Section 1 – Codec Manufacture and Sales
Products sold to End Users and OEMs for PCs (except for products that are part of a personal computer’s operating system)
Decoder, encoder or product consisting of one decoder and one encoder = “unit”.
| Volume (per unit / annual reset) | Per Unit Fee |
| For the first 1 to 100,000 units | No Royalty* |
| For units 100,001 to 5,000,000 | $ 0.20 ea. |
| For units 5,000,001 and more | $ 0.10 ea. |
| *Available to one legal entity in an affiliated group. | |
| Enterprise cap:
$3.5M per year 2005 to 2006 $4.25M per year 2007 to 2008 $5M per year 2009 to 2010 $6.5M per year 2011 to 2015 $8.125M in 2016 $9.75M per year in 2017 through 2025 |
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Products incorporated into a personal computer’s operating system at the time of sale
Decoder, encoder or product consisting of one decoder and one encoder = “unit”.
| Volume (per unit / annual reset) | Per Unit Fee |
| For the first 1 to 100,000 units | No Royalty* |
| For units 100,001 to 5,000,000 | $ 0.20 ea. |
| For units 5,000,001 and more | $ 0.10 ea. |
| * Available to one legal entity in an affiliated group. | |
| Enterprise cap:
$3.5M per year 2005 to 2006 $4.25M per year 2007 to 2008 $5M per year 2009 to 2010 $6.5M per year 2011 to 2015 $8.125M in 2016 $9.75M per year in 2017 through 2025 |
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- Includes right to manufacture and sell AVC encoders and decoders with the right of End Users to use them for personal and consumer (including internal business) purposes without remuneration but not for other uses.
For encoders and decoders, coverage is effective from January 1, 2002, and the back royalty date is January 1, 2005.
Section 2 – Participation Fees
Where End User pays for AVC Video
Subscription (Not limited by title)
| Volume (per subscription) | Annual Fee |
| For the first 1 to 100,000 | No Royalty |
| For subscription 100,001 to 250,000 | $ 25,000 |
| For subscription 250,001 to 500,000 | $ 50,000 |
| For subscription 500,001 to 1,000,000 | $ 75,000 |
| For subscription 1,000,001 and more | $ 100,000 |
Title-by-Title
| Volume (per title) | Fee |
| 12 minutes or less | No Royalty |
| Longer than 12 minutes | Lower of (a) 2% of the remuneration paid in licensee’s first arm’s-length sale or (b) $ 0.02 per title |
Where remuneration is from other sources
| Volume (per title) | Fee | ||||||||||
| For Free Television | (a) one-time $2,500 per transmission encoder or
(b) Annual fee depending on the size of the broadcast market measured in number of households (“HH”).
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| Internet Broadcast AVC Video (not title-by-title, not subscription) | No royalty for life of the AVC Patent Portfolio License |
- Enterprise cap (applies cumulatively across all participation fee categories from 2006):
- $3.5M per year 2006 to 2007
- $4.25M per year 2008 to 2009
- $5M per year in 2010
- $6.5M per year 2011 to 2015
- $8.125M in 2016
- $9.75M per year in 2017 through 2025
For participation fees, coverage is effective from January 1, 2002, and the back royalty date is January 1, 2006.
The actual License agreement provides the only definitive and reliable statement of license terms.