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Circuit City’s DIVX Patents Fetch $750,000

Needham, Mass. – Circuit City’s ill-fated

Video Express

(DIVX) pay-per-play DVD format from the 1990s is back in the
news more than a decade after its demise.

The Circuit City
Stores Inc. Liquidating Trust entered into an agreement to sell its remaining
patent portfolio, consisting primarily of Digital Video Express patents, to
Imaging Transfer Co. for a cash price of $750,000, subject to better offers.

Competing bids are
due by Aug. 12, and an auction will be held on Aug. 16, said Streambank, the
company hired by the trust to sell the portfolio. The portfolio consists of 22
U.S. patents and patent applications as well as multiple related foreign

 The DIVX technology “remains relevant to the
areas of compression, distribution, security, usage tracking of movie content,
anti-piracy, digital media and watermarking,” Streambank, based here, said.

 The Circuit City-backed technology was


when it hit the market in the late 1990s soon after the launch of the DVD
format. Many in the industry feared it would confuse consumers and drive them
away from the purchase of any DVD player, and many retailers were unwilling to
support a technology whose sales would bolster a rival’s bottom line. In 1999,
Circuit City pulled the plug on the format.

 Developed as an alternative to driving to
video-rental stores to return discs, DIVX-enabled discs could be purchased at a
price allowing for an initial 48-hour viewing period on DIVX-enabled DVD
players. Consumers could purchase additional 48-hour viewing periods or pay for
unlimited viewing. DIVX-enabled DVD players could also play regular DVD discs.