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Blu-ray Licensing Program Proposed

San Diego — Manufacturers of Blu-ray Disc products may soon find it easier to acquire licenses to the technology through a one-stop-shop licensing program being coordinated by key patent holders Panasonic, Philips and Sony.

Representatives for the three consumer electronics companies said Wednesday they are now working with other Blu-ray Disc patent holders to establish the licensing program.

The companies said the resulting single license will cover essential patents for Blu-ray Disc, DVD and CD, and is expected to be available around the middle of the year.

A new independent licensing company is being set up and will be based in the United States with branch offices in Asia, Europe and Latin America, the companies said.

Gerald Rosenthal, former head of IP at IBM and more recently CEO of Open Invention Network, will be CEO of the licensing entity.

“By establishing a new licensing entity that offers a single license for Blu-ray Disc products at attractive rates, I am confident that it will foster the growth of the Blu-ray Disc market and serve the interest of all companies participating in this market, be it as licensee or licensor,” stated Rosenthal.

The three founding companies said they expect the program “will stimulate the growth of the market for Blu-ray Disc products.”

The companies are inviting any essential patent holders for Blu-ray Disc, DVD and CD patents to join the licensing pool as a licensor and shareholder.

The fees for the new product licenses are $9.50 for a Blu-ray Disc player and $14 for a Blu-ray Disc recorder. The license fees for Blu-ray Disc software will be 11 cents for a read-only disc, 12 cents for a recordable disc and 15 cents for a rewritable disc.

As a result of the efficiencies obtained with the combined license offering, the royalty rates for Blu-ray Disc products are expected to be at least 40 percent lower than the current cumulative royalty rates for individual Blu-ray Disc, DVD and CD format licenses, the companies said.

The Blu-ray Disc product licensing program aims to create a level playing field in the market for Blu-ray Disc products by introducing special measures to encourage companies selling Blu-ray Disc products to comply with their license obligations, the companies said. The program also includes measures to easily identify unlicensed products in the market and a system to address those who may not have obtained proper licenses for Blu-ray Disc products.

In this one-stop-shop product license, the new license company will be a single point of contact for licensees, greatly reducing the burden on licensed companies that would otherwise have to report to multiple patent pools.

Commenting on the proposal: Tom O’Reilly of MPEG LA, a firm that licenses patent pools required for use of the MPEG-2, MPEG-4 Visiual (Part 2), IEEE 1394, VC-1, ATSC and AVC/H.264 standards, said, “MPEG LA’s goal is to serve the marketplace, and the principle that has guided our mission is that a single license with as much essential intellectual property as possible best does that. The formation of a joint license takes place in several steps. The first is facilitation of discussions among essential patent holders to develop a single joint license, and the last is choice of licensing administrator. It is up to patent holders to determine how they wish to license their patents.

“MPEG LA has spent about three years on the first of those steps, facilitation. Based on those facilitation efforts, we concluded that at the present time the best opportunity to achieve our goal of seeing the marketplace served by a single license is to see if the three-company initiative may succeed in achieving that result,” O’Reilly told TWICE.