Letter From DEPARTMENT OF JUSTICE - JOEL I. KLIEN of the Antitrust Division - Assistant Attorney General.
More Iviewit Proof of Fraud and MPEG LA Involvement.
Proskauer Rose LLP Corruption. Patent Fraud ?
June 10, 1999 - Letter From DEPARTMENT OF JUSTICE - JOEL I. KLIEN of the Antitrust Division - Assistant Attorney General
"
Carey R. Ramos, Esq.Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Dear Mr. Ramos:This letter is in response to your request on behalf of Hitachi, Ltd., Matsushita Electric Industrial Co., Ltd.,
Mitsubishi Electric Corporation,
Time Warner Inc., Toshiba Corporation, and Victor Company of Japan, Ltd. (collectively, the "Licensors"), for the issuance of a business review letter pursuant to the Department of Justice's Business Review Procedure, 28 C.F.R. § 50.6.
You have
requested a statement of the Department of Justice's antitrust enforcement intentions with respect to a proposed arrangement pursuant to which Toshiba will assemble and offer a package license under the Licensors' patents that are "essential," as defined below, to manufacturing products in compliance with the DVD-ROM and DVD-Video formats and will distribute royalty income to the other Licensors.
I. The DVD-ROM and DVD-Video FormatsThe Standard Specifications for the DVD-ROM and DVD-Video formats describe the physical and technical parameters for DVDs for read-only-memory and video applications, respectively, and "rules, conditions and mechanisms" for player units for the two formats.
(1) In either format, the DVD has more than seven times the storage capacity of a compact disc; a single-layer, single-sided DVD, for example, can store 4.7 billion bytes (4.38 GB) of information including audio, video, text, and data. Employing compression technology, a DVD-Video disc can hold a 135-minute feature film on a single side.
The Licensors, along with a number of other producers of consumer electronics hardware, software, or both,
(2) established the Standard Specifications.
(3) These Standard Specifications appear to implicate the intellectual property rights of numerous firms.
II. The Proposed ArrangementA memorandum of understanding among the Licensors (the "MOU," attached as Exhibit 1 to your letter) sets forth the central terms of the proposed arrangement, pursuant to which Toshiba will aggregate the Licensors' "essential" patents and disseminate rights under them to makers of Digital Versatile Discs (DVDs),
DVD players, and DVD decoders(4) ("DVD Products"), and
distribute royalty income to the other Licensors. The arrangement will be carried out through a group of other agreements, including:
(1) a license that Toshiba will receive from each other Licensor to enable
Toshiba to license users of the Standard Specifications under that Licensor's "essential" patents (the "Authorization Agreement," attached as Exhibit 3); (2) Toshiba's sublicense to makers of DVD Products under the Licensors' patents (the "DVD Patent License," attached as Exhibit 2);
(3) an agreement among the Licensors concerning the retention and authority of experts to select and evaluate the patents to be licensed (the "Expert Agreement," attached as Exhibit 4); and
(4) the "Ground Rules for Royalty Allocation" (attached as Exhibit 7), which set forth the formula that will determine how Toshiba will distribute royalties among the Licensors.
(5) A. The patents to be licensed In the MOU, the Licensors commit to license each other and third parties to make, use and sell
DVD Products under their present and future patents that are "essential" to doing so.
(6) The Licensors agree to two separate means of carrying out this obligation. First, they agree to grant Toshiba the right to sublicense third parties under their present and future "essential" patents for these purposes, and Toshiba agrees in turn to sublicense those patents, along with its own such patents, in the
DVD Patent Licenses.
(7) Second, each Licensor agrees to "offer to license its essential DVD patents on a non-exclusive basis to interested third-party licensees pursuant to separate negotiations on fair, reasonable and non-discriminatory terms, whether or not said third-party licensees intend to make, use and sell DVD products that are in conformity with the Specifications."
(8) A Licensor's patent is "essential," and thus subject to the commitments in the MOU, if it is "necessarily infringed," or "there is no realistic alternative" to it, "in implementing the DVD Standard Specifications."
(9) Initially, each Licensor will identify its own "essential" patents in an attachment to its Authorization Agreement with
Toshiba.
(10) Toshiba will then incorporate those patents in a list attached to the DVD Patent License.
(11) Shortly, however, an expert individual or panel, with "full and sufficient knowledge and skill in the relevant technology,"
(12) will complete a review the patents each Licensor has designated as "essential" in order to determine whether they satisfy the MOU criteria.
(13).MOU, ¶ 8; Expert Agreement, preamble.
(14) At that time, any patent initially designated by a Licensor for inclusion in the DVD Patent License that the expert determines is not "essential" will be excluded from subsequent
DVD Patent Licenses, although current licensees will have the option to retain it in their existing licenses.
(15) The expert will repeat this comprehensive review of all the patents in the DVD Patent License portfolio every four years.
(16) In between the quadrennial reviews, the proposed program also provides a mechanism by which the expert may review individual patents whose essentiality comes into question. If a Licensor comes to a
good faith conclusion that a licensed patent is not "essential," and provides a reasonable basis for that belief, the expert will re-examine the patent.
(17) If the expert concludes that the patent is not "essential," the patent will be excluded from the
DVD Patent License.
(18) The agreement provides that the expert's determinations are "conclusive and non-appealable," although the expert must submit a report explaining any decision that a patent was not "essential."
(19) Compensation will be at the expert's "standard hourly rates."
(20) Each Licensor will bear the cost of the expert's review of its patents; the Licensors will share costs attributable to all of them, such as time spent reviewing the DVD Standard Specifications.
(21) The expert, although retained by the Licensors and selected by a majority vote among them, will not have an economic affiliation with any individual Licensor.
(22) A majority of the Licensors may remove the expert for failure or inability to perform the duties set forth in the Expert Agreement "in a professional, competent, reliable or timely manner."
(23) Although the
proposed licensing program currently includes the patents of only the Licensors, it is open to any owner of an "essential" patent willing to license on the program's terms and conditions.
(24)Full Letter and Source of Posthttp://www.justice.gov/atr/public/busreview/2485.htmSave and Print the Above for Your Records.Note: over the Last year of Writing on iViewt the companies at the top of this post have been all over my Blogs, they Ignore what is happening because the UPSTO, US Judges, Corrupt Law Firms like Foley and Lardner and ALL on my blog at
http://www.deniedpatent.com/ seem to be protected by US Billionaires and Politicians. THEY knwo that the
Massive Shareholder Liability is Inevitable and Are Protecting themselve from it.
No ONE is Protecting Investors or Inventors.More on the
Massive Shareholder Fraud Coming Soon to a Pocket Book near You.
http://www.iviewit.tv/http://www.jeffreybewkes.com/http://www.deniedpatent.com/