DEFINITIVE AGREEMENT
THIS AGREEMENT is made as of October 1, 1996 ("Effective Date"), by and
between STARSIGHT TELECAST, INC. ("StarSight"), a corporation organized and
existing under the laws of the State of California, USA, having its main office
and place of business at 00000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxxxx,
00000, XXX, and Microsoft Corporation ("Microsoft"), a corporation organized and
existing under the laws of the State of Washington, USA, having its main office
and place of business at Xxx Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, XXX,
who agree as follows:
SECTION 1
RECITALS
StarSight is engaged in the manufacture, research and development of
data processing products and methods including the provision of schedule and
programming information to end users and television broadcast facilities having
systems compatible for receiving such information.
Microsoft develops, manufactures, licenses, sells and supports a wide
range of software and hardware products, including data processing products, for
personal computers ("PCs"), sub-PCs, computerized appliances, workstations and
servers.
StarSight and Microsoft have intellectual property rights including
certain patents and patent applications, and have the right to grant licenses to
the other under such intellectual property rights. The parties expect to
continue research and development which will be protected by future intellectual
property rights. Each of the parties wishes to be granted licenses under such
intellectual property rights of the other party.
The parties wish to cooperate with respect to their respective
development of data processing products and provision of schedule and
programming information to end users and television broadcast facilities.
Further, the parties wish to share certain revenues and conduct various
marketing activities in connection with such products and services.
SECTION 2
DEFINITIONS
When the following terms are used in capitalized form herein, they
shall have the following meanings:
"Advertising Links" means a hypertext link or other mechanism through
which advertising is made available to or accessible by user selection. One
example of an "Advertising Link" would be an icon which could be selected by a
user which activates or causes the display or storage of an advertising message.
"Advertising Revenue(s)" means all Microsoft revenues generated from
advertising sold for display in any EPG display of any Microsoft EPG Product, as
well as any fees paid by an advertiser to Microsoft for display of an
Advertising Link or for user selection of an Advertising Link in any EPG display
of any Microsoft EPG Product.
"Data Loader" means a mechanism for receiving and storing data in a
manner which allows it to be displayed in an EPG.
"Deliverables" shall mean either the Microsoft Deliverables or the
StarSight Deliverables as the context may require.
"Delivering Party" shall mean Microsoft in the case of the Microsoft
Deliverables and StarSight in the case of the StarSight Deliverables.
"Digital Set Top Box" means any digital device (other than a
Traditional Product, a personal computer or other multi-purpose device, as well
as, components designed therefor), the principal design and function of which is
the reception, decoding and conditional access of MPEG (or equivalent) digital
broadcast signals, irrespective of the broadcast method (e.g., cable,
satellite), of programming services such as television.
"Direct Broadcast Satellite Product" or "DBS Product" means an
integrated receiver/decoder product compatible with a direct broadcast satellite
system such as, for example, the DirecTV 101(degree) West direct broadcast
satellite network. A DBS Product may be, for example, without limitation a
television, a VCR or personal computer having an integrated direct broadcast
satellite network receiving function.
[REDACTED***] means [REDACTED***] or its successor in interest to its
[REDACTED***].
"Electronic Program Guide" or "EPG" means any electronic guide which
displays or gives selective access to any information.
"Licensed Patents" means, as to each party to this Agreement, the
claims covering EPG-related inventions in any and all patents and applications
throughout the world including utility models, design patents, divisionals,
reissues, continuations, re-examinations and extensions thereof, issued or
issuing on applications entitled to an effective filing date before
[REDACTED***], under which patents or applications therefor such party or any of
its Subsidiaries now has or [REDACTED***] of or within the scope granted herein.
The term "Licensed Patents" shall not apply with respect to any claim of any
patent in which either party first obtains rights before, on, or after the
Effective Date if a grant of a license or the exercise of rights thereunder
would result [REDACTED***], or result in the loss of any rights in such patent,
by the granting party, except for [REDACTED***] to Subsidiaries of such granting
party, and [REDACTED***] to third parties for inventions made by said third
parties while employed by such granting party to this Agreement.
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"Microsoft Deliverables" shall mean deliverables identified on Appendix
A, attached hereto and incorporated by reference and as may be amended from time
to time in writing by the mutual agreement of the parties to this Agreement.
"Microsoft EPG Product" means a Microsoft Licensed Product that
includes or incorporates an EPG designed to receive and display local broadcast
TV listings.
"Microsoft Licensed Product(s)" means any and all products, services
and infrastructure of Microsoft or any of its Subsidiaries which products,
services and infrastructure, but for this Agreement would directly or indirectly
infringe one or more of the valid and enforceable claims of the StarSight
Licensed Patents. The term "Microsoft Licensed Products," however, shall not
include Traditional Products.
"Net Advertising Revenues" means Advertising Revenues less only
allowances for uncollectable amounts and bad debts, determined in accordance
with generally accepted accounting principles as consistently applied by
Microsoft.
"Net Subscription Revenues" means Subscription Revenues less only
allowances for uncollectible amounts and bad debts, determined in accordance
with generally accepted accounting principles as consistently applied by
StarSight.
"Receiving Party" shall mean StarSight in the case of the Microsoft
Deliverables and Microsoft in the case of the StarSight Deliverables.
"Service Provider" means any company or entity which operates a
broadcast system, irrespective of the broadcast method (e.g., cable, satellite),
for providing programming services such as television.
[REDACTED***] means, with respect to any Digital Set Top Box, one that
is directly or indirectly provided by a [REDACTED***] to an end user via lease,
subscription or otherwise whereby title to the Digital Set Top Box does not pass
to the end user (i.e., the Digital Set Top Box remains an asset listed on the
financial books of the [REDACTED***] or other entity which provides the Digital
Set Top Box to the end user).
"StarSight Authorization Codes" means codes which StarSight uses to
electronically send activation, deactivation or other commands or data to
individually addressable StarSight products.
"StarSight Competitor" means an entity that actively designs and/or
sells or otherwise markets Electronic Program Guide hardware, services and/or
software which, when such products and services, taken individually or
collectively, directly compete in the marketplace with similar StarSight
products and services designed, sold, or otherwise marketed by StarSight, or are
licensed under and/or covered by any StarSight patent, copyright, or trade
secret.
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*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
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"StarSight Data Loader" means a Data Loader that receives and stores
StarSight data, pursuant to a StarSight subscription.
