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16. Intellectual Property and Legal Matters

16.1 Who owns the name Blu-ray Disc and its logo?
16.2 Who claims and who administers BD patent rights?
16.3 What licensing obligations exist when duplicating and distributing content on writable BD discs?
16.4 What licensing obligations exist when replicating and distributing content on prerecorded BD discs?


16.1 Who owns the name Blu-ray Disc and its logo?
For the most part, the Blu-ray Disc name and its logo are trademarks of the Blu-ray Disc Association (BDA). Originally, Sony Corporation (Sony Kabushiki Kaisha) and other founding BD companies registered Blu-ray Disc in various countries but have since transferred ownership to the BDA.

As worldwide registration is not yet complete, to be safe, the BDA employs transitional language such as "Blu-ray Disc and the Blu-ray Disc logo are trademarks." Other related names and logos, including BONUSVIEW, BD-Live, Blu-ray 3D, AVCREC, BD Regional Playback Control (RPC) and BDXL, are also trademarks of the BDA (see figure 16.1).

Blu-ray Disc logos

Figure 16.1: Official Blu-ray Disc logos (used with permission of Blu-ray Disc Association)

 

16.2 Who claims and who administers BD patent rights?
Despite notions to the contrary, the Blu-ray patent picture is far more extensive than any one dominating company. Properly understood, BD intellectual property rights encompass everything from audio and video codecs, content protection systems and software to materials, manufacturing processes, packaging and more.

Seeking to avoid the complexities of DVD’s multi-agent system (DVD6C, 4C, 3C, 1C, etc.), MPEG LA began working in 2005 with BD’s multiple stakeholders to establish itself a one-stop essential Blu-ray patent licensing authority. Those who participated in this effort included: CyberLink, Dell, Disney, Hewlett-Packard, Hitachi, Philips Electronics, LG Electronics, Mitsubishi, Panasonic, Pioneer, Samsung, Sanyo, Sharp, Sonic Solutions, Sony, TDK, Victor Company of Japan (JVC) and Warner Home Video. MPEG LA later abandoned its attempt in early 2009.

On Feb. 25, 2009, Panasonic, Philips and Sony announced their intentions to cooperate with each other and any interested patent holders to create a joint Blu-ray license. Under this plan, packages of essential BD, DVD and CD patent licenses (see table) will be made available to manufacturers and software publishers through an independent entity, established on Oct. 9, 2009 as One-Blue, LLC.

On Oct. 20, 2009, One-Blue, LLC issued a call for patents with their essentiality to BD products sold in the United States to be evaluated by Proskauer, Rose LLP (an international law firm that performs similar determinations for MPEG LA, DVD6C and 4C). An initial meeting of essential patent holders is planned for Nov. 6, 2009 in Japan. However, it is far from clear how successful this effort will be with respect to its ultimate participants as well as the scope and terms of any possibly consensual programs.

Philips, Panasonic and Sony Essential BD/DVD/CD Patent Royalties
(as of Feb. 25, 2009)
Products License Royalties (US$)
Blu-ray Disc CE player $9.50 unit
Blu-ray Disc CE player $14.00 unit
Blu-ray Disc computer drive $10.50 unit
Blu-ray Disc computer recorder $14.00 unit
BD-ROM disc $0.11 unit
BD-R disc $0.12 unit
BD-RE disc $0.15 unit

On March 8, 2010, Mitsubishi Electric Corporation, Thomson Licensing, Toshiba Corporation and Warner Bros. Home Entertainment (BD4C Licensing Group) announced they have commended a joint licensing program beginning March 1, 2010. Under this plan, essential BD and DVD patent licenses will be made available through Toshiba (see table).

