ATSC PATENT PORTFOLIO LICENSE SUMMARY
Click here to download a summary of the ATSC Patent Portfolio License. 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.
The ATSC Patent Portfolio License grants rights under patents listed in Attachment 1 to the License that are essential for implementing the ATSC Standard (see Sections 1.3, 1.4, 1.5, 1.8, 1.15).
The sublicense granted by the License for ATSC Receiver Products (Section 2.1) is royalty-bearing, worldwide, nonexclusive and nontransferable. New Licensors and essential patents may be added following a determination of their essentiality (the Attachment 1 patent list is updated on a regular basis to include them) at no additional cost during the current term, and coverage is for the entire term. Under agreement with MPEG LA, Licensors are required to include all essential ATSC patents that they or their affiliates have the right to license or sublicense (4th Whereas clause).
Product Categories and Royalties
Under the ATSC Patent Portfolio License, the party that offers ATSC Receiver Products (Section 1.6) for “Sale” (Section 1.16) to the End User (Section 1.11) is responsible for royalties on those Products either manufactured or sold in a country with one or more Portfolio patents. The royalty is $5.00 for each ATSC Receiver Product from January 1, 1998 through December 31, 2016. The royalty is $1.50 per ATSC Receiver Product from January 1, 2017 – December 31, 2020, but Licensees may elect, with written notice to MPEG LA, a further reduced royalty of $1.00 per ATSC Receiver Product from the later of January 1, 2017 or the receipt of such notice with 30-day right of termination on or after January 1, 2021. From January 1, 2021 forward, the royalty is $1.00 per ATSC Receiver Product (Section 3.1).
Coverage is from December 24, 1996 (Section 0.1). The License provides coverage through the expiration of the ATSC Patent Portfolio Patents.
Other important provisions
A Licensor may instruct MPEG LA to remove its patents from coverage as to a particular Licensee if that Licensee brings a lawsuit or other proceeding for infringement of an ATSC Related Patent (Section 1.7) or an ATSC Essential Patent (Section 1.3) against the Licensor and has refused to grant the Licensor a license on fair and reasonable terms and conditions under such patents on which the lawsuit is based (one example of which is the Licensor’s per patent share of royalties payable under the License). The reason for this provision (Section 6.3) is that the License is to protect companies from being sued for using ATSC but should not be used to protect a Licensee benefiting from a Licensor’s ATSC essential patents so that it can sue others; it encourages negotiation and innovation in support of the ATSC standard.
Any Licensee is free to add ATSC essential patents to the Portfolio that it and its affiliates may own on the same terms and conditions as all other Licensors (Section 7.4). If a Licensee chooses not to do so, however, it must agree to license such patents 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 (Section 7.3) is to assure, for the benefit of all Licensees, that a Licensee does not take advantage of the ATSC Patent Portfolio License, on the one hand, yet refuse to license its own ATSC essential patents on fair and reasonable terms.
A most favorable royalty rates provision (Section 7.7) is included to assure Licensees that no Licensee will be granted an ATSC Patent Portfolio License with more favorable royalty rates than those provided for in the License.
Licensees are responsible for making accurate royalty reports and payments which are subject to withholding of any taxes of Licensors required by applicable law and to audit by MPEG LA (Article 3).
The ATSC Patent Portfolio License is provided for the convenience of Licensees in acquiring patent rights necessary for compliance with the ATSC Standard from multiple Licensors in a single transaction as an alternative to negotiating individual license agreements with each of them. No representation is or can be made that all ATSC Standard patents are included or that other patents may not be infringed or necessary (Article 4).
Licensee information is treated as confidential (Article 5).