THIS DUPLICATOR AGREEMENT ('Agreement') is made as of the 1st day of June, 1988,
by and between Macrovision Corporation, a corporation organized under the laws
of the State of California ('Macrovision'), having its principal place of
business at 10201 Torre Avenue, Suite 330, Cupertino, California 95014, U.S.A.
and Victor Company of Japan, Limited, a corporation organized under the laws of
Japan, ('Duplicator'), represented by Magnetic Products Division, having its
principal place of business at Mito Plant 1030, Motoyoshida-Cho, Mito-City 310,
1. DEFINITIONS. For purposes of this Agreement, the following words and
phrases shall have the following meanings:
1.1 'Macrovision Anticopy Process' shall mean the process of modifying a video
signal by the addition of a plurality of bipolar pulse pairs during selected
lines of the vertical blanking interval, which process has been granted United
States Patent No. 4,631,603 and Japan Patent Application No. 86-087236 filed
April 17, 1986.
1.2 'Processor' shall mean the equipment including and containing the
electrical circuitry required to apply the Macrovision Anticopy Process to the
1.3 'Cassettes' shall mean prerecorded video cassettes.
1.4 'Rights Owners' shall mean those persons who have the right to manufacture
and sell Cassettes of certain motion pictures and/or certain other videographic
materials ('Pictures') and who have valid agreements with Macrovision
authorizing the application of the Macrovision Anticopy Process to Cassettes of
2. SERVICES It is understood by both parties that Duplicator shall render a
service to apply the Macrovision Anticopy Process into Cassettes using the
Processor subject to instruction and order to be made by the Rights Owners.
3. USE OF TECHNOLOGY Macrovision hereby agrees to provide the fully adjusted
Processor to Duplicator and to grant the right to use it to Duplicator during
the term of this Agreement, as far as it is used by Duplicator solely in
connection with the manufacture of Cassettes of Pictures for Rights Owners,
subject to all of the terms, conditions and restrictions of this Agreement.
4. SERVICE FEE In full consideration of the services agreed to be performed
by Duplicator hereunder, Macrovision shall pay to Duplicator the sum of Yen2 per
Cassette manufactured by Duplicator hereunder, payable within forty-five (45)
days following receipt by Macrovision of the statement required by Section 13.2
5. INSTALLATION Macrovision shall deliver the necessary number of Processors
to Duplicator upon each Duplicator's request from time to time as soon as
reasonably possible after such Duplicator's request, and shall furnish any
necessary technical assistance to enable Duplicator to install and operate the
Processor, without any charge to Duplicator.
6. OWNERSHIP The processor and all rights therein shall remain the property
of Macrovision at all times, and may be removed from Duplicator's premises by
Macrovision at any time after giving Duplicator reasonable prior notice.
Duplicator shall cause or permit the Processor to be clearly and conspicuously
labeled as the property of Macrovision. Duplicator will not make, or knowingly
authorize third parties to make, directly or indirectly, any modifications,
alterations, improvements, variations, changes and/or logical extensions to the
Processor, nor will Duplicator take any action that is inconsistent with or
challenges the ownership by Macrovision of the Processor, without the prior
consent of Macrovision.
7. LIMITED USE Duplicator shall utilize the Processor solely in connection
with the application of the Macrovision Anticopy Process by Duplicator in the
manufacture of Cassettes for Rights Owners. Duplicator shall not have the right
to lease, license, or otherwise to grant to anyone the right to use the
Processor. Duplicator shall not have the right to apply the Macrovision
Anticopy Process, or to cause the Macrovision Anticopy Process to be applied, by
any person or persons other than Duplicator's employees and/or at any location
or locations other than Duplicator's business locations. Duplicator shall not
have the right to use the Processor to manufacture Cassettes of any Picture for
anyone other than the Rights Owners of the Picture.
8. SECURITY Duplicator will use all reasonable efforts to establish adequate
security measures to prevent theft or unauthorized access to or use of the
Processor. Macrovision shall have the right to enter the premises of Duplicator
during Duplicator's normal business hours, after giving Duplicator twenty-four
(24) hours prior notice, to inspect the operation of the Processor and to review
Duplicator's security measures.
9. QUALITY CONTROL Duplicator shall employ such reasonable manufacturing and
quality standards as Macrovision may specify from time to time with respect to
the use of the Processor in applying the Macrovision Anticopy Process to
Cassettes. Duplicator shall follow the instructions of Macrovision in
connection with the maintenance of the Processor and shall immediately report
any operational problems of the Processor to Macrovision.
10.1 Duplicator makes representations and warranties that subject to the
instructions or orders to be made by the Rights Owners. Duplicator shall be
liable to the Rights Owners and Macrovision the application of the Macrovision
Anticopy Process to any of the Cassettes using the Processor
Macrovision may specify from time to time under Article 9 hereof.
