3.1.2.2 A copy of MPEG-2 Encoding Software; or
3.1.2.3 A copy of MPEG-2 Bundled Encoding Software.
3.1.3 MPEG-2 Distribution Encoding Product. The royalty for the
sublicense granted pursuant to Section 2.3 hereof shall be
L times Four United States Dollars (L x U.S. $4.00) upon the
Sale of each MPEG-2 Distribution Encoding Product Manufactured
or Sold as an end product in a country where one or more MPEG-2
Patent Portfolio Patent(s) that would be infringed absent a
license thereunder, is in force, where L is the number of
Channels of the MPEG-2 Distribution Encoding Product for
providing video information encoded in a format in compliance
with the MPEG-2 Standard.
3.1.4 Consumer Product. The royalty for the sublicense granted
pursuant to Sections 2.2 and 2.3 hereof for an end product
having both MPEG-2 encoding and decoding capabilities shall be
limited to Six United States Dollars (U.S. $6.00) upon the Sale
of each such end product Manufactured or Sold as a Consumer
Product in a country where one or more MPEG-2 Patent Portfolio
Patent(s) that would be infringed absent a license thereunder,
is in force, where the Consumer Product:
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3.1.4.1 Incorporates both an MPEG-2 Encoding Product and an
MPEG-2 Decoding Product;
3.1.4.2 Is a copy of software that is both MPEG-2 Encoding
Software and MPEG-2 Decoding Software; or
3.1.4.3 Is a copy of software that is both MPEG-2 Bundled
Encoding Software and MPEG-2 Bundled Decoding
Software.
3.1.5 MPEG-2 Transport or Program Stream Product. The royalty for the
sublicense granted pursuant to Section 2.5 hereof shall be N
times Four United States Dollars (N x U.S. $4.00) upon the Sale
of each MPEG-2 Transport or Program Stream Product
Manufactured or Sold as an end product in a country in which
one or more MPEG-2 Patent Portfolio Patent(s) that would be
infringed absent a license thereunder, is in force, where N is
the greater of the number of input or output transport or
program streams of the MPEG-2 Distribution Transport or Program
Stream Product.
3.1.6 MPEG-2 Packaged Medium. The royalty for the sublicense granted
pursuant to Section 2.4 hereof upon the Sale of each copy of
MPEG-2 Packaged Medium containing one or more MPEG-2 Video
Events encoded using an MPEG-2 Encoding Product, an MPEG-2
Distribution Encoding Product, MPEG-2 Encoding Software and/or
MPEG-2 Bundled Encoding Software, shall be Four United States
Cents (U.S. $0.04) for the first MPEG-2 Video Event on any
MPEG-2 Packaged Medium, plus One United States Cent (U.S.
$0.01) for each additional 30 minutes of video playing time or
portion thereof on the same MPEG-2 Packaged Medium.
Notwithstanding the above, however, the royalty (i) shall not
exceed Four United States Cents(U.S. $0.04) for a single Movie;
(ii) shall not exceed an additional Two United States Cents
(U.S. $0.02) for the second Movie contained on the same MPEG-2
Packaged Medium as the first Movie; and (iii) shall be One
United States Cent (U.S. $0.01) for each MPEG-2 Packaged Medium
having a normal playing time up to and including 12 minutes,
but not more than 12 minutes, of video programming on the same
MPEG-2 Packaged Medium which is encoded into a format in
compliance with the MPEG-2 Standard.
3.1.7 Subject to Paragraph 3.1.4 of this Agreement, the royalties set
forth in this Section 3.1 are additive as to each MPEG-2
Royalty Product to the extent that individual royalties are
applicable thereto.
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3.2 Payment Schedule.
3.2.1 Except as provided in Section 3.3 hereof, royalties payable
pursuant to Section 3.1 of this Agreement that accrue after
the latest signature date specified on the final page of this
Agreement shall be payable by Licensee to the Licensing
Administrator semiannually as previously agreed between
Licensee and the Licensing Administrator in the term prior to
this Agreement, or if there was no prior term, as measured
from such signature date to the last business day of each six
month period thereafter for MPEG-2 Royalty Products
Manufactured or Sold during the immediately preceding
semiannual period ending on the last business day of the
second month preceding the month when royalties are payable.
Such royalties shall be paid to the Licensing Administrator
and shall be accompanied by a statement pursuant to Section
3.8 of this Agreement, which statement shall be deemed to be
true and correct unless shown otherwise in an audit in
accordance with Section 3.9 of this Agreement.
3.2.2 Back Royalties. Any royalties pursuant to the above
schedule which accrued during the period from June 1, 1994 to
the latest signature date specified above shall be payable
within thirty (30) Days of such signature date, together with
accrued interest of 10% per annum.
3.3 Payments Upon Termination or Expiration. Within thirty (30) Days after
the effective date of termination or expiration of this Agreement,
Licensee shall pay the Licensing Administrator any and all amounts
that are due pursuant to this Agreement as of the effective date of
such termination or expiration, together with a royalty statement for
such payment in accordance with Section 3.8 of this Agreement.
3.4 Form of Payment. Any payment made under the provisions of this
Agreement shall be made by check drawn on a bank(s) reasonably
acceptable to the Licensing Administrator, by cashier's check drawn on
immediately available funds, or by other means of payment acceptable
to the Licensing Administrator.
