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Technology Stocks : Ampex Corp: Digital Storage
AMPX 11.80-3.2%Dec 8 3:59 PM EST

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To: Glenn Perry who wrote (2774)5/4/1997 7:21:00 PM
From: Gus   of 3256
 
Hi Glenn,

1) Uri Cohen was issued Patent No. 5,621,595 for his Pinched Head Magnetic Thin Film Recording Head on 4/15/97. For those who may have forgotten, Uri Cohen is the former Stanford/Seagate scientist who co-founded Velocidata, a private startup that has been making the rounds in the disk drive community pushing its torroidal heads, or Toroheads, in 2 ways:

a) as an improved TFI MR-writer in a MR head.
b) when used with KM, it is also a low cost alternative to MR heads.

Considering that each platter typcially has 2 heads (one for each side), the Data Storage article generated a lot of interest on this board. When we left this part of the story, the thinking was that Ampex was either working closely with Velocidata on a Torohead+KM combo or Ampex had developed its own field confinement heads that show the same kind of reduced inductance and thermal noise exhibited by the Torohead. Good question to ask at the meeting.

2) Patent No.4,212,027 IS the PIP patent.

3) I was incorrect to state that Ampex had negotiated settlements with the other TV manufacturers re: the Lemoine patent.

The Company's royalty income derives from patent licenses, and the Company receives most of its royalty income from licenses with companies that manufacture consumer video products (such as VCRs and camcorders) and, in certain cases, professional video
tape recorders. Historically, most royalty income was attributable to VHS video recorders. However, in recent periods a significant portion of royalty income related to 8 mm video recorders and camcorders.


Given all that, it is reasonable to assume that Ampex stands to benefit in at least 2 ways:

a) Mitsubishi may be a test case which, if successfully prosecuted, may result in a slew of negotiated settlements from past infringers for its television receiver patents (PIP may just be one). Already, we have the $8.1 million jury award in Delaware for past infringement.

b) Prospectively, if Ampex's patents hold up, this may facilitate the licensing of Ampex patents for the new digital tvs coming our way, e.g. the new HDTV big screen TVs from Mitsubishi that Hugh pointed out.

If you accept the premise that Ampex could conceivably have gatekeeper type of patents for digital tvs and digital video, then I think you begin to understand why Ampex is spending the amount of money it is spending to prosecute Mitsubishi. This is not far-fetched because, if you remember, the Japanese powerhouses in the seventies and eighties decided to direct their efforts towards developing an Analog High Definition Television System (Hi-Vision), which means that in some areas they lag the American companies who went after a true Digital High Definition Television System from the get-go.

Make no mistake about it, a major, major battle is being waged in Delaware, with implications that we are just beginning to grasp. It now looks like Los Angeles was just a preemptive attack by Mitsubishi that failed. Stay tuned.

Gus
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