COPY PROTECTION TECHNOLOGY AGREEMENT
This Copy Protection Technology Agreement (this 'Agreement') is made as
of January ___, 1997 (the 'Effective Date'), by and between MACROVISION
CORPORATION, a California corporation ('Macrovision'), having its principal
place of business at 1341 Orleans Drive, Sunnyvale, California 94089
[fax #: (408) 743-8610], and VICTOR COMPANY OF JAPAN, LIMITED, a Japanese
corporation ('JVC'), having its principal place of business at 12, Moriya-cho
3-chome, Kanagawa-ku, Yokohama, Kanagawa 221, Japan
[fax # 011-81-45-450-1599].
RECITALS
A. Macrovision is the owner of all right, title and interest in and to
certain anticopying technology which may be used to protect video material
from unauthorized copying.
B. JVC desires that Macrovision continue to make available its anticopy
technology for licensing on a nondiscriminatory basis.
C. Macrovision and JVC have entered into a Duplicator Agreement dated
June 1, 1988, and a Technology Application Agreement dated November 29, 1988,
pursuant to which JVC has manufactured and distributed Videocassettes (as
defined below) which have been encoded with the Process (as defined below).
JVC desires that it continue to have access to the Technology (as defined
below) for such purposes, for purposes of DVD (as defined below) and DVC (as
defined below) replication, and for purposes of manufacturing Digital
Hardware (as defined below).
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants set forth below,
the parties agree as follows:
1. DEFINITIONS
(a) 'DVC' means a digital video cassette or digital versatile
cassette, or any similar digital media developed in the future, containing a
prerecorded motion picture or other videographic material.
(b) 'DVD' means a digital video disk or digital versatile disk, or
any similar digital media developed in the future, containing a prerecorded
motion picture or other videographic material.
(c) 'DIGITAL HARDWARE' means integrated receiver decoders or other
video decoders used in connection with cable and satellite television systems
and DVD and DVC players, each of
which incorporates an integrated circuit which contains an apparatus for
implementing the Process on Pay-Per-View Transmissions (expressly excluding
less-than-real-time transmissions (i.e., the transmission of videographic
materials in a fraction of the time required for normal speed exhibition of
such materials to a recording device for subsequent playback at normal
speed), because Macrovision has an exclusive agreement with Emc3
International Inc. for such use) or the analog playback of a DVD or DVC
(expressly excluding DVDs and DVCs containing conditional access encryption
(i.e., codes permitting each playback of the DVD or DVC to be separately
authorized), because Macrovision expects to enter into an exclusive agreement
with Zoom Television Incorporated for such use).
(d) 'PATENTS' means U.S. Patent Nos. 4,631,603, 4,577,216,
4,819,098, 4,907,093 and 5,583,936, and foreign counterpart patents
disclosing and claiming the same inventions as recited in the U.S. patents
enumerated above, together with future derivatives and extensions of all such
U.S. and foreign patents, and any other patents pertaining to the
modification of a video signal by means of the Process (but not pertaining to
the elimination or defeat of the effects of the modified video signal).
(e) 'PAY-PER-VIEW TRANSMISSION' means transmission of a video
program to video consumers for reception in the form of an electromagnetic
wave, electrical signal or optical wave, whether by means of cable or
satellite transmission or otherwise, for which the recipient video consumer
pays an additional or separate fee to receive transmission of the specific
program.
(f) 'PROCESS' means Macrovision's process of modifying a video
signal by (a) the addition of a plurality of unipolar pulses and bipolar
pulse pairs in and around the vertical blanking interval ('AGC Pulse') and
(b) by pseudorandomly phase modulating the color bursts ('Colorstripe-TM-'),
as specified in the Specifications of the Macrovision Antitaping Process for
Digital Platforms, Revision 7.01 dated September 6, 1996, a copy of which has
been provided to JVC (the 'Specifications').
