Audiovox Disputes MPEG LA Lawsuit

By Greg Tarr and Amy Gilroy -- TWICE, 12/26/2007 11:26:00 AM

Hauppauge, N.Y. – Audiovox denied charges in a lawsuit filed against it Dec. 10 by MPEG LA, the licensing administrator for the MPEG-2 and IEEE-1394 patent portfolios, for under reporting DVD player shipments, and said it will counter sue MPEG LA for what amounts to “double dipping.”

MPEG LA had charged in a suit filed in New York State Supreme Court in Manhattan, that Audiovox owes millions of dollars in back royalty payments for breach of its contract with the MPEG-LA. The license administrator is seeking specific performance of the license agreement as well as injunctive relief and past royalty payments with interest.

Commenting on the issue Wednesday, Audiovox said: “the lawsuit is totally without merit and Audiovox intends to counter sue MPEG LA for breach of the agreement. The company has reported all sales and paid all royalties due MPEG LA on products purchased from suppliers whom MPEG LA does not represent to be licensees.”

Audiovox said it has made a reasonable offer to MPEG LA to audit its books and records to ascertain that the proper royalties have been paid but the offer was not accepted.

“This complaint is false, misleading and has no merit whatsoever,” stated Patrick Lavelle, Audiovox president and CEO. “MPEG LA has licensing agreements in place with the companies we do business with and this lawsuit is nothing more than an attempt to double dip on royalty payments. I believe their request to audit our records is simply a disguised attempt to review industry sales to aid their collection efforts with other vendors. We will vigorously defend this action and take all necessary legal actions in this manner and I am confident we will prevail.”

A spokesman for MPEG LA said “there is no merit to Audiovox's statement.”

According to a copy of the MPEG LA lawsuit, Audiovox has told the license administrator that the unpaid money should be collected from the original equipment manufacturers that make the products for Audiovox.

MPEG LA said in the suit that it told Audiovox repeatedly that was not the case.

MPEG LA also charged in the suit that Audiovox refused to let it audit its books, which is in violation of its MPEG-2 contracts.