Offer Letters

December 11, 2017


Dear Madam/Sir:

On behalf of the DVD6C Licensing Group (DVD6C), we are pleased to offer your company a portfolio license that covers essential patents for certain DVD formats and +R/+RW Disc formats. The eight members of DVD6C - Hitachi Consumer Electronics Co., Ltd., JVC KENWOOD Corporation, Mitsubishi Electric Corporation, Panasonic Corporation, Samsung Electronics Co. Ltd., Sharp Corporation, Toshiba IPR Solutions, Inc. and Warner Bros. Home Entertainment Inc. - collectively own hundreds of essential patents for these DVD formats and +R/+RW Disc formats. We offer a portfolio license to all of the essential patents owned by DVD6C members for players, recorders, drives, encoders, decoders, discs and cases implementing the DVD-ROM, DVD-Video, DVD-Audio, DVD-RAM, DVD-RW, DVD-R and DVD Video Recording formats, and discs implementing the +R/+RW Disc formats.

All companies that practice these patents, including in the manufacture of players, recorders, drives, encoders, decoders, discs and disc cases, must be licensed.

Please note that the DVD6C patent license is a voluntary license offered as a convenience to the licensee. Because of the expiration of many essential patents for certain DVD formats, there may be no essential patents for such DVD formats in the countries where your DVD products are manufactured or sold, and that if your DVD products implement certain DVD formats incompletely or partially, there may be some patents that are not used, including in the manufacture of your DVD products, even though the patents are essential for implementing mandatory or optional sections of such DVD formats. Therefore, you should confirm that there are one or more essential patents owned by DVD6C members to be used in your DVD products when you enter into the DVD license agreement or pay royalties. Please refer to the Patent List on the DVD6C website (http://www.dvd6cla.com/list.html).The licensee will pay the same specified royalty if one or more patents in the patent portfolio would, absent a license, be infringed.

Instead of taking a portfolio license for all DVD products licensed by DVD6C, licensees have the option of selecting portfolio licenses for particular categories of products, as listed below. Each of these licenses covers all essential patents owned by the DVD6C members for the particular category(ies) of products listed below and selected by the licensee, but not any patents that are not essential for the category(ies) of products chosen.

DVD6C’s joint licensing program offers an efficient means to be licensed and, therefore, to avoid patent infringement, by offering a package of essential patents owned by the nine members. However, your company is also free to negotiate individual license agreements with DVD6C’s member companies, rather than taking a portfolio license for all or any particular category of DVD products. The member companies have committed to provide such licenses under fair, reasonable and non-discriminatory terms and conditions. The nine members of DVD6C have authorized Toshiba Corporation to grant portfolio licenses on their behalf.

The royalty rates applicable to the licenses available under the DVD6C license agreement (the “New DVD6C License Agreement”) for particular categories of products (should you elect to license one or more categories of products listed below) are as follows:

Category Royalty
DVD-Video Player The greater of:
(i) 4% of the net selling price (up to a maximum of US$8.00 per player) or
(ii) US$4.00 per player;
US$2.00 per player on or after the effective date of the New DVD6C License Agreement;

US$1.75 per player for all DVD-Video Players sold or otherwise transferred on or after July 1, 2016 through and including December 31, 2017, US$1.50 per player for all DVD-Video Players sold or otherwise transferred on or after January 1, 2018 through and including December 31, 2018, and US$1.25 per player for all DVD-Video Players sold or otherwise transferred on or after January 1, 2019, for those licensees with no overdue or incorrect royalty reports or overdue or underpaid royalties (including back royalties) and otherwise in compliance with the New DVD6C License Agreement:
(i) as of the due date for payment of royalties for the immediately preceding semi-annual reporting period, provided that a licensee who otherwise qualifies for the US$1.75, US$1.50, and/or US$1.25 per player rate shall be subject to the US$2.00 per player rate for any period for which an audit has revealed an underpayment of royalties of greater than 3%.
DVD-Audio Player The greater of:
(i) 4% of the net selling price (up to a maximum of US$8.00 per player) or
(ii) US$4.00 per player;
US$2.00 per player on or after the effective date of the New DVD6C License Agreement;