"StarSight Deliverables" shall mean deliverables identified on Appendix
B, attached hereto and incorporated by reference.
"StarSight Licensed Product(s)" means any and all EPG products and
services of StarSight or any of its Subsidiaries the primary function of which
is to receive and display information from a StarSight data service and a
substantial portion of which functionality is to receive and display television
programming information which products and services, but for this Agreement
would directly or indirectly infringe one or more of the valid and enforceable
claims of the Microsoft Licensed Patents. For example, personal computer
operating systems, Internet/Intranet browser programs, general purpose
word-processing programs, and spreadsheet programs would not be included in the
term "StarSight Licensed Products."
"StarSight Protocol(s)" means data structures, protocols, and similar
information established by StarSight to enable StarSight products to receive,
decode and utilize information broadcast through the StarSight system.
"StarSight Trademarks" means the "StarSight and the "StarSight and
Design" trademarks, whether alone or in combination, as illustrated in Appendix
C, attached hereto and incorporated by reference; provided however, that the
appearance and/or style of the trademarks may vary from time to time as
specified by StarSight in its sole discretion.
"Subscription Revenues" means StarSight revenues generated from (or as
a result of) paid subscribers to the StarSight EPG subscription service for
local broadcast TV listings derived directly from users' use of Microsoft EPG
Products. The term "Subscription Revenues" does not include subscription
revenues received by StarSight derived from any non-Microsoft EPG product
irrespective of whether such non-Microsoft EPG Product runs on a third party
platform or on a Microsoft operating system platform (such as "Windows(R) 95" or
its successor products and platforms).
"Subsidiary" means a corporation, company, or other entity: (i) more
than 50% of whose outstanding shares or securities (representing the right to
vote for the election of directors or other such managing authority) are, now or
hereafter, owned or controlled, directly or indirectly by a party hereto, but
such corporation, company, or other entity shall be considered to be a
Subsidiary only so long as such ownership or control exists; or (ii) which does
not have outstanding shares-or securities, as may be the case with a
partnership, joint venture, or unincorporated association, but more than 50% of
whose ownership interest representing the right to make decisions for such
corporation, company, or other entity is, now or hereafter, owned or controlled,
directly or indirectly by a party hereto, but such corporation, company, or
other entity shall be considered to be a Subsidiary only so long as such
ownership or control exists.
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"Trade Secret(s)" means information shared by one party with the other
relating to past, present and future research, development and business
activities, which information is treated as secret and confidential, and which
information derives independent, actual or potential value from not being
generally known to other persons by proper means.
"Traditional Products" means devices of the type and capability
generally available in the consumer market as of [REDACTED***], in the following
product categories: television sets, VCRs, TVCRs, and television set top decoder
boxes irrespective of whether such products are connected via cable, satellite,
telephony, MMDS, etc. and irrespective of whether such products are
[REDACTED***] or distributed by some other means.
"Transfer(s)" or "Transferred" means (i) deliver(ed) to others
(including for export) other than by sale, regardless of the basis of
compensation, if any, (e.g., by consignment or by gift) and/or (ii) sell (sold)
in combination with other products.
"Version" means a particular model or version of a Microsoft Licensed
Product.
"Version Number" means any combination of numbers, letters, and/or
words used to identify a particular Version of a Microsoft Licensed Product.
SECTION 3
PATENT AND TRADE SECRET CROSS-LICENSE
3.1 Subject to the obligations herein, including without limitation the
consideration and payments pursuant to Sections 5 and 6, StarSight hereby grants
to Microsoft a worldwide, non-exclusive, non-assignable license under
StarSight's Licensed Patents and, subject without limitation to Section 10.1 and
10.2, Trade Secrets to make, have made, use, lease, sell, offer to sell,
otherwise market and import Microsoft Licensed Products.
3.2 Subject to the obligations herein, including without limitation the
consideration and payment pursuant to Sections 5 and 6, Microsoft hereby grants
to StarSight a worldwide, non-exclusive, non-assignable license under
Microsoft's Licensed Patents and, subject without limitation to Section 10.1 and
10.2, Trade Secrets to make, have made, use, lease, sell, offer to sell,
otherwise market and import StarSight Licensed Products.
3.3 Subject to Section 11, the patent licenses granted under this
Section 3 shall not include the right to grant sub-licenses. The right to "have
made" shall not be considered a prohibited sub-license.
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*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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SECTION 4
DEVELOPMENT AND SCHEDULES
4.1 Microsoft shall deliver the Microsoft Deliverables to StarSight in
accordance with schedules referenced in Section 4.5. If the schedule is not
specified for a particular Microsoft Deliverable, then such Microsoft
Deliverable will be distributed throughout the term of this Agreement as jointly
determined by the parties.
4.2 Microsoft grants to StarSight the license rights described in
Appendix A with respect to the Microsoft Deliverables. The relevant license
grants will apply to all Versions (pre-release and final) and components thereof
distributed by Microsoft. To the extent any of the license rights set forth in
Appendix A are inconsistent with the license rights set forth in this Agreement,
then the license rights set forth in this Agreement shall apply.
4.3 StarSight shall deliver the StarSight Deliverables to Microsoft in
accordance with schedules referenced in Section 4.5. If the schedule is not
specified for a particular StarSight Deliverable, then such StarSight
Deliverable will be distributed throughout the term of this Agreement as jointly
determined by the parties.
4.4 StarSight grants to Microsoft the license rights described in
Appendix B with respect to the StarSight Deliverables. The relevant license
grants will apply to all Versions (pre-release and final) and components thereof
distributed by StarSight. To the extent any of the license rights set forth in
Appendix B are inconsistent with the license rights set forth in this Agreement,
then the license rights set forth in this Agreement shall apply.
4.5 The current schedule for the delivery of the Deliverables is set
forth on Appendices A and B and may, from time to time be updated upon agreement
of the parties. The schedule and all updates thereto will take into account the
availability of the Deliverables and timing of development activities and test
deployments. The parties agree to use reasonable efforts to implement the
development activities and test deployments in accordance with the agreed upon
schedule.
4.6 In the event hardware is included in the Deliverables, then the
following additional terms and conditions shall apply to such hardware. The
Delivering Party shall retain title to hardware it delivers at all times. The
Receiving Party shall insure and take normal precautions to care for the
hardware it receives. The Delivering Party agrees that for the duration of this
Agreement it will maintain the hardware it delivers in good working order at its
expense. The Delivering Party shall determine in its sole discretion the methods
(e.g., repair, replacement) by which it will maintain the hardware it delivers
in good working order. The Receiving Party agrees to provide reasonable
assistance and access to the hardware ft receives to the Delivering Party for
this purpose.
