MPEG Licensing Association letters..........
mpegla.com
In the future we will use this area
to provide you with the MPEG-2 Patent
Portfolio License agreement FAQs we
have received and responded to. Click
here to ask us your questions about the
agreement.
For now, below are three letters sent to all
MPEG LA database listings by Larry
Horn, MPEG LA VP, Licensing regarding
important information, provisions and
interpretations of the license agreement.
Following the three letters are some
general Qs and As regarding MPEG,
MPEG LA and the effort leading the the
MPEG-2 Patent Portfolio Licensing
program.
Letter 1:
250 Steele Street, Suite 300
Denver, Colorado 80206
303.331.1880
FAX 303.331.1879
Lawrence A. Horn
Vice President, Licensing
Tel: (301) 986-6660
Fax: (301) 986-8575
September 5, 1997
Dear Colleague:
Thank you for attending MPEG LA,
LLC's MPEG-2 Patent Portfolio Licensee
Informational Meeting earlier this summer.
Based on the strong showing of interest,
our licensing program is off to an excellent
start.
Assuring the interoperability and
implementation of digital video involves
three steps. First was worldwide
acceptance of the MPEG-2 digital video
standard. Second was the grant to
MPEG LA, LLC of the right to license
patents essential to the MPEG-2
standard. As MPEG LA, LLC's Vice
President of Licensing, I am focused on
the third step ? making these patent rights
available to all MPEG-2 users on the
same terms under a single license.
I want to understand your MPEG-2
marketplace goals and licensing needs,
make sure our licensing program meets
them and sign you up to take advantage of
the coverage it affords. Please call me
with any questions. I would be glad to
review the program with you or present it
to your colleagues. If you would like
additional copies of the information packet
containing MPEG LA's MPEG-2 Patent
Portfolio License, please let me know. If
you are ready to sign the License, simply
fill in the information called for on pages 1
and 19, execute two copies of page 25
and return both copies to me for execution
by MPEG LA, LLC.
I want to take this opportunity to answer
some recurring questions concerning the
MPEG-2 Patent Portfolio License:
(1) Given the timing of the various
worldwide informational meetings and that
you may just now be getting back from
your summer holiday, we have designated
September 1, 1997, as the uniform date
from which the 90-day period will run for
purposes of calculating "accrued
interest" under Section 3.2.2 on royalties
dating back to June 1, 1994.
(2) The License grants rights under patents
that are essential for MPEG-2 products;
it does not obligate licensees to make,
use, sell or distribute them.
(3) Section 2 of the License grants rights
under patents essential for making,
using, selling or distributing MPEG-2
products, and Section 3 covers those
MPEG-2 products for which royalties
are due. Therefore, "MPEG-2
Intermediate Products" (defined in
Section 1.19) are covered in Section 2 but
are not included in Section 3, since
MPEG-2 products made with MPEG-2
Intermediate Products are covered in
Section 3. MPEG LA's intention is that
each MPEG-2 product have one royalty
attached to it, borne by the MPEG-2
product (or product incorporating
MPEG-2 product(s)) sold to the end user.
Digital video heralds a time of dramatic
change for the industry. By affording
reasonable access to patents that are
essential for the MPEG-2 digital video
standard, MPEG LA can help lighten that
load. On behalf of MPEG LA, I look
forward to working with you.
Sincerely,
Letter 2:
250 Steele Street, Suite 300
Denver, Colorado 80206
303.331.1880
FAX 303.331.1879
Lawrence A. Horn
Vice President, Licensing
Tel: (301) 986-6660
Fax: (301) 986-8575
November 7, 1997
Dear Colleague:
I've had the pleasure of visiting many of
you over the last two months. With the
conclusion of the moratorium on back
royalty interest under the MPEG LA
Patent Portfolio rapidly approaching (end
of November), I want to take this
opportunity to update you on recent
developments.
The License remains the same as the one
you have. No amendments are planned,
but questions of specific application and
policy will be handled by interpretations.
Here are the first ones:
(a) We recently decided that we will
not apply the second tier of the packaged
media royalty structure ($.40 per
MPEG-2 Video Event recorded per copy
on packaged media sold to commercial
end users) through the first term of the
License ending January 1, 2000. In our
view, the current market is a "sell-thru"
market and will continue to be so until
DVD players reach a critical mass.