10.2 Duplicator shall not be liable to Macrovision or others for consequential
damages under any circumstances.
10.3 Duplicator agrees to give Macrovision prompt notice of every complaint,
claim of lawsuit concerning Cassettes to which the Macrovision Anticopy Process
is applied, and thereafter to keep Macrovision fully informed of the status
thereof. Duplicator agrees to keep a record of all complaints received with
respect to Cassettes to which the Macrovision Anticopy Process is applied and to
give Macrovision reasonable access to all such records.
11. TERM AND TERMINATION
11.1 This Agreement shall be effective as of the date set forth in the
introductory paragraph subject to Governmental Approval, if any, and shall
continue in full force and effect until terminated by Macrovision by giving
Duplicator written notice of such termination not less than sixty (60) days
prior to the termination date.
11.2 In the event of a material default by either party in the performance of
its duties, obligations or undertakings under this Agreement, the other party
shall have the right to give written notice to the defaulting party advising
such party of the specific default involved. If the defaulting party shall not
have remedied such default within ten (10) days after such notice (or, if the
default cannot reasonably be remedied within ten (10) days, within thirty (30)
days after such notice), the other party shall have the right, in addition to
any other rights and remedies it may have, to terminate this Agreement
immediately upon written notice to the defaulting party. In the event of a
termination due to a material default by Duplicator, Macrovision shall have no
obligation to pay any amounts that would otherwise be due pursuant to Section 4
hereof for Cassettes manufactured after Macrovision provides written notice of
such default to Duplicator.
11.3 Upon any termination of this Agreement, all rights in or to the Processor
that Duplicator may have under this Agreement immediately shall terminate and
shall revert to Macrovision; duplicator shall immediately cease the use of the
Processor; and Duplicator shall return immediately to Macrovision the Processor
and any and all documents and other materials furnished Duplicator or otherwise
obtained from Macrovision under this Agreement, together with all copies or
11.4 No termination of this Agreement shall in any manner whatsoever release, or
be construed as releasing, any party from any liability to the other arising out
of or in connection with a party's breach of, or failure to perform, any
covenant, agreement, duty or obligation contained herein.
12.1 Any confidential or proprietary information, whether in writing, orally
transmitted, or communicated through audio-visual media or other means,
communicated under or in connection with this Agreement (the 'Confidential
Information'), shall be treated by the recipient as confidential and shall,
subject to Section 12.3 below, not be revealed or disclosed to any third person
or used except as contemplated hereunder.
12.2 Recipient hereby agrees not to use the Confidential Information for its own
benefit except for the purposes of and as provided in this Agreement.
12.3 Recipient hereby agrees not to disclose the Confidential Information to any
third party or to use the Confidential Information for the benefit of any third
party without the express written permission of the other party, except that
recipient shall not be prevented from using or disclosing information:
(a) which recipient can demonstrate by written records was known to
recipient prior to the date of disclosure by the other party, provided such
information was not obtained by recipient through disclosure by a third party
receiving such information in confidence from the other party;
(b) which is now public knowledge, or becomes public knowledge in the
future, other than by breach of this Agreement by recipient;
(c) which is independently developed by recipient without benefit of
Confidential Information received from the other party; or
(d) which is disclosed to recipient after the date of disclosure by the
other party by a third party having a right to make such disclosure.
12.4 Recipient further agrees to use best efforts, and at least the same degree
of care that it uses to protect its own confidential and proprietary
information, to prevent the unauthorized disclosure to any third party of the
12.5 The confidentiality obligation set forth herein shall survive termination
of this Agreement, but in no way shall last for five (5) years after the receipt
of such Confidential Information.
12.6 Any information communicated to any party hereunder may be disclosed, when
reasonably appropriate or necessary to the performance of a party's obligations
hereunder, by that party to: such of its employees who reasonably require the
same for the purpose of this Agreement (who are bound to the party by an
obligation as to confidentiality like that between the parties hereunder).
13. MAINTENANCE AND INSPECTION OF BOOKS AND RECORDS
13.1 Duplicator shall maintain books and records reflecting the number of all
Cassettes and the names of the Rights Owners of the Pictures on such Cassettes
to which the Macrovision Anticopy Process is applied, and such other information
as Macrovision may from time to time reasonably request with respect to the use
of the Processor.
13.2 Subject to the approval of the Rights Owners, Duplicator shall furnish to
Macrovision monthly reports setting forth the number of all Cassettes to which
the Macrovision Anticopy Process is applied with respect to each Rights Owner,
as well as the name of the Rights Owner. Duplicator shall permit Macrovision to
inspect review and audit any and of Duplicator's books and records which contain
entries pertaining to the use of the Processor, on reasonable prior notice
during normal business hours.