4.7 The Receiving Party may not reverse engineer, and in the case of
the software, decompile, or disassemble the Deliverables it receives.
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4.8 Microsoft agrees that it shall not intentionally design its
software and/or hardware to block out or prevent the reception of StarSight's
data/service, provided that StarSight shall use reasonable efforts to make its
data and security mechanisms compatible with such software and/or hardware.
Microsoft agrees that it shall take prompt steps to correct any inadvertent
blocking designs upon written notice from StarSight or upon Microsoft's own
discovery of such a problem.
4.9 The parties acknowledge that changes to the Deliverables will
probably need to be made as development on their respective products progresses
toward commercial release or as new types of products are developed.
Accordingly, the parties agree to review Appendices A and B from time to time
and make amendments to this Agreement to reflect such changes.
SECTION 5
MARKETING AND DATA LOADERS
5.1 INCLUSION OF STARSIGHT DATA LOADER
5.1.1 Microsoft, as partial consideration for the licenses and rights
granted to it herein, agrees that all Microsoft EPG Products shall conform to
each of the following:
(a) Microsoft shall deliver the applicable StarSight Data
Loader with all Microsoft EPG Products irrespective
of whether the StarSight Service is available to
permit the display of local broadcast TV listings
data pursuant to a StarSight subscription (whether
that service is free or otherwise). It is expressly
understood between the parties that a service
providing only satellite or other national TV
broadcast listings (i.e., not including local
broadcast TV listings data) shall not be considered a
service that provides local broadcast TV listings
data.
(b) Microsoft shall not deliver as part of the Microsoft
EPG Product any other Data Loader for a service that
provides local broadcast TV listings.
5.1.2 Notwithstanding the provisions of Section 5.1.1(b), in the event,
despite Microsoft's best efforts, a potential Microsoft licensee who is also a
[REDACTED***] or who has a [REDACTED***] or other [REDACTED***] (e.g., via
contract) in a [REDACTED***] a Microsoft [REDACTED***] as a consequences of the
[REDACTED***] described in Sections [REDACTED***] and [REDACTED***] then
Microsoft may [REDACTED***] offer and license to the licensee a Microsoft
[REDACTED***] which does not [REDACTED***] described in Sections [REDACTED***]
and [REDACTED***] Microsoft shall [REDACTED***] the StarSight Data Loader as
required by Section 5.1.1(a) with all Microsoft [REDACTED***]. As compensation,
for the foregoing [REDACTED***] Microsoft shall pay the license fees described
in Section [REDACTED***].
5.1.3 Notwithstanding the provisions of Section 5.1.1(b), in the event
the StarSight local broadcast TV listings data service is not available in a
geographic region at the time a Version of a Microsoft EPG Product is introduced
in such region, then Section 5.1.1(b) shall not apply to such
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Version. The Microsoft EPG Product, however, shall still include a StarSight
Data Loader, except as provided below, so that if and when the StarSight data
service becomes available in such region ft may be used with the Microsoft EPG
Product. Microsoft, prior to the introduction of a new Version, is not required
to include the StarSight Data Loader in circumstances where it is unlikely the
StarSight data service will. be available in a particular geographic area based
upon written confirmation to that effect by StarSight and when, by the nature of
the hardware on which the Microsoft EPG Product is loaded, storage limitations
exist. In the event StarSight fails to respond to Microsoft's request for
"written confirmation" within twenty (20) days of Microsoft's written request,
Microsoft may proceed absent written confirmation from StarSight. Microsoft will
also promptly introduce a new Version of the Microsoft EPG Product which
complies with the requirements of Sections 5.1.1(a) and (b), by removing the
other Data Loader in such new Version, when the StarSight data service becomes
available in such region.
5.2 MARKETING REQUIREMENTS
5.2.1 Microsoft, as partial consideration for the licenses and rights
granted to it herein, agrees that all Microsoft EPG Products shall conform to
each of the following:
(a) At least with the same frequency it displays the
Microsoft logo, if and when displayed, Microsoft
shall prominently display the StarSight logo in all
Microsoft EPG Products (including, to the extent
applicable, Windows 95 and/or successor products):
(i) during the EPG set up routine;
(ii) on the EPG display;
(iii) with reference to the offer of the trial period
described in Section 5.6; and
(iv) to StarSight Service subscribers (1) when
StarSight information is displayed and (2) when
other EPG advertising and service related
screens (if any) are displayed.
(b) The StarSight logo will be the only logo for a local
broadcast TV listings service shown on the EPG
display of any Microsoft EPG Product which actively
uses the StarSight Data Loader.
(c) Microsoft shall give credit to StarSight in an "about
box" or equivalent screen, in all Microsoft EPG
Products including those products identified in
Sections 5.1.2 and 5.1.3. An example of such language
is:
"StarSight Logo" Features of this product are
licensed from
StarSight Telecast, Inc.
-8-
(d) Microsoft shall prominently display the StarSight
logo on the front of any hardware product made by or
for Microsoft that includes a Microsoft EPG Product
and on the face of any accompanying Microsoft remote
control device.
(e) Microsoft shall make commercially reasonable use of
the StarSight Trademarks (both the word and design
marks) in connection with the marketing or
advertising of the EPG functionality of a Microsoft
EPG Product, provided the StarSight EPG service is
available for use in connection with such Microsoft
EPG Product in the applicable geographic area.
Microsoft shall not incorporate into any Microsoft
EPG Product the logo or trademark of any competing
(i.e., non-StarSight) EPG service for local broadcast
TV listings subject to the provisions of Sections
5.1.2, 5.2.2 and/or 7.2. Microsoft's use of the
StarSight Trademarks (both the word and design marks)
shall cover the following materials and advertising:
(i) manuals and user documentation (whether
printed or in electronic form);
(ii) product specification sheets;
(iii) point-of-purchase materials;
(iv) sales training materials;
(v) TV/radio advertising;
(vi) in-box materials;
(vii) consumer magazine advertising;
(viii) trade journals and related advertising; and
(ix) packaging.
However, the foregoing shall not require Microsoft to
mention StarSight or display the StarSight logo on
every occasion listed in this Section 5.2.1(e) where
EPG functionality is described or discussed, so long
as this Section 5.2.1(e) is substantially met.