(g) 'TECHNOLOGY' means the proprietary Macrovision technology based
upon the Patents that is reasonably necessary for application of the Process
to Videocassettes, DVDs, DVCs, and Pay-Per-View Transmissions, or for
application of the Process to a video signal by means of Digital Hardware,
including but not limited to the technology specified in the Specifications,
and any such technology enhanced by Macrovision in the future.
(h) 'VIDEOCASSETTE' means a video cassette containing a prerecorded
motion picture or other videographic material.
2. NONDISCRIMINATORY AVAILABILITY
(A) NONDISCRIMINATORY AVAILABILITY OF TECHNOLOGY. Macrovision agrees
that it will continue to license the Technology, the Process and the Patents,
on terms that are commercially reasonable to Macrovision, to financially
qualified (i) cable and satellite television system operators and
manufacturers of television set top decoders/receivers for their use in
connection with Pay-Per-View Transmissions; (ii) Videocassette, DVD, DVC and
Digital Hardware manufacturers; and (iii) motion picture studios and other
content providers that hold the rights to motion pictures and other
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videographic materials that are displayed by means of Videocassette, DVD,
DVC, and/or Pay-Per-View Transmission. Such licensing shall be made on a
nondiscriminatory basis as among similarly situated parties. Without limiting
the generality of the foregoing, Macrovision also agrees that if it is
acquired (as defined below) by a company other than JVC and/or any of its
affiliates, Macrovision will not refuse to license, on the terms described in
this Section 2(a), companies that are competitors of the acquiring company,
if the effect of such a refusal would be to favor the product or technology
approach of the acquiring company or its affiliates over alternative
approaches of other companies. For purposes of this agreement, 'licensing'
includes entering into agreements not to assert infringement of the Patents.
For purposes of this Agreement, 'acquired' means the acquisition of ownership
of, or the exclusive rights to, a majority of the U.S. patents specifically
listed in the definition of 'Patents'; the acquisition of all or
substantially all of the assets of Macrovision pertaining to its video copy
protection business; the acquisition of voting securities of Macrovision
having a majority of the voting power attributable to all outstanding
securities entitled to vote in the election of directors to Macrovision's
Board of Directors; or any merger or consolidation involving Macrovision
after which the shareholders of Macrovision immediately before the
transaction own voting securities of the surviving or successor corporation
having less than a majority of the voting power attributable to all
outstanding securities entitled to vote in the election of directors of such
corporation.
(b) NO OBLIGATION TO LICENSE TO CERTAIN PARTIES. Notwithstanding the
provisions of Section 2(a) above, Macrovision shall have no obligation to
license or to continue to license the Technology, the Process or the Patents
to any party that is materially breaching or has materially breached any
agreement with Macrovision or that is infringing or has infringed or is or
has been alleged to have infringed any Macrovision patent or any other
intellectual property right of Macrovision, provided that Macrovision has
given such party written notice of the breach or infringement, the other
party has not cured such breach or infringement, and any applicable cure
period has expired.
(c) NO REQUIREMENT THAT TERMS BE THE SAME AMONG GROUPS OF QUALIFIED
PERSONS OR WITHIN A PARTICULAR GROUP. Macrovision may offer different terms
and conditions with respect to the use of the Technology, the Process and the
Patents to different parties for legitimate business reasons, which business
reasons may include, but are not limited to, the specific use of the
Technology, the Process or the Patents; geographic region; volume of
business; length of business relationship; time of commencement of business
relationship; or presence or absence of other business relationships with the
same party. The terms offered to any particular prospective licensee shall
not be materially less favorable to the licensee, or materially more
favorable to Macrovision or any successor, in the aggregate, than the terms
agreed upon with similarly situated licensees.