3.4.1 The amounts payable hereunder shall be paid to the Licensing
Administrator by the Licensee in United States Dollars.
3.5 Taxes. In addition to the royalties set forth in Section 3.1 of this
Agreement, Licensee shall pay or reimburse the Licensing
Administrator for any and all taxes, such as sales, excise, value
added, use taxes, and similar taxes of the Licensee, based on
payments to be made hereunder in a jurisdiction(s) where such taxes
are required.
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The royalties set forth in Section 3.1 of this Agreement shall be
subject to withholding of any taxes of the Licensor required by
applicable law.
3.5.1 At the Licensee's request, the Licensing Administrator shall
file any certificate or other document which may cause any
tax that is so payable by the Licensee to be avoided or
reduced.
3.5.2 The Licensee shall not be required to pay or reimburse the
Licensing Administrator for taxes based upon the net worth,
capital, net income, or franchise of the Licensing
Administrator, nor taxes imposed upon the Licensing
Administrator solely by reason of the Licensing Administrator's
doing business in or being incorporated in the jurisdiction
imposing such taxes.
3.5.3 The Licensee shall reasonably cooperate with the Licensing
Administrator in respect of mitigating any withholding taxes,
including providing such information as may be required by the
Licensing Administrator for purposes of obtaining refunds of
any taxes withheld.
3.5.4 The Licensing Administrator shall reasonably cooperate and
provide such information as may be required by the Licensee for
any purpose or reason relating to taxation.
3.5.5 If the Licensee in good faith contests any tax that is so
payable or reimbursable by the Licensee, the Licensing
Administrator shall reasonably cooperate in such contest at the
Licensee's expense.
3.5.6 The Licensing Administrator shall pass on to the Licensee any
tax refunds received by the Licensing Administrator with
respect to the Licensee's previous payment or reimbursement of
applicable taxes hereunder, if any.
3.6 Late Payments. Any payment required hereunder that is made late
(including unpaid portions of amounts due) shall bear interest,
compounded monthly, at the lesser of 10% per annum or the highest
interest rate permitted to be charged by the Licensing Administrator
under applicable law.
3.6.1 Any payment received more than fourteen (14) Days after
becoming due as set forth in Section 3.2 of this Agreement
shall be deemed late for purposes of this Agreement.
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3.6.2 Any interest charged or paid in excess of the maximum rate
permitted by applicable law shall be deemed the result of a
mistake and interest paid in excess of the maximum rate shall
be promptly credited or refunded (at Licensee's option) to
Licensee.
3.7 Dishonored Checks. If a payment due under this Agreement is made by
Licensee's check and the check is dishonored, the payment may at the
Licensing Administrator's option be deemed not to have been made. The
Licensing Administrator may at its option, by written notice to
Licensee, require subsequent payments to be made by cashier's check
in immediately available funds.
3.8 Statements. Licensee shall accompany each semi-annual payment with a
statement showing in reasonable detail and separately identifying for
each MPEG-2 Royalty Product the quantity Manufactured in each country
and the quantity Sold in each country of any and all MPEG-2 Royalty
Products Sold during such period by Licensee and its Affiliates, and
a calculation of the royalties, if any, which are payable by virtue
of such Manufacture and Sale of MPEG-2 Royalty Products during the
semi-annual period when the payment, if any, accrued.
3.8.1 Such statements shall be certified by an officer of Licensee
authorized to make such certification.
3.8.2 The Licensing Administrator shall maintain all information in
such statements of Licensee as Confidential Information in
accordance with Article 5 of this Agreement, except to the
extent that the information is needed by the Licensing
Administrator to report to the Licensors the aggregate
royalties paid by all sublicensees of the Licensing
Administrator. In no event shall the Licensing Administrator
provide to any of the Licensors information on royalties paid
on a licensee-by-licensee or country-by-country basis unless
required by law.
3.9 Audits.
3.9.1 Books and Records. Licensees shall keep and maintain accurate
and detailed books and records adequate for the Licensing
Administrator to ascertain the royalties payable hereunder.
Such books and records shall be maintained for three (3) years
from the end of each period when royalties are payable.
3.9.2 Audit Rights. The Licensing Administrator shall have the right
to audit or have audited the books and records of Licensee
relating to payments
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hereunder for the sole purpose of verifying the amounts due
and payable hereunder, not more than once per calender year
upon reasonable notice to the Licensee. All such audits shall
be conducted during reasonable business hours of the
Licensee.
3.9.2.1 Any such audit shall be performed by an independent
certified public accountant(s) or equivalent (Auditor)
reasonably acceptable to Licensee in the country where the
audit is to take place. Licensee shall fully cooperate with
Auditor in conducting such audit and shall permit Auditor to
inspect and copy such portions of the Licensee's books and
records that the Auditor deems appropriate and necessary in
accordance with the professional standards applicable to the
Auditor in the country where the Audit is to take place.
3.9.2.2 The Auditor (and each member or employee thereof
participating in the audit) shall agree not to disclose any
information learned by the Auditor in the audit to any
Licensor, nor use any such information, except for providing
the Licensing Administrator with a statement of payments due
by Licensee.
3.9.2.3 The cost of an audit in accordance with Paragraph 3.9.2 of
this Agreement shall be at the expense of the Licensing
Administrator; provided, however, the Licensee shall bear the
cost of the audit if the audit reveals any underpayment which
in the aggregate is greater than five percent (5%) of the
amount actually due for the period being audited.