(f) Microsoft shall provide the functionality in
Microsoft EPG Product software to display an offering
message to the consumer in the EPG set up routine or
other appropriate place to encourage the consumer to
subscribe to the StarSight service and to display a
message to alert the customer to renew the StarSight
service when renewal is due; provided that such
functionality shall not be a generalized messaging
function to enable communication with users.
5.2.2 Notwithstanding the provisions of Section 5.2.1(a), 5.2.1(b) and
5.2.1(e), in the event the initial execution of the EPG set-up routine of a
Microsoft EPG Product is not able to connect to a data transmission/delivery
mechanism for StarSight's local broadcast TV listings data in any given
geographic region because such mechanism is not available, or if the user
declines to sign up for the StarSight service (whether that service is free or
otherwise), then the set-up routine may [REDACTED***] on the EPG display; but
only on the condition that the Microsoft EPG Product shall allow the user, at
[REDACTED***] for the StarSight service at a
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later date, whether that occurs as a result of the availability of the
service in that geographic area or otherwise, in which case the [REDACTED***]
shall appear in the EPG display if and as required pursuant to Sections 5.2.1(a)
and (b). In all cases, however, the provisions of Section 5.2.1(c) shall apply.
For the purposes of this Section 5.2.2, a "data transmission/delivery mechanism"
shall generally mean without limitation any broadcast data transport provided to
the consumer as part of a normal cable, telephony, airwave or satellite service.
In the event the StarSight data service is not available on a "data
transmission/delivery mechanism" which mechanism is generally competitive in
terms of cost, availability and service to the "data transmission/delivery
mechanism" for other EPG-related services available to consumers in the
particular geographic region, then the StarSight mechanism shall not be
considered a "data transmission/delivery mechanism" for the purposes of this
Section, but only so long as the StarSight "data transmission/delivery
mechanism" is not generally competitive.
5.3 LICENSE FOR STARSIGHT TRADEMARKS
5.3.1 StarSight grants to Microsoft and Microsoft accepts a worldwide,
nonexclusive, royalty-free license to use the StarSight Trademarks solely in
connection with the marketing and promotion of StarSight as set forth in Section
5. Microsoft shall use the StarSight Trademarks (word and design marks) only in
the form set forth on Appendix C unless otherwise approved in writing by
StarSight and shall include the designation(TM) or (R), as instructed by
StarSight. Microsoft agrees to use its best efforts to comply with all
applicable laws and regulations pertaining to the proper use and designation of
StarSight Trademarks in each country in which Microsoft uses the StarSight
Trademarks. Microsoft shall not have the fight to use the StarSight Trademarks
as a business name, or fictitious business name.
5.3.2 QUALITY CONTROL:
(a) The nature and quality of Microsoft Licensed Product
marketed in connection with the StarSight Trademarks
and the StarSight logo, and all marketing and
promotional material using the StarSight Trademarks
and the StarSight logo, shall be a high quality
consistent with the high quality of StarSight's goods
and shall conform to the requirements of this
Agreement and otherwise be consistent with the
reputation and goodwill symbolized by the StarSight
Trademarks and the StarSight logo.
(b) StarSight shall have the right to monitor the quality
of the Microsoft Licensed Products and advertising
and promotional materials using the StarSight
Trademarks and the StarSight logo to ensure that the
Microsoft Licensed Products and advertising and
promotional materials conform to the requirements of
this Agreement. In the event StarSight believes any
Microsoft Licensed Products, advertising or
promotional materials do not, conform to such
standards, upon StarSight's request Microsoft shall
provide exemplars of the relevant Microsoft Licensed
Products, advertising and promotional materials for
review by StarSight.
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*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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5.3.3 Microsoft acknowledges that it is often difficult, particularly
in foreign countries, to obtain clear, registered title to StarSight Trademarks.
Accordingly, Microsoft agrees that the rights granted herein exist only to the
extent that StarSight owns such rights, and no warranty, express or implied, is
made with respect thereto or with respect to the trademark rights of any third
parties that may conflict with the rights granted herein.
5.3.4 Microsoft agrees that any use of the StarSight Trademarks or the
StarSight logo, including but not limited to use as a trade name, service xxxx
or trade style shall inure to the benefit of StarSight, and that such use by
Microsoft shall not give to Microsoft any right, title or interest in the
StarSight Trademarks or the StarSight logo.
5.3.5 Microsoft agrees that it will not, during the term of this
Agreement or at any time thereafter, make application for, or aid or abet others
to seek trademark registrations or recordings of, trade names or company names
in any state of the United States, in the United States Patent and Trademark
Office, or in other United States governmental agencies, or in any foreign
country of any xxxx or design which includes StarSight Trademarks, or variations
thereof, or imitations thereof, alone or in combination, except with the prior
written permission of StarSight.
5.3.6 Microsoft agrees not to take any action challenging or opposing,
or to raise or cause to be raised, either during the term of this Agreement or
after its termination, on any grounds whatsoever, any questions concerning, or
objections to, the validity of the StarSight Trademarks or StarSight's rights
therein.
5.3.7 Microsoft agrees to provide reasonable assistance to StarSight,
at StarSight's cost, in obtaining registrations for the StarSight Trademarks by
providing, without limitation, information and samples of trademark usage
regarding the StarSight Trademarks; provided, however, the failure to obtain
such registrations shall not affect the validity of this Agreement.
5.3.8 Microsoft acknowledges that this Agreement does not convey any
ownership interest in the StarSight Trademarks to Microsoft.
5.4 [REDACTED***]
5.4.1 Subject to the parties reaching agreement on the terms of
Microsoft's acquisition [REDACTED***] bandwidth through StarSight (as provided
in Section 5.4.2), Microsoft agrees to provide StarSight, at no charge, access
to and use of a minimum of [REDACTED***] data capability of Microsoft's
allocated bandwidth or equivalent bandwidth on the [REDACTED***] within the
continental US. The approval by [REDACTED***] of such allocation of bandwidth to
StarSight shall be subject to the terms and conditions of the agreement between
Microsoft and [REDACTED***]. Microsoft agrees to use its commercially
reasonable, good faith efforts to obtain such approval from [REDACTED***] and to
assist StarSight in its efforts to work with [REDACTED***] to resolve any
hardware-related issues and/or other technical issues relating to the use of the
[REDACTED***] bandwidth (For example, distribution and/or retrofitting of
set-top boxes to handle the [REDACTED***] data channel decryption function).
