{"id":42419,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/letter-agreement-re-applicantion-of-macrovision-s-copy.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"letter-agreement-re-applicantion-of-macrovision-s-copy","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/letter-agreement-re-applicantion-of-macrovision-s-copy.html","title":{"rendered":"Letter Agreement re: Applicantion of Macrovision&#8217;s Copy Protection Process to Videocassettes and DVDs &#8211; Macrovision Corp. and Buena Visa Home Video"},"content":{"rendered":"<pre>                                \n                              ** Confidential treatment requested\n                            for certain portions of this document\n                                                                 \nMACROVISION-Registered Trademark-      Macrovision Corporation\n                                       1341 Orleans Drive\nPROTECTING YOUR IMAGE                  Sunnyvale, California 94089\n                                       (408)743-8600\n                                       Fax (408) 743-8610\n\nLetter Agreement - Confidential\n-------------------------------\n\n14 January 1997                        VIA FAX TO 818-566-7685 (5 PAGES TOTAL)\n\nMr. Craig M. Kornblau\nSenior Vice President\nWorldwide Operations and Logistics\nBuena Vista Home Video\n350 South Buena Vista Avenue\nBurbank, CA 91521-7890\n\nDear Craig:\n\nWe present below the key business terms related to Disney\/Buena\nVista Home Video's application of Macrovision's copy protection\nprocess to videocassettes and digital video discs ('DVDs') during\nthe period beginning March 1, 1997 and ending February 28, 2000.\n\n1.   MINIMUM FEES AND COPY PROTECTION MAXIMUMS\nDisney\/Buena Vista Home Video ('Buena Vista') agrees to pay\nMacrovision a Minimum Guaranteed Application Fee of [ *  * ] the\nperiod March 1, 1997 through February 28, 1998, [ *  * ] for the\nperiod March 1, 1998 through February 28, 1999, and [ *  * ] for\nthe period March 1, 1999 through February 28, 2000.  These fees\nshall entitle Buena Vista to apply Macrovision copy protection to\na maximum number of videocassettes and DVD titles in all Category\nA countries (as listed on Exhibit 1) combined, as follows:\n\n-------------------------------------------------------------------\n                                                       Maximum\n               Minimum Guaranteed  Maximum Number of   Number of\nYear Ended     Application Fee     Videocassettes      DVD Titles\n-------------------------------------------------------------------\n 2\/28\/98                               [ *  * ]        \n------------\n 2\/28\/99                                     \n------------\n 2\/28\/00                                     \n-------------------------------------------------------------------\n\nThere shall be no carry over from any year to subsequent years in\nthe event that Buena Vista does not apply copy protection to the\nMaximum Number of Videocassettes or DVD titles in any particular\nyear.  It is Buena Vista's intention to apply copy protection to\nsubstantially all videocassettes which are produced in\n\n\n\n\n                              ** Confidential treatment requested\n                               for certain parts of this document\n                                                                 \nMR. CRAIG KORNBLAU                 -2-            1\/14\/97 CONFIDENTIAL\n\n\nCategory A countries. Buena Vista's failure to apply copy\nprotection as provided herein shall not constitute a breach of\nthis agreement.\n\nCountries in Category B would not be covered the Minimum\nGuaranteed Application Fee.  Category C and D countries (as\nlisted on Exhibit 1) would INITIALLY not be covered by the\nMinimum Guaranteed Application Fee but would automatically\nconvert to Category A countries (and therefore be covered by the\nMinimum Guaranteed Application Fee) if and when Buena Vista\nundertakes to distribute videocassettes directly in any such\nCategory C or Category D country.  For example, if Buena Vista\ndecided to go direct in Brazil, and terminated its home video\ndistribution license with Abril, the volume of Buena Vista-direct\ncassettes in Brazil effective as of the date Buena Vista went\ndirect in Brazil could be copy protected without payment of an\nadditional fee to Macrovision.  'Buena Vista-direct' means any\nterritory where Buena Vista or other wholly owned Disney entity\noperates either directly or via a joint venture or other entity\nin which Disney holds at least a 40% ownership interest.\nCategory E countries will be addressed as described in Exhibit 1.\n\nOne half of each years' Minimum Guaranteed Application Fee shall\nbe payable on March 1 of each year and the other half shall be\npayable on September 1 of each year.  