3.9.2.4 Licensee shall pay any shortfalls uncovered in accordance
with Paragraph 3.9.2 of this Agreement, plus interest as set
forth in Section 3.6 herein, within thirty (30) Days after
receiving notice from the Licensing Administrator of such
shortfall.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Licensing Administrator represents and warrants that it has the
authority, power and right to grant the rights and licenses to
Licensee under this Agreement.
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4.2 The Licensing Administrator makes no representation or warranty that
the MPEG-2 Patent Portfolio Patent(s) sublicensed hereunder includes
all MPEG-2 Essential Patent(s) throughout the world, or that the
making, using or selling of products, or providing services covered
by the claims of the MPEG-2 Patent Portfolio Patent(s) licensed
hereunder will not infringe, directly, contributorily or by
inducement under the laws of the United States or under equivalents
thereof under the laws of a country other than the United States, any
patent or other intellectual property right of a party other than the
MPEG-2 Patent Portfolio Patent(s).
4.3 Licensee represents and warrants that it is entering into this
Agreement for its own convenience in acquiring patent rights necessary
for compliance with the MPEG-2 Standard from multiple licensors in a
single transaction rather than entering into separate license
agreements with individual licensors, and that Licensee is fully aware
that the patents in the MPEG-2 Patent Portfolio may not include all
present and future MPEG-2 Essential Patent(s), and that this Agreement
may not provide Licensee with all the patent rights needed to perform
the activities contemplated by Licensee in entering into this
Agreement. The Licensing Administrator and Licensee recognize that
Licensee has the right to separately negotiate a license with any or
all of the Licensors under any and all of the MPEG-2 Patent Portfolio
Patents under terms and conditions to be independently negotiated by
each Licensor.
4.4 Licensee represents and warrants that it has not granted an exclusive
license under an MPEG-2 Essential Patent owned by Licensee and has not
assigned an MPEG-2 Essential Patent in anticipation of entering into
this Agreement. Notwithstanding anything to the contrary in this
Agreement, Licensors reserve the right to grant to Licensing
Administrator an exclusive license under any MPEG-2 Patent Portfolio
Patent with respect to any particular party.
4.5 Each party represents and warrants that it will comply with all
applicable laws, regulations or ordinances pertaining to its
performance hereunder.
4.6 Each party represents and warrants that this Agreement and the
transactions contemplated hereby do not violate any agreements each
party has with its agents, employees, or Affiliates or third parties.
4.7 Each party further represents and warrants that in executing this
Agreement, it does not rely on any promises, inducements, or
representations made by any party or third party with respect to this
Agreement or any other business dealings with any party or third
party, now or in the future.
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4.8 Each party represents and warrants that it is not presently the
subject of a voluntary or involuntary petition in bankruptcy or the
equivalent thereof, does not presently contemplate filing any such
voluntary petition, and does not presently have reason to believe
that such an involuntary petition will be filed against it.
4.9 Other than the express warranties of this Article, there are NO OTHER
WARRANTIES, EXPRESS OR IMPLIED.
5. CONFIDENTIAL INFORMATION
5.1 For a period of five (5) years as measured from the first date of
disclosure pursuant to this Agreement, the Licensing Administrator
agrees to use reasonable care and discretion, at least commensurate
with that degree of care it uses to protect similar information of
its own, to avoid disclosure, publication, or dissemination of
received Confidential Information, outside of those employees or
consultants of the Licensing Administrator who have a need to know
Confidential Information.
5.2 Disclosure by the Licensing Administrator of Confidential Information
under Section 5.1 of this Agreement shall be permitted in the
following circumstances; provided, that the Licensing Administrator
shall have first given reasonable notice to Licensee that such
disclosure is to be made:
5.2.1 In response to an order of a court or other governmental body;
5.2.2 Otherwise required by law; or
5.2.3 Necessary to establish rights under this Agreement.
5.3 Notwithstanding any other provisions of this Agreement, the
obligations specified in Section 5.1 of this Agreement will not apply
to any information that:
5.3.1 Is or becomes publicly available without breach of this
Agreement; or
5.3.2 Is released for disclosure by written consent of the Licensee.
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6. TERM AND TERMINATION
6.1 Term and Certain Royalty Rates on Renewal. This Agreement shall expire
on December 31, 2004. Upon expiration, Licensee shall have the right
to renew this sublicense for successive five year periods for the life
of any MPEG-2 Patent Portfolio Patent, subject to reasonable amendment
of the royalty terms and rates set forth in this sublicense. Such
reasonable amendment may take into account prevailing market
conditions, changes in technological environment, and available
commercial products at the time of each five year renewal. In no event
shall the royalty rates upon each renewal of this sublicense increase,
if at all, by more than 25% of the royalty rates set forth in this
sublicense immediately prior to renewal. The preceding sentence,
however, shall not apply to the Licensing Administrator's request at
the time of renewal that royalty rates for MPEG-2 Packaged Media which
ultimately are offered for rental to consumers be higher than royalty
rates for MPEG-2 Packaged Media set forth in this sublicense at the
time of renewal. Such request for higher royalty rates shall only be
made by the Licensing Administrator, if at all, in the event that the
majority of Licensees which are unaffiliated with entities which own
copyrights on Movies charge different rates for replication of MPEG-2
Packaged Media depending on whether such MPEG-2 Packaged Media is
offered to consumers for sale or rental.