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*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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5.4.2 StarSight agrees to work with Microsoft if requested, on a
commercially reasonable basis to provide Microsoft access to at least
[REDACTED***] within StarSight's existing data delivery systems or network to
facilitate the delivery of Microsoft advertising or other information. StarSight
would maintain the network in conjunction with its existing service, and invoice
Microsoft in an amount to be agreed upon which is intended to cover StarSight's
costs and expenses to maintain the network and obtain [REDACTED***] bandwidth.
The use of [REDACTED***] bandwidth shall be subject to the terms and conditions
of StarSight's agreement(s) with the applicable third party data delivery
systems or network provider(s).
5.4.3 The parties also agree to work with each other on a commercially
reasonable basis to assist in obtaining any rights or access to data delivery
systems worldwide which are necessary or desirable to support the parties'
respective subscription and/or advertising businesses related to products
licensed hereunder. The parties acknowledge, however, that despite such efforts
they may not be able to obtain access to the necessary or desirable amount of
bandwidth on any given data delivery system.
5.5 ADVERTISING AND SUBSCRIPTION
5.5.1 StarSight agrees that all advertising data/inventory for
Microsoft EPG Products shall be exclusively obtained and sold by Microsoft
and/or its designates.
5.5.2 Microsoft agrees to make available to StarSight a limited amount
of advertising inventory in any EPG display of Microsoft EPG Products,
equivalent to [REDACTED***] of the total advertising inventory, free of charge,
solely for advertising StarSight's own products and services. The advertising
inventory made available to StarSight pursuant to this Section 5.5.2 shall be
evenly distributed between prime and non-prime times. Further, when viewed by a
viewer, such advertising inventory shall be of no less prominence, on average,
than the advertising inventory of other Microsoft customers who pay for such
inventory in cash.
5.6 StarSight agrees to provide a minimum of [REDACTED***] free service
("Trial Period") to each new end user customer of a Microsoft EPG Product only
in those instances when the StarSight Data Loader is used by the customer. Upon
the expiration of the Trial Period, the consumer will be offered the opportunity
to subscribe to the StarSight service at a rate no higher than the then current
published standard StarSight consumer rate card. In the event the consumer does
not subscribe, then the StarSight data subscription service to such subscriber
may be terminated, in StarSight's discretion. StarSight may from time to time,
at its sole option, offer end user customers of Microsoft EPG Products
additional periods of free and/or discounted service.
5.7 StarSight will administer, at its sole expense, the end user
subscription process, including xxxx collections, credit checks, subscription
authorizations and de-authorizations, with customers who subscribe to
StarSight's service through a Microsoft EPG Product. Microsoft will administer,
at its sole expense, technical support insofar as it relates to Microsoft
Licensed Products.
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-12-
5.8 Microsoft agrees to communicate and/or meet with StarSight on a
regular and timely basis to discuss Microsoft's intent and/or plans to introduce
Microsoft EPG Products into any geographic region where the StarSight service is
not then available. Microsoft further agrees to use commercially reasonable
efforts to assist StarSight so that it may meet Microsoft's launch plans in any
given geographic region. This assistance includes but is not necessarily limited
to Microsoft assisting StarSight to make the necessary local contacts for the
purposes of initiating StarSight service in such geographic region. Microsoft
shall work with StarSight, in conjunction with original equipment manufacturers
and the owners of data transmission capacity, to increase and facilitate
StarSight's ability to have a viable data transmission/delivery mechanism for
local broadcast TV listings data in any given geographic region where StarSight
does not then have its service available. StarSight shall, however, be solely
responsible for negotiating and acquiring the necessary bandwidth and
establishing the required infrastructure to support their data service.
5.9 [REDACTED***] DIGITAL SET TOP BOXES
5.9.1 In addition to the requirements set forth in this Agreement, the
license set forth in Section 3 for Microsoft EPG Products installed on or
incorporated in [REDACTED***] Digital Set Top Boxes is expressly conditioned
upon the occurrence of one of the following:
(i) Microsoft elects, at its sole option, to
[REDACTED***] described in Section [REDACTED***] for
each [REDACTED***] on which a Microsoft EPG Product
licensed by Microsoft is installed or incorporated
into; or
(ii) The [REDACTED***] which distributes a [REDACTED***]
Digital Set Top Box shall have entered into an
agreement with StarSight that provides a license from
StarSight covering the Microsoft EPG Product.
For situations described in Section 5.9.1 (i), in the event the [REDACTED***]
Microsoft EPG Product [REDACTED***], then Microsoft may, [REDACTED***] the
licensee a Microsoft EPG Product which [REDACTED***] described in Sections
5.1.1(b) and 5.2.1(a), (b), (d), (e), (f). Microsoft shall, however, still
include the StarSight Data Loader as required by Section 5. 1.1(a) with all
Microsoft EPG Products.
SECTION 6
PAYMENTS, ACCRUALS, RECORDS AND REPORTS
6.1 PAYMENTS.
6.1.1 Microsoft shall pay StarSight at execution hereof the
non-refundable "lump sum" royalty payment of Twenty Million US Dollars
(US$20,000,000) for the license set forth in Section 3.1.
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-13-
6.1.2 Microsoft shall pay StarSight [REDACTED***] (i) for each unit of
Microsoft EPG Product distributed with one or more Data Loaders in addition to
the StarSight Data Loader pursuant to Section 5.1.2, or (ii) for each unit of
Microsoft EPG Product licensed by Microsoft and installed on or incorporated
into a [REDACTED***] Digital Set Top Box pursuant to Section [REDACTED***]. For
the purposes of this Section 6.1.2, upgrades, updates and new versions to or for
a particular unit of Microsoft EPG Product for which a [REDACTED***] royalty has
already been paid shall not constitute a new unit of Microsoft EPG Product so
long as the original [REDACTED***] Digital Set Top Box or other applicable
hardware has not been taken out of service, replaced with new hardware or a new
[REDACTED***] Digital Set Top Box. This royalty amount is over and above all
other payments specified in this Agreement.
6.1.3 Microsoft agrees to pay StarSight [REDACTED***] of the total Net
Advertising Revenues.
6.1.4 StarSight agrees to pay Microsoft [REDACTED***] of the total Net
Subscription Revenues.