(d) LIMITED LICENSE WITH SUBLICENSING RIGHTS ONLY. Macrovision
hereby grants to JVC a nonexclusive, nontransferable license only to grant
sublicenses to other parties described in Section 2(a) above (and that are
not described in Section 2(b) above) to use the Technology, the Process and
the Patents solely for the purposes described in Section 2(a) above. JVC
shall utilize such license only if Macrovision is acquired by a company other
than JVC and/or any of its affiliates, only as and to the extent necessary to
fulfill Macrovision's obligations under Section 2(a) above, and only if and
so long as Macrovision breaches, and continues to breach its obligations
thereunder; provided, however, that all sublicenses granted by JVC pursuant
to this Agreement during any such
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period of breach shall continue in force in accordance with their terms. JVC
shall grant any and all such sublicenses on such terms and conditions,
including royalty and payment terms, as Macrovision shall have granted
licenses to similarly situated parties most recently prior to the event or
events constituting the breach of Macrovision's obligations, or, if the
aggregate terms of such most recently granted licenses are then contained in
less than ten percent (10%) of Macrovision's licenses with similarly situated
parties and are materially less favorable to the licensees, or materially
more favorable to Macrovision or any successor, than licenses granted prior
to the commencement of discussions between Macrovision and the acquiring
company regarding the acquisition, then on such terms and conditions as
Macrovision shall have granted licenses to similarly situated parties most
recently prior to the commencement of such discussions. JVC shall pay
Macrovision ninety-five percent (95%) of any and all amounts collected from
its sublicensees with respect to any such subleases granted by JVC. Prior to
exercising any rights under this license, JVC shall give Macrovision written
notice specifying the alleged breach of Macrovision's obligations under the
penultimate sentence of Section 2(a) above and specifying reasonable and
appropriate corrective measures that JVC proposes to cure such breach. JVC
shall not exercise any rights under this license unless Macrovision fails to
implement the corrective measures proposed by JVC (or subsequently agreed
upon by JVC and Macrovision pursuant to the procedure described below) within
sixty (60) days following receipt of such notice, or, if such measures are
not capable of being implemented within sixty (60) days, Macrovision fails to
commence implementation of such corrective measures within such sixty (60)
day period, to proceed with such implementation in good faith, reasonably and
expeditiously, thereafter, or to complete such implementation within ninety
(90) days following receipt of such notice (or such longer period as JVC may
approve, with such approval not to be unreasonably withheld). After
expiration of the time period set forth in the preceding sentence without
Macrovision implementing the corrective measures, Macrovision promptly will
take all such actions as JVC reasonably may request in order to permit JVC to
fully exercise and enforce JVC's rights under the license set forth in this
Section 2(d). Macrovision may dispute either or both of the alleged breach
and the proposed corrective measures by giving JVC written notice of such
dispute within thirty (30) days following Macrovision's receipt of the
notice from JVC. Following Macrovision's notice of any such dispute,
Macrovision and JVC shall work together in good faith to agree upon what, if
any, corrective measures are necessary for Macrovision to undertake to cure
any alleged breach; provided, however, that any lack of agreement between JVC
and Macrovision regarding such matters will not affect JVC's rights to grant
sublicenses pursuant to this Section 2(d), if the conditions incident thereto
have occurred, immediately following the expiration of the time period set
forth in the third preceding sentence. JVC may exercise its rights under this
Section 2(d) without any obligation first to seek of obtain any court order
or ruling. Without limiting the foregoing, if any dispute referred to above
regarding an alleged breach or proposed corrective measures is not resolved
within sixty (60) days following Macrovision's receipt of the initial notice
from JVC, then JVC may seek specific performance of its right to exercise
this license and/or Macrovision may seek an injunction against the
unauthorized exercise of rights under this license, by filing an appropriate
action in the Superior Court for Santa Clara County, California.