6.2 Termination for Material Breach. The Licensing Administrator shall
have the right to terminate this Agreement upon breach of a material
provision thereof by the Licensee. Such termination for material
breach shall become effective upon the Licensing Administrator
sending written notice to the Licensee specifying the breach, and the
failure of the Licensee to demonstrate, to the satisfaction of the
Licensing Administrator, that Licensee has cured such breach within
sixty (60) Days of the sending of such notice. The following are
examples of acts or omissions which constitute a material breach of
this Agreement:
6.2.1 Failure of the Licensee to make payments and provide
statements in accordance with Sections 3.2 and 3.8 of this
Agreement;
6.2.2 Failure of the Licensee to maintain adequate books and records
in accordance with Paragraph 3.9.1 of this Agreement or to
permit an audit in accordance with Paragraph 3.9.2 of this
Agreement; or
6.2.3 Failure of the Licensee to grant licenses to MPEG-2 Essential
Patent(s) licensable or sublicensable by Licensee in
accordance with Sections 7.3 or 7.4 of this Agreement.
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6.2.4 The foregoing list is by way of example and not limitation.
6.3 Partial Termination in the Event of Litigation. The Licensing
Administrator, upon the instruction of a Licensor, shall terminate
Licensee's sublicense under any MPEG-2 Patent Portfolio Patent(s)
licensed or sublicensed to the Licensing Administrator by such
Licensor in the event that the Licensee has brought a lawsuit or other
proceeding for infringement of an MPEG-2 Related Patent(s) and/or an
MPEG-2 Essential Patent(s) against such Licensor, and Licensee has
refused to grant the Licensor a license on fair and reasonable terms
and conditions under the MPEG-2 Related Patent(s) and/or MPEG-2
Essential Patent(s) upon which the lawsuit or other proceeding is
based. For purposes of this Section 6.3 only, the Licensor's per
patent share of royalties payable pursuant to Section 3.1 of this
Agreement shall be presumed to be a fair and reasonable royalty rate
for Licensee's Patent(s) considering the essential nature of
Licensor's Patent(s) licensed hereunder.
6.4 Voluntary Termination. Licensee may terminate this Agreement by
providing thirty (30) Days written notice to the Licensing
Administrator.
6.5 Other Terminations. This Agreement may be terminated by the Licensing
Administrator upon the occurrence of the following events:
6.5.1 If Licensee files a petition in bankruptcy or the equivalent
thereof, or is the subject of an involuntary petition in
bankruptcy that is not dismissed within sixty (60) Days after
the filing date thereof, or is or becomes insolvent, or admits
of a general inability to pay its debts as they become due.
6.5.2 Upon the de facto or de jure nationalization or expropriation
of Licensee by governmental or military action, whether or not
with valid authority.
6.5.3 Upon any failure by Licensee to provide, within thirty (30)
Days after written notice from the Licensing Administrator,
satisfactory and adequate assurances that Licensee is able and
willing to fully and effectively perform its obligations under
this Agreement.
6.5.4 In the event that any of the events listed in Sections 6.5.1,
6.5.2 or 6.5.3 hereof occur, this Agreement may be terminated
by the Licensing Administrator upon thirty (30) Days written
notice to Licensee, without right to cure.
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6.6 Survival. The following provisions of this Agreement shall survive
expiration or termination of this Agreement:
6.6.1 The obligation of Licensee to pay all royalties accrued as of
the effective date of expiration or termination pursuant to
Section 3.3 hereof;
6.6.2 The obligation of Licensee to provide statements under Section
3.8 of this Agreement; and
6.6.3 The obligation of the Licensing Administrator to maintain
confidentiality under Article 5 of this Agreement.
7. MISCELLANEOUS PROVISIONS
7.1 Assignment.
7.1.1 In the event that the right of the Licensing Administrator to
grant MPEG-2 Patent Portfolio Licenses is transferred to a
successor Licensing Administrator, this Agreement shall be
deemed assigned to the successor Licensing Administrator.
7.1.2 This Agreement may not be assigned by the Licensee, other than
to a successor of the entire interest of an Affiliate or
business division of Licensee manufacturing or selling Licensed
Products, or providing a service in compliance with the MPEG-2
Standard, or to a purchaser of substantially all of the assets
of Licensee or such Affiliate or business division thereof.
7.2 Notice.
7.2.1 All notices required or permitted under this Agreement shall be
sent by either Certified Mail with return receipt requested or
by overnight delivery by commercial or other service which can
verify delivery. Such notices so sent shall be effective as of
the date it is sent.
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7.2.2 All notices from the Licensing Administrator to Licensee shall
be sent to:
Name: Tadashi Tomita
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Title: General Mgr., Admin. Dept., Intellectual Prop. Div.