6.1.5 All payments due under Sections 6.1.2, 6.1.3 and 6.1.4 shall be
accounted for on a calendar year quarterly basis and paid within forty-five (45)
days after each quarter. Notwithstanding the foregoing, at Microsoft's option,
it may elect to pay amounts due under Section 6.1.2 in quarterly installment
payments over a period of three (3) years from the date the original payment is
due. A reasonable rate of interest to be agreed by the parties shall accrue on
such installment payments.
6.2 ACCRUALS, RECORDS AND REPORTS
6.2.1 Royalties and payments due under Sections 6.1.2, 6.1.3 and 6.1.4
shall accrue as follows:
(a) Royalties shall accrue when any unit of Microsoft EPG
Product with respect to which royalty payments are
required by Section 6.1.2 is sold or licensed (as
evidenced by xxxx or invoice) and payment therefor is
received by Microsoft. Royalties shall not accrue at
the time of sale or Transfer for sales or Transfers
between Microsoft and its Subsidiary for resale or
for further Transfer. Royalties shall not accrue for
"not for resale" or "NFR" units distributed by
Microsoft.
(b) Payments required by Section 6.1.3 shall accrue when
Advertising Revenues as to which such payment is due
have been billed by Microsoft and payment therefor is
received by Microsoft. Payments required by Section
6.1.3 shall accrue for "not for resale" or "NFR"
units distributed by Microsoft.
(c) Payments required by Section 6.1.4 shall accrue on
Net Subscription Revenues when the underlying
subscription fee has been billed and payment therefor
is ' received by
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-14-
StarSight. Payments required by Section 6.1.4 shall
accrue for "not for resale" or "NFR" units
distributed by Microsoft.
6.2.2 The royalty payment set forth in Section 6.1.1 reflects, on a
ratable quarterly basis, a projected installed base of at least [REDACTED***]
units of Microsoft Licensed Product during the initial [REDACTED***] period from
the Effective Date and is being paid in a lump sum as a matter of convenience to
the parties, in part to avoid expenses and other costs associated with
accounting for the actual number of units of Microsoft Licensed Products sold or
Transferred during the payment period. Likewise, the payments set forth in
Sections 6.1.2 and 6.1.3, are attributable to Microsoft EPG Product sold or
Transferred over the entire term of the Agreement including the period beyond
the initial [REDACTED***] term of the Agreement.
6.2.3 All royalties and other sums of money due hereunder shall be paid
in United States dollars. All royalties and other sums of money for an
accounting period computed on invoiced amounts in currencies other than United
States dollars shall be converted directly into United States dollars without
intermediate conversions to another currency at the intercompany exchange rates
established from time to time and consistently applied by the paying party for
internal transactions and accounting purposes.
6.2.4 Each Microsoft royalty report shall include the following
information:
(a) as to royalties due under Section 6.1.2:
(i) identification by Version Number, Service
Provider(as applicable), quantity and
description of each Microsoft EPG Product upon
which a royalty has accrued pursuant to Section
6.2.1 (a);
(ii) identification of the amount of royalties due
for each such product, including all
information required to show how such amount
has been calculated and the aggregate of all
royalties due; and
(iii) identification of the amount of royalties as to
which credit is taken under Section 7.4.1, if
any.
(b) as to Net Advertising Revenue payments due under
Section 6.1.3:
(i) the total amount of Advertising Revenues;
(ii) the amount of each cost permitted to be
deducted from such total in order to determine
Net Advertising Revenue;
(iii) identification of the amount of Net Advertising
Revenues payment due including all other
information, in addition to that of Section
6.2.4(b)(ii), to show how such amount has been
calculated; and (iv) identification of the
amount of royalties as to which credit is taken
under Section 7.4.1, if any.
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-15-
6.2.5 Each StarSight royalty report shall include the following
information:
(a) as to payments due on Net Subscription Revenues under
Section 6.1.4:
(i) the total amount of Subscription Revenues;
(ii) the amount of each cost permitted to be
deducted from such total in order to determine
Net Subscription Revenues; and
(iii) identification of the amount of Net
Subscription Revenues payment due including all
other information, in addition to that of
Section 6.2.5(a)(ii), to show how such amount
has been calculated.
6.2.6 In the event that any of the subsections of Sections 6.2.4 or
6.2.5 (as applicable) do not apply, the reporting party shall so state as to
each Section. In the event no royalties are due, the reporting party's royalty
report shall so state as to each such subsection.
6.2.7 Each royalty report shall be certified by an officer of the
reporting party or by a designee of such officer to be correct to the best of
such party's knowledge and information.
6.2.8 Each royalty report shall be in a format substantially similar to
the appropriate form(s) provided in Appendix D for Microsoft and Appendix E for
StarSight, attached hereto and incorporated by reference.
6.2.9 An accounting period shall end on the last day of each March,
June, September, and December during the term of this Agreement. The first
accounting period under this Agreement shall be for a period commencing October
1, 1996 and ending December 31, 1996. Within forty-five (45) calendar days after
the end of each such period, the paying party shall furnish to the other party a
written royalty report containing the information specified in Section 6.2.4 or
Section 6.2.5 (as applicable) and shall pay to such party all unpaid amounts,
whether royalty or other payments, accrued hereunder in favor of such other
party to the end of each such period. The paying party shall bear and pay all
taxes which are required by its national government, including any political
subdivision thereof, as the result of the existence or operation of this
Agreement, except any necessary, appropriate, and required income tax imposed
upon royalties or other payments, by the national government of such party. The
paying party may deduct or withhold such income tax from said royalties or other
payments provided it furnishes the other party with a tax certificate, or other
document evidencing payment of such income tax.
6.2.10 Each party shall keep separate records in sufficient detail to
permit the determination of royalties and other payments payable hereunder. Such
records shall be maintained for at least [REDACTED***]. At the request of one
party, the other party will permit an independent auditor and technical
consultant selected by the requesting party or any other person or persons
acceptable to both parties, to examine during ordinary business hours once each
calendar year such records and other documents as may be necessary to verify or
determine royalties and other payments paid or payable under this Agreement.
Such auditor, technical consultant or other person(s) shall be instructed to
report to the requesting party only the amount of royalties and other payments
due and
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-16-
payable. If no request for examination of such records for any particular
accounting period has been made by one party within [REDACTED***] after the end
of said period, the right to examine such records for said period shall
terminate.