3. SPECIFIC AGREEMENTS
(a) DUPLICATION, REPLICATION, TECHNOLOGY APPLICATION AND
MANUFACTURING AGREEMENTS. Macrovision agrees that it will license the
Technology, the Process and the Patents, on a nonexclusive basis, to JVC
and/or one or more majority-owned (directly or indirectly) subsidiary
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corporations of JVC, on terms that are commercially reasonable to
Macrovision, for the application of the Process to Videocassettes, DVDs and
DVCs manufactured by JVC and/or such a subsidiary corporation for
distribution in Japan and/or in any other territory or territories in which
Macrovision currently licenses the Technology, the Process and the Patents to
third parties for such uses on a nonexclusive basis. Additionally,
Macrovision agrees that it will license the Technology, the Process and the
Patents, on a nonexclusive basis, to JVC and/or one or more majority-owned
(directly or indirectly) subsidiary corporations of JVC, on terms that are
commercially reasonable to Macrovision, for the manufacture of Digital
Hardware in territories in which Macrovision holds patents relating to video
copy protection in Digital Hardware. Such licenses shall be made on terms and
conditions comparable (but not necessarily identical) to those generally
provided by Macrovision to similarly situated parties; provided, however,
that the terms offered to JVC and/or such a subsidiary corporation shall not
be materially less favorable to the licensee, or materially more favorable to
Macrovision or any successor, in the aggregate, than the terms agreed upon
with similarly situated licensee.
(b) NO OBLIGATION TO LICENSE IF JVC AND/OR ANY SUBSIDIARY
CORPORATION BREACHES AGREEMENT. Notwithstanding the provisions of Section
3(a) above, so long as Macrovision is then not in material breach or default
under this Agreement or any of the specific agreements described in Section
3(a) above, Macrovision shall have no obligation to license the Technology,
the Process or the Patents to JVC and/or any subsidiary corporation if it or
any of them fails to make any payment that may be required by, or otherwise
materially breaches the provisions of, this Agreement or any of the specific
agreements described in Section 3(a) above; provided that Macrovision
asserted the breach in writing, the breach has not been cured, any time for
cure permitted under the applicable agreement has expired, and Macrovision
has lawfully terminated the applicable agreement.
(c) NO OBLIGAITON TO PROVIDE IF NOT PROVIDING TO SIMILARLY
SITUATED PARTIES. Notwithstanding the provisions of Section 3(a) above,
Macrovision shall have no obligation to license the Technology, the Process
or the Patents to JVC and/or any subsidiary corporation if Macrovision is not
licensing the Technology, the Process or the Patents to similarly situated
parties for similar purposes; provided that, in the event that Macrovision is
acquired (as defined in Section 2(a) above) by any company other than JVC
and/or any of its affiliates, this provision shall apply only if Macrovision
was not licensing the Technology, the Process or the Patents to similarly
situated parties immediately prior to the commencement of discussions between
Macrovision and the acquiring company regarding the acquisition.
4. PROPRIETARY RIGHTS
JVC acknowledges that Macrovision claims the Process, the Patents
and the Technology are the proprietary property of Macrovision, and JVC
agrees that, except as expressly provided in Section 2(d) above, JVC has no
right to sublicense the Process, the Patents or the Technology to any party,
and has only such limited rights as are expressly provided by Macrovision to
JVC hereunder or in other agreements between the parties hereto.
5. TERM AND TERMINATION
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This Agreement will commence on the Effective Date and will
continue until expiration of the last of the Patents, unless earlier
terminated as provided herein. Either party may terminate this Agreement upon
the material breach hereof by the other party, if after written notice the
other party fails to cure such breach with sixty (60) days.