14. MISCELLANEOUS PROVISIONS
14.1 GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California.
14.2 ARBITRATION Any controversy or claim arising out of or relating to this
Agreement or the breach thereof should be settled by mutual agreement of the
parties. If such mutual agreement should not be reached within a reasonable
period of time, all disputes arising from or in connection with this Agreement
shall be finally settled under the Commercial Arbitration Rules of the American
Arbitration Association by three arbitrators appointed in accordance with the
said Rules. The place of arbitration shall be New York, NY, U.S.A.
14.3 RIGHTS CUMULATIVE. Each and all of the various rights, powers and remedies
of the parties shall 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 shall neither
constitute the exclusive election thereof nor the waiver of any other right,
power or remedy available to such party.
14.4 NOTICES. All notices, consents or demands of any kind which either party
to this Agreement may be required or may desire to serve on the other party in
connection with this Agreement shall be in writing and may be delivered by
personal service or by registered or certified airmail, return receipt
requested, deposited in the mail with postage thereon fully prepaid, or by telex
or telefax which is to be immediately confirmed by air mail, addressed to the
party as follows:
If to Macrovision:
10201 Torre Avenue, Suite 330
Cupertoin, California 95014
Attention: Chief Operation Officer
cc: David, W. Herbst, Esq.
Holtzmann, Wise & Shepard
600 Hansen Way, Suite 200
Palo Alto, California 94306
If to Duplicator:
Victor Company of Japan, Limited
Mito Plant 1030, Motoyoshida-Cho
Attention: General Manager
Magnetic Recording Division
Telex: No:. 3632289
Answer Back: VICTOR J
cc: Victor Company of Japan, Limited
8-14, Nihonbashi-honcho 4-chome
Chuo-ku, Tokyo 103
Attention: General Manager, Patent Department
Telex:No. J26222 Answer Back:VICTOR A
Service of any such notice or demand so made by mail shall be deemed complete on
the date of actual delivery as shown by the addressee's registry or
certification receipt or at the expiration of the tenth (10th) business day
after the date of mailing, whichever is earlier in time. Either party hereto may
from time to time, by notice in writing served upon the other as aforesaid,
designate a different mailing address or a different person to which such
notices or demands are thereafter to be addressed or delivered.
14.5 SEVERABILITY. If any of the provisions of this Agreement are held to be
void or unenforceable, the parties agree that such determination shall 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 possible, the economic, business and other purposes of
the void or unenforceable provisions.
14.6 COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which shall be deemed as an original and when executed, separately or
together, shall constitute a single original instrument, effective in the same
manner as if the parties had executed one and the same instrument.
14.7 WAIVER. No waiver of any term, provision or condition of this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or be construed as, a further or continuing waiver of any such term,
provision or condition or as a waiver of any other term, provision or condition
of this Agreement.
14.8 ENTIRE AGREEMENT. This Agreement and any terms and conditions agreed to
pursuant to this Agreement are intended by the parties to be the final
expression of their agreement and constitute and embody the entire agreement and
understanding between the parties hereto and constitute a complete and exclusive
statement of the terms and conditions thereof, and shall supersede any and all
prior correspondence, conversations, negotiations, agreements or understandings
relating to the same subject matter.
14.9 AMENDMENTS. No change in, modification of or addition to the terms and
conditions contained herein shall be valid as between the parties unless set
forth in a writing which is signed by authorized representatives of both the
parties and which specifically states that it constitutes an amendment to this
14.10 ASSIGNMENT. Neither party shall assign its rights or obligations under
this Agreement to any other person without the prior written approval of the
other party which approval will not be unreasonably withheld. Any attempt at
assignment without such prior written approval shall be void.
14.11 BINDING ON SUCCESSORS AND ASSIGNS. Subject to the restrictions of
Section 14.10, this Agreement and all or its terms, conditions and covenants are
intended to be fully effective an binding, to the extent permitted by law, on
the successors and permitted assigns of the parties hereto.
14.12 FORCE MAJEURE. Neither party shall be held responsible or liable for
any failure to perform any obligation assumed hereunder during the period
when such failure is due to strike, lockout, riot, war, natural disaster,
acts of God., fire, Governmental order or regulation or any other cause
beyond the control of either party.
14.13 CAPTIONS. Captions are provided herein 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.
14.14 DISCLAIMER OF AGENCY. Nothing contained in this Agreement is intended or
shall be construed so as to constitute Macrovision and Duplicator as partners or
joint venturers or as agents of each other. Neither party shall 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.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the day and year first above written.
By /s/ Eugene Eidenberg 6/1/88
Eugene Eidenberg, President
VICTOR COMPANY OF JAPAN, LIMITED
By /s/ Satoru Tomita
GENERAL MANAGER JUN 20, 1988
MAGNETIC PRODUCTS DIVISION