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Company: Pioneer Corporation
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Address: 4-1, Meguro 1-Chome, Meguro-ku
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Tokyo 153 Japan
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Tel: 011 81-3-3495-4526
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Fax: 011 81-3-3495-4432
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E-mail: tadashi.tomita@post.pioneer.co.jp
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CC:
Name:
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Title:
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Company:
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Address:
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Tel:
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Fax:
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E-mail:
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7.2.3 All notices from the Licensee to the Licensing Administrator or
its successor shall be sent to:
Baryn S. Futa
Manager and Chief Executive Officer
MPEG LA, LLC
250 Steele Street
Denver, Colorado, U.S.A. 80206
Tel: 303-331-1880
Fax: 303-331-1879
E-mail: bfuta@mpegla.com
7.3 Licensee Grant. Licensee agrees to grant a worldwide, nonexclusive
license and/or sublicense under any and all MPEG-2 Essential Patent(s)
that Licensee or its Affiliate(s), if any, has the right to license
and/or sublicense, to any Licensor or any sublicensee of the Licensing
Administrator desiring such a license and/or sublicense on fair and
reasonable terms and conditions. For purposes of this Section 7.3
only, the Licensors' per patent share of royalties payable pursuant to
Section 3.1 of this
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Agreement shall be presumed to be a fair and reasonable royalty rate
for the aforementioned license and/or sublicense to be granted by the
Licensee.
7.3.1 Licensee's obligation to grant licenses and/or sublicenses
pursuant to Section 7.3 of this Agreement shall be effective
upon execution of this Agreement.
7.4 Licensee's Option. In lieu of Section 7.3 Licensee shall have the
option to hereby grant a worldwide, nonexclusive, nontransferable,
except to a successor Licensing Administrator, license and/or
sublicense under any and all of its MPEG-2 Essential Patent(s) to the
Licensing Administrator with the right by the Licensing Administrator
to grant MPEG-2 Patent Portfolio Licenses that include the MPEG-2
Essential Patent(s) that Licensee or its Affiliate(s), if any, has the
right to license or sublicense. Licensee shall identify to the
Licensors any and all of its patents and patents of its Affiliate(s),
if any, which Licensee believes in good faith to be MPEG-2 Essential
Patent(s). Licensors shall determine whether each of the patent(s)
identified by Licensee is an MPEG-2 Essential Patent(s) according to
an established procedure applicable to all new patents identified to
the Licensors. The terms and conditions of the license and/or
sublicense granted by the Licensee to the Licensing Administrator
under this Section 7.4 shall be identical to the terms and conditions
of the license and/or sublicense granted by each Licensor to the
Licensing Administrator. If Licensee elects the option set forth in
this Section 7.4, it shall be required to enter into an agreement
referred to as the "Agreement Among Licensors," which has been entered
into by all Licensors.
7.5 Licensee Covenants.
7.5.1 Licensee hereby covenants to promptly notify the Licensing
Administrator in the event that any allowed patent
application(s) published for opposition, which is licensed or
sublicensed to the Licensing Administrator pursuant to Section
7.4 of this Agreement as an MPEG-2 Essential Patent(s), does
not issue as an MPEG-2 Essential Patent(s).
7.5.2 Licensee shall promptly identify to the Licensing Administrator
each patent(s), except for MPEG-2 Patent Portfolio Patents of
the Licensors, licensable or sublicensable by Licensee or its
Affiliate(s), if any, which Licensee believes in good faith to
be an MPEG-2 Essential Patent(s) within fourteen (14) Days of
execution of this Agreement.
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7.5.3 In the event that Licensee has granted an exclusive license to
a third party under an MPEG-2 Essential Patent(s) prior to the
date of execution of this Agreement, Licensee shall advise the
Licensing Administrator of such an exclusive license and
identify to the Licensing Administrator such third party.
7.6 Licensing Administrator Covenants.
7.6.1 The Licensing Administrator covenants that if during the term
of this Agreement, it acquires rights to grant sublicenses
under additional MPEG-2 Essential Patent(s), the MPEG-2 Patent
Portfolio License herein will be supplemented to include such
additional MPEG-2 Essential Patent(s).
7.6.2 The Licensing Administrator covenants that, with the exception
of partial termination under Section 6.3 of this Agreement, any
deletion from the MPEG-2 Patent Portfolio shall occur only upon
a determination by the Licensors, or upon a final adjudication
of a tribunal of competent jurisdiction from which no appeal is
taken or allowed, that the deleted Patent(s) is invalid or
unenforceable in the country which issued or published the
Patent(s), and that any addition to the MPEG-2 Patent Portfolio
shall occur only upon the determination by the Licensors that
the additional Patent(s) is an MPEG-2 Essential Patent(s) in
the country which issued or published the Patent(s).
7.6.3 The Licensing Administrator further covenants that if any
Patent(s) in the MPEG-2 Patent Portfolio is found not to be an
MPEG-2 Essential Patent(s) in the country which issued or
published the Patent(s), either by the Licensors or upon a
final adjudication of a tribunal of competent jurisdiction
from which no appeal is taken or allowed and such Patent(s) is
to be deleted from the MPEG-2 Patent Portfolio, the Licensing
Administrator shall give notice to Licensee of such deletion,
and Licensee shall have the option to retain its sublicense
under the deleted Patent(s) for the remainder of the term of
this Agreement, including any renewal pursuant to Section 6.1
hereunder.
7.6.4 The Licensing Administrator covenants that it shall not delete
from or add to the MPEG-2 Patent Portfolio for reasons other
than stated in Paragraphs 7.6.1 and 7.6.2 and Section 6.3
herein.