The following table\npresents the payment schedule:\n\n                    --------------------------\n                    PAYMENT     PAYMENT AMOUNT\n                    DATE        \n                    --------------------------\n                    3\/1\/97      \n                    --------------------------\n                    9\/1\/97      \n                    --------------------------\n                    3\/1\/98        [ *  * ]\n                    --------------------------\n                    9\/1\/98      \n                    --------------------------\n                    3\/1\/99      \n                    --------------------------\n                    9\/1\/99      \n                    --------------------------\n\n2.   ADDITIONAL FEES - VIDEOCASSETTES\nIf, in any of the three years ending February 28, 1998, February\n28, 1999, or February 28, 2000 (each, a 'Contract Year') Buena\nVista applies copy protection to a total number of videocassettes\nwhich is greater than the Maximum Number of Videocassettes for\nsuch Contract Year, Buena Vista agrees to pay to Macrovision an\nadditional fee of [ *  * ] for each such videocassette to which\ncopy protection is applied above the maximum.  Each payment for\nsuch additional videocassettes will be due and payable no later\nthan 30 days following the close of each Contract Year.  [ *  * ]\nBuena Vista agrees to provide Macrovision\n\n\n\n\n                              ** Confidential treatment requested\n                               for certain parts of this document\n                                                                 \nMR. CRAIG KORNBLAU                 -3-            1\/14\/97 CONFIDENTIAL\n\nwith written notice on September 1, 1997, September 1, 1998, and\nSeptember 1, 1999 as to whether it is likely that Buena Vista will\napply copy protection to a higher number of videocassettes than\nthe maximum for that Contract Year, and if so, what the total\nnumber of copy protected cassettes is likely to be for that full\nContract Year.  Macrovision shall keep such a report confidential\nand not disclose such information to third parties and shall use\nsuch a report only for purposes of its internal planning and\nbudgeting and for no other purpose.  Such report shall not\nrepresent a binding commitment on the part of Buena Vista to\nactually apply copy protection to any particular number of\nvideocassettes in excess of the maximum for that Contract Year.\n\n3.   ADDITIONAL FEES - DVD TITLES\nPrior to applying copy protection to more than [ *  * ] DVD\ntitles in any Contract Year, Buena Vista agrees to so notify\nMacrovision and both Buena Vista and Macrovision agrees to enter\ninto good faith negotiations regarding the per-unit fee which\nBuena Vista would pay to Macrovision for DVD titles to which copy\nprotection is applied in excess of [ *  * ] titles per year.\n\n4.   COMMITMENT TO REQUIRE NORTH AMERICAN LICENSEES TO APPLY COPY\nPROTECTION\nIt is Buena Vista's intention to require all Buena Vista home\nvideo licensees in North America (such as Columbia House) to copy\nprotect, using Macrovision's copy protection technology or any\ncomparable copy protection technology which in Buena Vista's\njudgment provides equal or better effectiveness and playability,\nsubstantially all Buena Vista titles which they produce\n(including Touchstone, Hollywood Pictures, Disney, Miramax and\nother Buena Vista home video labels) and to pay copy protection\nfees for such titles directly to Macrovision or to such other\ncopy protection supplier, as appropriate.  Macrovision shall\ncharge such Buena Vista licensees not more than 6 cents per unit\nfor the application of the Macrovision copy protection process to\nBuena Vista videocassettes or DVDs.  Buena Vista's failure to\nrequire such copy protection shall not constitute a breach of\nthis Agreement.\n\n5.   'CP' LOGO COMMITMENT\nBuena Vista agrees to use its reasonable efforts to use the\ntriangular 'cp' logo in substantially all of its trade\nadvertisements for rental and sell-through videocassettes and DVD\ntitles.  Macrovision agrees that Buena Vista's inadvertent\nomission of the 'cp' logo in any particular ad or ads or Buena\nVista's failure to notify trade publications in any country as to\nBuena Vista's copy protection policy will not be considered a\nmaterial breach of this agreement.\n\n6.   LONG FORM AGREEMENT\nUpon acceptance of Buena Vista, this Letter Agreement shall\nrepresent a binding agreement between Buena Vista and Macrovision\nwhich reflects substantially all fee-related economic terms\nrelated to Buena Vista's application of Macrovision's copy\nprotection process to Videocassettes and DVD titles, until such\ntime as a long form agreement incorporating the terms and\nconditions of this Letter Agreement has been executed by the\nparties.  Macrovision and Buena Vista shall use their reasonable\n\n\n\n\nMR. CRAIG KORNBLAU                 -4-            1\/14\/97 CONFIDENTIAL\n\n\nefforts to negotiate in good faith and prepare and execute within\nsixty days of acceptance by Buena Vista of this Letter Agreement\nsuch long-form agreement.\n\nBuena Vista acknowledges that, due to the 'mechanics' of actually\napplying copy protection to DVDs, Macrovision requires DVD\nauthoring facilities and DVD replicators to sign license\nagreements with Macrovision which grant them the rights to set\nMacrovision's copy protection trigger bits to their 'on' position\nfor DVD titles and\/or replicate DVDs for which Macrovision's copy\nprotection trigger bits have been set to their 'on' position.