Mitsubishi, Thomson, Toshiba and Warner Bros. Essential BD/DVD Patent Royalties
(as of Mar. 8, 2010)
Products License Royalties (US$)
BD-Video Disc $0.04 per disc
BD-ROM Disc $0.04 per disc
BD-R Disc $0.065 per disc
BD-RE Disc $0.09 per disc
BD/DVD Hybrid Disc
(including BD/DVD Hybrid ROM Discs and BD/DVD Hybrid Video Discs)
$0.08 per disc
BD Decoder $1.00 per decoder, with an annual cap of $10,000,000
BD Encoder $1.50 per encoder, with an annual cap of $15,000,000
BD-Video Player $4.50 per player
BD-Video Combo Player $6.00 per player
BD-Video Recorder $7.00 per recorder
BD-Video Combo Recorder $6.00 per recorder
BD-ROM Drive $4.00 per drive
BD Recordable Disc Drive $6.00 per drive
BD-ROM Combo Drive $5.00 per drive
BD Combo Recordable Disc Drive $5.00 per drive

In addition and notwithstanding participating in pools, such as that proposed by Panasonic, Philips and Sony, companies typically offer the option to directly license their intellectual property. By way of example, Philips and Sony offer various programs to manufacturers who wish to license their essential BD patents (see tables).

Philips Electronics Essential BD Patent Royalties
(as of Feb. 7, 2008)*
Product License Royalties
Blu-ray Disc ROM Data Disc €0.03/unit ($0.0409 U.S.) **
Blu-ray Disc ROM Movie Disc €0.04/unit ($0.0545 U.S.)
Blu-ray Disc R Disc €0.06/unit ($0.0818 U.S.)
Blu-ray Disc RE Disc €0.06/unit ($0.0818 U.S.)
Blu-ray Disc Player
(incl. DVD-Video, Video CD, AC-3 and DTS playback)
€3.50/unit ($4.769 U.S.)
Blu-ray Disc Recorder
(incl. DVD±R/RW, DVD-Video, Video CD, AC-3 and DTS playback)
€5.00/unit ($6.8129 U.S.)
* Manufacturers must begin accruing royalties from Feb. 1, 2008.
** U.S. currency conversion on Mar. 23, 2009.
Sony Electronics Essential BD Patent Royalties
(as of May 20, 2008)
Products License Royalties
Blu-ray Disc ROM Disc 1.5% of net selling price or $0.03 U.S. (whichever is greater)
Blu-ray Disc R Disc 1.5% of net selling price or $0.06 U.S. (whichever is greater)
Blu-ray Disc RE Disc 1.5% of net selling price or $0.06 U.S. (whichever is greater)
Blu-ray Disc Player 1.5% of net selling price or $3 U.S. (whichever is greater)
Blu-ray Disc Recorder 1.5% of net selling price or $3 U.S. (whichever is greater)

MPEG LA also administers joint patent licenses for MPEG-2, MPEG-4 AVC/H.264 and VC-1 video codecs (see table). Keep in mind, however, that while these portfolios may be comprehensive, they are not exhaustive and include only essential patents. Thus, it is possible that other parties may be due royalties. For example, neither AT&T, nor many of the participants of a rival, and now abandoned, MPEG-4 AVC/H.264 joint patent licensing program administered by Via Licensing Corporation, are included in MPEG LA’s offering.

MPEG-2 patent licensors: Alcatel Lucent, British Telecommunications plc, Canon, Inc., CIF Licensing, LLC, Columbia University, France Télécom (CNET), Fujitsu, General Instrument Corp., GE Technology Development, Inc., Hitachi, Ltd., KDDI Corporation (KDDI), LG Electronics Inc., Matsushita, Mitsubishi, Nippon Telegraph and Telephone Corporation (NTT), Philips, Robert Bosch GmbH, Samsung, Sanyo Electric Co., Ltd., Scientific-Atlanta, Sharp, Sony, Thomson Licensing, Toshiba and Victor Company of Japan, Limited (JVC).