7.6.5 The Licensing Administrator covenants that the royalties set
forth in Section 3.1 of this Agreement shall not increase
during the term of this Agreement, as set forth in Article 6
of this Agreement.
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7.7 Most Favorable Royalty Rates. Except as provided in Paragraph 7.7.1 of
this Agreement, in the event that the Licensing Administrator grants
an MPEG-2 Patent Portfolio License to another party with royalty rates
more favorable than those set forth in Section 3.1 of this Agreement,
whether or not such more favorable royalty rates are on terms and/or
conditions that are different than those set forth herein, the
Licensing Administrator shall send written notice to Licensee
specifying the more favorable royalty rates and any terms and/or
conditions that are different than those set forth herein within
thirty (30) Days of the granting of the MPEG-2 Patent Portfolio
License providing for such more favorable royalty rates. Licensee
shall be entitled to an amendment of this Agreement to the extent of
providing for royalty rates as favorable as that available to such
other party within thirty (30) Days of sending written notice to the
Licensing Administrator requesting such amendment; provided, however,
that this Agreement shall also be amended to include any additional
benefits to the Licensing Administrator. Any amendment made pursuant
to this Section 7.7 shall be effective as of the date it is made, and
such more favorable royalty rates shall not be retroactively
applicable in favor of the Licensee, and shall not be a basis for
claiming any refund of royalties paid prior to such effective date.
7.7.1 Section 7.7 shall not apply to:
7.7.1.1 Settlement of litigation;
7.7.1.2 Determination by the Licensing Administrator of back
royalties owed by a sublicensee;
7.7.1.3 Compromise or settlement of royalty payments owed by a
sublicensee in financial distress;
7.7.1.4 Individual licenses or sublicenses granted by a
Licensor to a third party;
7.7.1.5 An order of a court or an administrative body; and
7.7.1.6 An unauthorized act of the Licensing Administrator.
7.8 Freedom of Independent Development. Nothing in this Agreement shall be
construed as prohibiting or restricting Licensee from independently
developing competitive video products or video services which do not
comply with the MPEG-2 Standard.
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7.9 Relationship. Nothing in this Agreement shall be construed to create
a principal-agent relationship, partnership or joint venture between
the parties, or give rise to any fiduciary duty from one party to the
other party.
7.10 Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable or contrary to law, the
remaining provisions of the Agreement will remain in full force and
effect.
7.11 No Waiver. The failure of either party at any time to require
performance by the other party of any provision of this Agreement
shall not be construed as acquiescence or waiver of such failure to
perform such provision. The failure of either party to take action
upon the breach of any provision of this Agreement shall not be
construed as acquiescence or waiver of any such breach.
7.12 Binding on Successors. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and assigns to the
extent assignment is permitted by this Agreement.
7.13 Article and Section Headings. The Article and Section headings
contained in this Agreement are for reference purposes only and shall
not in any way control the meaning or interpretation of this
Agreement.
7.14 Representation of Counsel; Mutual Negotiation. Each party has been
represented by counsel of its choice in negotiating this Agreement.
This Agreement shall therefore be deemed to have been negotiated at
arms length, with the advice and participation of counsel, and
prepared at the joint request, direction, and instruction of the
parties, and shall be interpreted in accordance with its terms without
favor to any party.
7.15 English Language. The parties have required that this Agreement and
all documents relating thereto be drawn up in English.
7.16 Notice to Customers.
7.16.1 MPEG-2 Intermediate Products Notice: Licensee agrees to
provide to its customers or any other party that receives from
it an MPEG-2 Intermediate Product licensed under Section 2.1
of this Agreement a notice which specifies that: "USE OF THIS
PRODUCT IN ANY MANNER THAT COMPLIES WITH THE MPEG-2 STANDARD
IS EXPRESSLY PROHIBITED WITHOUT A LICENSE UNDER APPLICABLE
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PATENTS IN THE MPEG-2 PATENT PORTFOLIO, WHICH LICENSE IS
AVAILABLE FROM MPEG LA, L.L.C., 250 STEELE STREET, SUITE 300,
DENVER, COLORADO 80206."
Licensee understands that the license granted pursuant to
Section 2.1 of this Agreement is conditioned on the Licensee
providing the notice specified in this Section.
7.16.2 MPEG-2 Packaged Media Notice: Licensee agrees to provide to
its customers or any other party that receives from it an
MPEG-2 Encoding Product, an MPEG-2 Distribution Encoding
Product, MPEG-2 Encoding Software or MPEG-2 Bundled Encoding
Software Licensed under Section 2.3 of this Agreement a notice
which specifies that: "USE OF THIS PRODUCT IN ANY MANNER THAT
COMPLIES WITH THE MPEG-2 STANDARD FOR ENCODING VIDEO
INFORMATION FOR PACKAGED MEDIA IS EXPRESSLY PROHIBITED WITHOUT
A LICENSE UNDER APPLICABLE PATENTS IN THE MPEG-2 PATENT
PORTFOLIO, WHICH LICENSE IS AVAILABLE FROM MPEG LA, 250 STEELE
STREET, SUITE 300, DENVER, COLORADO 80206."
Licensee understands that the license granted pursuant to
Section 2.3 of this Agreement is conditioned on the Licensee
providing the notice specified in this Section.
