Reduced Royalties on DVD Decoder and Encoder

The DVD6C Licensing Group (DVD6C) consisting of nine developers of DVD technology and formats — Hitachi, Ltd., Matsushita Electric Industrial Co., Ltd. (Panasonic), Mitsubishi Electric Corporation, Samsung Electronics Co., Ltd., Sanyo Electric Co., Ltd., Sharp Corporation, Toshiba Corporation, Victor Company of Japan, Ltd. (JVC) and Warner Bros. Home Entertainment Inc. — announced that it has revised its worldwide patent licensing program beginning on and after July 1, 2008, including offering a new license agreement (the ‘New DVD6C License’, which offers the following reduced royalty rates on DVD Decoder and DVD Encoder, respectively.

The DVD6C’s patent royalty for DVD Decoder is the greater of 4% of the Net Selling Price of the DVD Decoder or US$1.00 per decoder sold on or before the effective date of the New DVD6C License, and the new royalty rate will be US$0.50 per decoder on or after the effective date of the New DVD6C License.

Similarly, the DVD6C’s patent royalty for DVD Encoder is the greater of 4% of the Net Selling Price of the DVD Encoder or US$1.50 per encoder sold on or before the effective date of the New DVD6C License, and the new royalty rate will be US$0.75 per encoder on or after the effective date of the New DVD6C License.

Interested parties will remain free to negotiate individual license agreements with DVD6C’s member companies, rather than taking out a single portfolio license or license for a category of products. The member companies have committed to provide such licenses under fair, reasonable and non-discriminatory terms and conditions.

The royalty rates to be offered under the new DVD6C License are shown below:

DVD Decoder (Newly revised):
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

DVD Encoder  (Newly revised)      
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

DVD-Video Player   
The greater of (i) 4% of the net selling price or (ii) US$4.00 per player,
or US$3.00 per player on or after the effective date of the New DVD6C License US$8.00 at maximum on or after January 1, 2003

DVD-Audio Player   
The greater of (i) 4% of the net selling price or (ii) US$4.00 per player,
or US$3.00 per player on or after the effective date of the New DVD6C License
US$8.00 at maximum on or after January 1, 2003

DVD-ROM Drive      
The greater of (i) 4% of the net selling price or (ii) US$4.00 per drive,
or US$3.00 per drive on or after the effective date of the New DVD6C License
US$8.00 at maximum on or after January 1, 2003

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$0.040 per disc on or after the effective date of the New DVD6C License

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$0.040 per disc on or after the effective date of the New DVD6C License

DVD-Audio Disc     
US$0.075 per disc;
US$0.05 per disc on or after January 1, 2004;
US$0.040 per disc on or after the effective date of the New DVD6C License

DVD Video Recorder 
The greater of (i) 4% of the net selling price or (ii) US$6.00 per recorder

DVD Recordable Disc Drive   
The greater of (i) 4% of the net selling price or (ii) US$6.00 per drive

DVD-R Disc         
The greater of (i) 4% of the net selling price or (ii) US$0.075 per disc;
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

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

DVD Recordable Disc Case   
The greater of (i) 4% of the net selling price or (ii) 0.5 US cents 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