6.2.11 The fees and expenses of the requesting party's representative
performing any examination of records under Section 6.2.10 shall be borne by the
requesting party. However, if an error resulting in the underpayment of either
royalties or other payments of more than [REDACTED***] of the total thereof
respectively due is discovered for any year examined, then the total fees and
expenses of these representatives shall be borne by the other party. Such other
party in any case shall pay the requesting party the amount of any under payment
of royalties or other payments uncovered as a result of any such examination of
records. Section 6.2.12 specifically applies to any such underpayment.
6.2.12 The paying party shall be liable for interest at a rate of
[REDACTED***] per month compounded monthly on any overdue royalty or other
payment set forth in Section 6.1, commencing on the date such royalty or other
payment becomes due. If such interest rate exceeds the maximum legal rate in the
jurisdiction where a claim therefor is being asserted, the interest rate shall
be reduced to such maximum legal rate.
SECTION 7
LIMITED INDEMNITY
7.1 Microsoft and StarSight agree, however unlikely, that ft is still
nonetheless possible that patent licenses may be requested or required from
[REDACTED***] and/or their affiliates (hereinafter collectively referred to as
"Claimant") for EPG related features of Microsoft Licensed Products. Hence,
StarSight agrees to [REDACTED***] the broadest possible covenants and licenses
from Claimant [REDACTED***] that include the capability of accessing the
StarSight data service.
7.2 The parties recognize that [REDACTED***] that it may not be able to
do so, or that such covenants and licenses [REDACTED***]. In such cases it may
be desirable for [REDACTED***] to retain additional flexibility [REDACTED***]
such licenses with perhaps more favorable terms than would be otherwise possible
but for certain requirements of this Agreement. Therefore, if all the following
conditions are met:
a. Within [REDACTED***] days of the Effective Date,
Microsoft receives a [REDACTED***] patent
infringement from a Claimant asserting, or after
[REDACTED***] days of the Effective Date, Microsoft
determines through discussions with a Claimant or
otherwise, that a [REDACTED***] one or more of
Claimant's EPG related patents which are based upon
any patent which has issued, or application which has
been filed, [REDACTED***]; and
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-17-
b. Microsoft gives StarSight at least [REDACTED***] days
notice of such a [REDACTED***] along with a copy of
Claimant's [REDACTED***] (if any), or if an
[REDACTED***], then with complete details of the
patent and other relevant information, subject to
preserving attorney/client privilege, so that
StarSight and Microsoft may evaluate whether or not
such [REDACTED***] by virtue of a pre-existing
agreement between StarSight and Claimant; and
c. If the [REDACTED***] is not in StarSight's and
Microsoft's reasonable opinion [REDACTED***] and
Microsoft is required to pay or deems it necessary
[REDACTED***] in excess of [REDACTED***] in the
aggregate for [REDACTED***]; then
Microsoft, irrespective of the requirements set forth in this
Agreement, [REDACTED***] of the particular Claimant in [REDACTED***] on an equal
(or lesser) basis with the [REDACTED***] if Microsoft deems it necessary in
order to acquire the [REDACTED***]. [REDACTED***].
7.3 Microsoft shall be entitled to [REDACTED***] of the royalties
described in Section 7.2 (irrespective of the royalty amount), up to a maximum
offset amount not to exceed [REDACTED***], for amounts actually paid by
Microsoft to Claimant only against amounts otherwise payable by Microsoft to
StarSight pursuant to Section 6.1.3.
StarSight's maximum indemnification liability under this
Section 7.3 is [REDACTED***].
7.4 Limited Indemnity [REDACTED***]
7.4.1 (a) StarSight has entered into a written [REDACTED***]
agreement with [REDACTED***] pursuant to which
StarSight is the [REDACTED***].
(b) In the event [REDACTED***] asserts its [REDACTED***]
[REDACTED***] [REDACTED***] which are the subject of
the [REDACTED***] which meet the requirements of
Sections 5.1.1 and 5.2.1 of this Agreement, then
StarSight will intervene to the appropriate level,
including litigation if necessary, in order to
ascertain StarSight's [REDACTED***] rights under
[REDACTED***] Agreement. The level of such
intervention will be determined solely by StarSight.
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-18-
(c) If, as a result of the foregoing intervention, it is
determined that StarSight does not have the
[REDACTED***] to such [REDACTED***] or the
[REDACTED***] of additional royalties to license such
[REDACTED***] to Microsoft; StarSight will indemnify
Microsoft for any amounts Microsoft directly pays to
[REDACTED***], including, subject to Section 7.4.2,
associated legal fees and costs, if any, as a result
of [REDACTED***] asserting such [REDACTED***] against
such [REDACTED***] up to [REDACTED***] of indemnity
paid, as follows:
(i) StarSight will indemnify Microsoft for the
first [REDACTED***] thereof, as it is paid by
Microsoft to [REDACTED***], in cash payments;
and
(ii) StarSight will indemnify Microsoft for up to an
additional [REDACTED***] at a rate of
[REDACTED***] per dollar paid by Microsoft to
[REDACTED***]. Any indemnification payments
required pursuant to this Section 7.4.1 (b)
shall be payable to Microsoft only as a credit
against payments to be made by Microsoft to
StarSight for such [REDACTED***] under Sections
6.1.2 or 6.1.3 of this Agreement.
StarSight's maximum indemnification liability under this Section 7.4.1
is [REDACTED***]. Legal fees incurred by StarSight as a result of its
indemnification of Microsoft hereunder shall not count against this maximum
indemnification liability.
7.4.2 (a) StarSight shall, at its expense and upon Microsoft's
reasonable request, defend [REDACTED***] action
brought by [REDACTED***] as a result of its assertion
as set forth in Section 7.4.1(b), which is brought in
a court of competent jurisdiction, against Microsoft
and/or Microsoft's Subsidiaries, affiliates,
directors, officers, employees, agents and
independent contractors, to the extent it is in
connection with [REDACTED***]; and
(b) On the condition that Microsoft shall: (1) provide
StarSight prompt notice in writing of any such action
or claim and permit StarSight to intervene, answer
and defend such action or claim; and (2) provide
StarSight reasonable information, assistance and
authority to help StarSight in such intervention or
defense; and
(c) StarSight will not be responsible for any costs,
damages or fees, if a settlement of any claim or
action under Section 7.4 is made by Microsoft without
StarSight's written permission, which permission will
not be unreasonably withheld. Microsoft shall have
the right, at its expense, to employ separate counsel
and participate in the defense of any action or
claim; and
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-19-
(d) StarSight may not settle any claim or action under
this Section 7.4 on Microsoft's behalf without first
obtaining Microsoft's written permission, which
permission will not be unreasonably withheld. In the
event Microsoft and StarSight agree to settle a claim
or action, each party agrees not to publicize the
settlement without first obtaining the other party's
written permission, which permission will not be
unreasonably withheld.