US$1.75 per player for all DVD-Audio Players sold or otherwise transferred on or after July 1, 2016 through and including December 31, 2017, US$1.50 per player for all DVD-Audio Players sold or otherwise transferred on or after January 1, 2018 through and including December 31, 2018, and US$1.25 per player for all DVD-Audio Players sold or otherwise transferred on or after January 1, 2019, for those licensees with no overdue or incorrect royalty reports or overdue or underpaid royalties (including back royalties) and otherwise in compliance with the New DVD6C License Agreement:
(i) as of the due date for payment of royalties for the immediately preceding semi-annual reporting period, provided that a licensee who otherwise qualifies for the US$1.75, US$1.50, and/or US$1.25 per player rate shall be subject to the US$2.00 per player rate for any period for which an audit has revealed an underpayment of royalties of greater than 3%.
DVD-ROM Drive The greater of:
(i) 4% of the net selling price (up to a maximum of US$8.00 per drive) or
(ii) US$4.00 per drive;
US$2.00 per drive on or after the effective date of the New DVD6C License Agreement;

US$1.75 per drive for all DVD-ROM drives sold or otherwise transferred on or after July 1, 2016 through and including December 31, 2017, US$1.50 per drive for all DVD-ROM Drives sold or otherwise transferred on or after January 1, 2018 through and including December 31, 2018, and US$1.25 per drive for all DVD-ROM Drives sold or otherwise transferred on or after January 1, 2019, for those licensees with no overdue or incorrect royalty reports or overdue or underpaid royalties (including back royalties) and otherwise in compliance with the New DVD6C License Agreement:
(i) as of the due date for payment of royalties for the immediately preceding semi-annual reporting period, provided that a licensee who otherwise qualifies for the US$1.75, US$1.50, and/or US$1.25 per drive rate shall be subject to the US$2.00 per drive rate for any period for which an audit has revealed an underpayment of royalties of greater than 3%.
DVD-ROM Disc US$0.075 per disc;
US$0.065 per disc on or after January 1, 2002;
US$0.05 per disc on or after January 1, 2004;
US$0.04 per disc on or after the effective date of the New DVD6C License Agreement;

US$0.0275 per disc for any semi-annual reporting period beginning on or after January 1, 2016, and US$0.0225 per disc for any semi-annual reporting period beginning on or after January 1, 2017, for those licensees with no overdue or incorrect royalty reports or overdue or underpaid royalties (including back royalties) and otherwise in compliance with the New DVD6C License Agreement:
(i) as of the due date for payment of royalties for the immediately preceding semi-annual reporting period, provided that a licensee who otherwise qualifies for the US$0.0275, and/or US$0.0225 per disc rate shall be subject to the US$0.04 per disc rate for any period for which an audit has revealed an underpayment of royalties of greater than 3%.
DVD-Video Disc US$0.075 per disc;
US$0.065 per disc on or after January 1, 2002;
US$0.05 per disc on or after January 1, 2004;
US$0.04 per disc on or after the effective date of the New DVD6C License Agreement;

US$0.0275 per disc for any semi-annual reporting period beginning on or after January 1, 2016, and US$0.0225 per disc for any semi-annual reporting period beginning on or after January 1, 2017, for those licensees with no overdue or incorrect royalty reports or overdue or underpaid royalties (including back royalties) and otherwise in compliance with the New DVD6C License Agreement:
(i) as of the due date for payment of royalties for the immediately preceding semi-annual reporting period, provided that a licensee who otherwise qualifies for the US$0.0275, and/or US$0.0225 per disc rate shall be subject to the US$0.04 per disc rate for any period for which an audit has revealed an underpayment of royalties of greater than 3%.
DVD-Audio Disc US$0.075 per disc;
US$0.05 per disc on or after January 1, 2004;
US$0.04 per disc on or after the effective date of the New DVD6C License Agreement;

US$0.0275 per disc for any semi-annual reporting period beginning on or after January 1, 2016, and US$0.0225 per disc for any semi-annual reporting period beginning on or after January 1, 2017, for those licensees with no overdue or incorrect royalty reports or overdue or underpaid royalties (including back royalties) and otherwise in compliance with the New DVD6C License Agreement:
(i) as of the due date for payment of royalties for the immediately preceding semi-annual reporting period, provided that a licensee who otherwise qualifies for the US$0.0275, and/or US$0.0225 per disc rate shall be subject to the US$0.04 per disc rate for any period for which an audit has revealed an underpayment of royalties of greater than 3%.
DVD Decoder The greater of:
(i) 4% of the net selling price or
(ii) US$1.00 per decoder;
US$0.50 per decoder on or after the effective date of the New DVD6C License Agreement
DVD Video Recorder The greater of:
(i) 4% of the net selling price or
(ii) US$6.00 per recorder;
US$4.00 per recorder on or after the effective date of the New DVD6C License Agreement;