7.17 Bankruptcy.
7.17.1 In the event that the Licensing Administrator should file a
petition under the federal bankruptcy laws, or that an
involuntary petition shall be filed against the Licensing
Administrator, the parties intend that Licensee shall be
protected in the continued enjoyment of its rights as
licensee under the MPEG-2 Patent Portfolio Patents
sublicensed hereunder to the maximum feasible extent
including, without limitation, if it so elects, the
protection conferred upon licensees under 11 U.S.C. Section
365(n). The Licensing
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Administrator agrees that it will give Licensee notice of the
filing of any voluntary or involuntary petition under the
federal bankruptcy laws.
7.17.2 The MPEG-2 Patent Portfolio Patents sublicensed hereunder
shall be deemed to be "intellectual property" as the term is
defined in 11 U.S.C. Section 101(52). All written agreements
entered into in connection with the parties' performances
hereunder from time to time shall be considered agreements
"supplementary" to this Agreement for purposes of said Section
365(n).
7.18 Choice of Law. The validity, construction and performance of this
Agreement shall be governed by the substantive law of the State of
New York, United States of America, without regard to the conflict of
law rules in the jurisdiction where a claim arising from this
Agreement is brought.
7.19 No Third Party Beneficiaries. Nothing in this Agreement shall be
construed to give rise to any obligation on either party hereto for
the benefit of a third party other than the Licensors or to confer
any rights on any third party other than the Licensors.
7.20 Entire Agreement.
7.20.1 The provisions of this Agreement, including its attachments
and any amendments, constitute the entire agreement between
the parties, and supersede any and all prior communications
and understandings, oral or written, between the parties
relating to the subject matter hereof.
7.20.2 Except for supplementation of or deletion from the MPEG-2
Patent Portfolio by the Licensing Administrator, no amendment
of this Agreement shall be effective unless such amendment
is in writing and specifically references this agreement, and
is signed by all parties hereto. The Licensing Administrator
shall promptly notify Licensee of any supplementation of or
deletion from the MPEG-2 Patent Portfolio.
7.21 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
-28-
29
8. USE OF MPEG LA, L.L.C. NAME AND LOGO
Subject to the written approval of the Licensing Administrator, which
approval shall not be unreasonably withheld: (1) Licensee shall have the
right to indicate on or in connection with its MPEG-2 Royalty Products
licensed hereunder that such products are licensed by the Licensing
Administrator, and (2) Licensee shall have the right to use an MPEG LA,
L.L.C. logo on or in connection with its MPEG-2 Royalty Products licensed
hereunder.
Date: December 25, 1999 (Licensee) Pioneer Corporation
-----------------
By: /s/ Kaneo Ito
-------------------------------
Kaneo Ito
President
Date: December 28, 1999 MPEG LA, L.L.C.
-----------------
By: /s/ Baryn S. Futa
-------------------------------
Baryn S. Futa,
Manager and CEO
-29-
30
Page 1 of 1 January 1, 2000
Addendum Of Patents Removed From Attachment 1
GENERAL INSTRUMENT
==================
DE P3789373.8 removed as of October 1, 1999
FR 0266049 removed as of October 1, 1999
GB 0266049 removed as of October 1, 1999
IT 0266049 removed as of October 1, 1999
SONY
====
GB 2289196 removed as of October 1, 1999
GB 2259229 removed as of October 1, 1999
VICTOR COMPANY OF JAPAN, LIMITED (JVC)
======================================
DE 69012405 removed as of October 1, 1999
FR 0395440-B removed as of October 1, 1999
GB 0395440-B removed as of October 1, 1999
NL 0395440-B removed as of October 1, 1999
31
Page 1 of 10 Attachment 1 January 1, 2000
COLUMBIA UNIVERSITY
-------------------
US Re 35,093
CA 2,096,431-C
DE 69129595
DE 69130329
FR 0564597
FR 0630157
GB 0564597
GB 0630157
JP 2,746,749
FRANCE TELECOM (CNET)
---------------------
US 4,796,087
DE 3767919
FR 2599577
GB 0248711
IT 0248711
SE 0248711
FI 86241
FUJITSU
-------
US 5,235,618
CA 2,029,320
DE 69030056.5
FR 0431319