MPEG-4 AVC/H.264 patent licensors: DAEWOO Electronics Corporation, Electronics and Telecommunications Research Institute, France Télécom, société anonyme, Fraunhofer-Gesellschaft zur Foerderung der angewandten Forschung e.V., Fujitsu Limited, Hitachi, Ltd., Koninklijke Philips Electronics N.V., LG Electronics Inc., Matsushita Electric Industrial Co., Ltd., Microsoft Corporation, Mitsubishi Electric Corporation, NTT DoCoMo, Inc., Nippon Telegraph and Telephone Corporation, Robert Bosch GmbH, Samsung Electronics Co., Ltd., Scientific-Atlanta Vancouver Company, Sedna Patent Services, LLC, Sharp Corporation, Siemens AG, Sony Corporation, The Trustees of Columbia University in the City of New York, Toshiba Corporation and Victor Company of Japan, Ltd (JVC).

VC-1 patent licensors: DAEWOO Electronics Corporation, France Télécom, société anonyme, Fujitsu Limited, Koninklijke Philips Electronics N.V., LG Electronics Inc., Matsushita Electric Industrial Co., Ltd. (Panasonic), Microsoft Corporation, Mitsubishi Electric Corporation, Nippon Telegraph and Telephone Corporation (NTT), Pantech & Curitel Communications, Inc., Samsung Electronics Co., Ltd., Sharp Corporation, Siemens AG, Sony Corporation, Telenor ASA, Toshiba Corporation and Victor Company of Japan, Ltd. (JVC).

MPEG LA Essential Video Codec Patent Royalties
(abridged, U.S. funds)*
Products MPEG-2 MPEG-4 AVC/H.264 VC-1
Disc
(prerecorded/replicated, written/duplicated)
≤12 min = $0.01/disc ;
>12 min = $0.03/disc
(2003-09), $0.0176/disc (2010), $0.016/disc (after 2010)
≤12 min = $0.00/title;
>12 min = lower of 2% of sale price or $0.02/title
≤12 min = $0.00/title;
>12 min = lower of 2% of sale price or $0.02/title
Encoder
(recorder, etc.)
$2.50/unit (2002-09), $2.00/unit (2010) ≤100k units = $0.00/unit;
>100k units = $0.20/unit;
>5m units = $0.10/unit;
max. $3.5m/year (2005-06),
$4.25 m/year (2007-08), $5m/year (2009-10)
≤100k units = $0.00/unit;
>100k units = $0.20/unit;
>5m units = $0.10/unit;
max. $5m/year (2006-12)
Decoder
(player, etc.)
$2.50/unit (2002-09), $2.00/unit (2010) ≤100k units = $0.00/unit;
>100k units = $0.20/unit;
>5m units = $0.10/unit;
max. $3.5m/year (2005-06),
$4.25 m/year (2007-08), $5m/year (2009-10)
≤100k units = $0.00/unit;
>100k units = $0.20/unit;
>5m units = $0.10/unit;
max. $5m/year (2006-12)
Encoder and Decoder/Consumer Products
(recorder/player, camcorder, etc.)
$2.50/unit (2002-09), $2.00/unit (2010) ≤100k units = $0.00/unit;
>100k units = $0.20/unit;
>5m units = $0.10/unit;
max. $3.5m/year (2005-06),
$4.25 m/year (2007-08), $5m/year (2009-10)
≤100k units = $0.00/unit;
>100k units = $0.20/unit;
>5m units = $0.10/unit;
max. $5m/year (2006-12)
* Other future, current and historical computation methods and rates may be applicable.

Various industry groups develop, maintain and license the digital audio/video interface and related encryption technologies employed by BD-equipped computers and consumer electronics devices (see table). These include HDMI Licensing, LLC (HDMI), Digital Display Working Group (DVI), Video Electronics Standards Association (DisplayPort) and Digital Content Protection, LLC (HDCP).