US$2.50 per recorder for any semi-annual reporting period beginning on or after July 1, 2016, for those licensees with no overdue or incorrect royalty reports or overdue or underpaid royalties (including back royalties) and otherwise in compliance with the New DVD6C License Agreement:
(i) as of the due date for payment of royalties for the immediately preceding semi-annual reporting period, provided that a licensee who otherwise qualifies for the US$2.50 per recorder rate shall be subject to the US$4.00 per recorder rate for any period for which an audit has revealed an underpayment of royalties of greater than 3%.
DVD (Recordable Disc) Drive The greater of:
(i) 4% of the net selling price or
(ii) US$6.00 per drive;
US$4.00 per drive on or after the effective date of the New DVD6C License Agreement;

US$2.50 per drive for any semi-annual reporting period beginning on or after July 1, 2016, for those licensees with no overdue or incorrect royalty reports or overdue or underpaid royalties (including back royalties) and otherwise in compliance with the New DVD6C License Agreement:
(i) as of the due date for payment of royalties for the immediately preceding semi-annual reporting period, provided that a licensee who otherwise qualifies for the US$2.50 per drive rate shall be subject to the US$4.00 per drive rate for any period for which an audit has revealed an underpayment of royalties of greater than 3%.
DVD Encoder The greater of:
(i) 4% of the net selling price or
(ii) US$1.50 per encoder;
     US$0.75 per encoder on or after the effective date of the
     New DVD6C License Agreement
DVD-R Disc The greater of:
(i) 4% of the net selling price or
(ii) US$0.075 per disc, or
     US$0.045 per disc on or after January 1, 2006
DVD-RW Disc The greater of:
(i) 4% of the net selling price or
(ii) US$0.075 per disc, or
     US$0.065 per disc on or after the effective date of the
     New DVD6C License Agreement
DVD-RAM Disc The greater of:
(i) 4% of the net selling price or
(ii) US$0.075 per disc, or
     US$0.065 per disc on or after the effective date of the
     New DVD6C License Agreement
Recordable Disc Case The greater of:
(i) 4% of the net selling price or
(ii) US$0.005 per case
+R Disc The greater of:
(i) 4% of the net selling price or
(ii) US$0.075 per disc, or
     US$0.045 per disc on or after January 1, 2006
+RW Disc The greater of:
(i) 4% of the net selling price or
(ii) US$0.075 per disc, or
     US$0.065 per disc on or after the effective date of the
     New DVD6C License Agreement

Please note that this patent licensing program does not cover video or audio compression patents (including, without limitation, MPEG-2 video compression, or AC-3, Dolby Digital or DTS audio compression) that may be applicable to DVD products or “CSS” (Content Scramble System) patents, “CPPM” (Copyright Protection for Pre-recorded Media) patents, or “CPRM” (Copyright Protection for Recordable Media) patents that may be applicable to DVD products, which are licensed through separate entities. Please also note that this patent licensing program does not cover Blu-ray Disc (“BD”) products, irrespective of whether they include DVD functionality.

If you are interested in taking a license under this joint licensing program with respect to any of the categories set forth above, please complete the attached form and return the same to the following address:

[CONTACT ADDRESS]

Upon receipt of the form, we will send you the DVD6C license agreement. For more information, please refer to our website at http://www.dvd6cla.com.

If you would like to inquire about the availability of a license to a category of products not included in this letter, or to fewer than all of the essential patents for any product category listed above, please write to the DVD6C licensing representative at the address set forth above. In this respect, please note that DVD6C may not be able to make all particular licenses requested available on a portfolio basis and reserves the right to refer the company making the request to the individual members of DVD6C, each of which has committed to making any of its essential patents for the product categories listed above available for licensing on fair, reasonable and nondiscriminatory terms.

This letter is without prejudice to any and all rights of the members of DVD6C, all of which are expressly reserved.

If you have any questions relating to this matter, please do not hesitate to contact the above.

With best regards,

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