GB 0431319
JP 2,787,599
GENERAL INSTRUMENT CORPORATION
------------------------------
US 4,394,774+
US 4,698,672
----------
+ Expired December 15, 1998
32
Page 2 of 10 Attachment 1 January 1, 2000
US 5,068,724
AU 627421-B2
NO 179890-C
TW NI-52990
US 5,091,782
AT 139402-T1
AU 627684-B2
CA 2,038,043-C
DE 69120139-T2
DK 0451545 T3
ES 2088440-T3
FR 0451545
GB 0451545
GR 3020736
IT 0451545
NO 178419-C
NO 178420-C
TW NI-50643
US 5,093,720
KDD CORPORATION
---------------
JP 1,835,550
33
Page 3 of 10 Attachment 1 January 1, 2000
MATSUSHITA
----------
US Re 35,910
AU 612543-B2
CA 2,016,523-C
CH 0397402
DE 69027710
ES 2091790
GB 0397402
FR 0397402
IT 0397402
JP 1,949,701
JP 2,695,244
KR 63,477
NL 0397402
SE 0397402
US Re 36,015
US 5,223,949
US 5,412,430
FR 0526163
GB 0526163
JP 2,699,703
NL 0526163
US 5,784,107
JP 2,684,941
JP 2,524,044
JP 2,794,899
JP 2,828,095
34
Page 4 of 10 Attachment 1 January 1, 2000
MITSUBISHI
----------
US 4,954,892
CA 2,000,156-C
DE 68913508-T2
FR 0382892
GB 0382892
HK 1008133
IT 0382892
JP 2,100,607
KR 58,957
SE 0382892
US 5,072,295
AU 625476-B2
CA 2,023,543-C
DE 69027820-T2
FI 98421-B
FR 0414193
GB 0414193
HK 1008129
IT 0414193
JP 2,128,624
NL 0414193
KR 77,808
SE 0414193
SG 45452
US 5,949,489
JP 2,924,431
US 5,963,258
JP 1,869,940
JP 2,510,456
JP 2,577,745
JP 2,814,819
JP 2,924,430
35
Page 5 of 10 Attachment 1 January 1, 2000
NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT)
------------------------------------------------
JP 1,939,084
JP 2,562,499
PHILIPS
-------
US 4,849,812
CN 1013425-B
DE 3871998-T2
FR 0282135-B
GB 0282135-B
IT 0282135-B
JP 2,534,534-B2
KR 9700364-B1
TW 29492-B
US 4,901,075
AT 260748-B
CN 10619-B
DE 3750206-C0
FR 0260748-B
GB 0260748-B
IT 0260748-B
JP 2,711,665
KR 118698
NL 0260748-B
SE 0260748-B
TW 35350-B
US 5,021,879
DE 3855114-B
FR 0290085-B
GB 0290085-B
JP 2,630,809-B
36
Page 6 of 10 Attachment 1 January 1, 2000
US 5,027,206
AT E 1313335-B
AU 634173-B
BE 0359334-B
CH 0359334-B
CN 1018695-B
DE 68925011-B
ES 0359334-B
FI 92127
FR 0359334
GB 0359334-B
GR 0359334-B
HK 96-1695-B
IT 0359334-B
KR 153275
LU 0359334
NL 0359334
SE 0359334
SG 9692026
US 5,128,758
JP 2,791,822
MX 172405-B
US 5,179,442
US 5,333,135
DE 69415698
FR 0609936
GB 0609936
MX 185421
US 5,606,539
AT E157830-B
BE 0460751-B
DE 69127504-B
DK 0460751-B
FR 0460751-B
GB 0460751-B
IT 0460751-B
NL 0460751-B
SE 0460751-B
US 5,608,697
37
Page 7 of 10 Attachment 1 January 1, 2000
US 5,740,310
US 5,844,867
SAMSUNG ELECTRONICS CO., LTD.
----------------------------
US 5,461,421
KR 0166722
US 5,654,706
DE 69321781
FR 0580454
GB 0580454
HK 1008711
KR 95,631
SCIENTIFIC ATLANTA
------------------
US 5,418,782
AU 683134
CA 2,180,363
JP 2,940,638
MX 190,776
US 5,420,866
AU 687844
CA 2,186,368
JP 2,940,639
US 5,457,701
AU 680680
CA 2,180,342
JP 2,937,301
SONY
----
US 4,864,393
DE 3854171-T2
GB 2205710-B2
38
Page 8 of 10 Attachment 1 January 1, 2000
US 5,191,436
DE 69127224
FR 0456433
GB 0456433
JP 2,874,745
JP 2,877,225
JP 2,969,782
US 5,291,486
GB 2289194-B2
GB 2289195-B2
US 5,298,991
DE 69229153
FR 0527011
GB 0527011
US 5,343,248
JP 2,977,104
US 5,428,396
US 5,461,420
AU 672812
US 5,481,553
AU 673244-B2
NZ 261907-B
TR 28436-B
TW 66605-B
US 5,510,840
AT 0573665
DE 69227185
FR 0573665
GB 0573665
IT 0573665
NL 0573665
US 5,539,466
AT 0598904
AU 662548-B2
DE 69229229
FR 0598904
GB 0598904
39
Page 9 Of 10 Attachment 1 January 1, 2000
IT 0598904
US 5,543,847
US 5,559,557
AU 669209-B2
US 5,663,763
AU 667970
US 5,666,461
AU 670288
MY 109,945
TW 70,497
JP 2,712,645
TOSHIBA CORPORATION
-------------------
US 5,317,397
JP 2,883,585
US 5,424,779
JP 2,755,851
US 5,467,136
JP 2,758,378
US 5,742,344
JP 2,883,592
VICTOR COMPANY OF JAPAN, LIMITED (JVC)
--------------------------------------
US Re 34,965
JP 2,530,217
JP 2,072,546
DE 69024235
DE 69030819
FR 0379217-B
FR 0572046-B
GB 0379217-B
GB 0572046-B
40
Page 10 of 10 Attachment 1 January 1, 2000
US Re 35,158
JP 2,137,325
DE 69031045
FR 0584840-B
GB 0584840-B
NL 0584840-B
US 5,175,618
DE 69123705
FR 0484140-B
GB 0484140-B
JP 2,830,881
JP 2,921,755
KR 94554
41
Attachment 2
Licensed Affiliates
As of July 29, 1999
1. Pioneer Electronics Technology (U.K.) Ltd.
2. Pioneer Video Corporation
3. Pioneer Video Manufacturing Inc.