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ATSC PATENT PORTFOLIO LICENSE SUMMARY
This briefing provides an outline of the License. It is for information purposes
only. The actual license agreement provides the only definitive and reliable
statement of license terms.
Click
here to download a PowerPoint summary of the ATSC Patent
Portfolio License.
Licensing Coverage
The ATSC Patent Portfolio License grants rights under patents listed
in Attachment 1 to the License that are essential for implementing the
ATSC Standard (see Sections 1.3, 1.4, 1.5, 1.8, 1.15).
The sublicense granted by the License for ATSC Receiver Products
(Section 2.1) is royalty-bearing, worldwide, nonexclusive and
nontransferable. New Licensors and essential patents may be added
following a determination of their essentiality (the Attachment 1 patent
list is updated on a regular basis to include them) at no additional
cost during the current term, and coverage is for the entire term. Under
agreement with MPEG LA, Licensors are required to include all essential
ATSC patents that they or their affiliates have the right to license or
sublicense (4th Whereas clause).
Product Categories and Royalties
Under the ATSC Patent Portfolio License, the party that offers ATSC
Receiver Products (Section 1.6) for "Sale" (Section 1.16) to the End
User (Section 1.11) is responsible for royalties on those Products
either manufactured or sold in a country with one or more Portfolio
patents. The royalty is $5.00 for each ATSC Receiver Product (Sections
1.6 and 3.11) from January 1, 1998 (Section 3.3.2).
License Term
Coverage is from December 24, 1996 (Section 0.1). The initial license
term is through December 31, 2016 (Section 6.1). Following that,
Licensees have the right of renewal for successive five-year periods for
the life of any ATSC Patent Portfolio Patent, subject to reasonable
amendment of royalty terms and rates (not to increase by more than 10%
for a specific licensed product and license grant on each 5-year
renewal) to suit prevailing market conditions, changes in technological
environment and available commercial products at the time of renewal.
Other important provisions
A Licensor may instruct MPEG LA to remove its patents from coverage
as to a particular Licensee if that Licensee brings a lawsuit or other
proceeding for infringement of an ATSC Related Patent (Section 1.7) or
an ATSC Essential Patent (Section 1.3) against the Licensor and has
refused to grant the Licensor a license on fair and reasonable terms and
conditions under such patents on which the lawsuit is based (one example
of which is the Licensor's per patent share of royalties payable under
the License). The reason for this provision (Section 6.3) is that the
License is to protect companies from being sued for using ATSC but
should not be used to protect a Licensee benefiting from a Licensor’s
ATSC essential patents so that it can sue others; it encourages
negotiation and innovation in support of the ATSC standard.
Any Licensee is free to add ATSC essential patents to the Portfolio
that it and its affiliates may own on the same terms and conditions as
all other Licensors (Section 7.4). If a Licensee chooses not to do so,
however, it must agree to license such patents on fair and reasonable
terms (one example of which is the Licensors' per patent share of
royalties payable under the License). The purpose of this provision
(Section 7.3) is to assure, for the benefit of all Licensees, that a
Licensee does not take advantage of the ATSC Patent Portfolio License,
on the one hand, yet refuse to license its own ATSC essential patents on
fair and reasonable terms.
A most favorable royalty rates provision (Section 7.7) is included to
assure Licensees that no Licensee will be granted an ATSC Patent
Portfolio License with more favorable royalty rates than those provided
for in the License.
Licensees are responsible for making accurate royalty reports and
payments which are subject to withholding of any taxes of Licensors
required by applicable law and to audit by MPEG LA (Article 3).
The ATSC Patent Portfolio License is provided for the convenience of
Licensees in acquiring patent rights necessary for compliance with the
ATSC Standard from multiple Licensors in a single transaction as an
alternative to negotiating individual license agreements with each of
them. No representation is or can be made that all ATSC Standard patents
are included or that other patents may not be infringed or necessary
(Article 4).
Licensee information is treated as confidential (Article 5).
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