\nMacrovision agrees that, with respect to Buena Vista DVDs to\nwhich copy protection is applied in connection with this Letter\nAgreement, such licenses will not require such authoring\nfacilities or replicators to pay fees of any kind to Macrovision.\n\nCraig, if the above terms are acceptable to Buena Vista, please\nconfirm this by having the appropriate Buena Vista official sign\nin the space provided below and return this Letter Agreement to\nme via FAX.  We can then task our respective legal\nrepresentatives with drafting the long form agreement as\ndescribed above.\n\nBest Regards,\n    \/s\/ Mark S. Belinsky\nMark S. Belinsky\nVice President, Copy Protection Group\n\nMSB:dh\n\nAttachment (Exhibit 1 - Countries by Category)\n\nAccepted and Agreed by Buena Vista Home Video\n---------------------------------------------\n\n\n     \/s\/ Craig Kornblau                      1\/15\/97\n-----------------------------------     ------------------------------\nBy (Signature)                          Date\n\n\n     Craig Kornblau                     Senior Vice President\n-----------------------------------     ------------------------------\nPrinted Name                            Title\n\n\n\n\n                              ** Confidential treatment requested\n                               for certain parts of this document\n\n                            EXHIBIT 1\n                                \n                      COUNTRIES BY CATEGORY\n\nCATEGORY A - EXISTING BUENA VISTA-DIRECT TERRITORIES COVERED IN\n              THE CURRENT AGREEMENT, PLUS MEXICO\n- Countries Included:  United States, Canada, Australia,\n  Austria, Benelux, Denmark, Finland, France, Germany, Italy,\n  Japan, Mexico, New Zealand, Switzerland, Sweden, Norway, Spain\n  and the United Kingdom\n- Status:  Covered by the Minimum Guaranteed Application Fee\n\nCATEGORY B - MACROVISION MASTER LICENSEE TERRITORIES\n- Countries Included:  Korea, Egypt, Hungary, Poland\n- Status:  Not covered by the Minimum Guaranteed Application\n  Fee.  Business relationship to be between Macrovision licensee\n  and Buena Vista or the Buena Vista licensee.\n\nCATEGORY C - BUENA VISTA LICENSEE TERRITORIES WITH PRE-EXISTING\n             MACROVISION RELATIONSHIPS\n- Countries Included:  Brazil, South Africa, Israel, Portugal,\n  Iceland\n- Status:  INITIALLY not covered by the Minimum Guaranteed\n  Application Fee.  Business relationship to be between\n  Macrovision or its licensed duplicator and the Buena Vista\n  licensee. Convertible to Category A if\/when Buena Vista\n  operates directly in the Category C country and so notifies\n  Macrovision in writing.\n\nCATEGORY D - EXISTING MACROVISION LICENSEE TERRITORIES WHERE\n  BUENA VISTA NEITHER OPERATES DIRECTLY NOR HAS A LICENSEE\n- Countries Included:  Bulgaria, Croatia, Slovenia\n\n- Status:  INITIALLY not covered by the Minimum Guaranteed\n  Application Fee.  Business relationship to be between Macrovision\n  and the Buena Vista licensee. Convertible to Category A if\/when\n  Buena Vista operates directly in the Category D country and so\n  notifies Macrovision in writing.\n\nCATEGORY E - ALL OTHER COUNTRIES\n- At Buena Vista's request, Macrovision will install one\n  videocassette copy protection processor unit to support Buena\n  Vista duplication at Buena Vista's chosen duplicator on a country-\n  by-country basis.  Each of these installations would involve a\n  three-party agreement between Macrovision, the licensed\n  duplicator, and Buena Vista or its home video licensee and a one\n  time advance payment of [ *  * ] from Buena Vista to Macrovision\n  which would be recoupable against copy protection service fees in\n  the relevant country.  The fee payable to Macrovision for\n  application of the copy protection process in any Category E\n  country shall be [ *  * ] per cassette.  Installation of\n  Macrovision processors in Taiwan is subject to an appropriate\n  legal framework being in place to control black boxes.\n  Installation of Macrovision processors in Hong Kong is subject to\n  satisfactory resolution (as relates to the protection of\n  intellectual property) of Hong Kong's incorporation into the\n  People's Republic of China and the related impact on the economic\n  and legal climate.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7331,8106],"corporate_contracts_industries":[9532,9466],"corporate_contracts_types":[9613,9616],"class_list":["post-42419","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-disney-walt-co","corporate_contracts_companies-macrovision-corp","corporate_contracts_industries-travel__services","corporate_contracts_industries-media__movies","corporate_contracts_types-operations","corporate_contracts_types-operations__ip"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42419","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42419"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42419"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42419"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}