Audio/Video Interface Licensing Fees and Patent Royalties
(U.S. funds)
License Fees and Royalties
DisplayPort Registration none
DVI Adopters Agreement none
HDMI Adopter Agreement $10K/year or $5K/year + $1.00/unit and $0.15/unit or
$0.05/unit w/trademarks or
$0.04/unit w/trademarks and HDCP
HDCP License Agreement $15K/year and
10K device keys = $1K; 100K device keys = $2.5K; 1M device keys = $5K
HDCP Component License Agreement $15K/year
HDCP Content Participation Agreement $50K/year

The Advanced Access Content System (AACS) is developed, administered and licensed by AACS LA, a consortium of technology and content providers consisting of IBM, Intel, Panasonic (Matsushita Electric), Sony, Toshiba, Microsoft, Disney and Warner Bros.

AACS Licensing Fees and Patent Royalties
(as of June 26, 2008, U.S. funds)
License Fees and Royalties
AACS Interim Adopter Agreement Adopter $25K/year + $5K/sub-category (max. $40K) for each of: player manufacturer, recorder manufacturer, drive manufacturer, component manufacturer, media manufacturer or
Licensed content producer $15K

prerecorded media = $0.04/disc + $1K/order
recordable media = $0.02/disc + $1K order

Device w/ECDSAType A Device Keys = $0.10/device
Type C Device Keys = $3.5K <100K copies/year
$12K <1M copies/year
$30K <10M copies/year
max. $60K/year
+ 1K/order

AACS Device w/o ECDSA
Type A Device Keys = $0.08/device
Type C Device Keys = $3K <100K copies/year
$10K <1M copies/year
$25K <10M copies/year
max. $50K/year
+ 1K/order

Type 3 MKB for Recorders = $0.02/device
max. $2K+ $1K/order

Drives $0.02/device + $1K/order

Content Certificates $500/certificate + $800/order

AACS Interim Content Participant Agreement Content Participant $40K/year and
prerecorded media = $0.04/disc + $1K/order or
<500K discs = $12K/year
<2M discs = $40K/year
<5M discs = $80K/year
<15M discs = $200K/year
<70M discs = $600K/year
<120M discs = $1.4M/year
<170M discs = $1.9M/year
<250M discs = $2.3M/year
>250M discs = $2.5M/year
+ $1K/order and
Content Certificates = $500/certificate + $800/order
AACS Interim Content Provider Agreement Basic Content Provider = $3K or
Volume Content Provider = $15K/year and
prerecorded media = $0.04/disc + $1K/order or
<500K discs = $12K/year
<2M discs = $40K/year
<5M discs = $80K/year
<15M discs = $200K/year
<70M discs = $600K/year
<120M discs = $1.4M/year
<170M discs = $1.9M/year
<250M discs = $2.3M/year
>250M discs = $2.5M/year
+ $1K/order and
Content Certificates = $500/certificate + $800/order
AACS Interim Reseller Agreement $5K/year

 

16.3 What licensing obligations exist when duplicating and distributing content on writable BD discs?
Distributing digital audio, video, text and still images, either electronically or on physical media, often involves important patent, trademark and other intellectual property considerations. When working with Blu-ray the need to enter into and comply with various license agreements differs depending upon the circumstance. For detailed descriptions of these requirements as they pertain to duplicating (recording) and distributing content on writable BD (BD-R/RE) discs see: Hugh Bennett. "Blu-ray Disc Licensing for Small Publishers, Duplicators, and Independent Studios." EMediaLive 26 June 2008.

 

16.4 What licensing obligations exist when replicating and distributing content on prerecorded BD discs?
Distributing digital audio, video, text and still images, either electronically or on physical media, often involves important patent, trademark and other intellectual property considerations. When working with Blu-ray the need to enter into and comply with various license agreements differs depending upon the circumstance. For a detailed description of these requirements as they pertain to replicating and distributing content on prerecorded/pressed BD (BD-ROM) discs see: Hugh Bennett. "The Ins and Outs of Blu-ray Disc Replication and Licensing." EMediaLive 7 Oct. 2008.