6. CONFIDENTIAL INFORMATION
(a) Macrovision and JVC (on behalf of themselves and their
respective officers, employees and agents) will use all reasonable efforts to
keep secret and confidential, and not to use or permit the use of for any
purpose whatsoever, during the term of this Agreement and for a period of
five (5) years thereafter, any and all written confidential information
(including the terms of this Agreement) acquired from the other party,
whether prior to or during the term of this Agreement, except as disclosure
or use of such information is permitted by this Agreement or by a writing
signed by the parties hereto. Without limiting the generality of the
foregoing provision, the Specifications and other technical information
provided by Macrovision regarding the Technology, the Process and the Patents
is deemed confidential for the purpose of this Section 6. The parties will
promptly confirm any oral disclosure of confidential information in writing,
and the delivering party will cause all written materials and other documents
containing confidential information designated by that party to be
confidential to be plainly marked to indicate the secret and confidential
nature thereof. The obligations imposed upon Macrovision by this Section 6
will not apply with respect to the disclosure of information in connection
with the public offering of any stock or other securities of Macrovision. JVC
may disclose Macrovision information the disclosure of which is restricted
under this Section 6 to majority-owned subsidiaries of JVC and to any actual
or prospective minority owners of such subsidiaries so long as such parties
are bound by confidentiality obligations to Macrovision with respect to such
information comparable to those set forth herein. The obligations imposed
upon each party hereto by this Section 6 will not apply with respect to any
information which (i) is or becomes published or otherwise is generally
available to the public other than through the fault of the receiving party,
or by the disclosing party; or (ii) is lawfully obtained from a third party
without a duty of confidentiality; or (iii) is disclosed by the disclosing
party to a third party without a duty of confidentiality, or (iv) is known to
the receiving party prior to such disclosure and was not improperly obtained;
or (v) is, at any time, developed by the receiving party independently of any
such disclosure from the disclosing party.
(b) SURVIVAL OF OBLIGATIONS. The obligations of the parties under
this Section 6 will survive the termination of this Agreement and will remain
in full force and effect regardless of the cause of termination.
7. EQUITABLE REMEDIES
Each party acknowledges that if it breaches any provision of this
Agreement, the other party will be irreparably harmed and will suffer
significant injury which would be difficult to ascertain and which would not
be compensable by damages alone. Accordingly, the parties agree that each
party will have the right to enforce this Agreement and any of its provisions
by injunction, specific performance or other equitable relief without
prejudice to any other rights and remedies that such party may have for a
breach of this Agreement, and without being required to post any bond or
other security.
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8. DISCLAIMER OF WARRANTIES
The Process, the Patents and the Technology are licensed under this
Agreement by Macrovision to JVC 'as is'. Nothing in this Agreement shall be
construed as a warranty or representation that JVC or any of its subsidiaries
or sublicensees will be able to make, use, offer to sell, sell or import any
Videocassette, DVD, DVC, or Digital Hardware without infringing the patent or
other intellectual property rights of third parties. Macrovision and its
successors shall have no obligation to license the Process, the Patents or
the Technology to any person if Macrovision or any successor has received
written notice of a claim that Macrovision or such successor is infringing
upon a third party's patent or other proprietary rights and, in the
reasonable, good faith judgment of Macrovision or such successor, Macrovision
or such successor would likely be liable for substantial damages to such
third party if it were to continue such licensing activity.
9. MISCELLANEOUS PROVISIONS
(a) GOVERNING LAW. This Agreement will be governed by and interpreted
in accordance with the laws of the State of California, without reference to
its laws on the conflict of laws.
(b) RIGHTS CUMULATIVE. Each and all of the various rights, powers and
remedies of the parties will be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have
at law or in equity in the event of breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy
will neither constitute the exclusive election thereof nor the waiver of any
other right, power or remedy available to such party.
(c) NOTICES. All notices which either party is required or desires to
send hereunder shall be in writing sent to the address specified in the first
paragraph of this agreement (in the case of JVC to the attention of 'Legal
Department') and will be deemed to have been given, delivered and received:
(i) if sent by first-class, registered pre-paid mail, five (5) days after
mailing; (ii) if sent by commercially receipted courier, upon actual
delivery; or (iii) if sent by facsimile, upon receipt by the sender of
acknowledgment of delivery from the recipient. Each party will promptly
acknowledge by return facsimile transmission such party's receipt of each
facsimile transmission received from the other party. Each party may
designate a different address or facsimile number by providing notice in
accordance with this Subsection.
