FOR IMMEDIATE RELEASE                                          AT
THURSDAY, JUNE 26, 1997                            (202) 616-2771
                                               TDD (202) 514-1888

                                 
     JUSTICE DEPARTMENT APPROVES PROPOSAL FOR JOINT LICENSING
    OF PATENTS ESSENTIAL FOR MEETING VIDEO TECHNOLOGY STANDARD
           USED IN ELECTRONICS AND BROADCAST INDUSTRIES


     WASHINGTON, D.C. -- The Department of Justice today approved
a proposal by a group of nine companies and one university that
want to create a one-stop-shopping clearinghouse by pooling their
patents, which are needed by entities looking to manufacture
electronic equipment that stores or transmits compressed video
data.

     Under the group's proposal, a jointly owned agent known as
MPEG LA would license these patents in a single package that would
enable manufacturers to meet an international standard known as
MPEG-2 video compression technology.  The technology standard
eliminates redundant information, such as images that are all the
same color or figures that do not change from one moment to the
next, reducing the amount of data, storage and transmission space
required to reproduce video sequences. 

     Through the licensing agent, manufacturers of products that
need to meet the standard will be able to obtain a single license
for most of the patents they will need.

     The owners of the essential patents are:

          The Trustees of Columbia University
          Fujitsu Limited
          General Instrument Corp.
          Lucent Technologies Inc.
          Matsushita Electric Industrial Co., Ltd.
          Mitsubishi Electric Corp.
          Philips Electronics N.V.
          Scientific-Atlanta, Inc.
          Sony Corp.

     The single license will be available to those who provide
products or services that store or transmit video information,
including televisions, digital video disks and players,
telecommunications equipment; as well as cable, satellite and
broadcast television services.

     The Department's position was stated in a business review
letter from Joel I. Klein, Acting Assistant Attorney General in
charge of the Antitrust Division, to counsel for MPEG LA and its
owners.

     Because meeting the standard would infringe on the patent
rights of many different entities, in 1993, a number of firms
interested in the standard formed a working group to explore a way
to efficiently disseminate the essential intellectual property
rights to users of the technology.  The group sponsored a well
publicized search for essential patents, conducted by an
independent patent expert.

     The expert and his assistant reviewed about 8000 patent
abstracts and 800 United States patents; the results of his search
led to the formation of MPEG LA by and nine owners of essential
patents and Cable Television Laboratories Inc.

     Under its agreements with the nine essential patent owners,
MPEG LA will serve as a licensing agent, offering nonexclusive
licenses worldwide to make, use and sell products that meet the
MPEG-2 standard under a portfolio of the nine firms' essential
patents.  The license will tell potential licensees exactly what
patents are in the portfolio, that each portfolio patent is
available independently from its owner, and that the portfolio does
not necessarily contain all the patents the licensee will need in
order to comply with the MPEG-2 standard.

     In order to ensure that the portfolio contains only truly
essential patents, but remains open to additions of other essential
patents, the nine essential patent owners have agreed to employ an
independent patent expert whenever a dispute arises as to whether
a patent in the portfolio is in fact not essential, or the
portfolio should include a patent that is not already part of the
joint licensing program. 

     Klein said that it appeared that the licensing program was
well designed to capture all the efficiencies that can come from
joint licensing of complementary technologies, while incorporating
many facets that should minimize the possibility of competitive
harm.  In addition to the benefits from the information the
portfolio license will convey to licensees, the use of the
independent-expert mechanism will help ensure that the portfolio
will contain only patents that are truly essential to the MPEG-2
standard, weeding out patents that are competitive alternatives to
each other.

     Under the Department's Business Review Procedure, an
organization may submit a proposed action to the Antitrust Division
and receive a statement as to whether the Division will challenge
the action under the antitrust laws.


     A file containing the business review request and the
Department's response may be examined in the Legal Procedure Unit
of the Antitrust Division, Suite 215, Liberty Place, 325 7th
Street, N.W., U.S. Department of Justice, Washington, D.C.  20004. 
After a 30-day waiting period, the documents supporting the
business review will be added to the file.

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