Therefore, the $.04 royalty per Video
Event will apply to all packaged media
during that period.
(b) We have interpreted "Video Event"
for purposes of calculating the royalty
owed on packaged media as meaning a
minimum of one "Video Event" for each
MPEG-2 packaged media copy on which
an event has been recorded. More than
one "Video Event" will be counted only in
clear-cut cases. For example, a disk
contains only one Video Event if it
contains shorts, biographies of the movie's
stars or a pan and scan format in addition
to the movie itself; it is two Video Events if
it contains two movies, two games, or a
movie plus a game.
(c) MPEG LA's Administrative
Committee, consisting of licensors, has
endorsed a program of "actual notice" to
substitute for and relieve licensees, in part,
of their obligation to mark products. Final
details are being worked out, but as soon
as they are, the program will go ahead.
Licensors will send a letter to users on a
regular basis notifying them of the essential
MPEG-2 patents owned by the licensors
and the products to which they apply.
You, too, will receive this letter.
We will continue to monitor every aspect
of our program to assure its practicality as
we have done in these cases. If we
believe the marketplace warrants
appropriate changes, we will make them.
Finally, five additional patents owned by
the current licensors have been added to
the Portfolio: Patent issuing on U.S. Patent
App. Ser. No. 08/538,101 (Predicting a
P-field from a P-field in the same frame
and a preceding frame ? Matsushita); U.S.
Patent No. 4,954,892 (Generating a low
delay encoded bitstream that does not
underflow or overflow the decoder buffer
? Mitsubishi); U.S. Patent No. 4,394,774
(Decoder buffer overflow control by
adjusting the quantizer ? NextLevel/GI);
U.S. Patent No. 4,698,672 ? VLC coding
of run-level pairs; and U.S. Patent No.
5,608,697 (VBV delay - Philips). And the
pipeline is filled with more from current
and new licensors. Attachment 1 to the
License will be updated on a regular basis
to reflect additions; the next update will be
issued later this month.
The list of MPEG LA Licensees, in
addition to Licensors, is growing. I will
report to you on new signings in my next
letter. We have always tried to be open
about everything we do consistent with the
need for confidentiality (Sec. 5 of the
License) and in that spirit, it is our intention
to keep the MPEG community apprised of
Licensors and Licensees to the MPEG-2
Patent Portfolio License. If you are ready
to sign the License, just ask for execution
copies and we will send them to you. If
you have questions, please let me hear
them. MPEG LA's licensing program has
been well received, but we want to make
sure it remains responsive to your business
needs.
Sincerely,
Letter 3:
250 Steele Street, Suite 300
Denver, Colorado 80206
303.331.1880
FAX 303.331.1879
Lawrence A. Horn
Vice President, Licensing
Tel: (301) 986-6660
Fax: (301) 986-8575
November 21, 1997
Dear Colleague:
This is a reminder that the 90-day grace
period for Licensees to avoid paying
interest on back royalties under MPEG
LA's MPEG-2 Patent Portfolio License
(Section 3.2.2) concludes on November
29, 1997. The payment of back royalties
in connection with a License dated
November 29 is due no later than
December 29, 1997.
We are pleased that most MPEG-2
suppliers have agreed to execute the
MPEG-2 Patent Portfolio License.
Others of you who would like copies of
the License for your execution, please call,
fax or e-mail us, and we will send them to
you.
The MPEG-2 Patent Portfolio License
provides incomparable value for the
money, but each MPEG-2 user must
make its own evaluation. The License
provides MPEG-2 Essential Patent rights
which MPEG-2 users require and will
have to obtain either from MPEG LA or
directly from each Portfolio Licensor. By
affording reasonable access at fixed rates
in one license to as many MPEG-2
Essential Patent rights as possible, the
MPEG-2 Patent Portfolio License is the
most cost-effective way to obtain them.
For those who owe back royalties, the
result of delaying execution of the License
is to increase their exposure. Therefore, it
is in every MPEG-2 user's best interests
to execute the MPEG-2 Patent Portfolio
License now.
The MPEG LA licensing program is the
first of its kind. The fair, reasonable,
nondiscriminatory access to MPEG-2
patents that it provides is necessary to
assure the interoperability and
implementation of digital video. Thanks to
you, the program is working. Digital video
has a bright future. I will continue to keep
you apprised of MPEG LA's licensing
efforts.
Sincerely,
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