(d) SEVERABILITY. If any of the provisions of this Agreement are held
to be void or unenforceable, such determination will not result in the
nullity or unenforceability of the remaining portions of this Agreement. The
parties further agree to replace such void or unenforceable provisions of
this Agreement with valid and enforceable provisions which will achieve, to
the extent legally permissible, the economic, business and other purposes of
the void or unenforceable provisions.
(e) COUNTERPARTS. This Agreement may be executed in separate
counterparts, and by facsimile, each of which will be deemed an original, and
when executed, separately or together, will
7
constitute a single original instrument, effective in the same manner as if
the parties had executed one and the same instrument.
(f) ENTIRE AGREEMENT. This Agreement is intended by the parties to be
the final expression of their agreement and constitutes the entire agreement
and understanding between the parties hereto and constitutes a complete and
exclusive statement of the terms and conditions thereof, and supersedes all
prior correspondence, conversations, negotiations, agreements or
understandings relating to the same subject matter; provided, however, that
this Agreement is not intended to amend, supersede, revoke or otherwise
modify either of the agreements referred to in Recital C above or the Stock
and Convertible Note Purchase Agreement dated May 24, 1991, between
Macrovision and an affiliate of JVC.
(g) AMENDMENTS. No change in, modification of, addition to, or waiver
of the terms and conditions contained herein will be valid as between the
parties unless set forth in a writing which is signed by authorized
representatives of both parties and which specifically states that it
constitutes an amendment to this Agreement.
(h) WAIVER. No waiver of any term, provision, or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances,
will be deemed to be, or be construed as, a further or continuing waiver of
any other term, provision or condition of this Agreement.
(i) ASSIGNMENT. JVC will not assign or delegate this Agreement or any
rights or obligations hereunder to any party without Macrovision's prior
written consent, and any attempt to do so without such consent shall be void.
Macrovision may assign its rights and delegate its obligations under this
Agreement to any party that acquires (as defined in Section 2(a) above)
Macrovision, and upon such acquiring party's written acknowledgement, in form
reasonably satisfactory to JVC, that the acquiring party has accepted all of
Macrovision's obligations hereunder, Macrovision shall have no further
responsibility hereunder.
(j) BINDING ON SUCCESSORS AND ASSIGNS. Subject to the restrictions of
Section 9(i), this Agreement and all of its terms, conditions and covenants
are intended to be fully effective and binding, to the extent permitted by
law, on the successors and permitted assigns of the parties hereto.
(k) ATTORNEY'S FEES. In any dispute between the parties arising out of
this Agreement, the prevailing party therein shall be entitled to have its
attorney's fees, reasonable expenses and related litigation or arbitration
costs (if any) paid by the other party.
(l) CAPTIONS. Captions are provided in this Agreement for convenience
only and they form no part of this Agreement and are not to serve as a basis
for interpretation or construction of this Agreement, nor as evidence of the
intention of the parties hereto.
(m) DISCLAIMER OF AGENCY. Nothing contained in this Agreement is
intended or will be construed so as to constitute the parties to this
Agreement as partners or joint venturers or as agents of each other. Neither
party will have any express or implied right or authority to assume or create
any obligations on behalf of or in the name of the other party or to bind the
other party in any contract, agreement or undertaking with any third party.
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(n) NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement shall be
deemed or interpreted to create any third party beneficiaries, or confer any
rights in any third parties.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the Effective Date.
MACROVISION CORPORATION VICTOR COMPANY OF JAPAN, LIMITED
By: /s/ Victor Viegas By: /s/ Tokio Nohara
------------------------- --------------------------
(Signature) (Signature)
Name: Victor Viegas Name: Tokio Nohara
------------------------ -------------------------
(Print) (Print)
Name: CFO Name: Associate Director
------------------------ -------------------------
(Print) (Print)
General Manager of
Intellectual Property Dept.
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Copy Protection Technology Agreement - Macrovision Corp. and Victor Co. of Japan Ltd.
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