1394 PATENT PORTFOLIO LICENSE SUMMARY
This briefing provides an outline of the License. It is for information purposes only. The actual license agreement provides the only definitive and reliable statement of license terms.
Following is an overview of the 1394 Patent Portfolio License:
Click here to download a summary of the 1394 Patent Portfolio License.
The 1394 Patent Portfolio License grants rights under patents (listed in Attachment 1) that are essential to the 1394 Standard (IEEE 1394-1995, IEEE P1394a (June 30, 1999), IEC 61883-1 and IEEE P1394b (Draft 0.75, August 10, 1999). Each patent is essential because one or more of its claims is infringed by compliance or implementation. Therefore, any company that makes or uses 1394 products requires a license under these patents. The sublicense grant is worldwide, nonexclusive and nontransferable, but a Licensee can extend coverage of the 1394 Patent Portfolio License to its affiliates.
Licensors are obligated to include all of their 1394 Essential Patents wherever they issue and cannot withdraw coverage of patents to Licensees that already have signed up during a period when a particular Licensor and/or patent(s) was in the Portfolio. Evaluation of patents for inclusion in the Portfolio is ongoing. New Licensors and essential patents will continue to be added at no additional cost during the current License Term following a determination of essentiality, and Attachment 1 will be updated on a regular basis to include them.
The royalty is US $0.25 upon the Sale or Manufacture of each 1394 Royalty Product, meaning a Finished Product offered for Sale in an unmodified and uncombined form to an End User that, but for the License, would infringe one or more Portfolio patents. The royalty on each Finished Product is without regard to the number of components in the product that incorporate the standard.
The initial term of the License is to January 1, 2010. The License (which is renewable for additional five year periods for the life of any Portfolio patent subject to reasonable amendment of terms and conditions to suit prevailing market conditions, changes in technological environment and available commercial products at the time of renewal) has been extended (and is renewable by past Licensees) for an additional five-year period to January 1, 2015 under the same terms.
Other important provisions
A Licensor may instruct the Licensing Administrator to remove its patents from coverage as to a particular Licensee if that Licensee brings a lawsuit or other proceeding (1) seeking a declaratory judgment of invalidity regarding Licensor's 1394 Essential Patents or other of Licensor's patents having one or more claims that may be infringed by compliance with or implementation of the 1394 standard or (2) for infringement against the Licensor of a 1394 Essential Patent or other patent having one or more claims that may be infringed by compliance with or implementation of the standard, and Licensee refuses to license such patent(s) on which the litigation is based to the Licensor on fair and reasonable terms (one example of which is the Licensors' per patent share of royalties payable under the License). The reason for this provision is that the License is to protect companies from being sued for using 1394 but should not be used to protect a Licensee so that it can sue others; it encourages negotiation and innovation in support of the standard.
Of course, any Licensee is free to add 1394 essential patents to the Portfolio that it or an affiliate may own on the same terms and conditions as all other Licensors. If a Licensee chooses not to do so, however, it must agree to license such patents to any Licensor or Licensee on fair and reasonable terms (one example of which is the Licensors' per patent share of royalties payable under the License). The purpose of this provision is to assure, for the benefit of all Licensees, that a Licensee does not take advantage of the 1394 Patent Portfolio License, on the one hand; yet refuse to license its own 1394 essential patents on fair and reasonable terms.
A most favorable royalty rates protection is included to assure Licensees that no Licensee will get more favorable royalty rates than another.
Licensee information is treated as confidential.