7.5 Maximum Indemnification Obligation
7.5.1 Notwithstanding any other provision in this Agreement to the
contrary, StarSight's maximum indemnification liability for whatever reason
under this Agreement is [REDACTED***]. Legal fees incurred by StarSight as a
result of its indemnification of Microsoft hereunder shall not count against
this maximum indemnification liability.
7.6 STARSIGHT TRADEMARK INDEMNIFICATION
7.6.1 StarSight shall, at its expense and Microsoft's request, defend
any claim or action brought against Microsoft, and Microsoft's Subsidiaries,
affiliates, directors, officers, employees, agents and independent contractors,
to the extent it is based upon a claim that the StarSight Trademarks infringe or
violate any trademark or other proprietary or unfair competition right of a
third party, and StarSight will indemnify and hold Microsoft harmless from and
against any costs, damages and fees reasonably incurred by Microsoft, including
but not limited to fees of attorneys and. other professionals, that are
attributable to such claim. Microsoft shall: (i) provide StarSight prompt notice
in writing of any such claim or action and permit StarSight to answer and defend
such claim or action; and (ii) provide StarSight information, assistance and
authority to help StarSight to defend such claim or action. StarSight will not
be responsible for any costs, damages or fees, if a settlement is made by
Microsoft without StarSight's written permission, which permission will not be
unreasonably withheld. Microsoft shall have the right, at its expense, to employ
separate counsel and participate in the defense of any claim or action.
StarSight shall reimburse Microsoft upon demand for any payments made or loss
suffered by it at any time after the Effective Date, based upon the judgment of
any court of competent jurisdiction or pursuant to a bona fide compromise or
settlement of claims, demands, or actions, in respect to any damages related to
any claim or action under this Section 7.6. StarSight may not settle any claim
or action under this Section 7.6 on Microsoft's behalf without first obtaining
Microsoft's written permission, which permission will not be unreasonably
withheld. In the event Microsoft and StarSight agree to settle a claim or
action, each party agrees not to publicize the settlement without first
obtaining the other party's written permission, which permission will not be
unreasonably withheld.
7.6.2 Notwithstanding Section 7.6.1, should the use of any StarSight
Trademark as contemplated by this Agreement be enjoined or be threatened to be
enjoined, StarSight shall notify Microsoft and immediately, at StarSight's
expense: (i) procure for Microsoft the right to continue use the StarSight
Trademark, as applicable, as licensed in this Agreement; or (ii) replace or
modify the StarSight Trademark with a xxxx that is non-infringing. In the
alternative, and at StarSight's election, StarSight may notify Microsoft that
Sections 5.2 and 5.3 shall not apply to the infringing or
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-20-
potentially infringing StarSight Trademark until such time as StarSight notifies
Microsoft that such xxxx is neither infringing nor potentially infringing. In
the event, after a reasonable period of time, StarSight is unsuccessful in its
attempts to procure the necessary rights or replace or modify the StarSight
Trademark as indicated above, Microsoft may take reasonable steps to remove or
modify the StarSight Trademark, with StarSight's approval not to be unreasonably
withheld, to prevent the injunction from being entered.
SECTION 8
WARRANTIES
8.1 NEITHER PARTY MAKES ANY REPRESENTATION, EXPRESS OR IMPLIED, AS TO
THE PRODUCTS LICENSED HEREUNDER, THIS AGREEMENT OR OTHERWISE, AND HEREBY
DISCLAIMS ANY FURTHER WARRANTY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, INTELLECTUAL PROPERTY VALIDITY, INTELLECTUAL
PROPERTY NON-INFRINGEMENT OR OTHER STATUTORY WARRANTY, EXCEPT AS EXPRESSLY SET
FORTH HEREIN.
8.2 NEITHER PARTY HERETO SHALL BE LIABLE TO THE OTHER PARTY, ITS
CUSTOMERS, OR ANY OTHER ENTITY CLAIMING THROUGH OR UNDER SUCH OTHER PARTY FOR
ANY LOSS OF PROFITS OR INCOME, LOSS OF DATA OR OTHER TANGIBLE BUSINESS LOSS OR
OTHER CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, EVEN IF SUCH PARTY HERETO
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT.
8.3 StarSight warrants title to U.S. Patents 4,706,121; 5,151,789;
5,353,121; 5,479,266; 5,479,268; and 5,550,576.
SECTION 9
TERM AND TERMINATION
9.1 This Agreement shall come into effect as of the Effective Date and,
unless terminated sooner in accordance with this Section 9, shall remain in
effect until the expiration of the last to expire of the licensed patents.
9.2 Either party may terminate this Agreement or any license granted by
it hereunder upon written notice to the other party in the event that the other
party breaches a material obligation or warranty hereunder, and fails to cure
such breach within sixty (60) days after written notice by the non-breaching
party. A breach of Section 5.1, 5.2, 5.3, 5.5 and 7.4, failure to make a payment
under Section 6 and breach of any confidentiality obligation under Section 1 0
including the NDA set forth in Section 10.1 shall be among the acts considered
to be a breach of a material obligation.
9.3 The provision of Sections 6.1.2 through 6.1.5, 6.2, 7.4, 8 and 10
and any other provision which by its nature is intended to survive termination,
shall survive any termination or expiration of this Agreement. Termination of
this Agreement or any license granted herein shall not
-21-
affect Microsoft Licensed Products or StarSight Licensed Products distributed
prior to the date of such termination.
9.4 During the term of this Agreement, and provided the parties are in
material compliance with the terms hereof, the parties shall in good faith
negotiate, and grant to each other on terms agreeable to both parties, any other
additional licenses under Microsoft intellectual property rights and StarSight
intellectual property rights as may be required and/or requested by either party
to continue the business contemplated by this Agreement.
SECTION 10
CONFIDENTIALITY
10.1 The terms and conditions of this Agreement and information
provided and or exchanged pursuant to this Agreement shall be deemed
"Confidential Information" and subject to the terms and conditions of the
Non-Disclosure Agreement dated April 1, 1996 (the "NDA"), as amended, between
Microsoft and StarSight, except that (1) the five (5) year period of Section
2(a) thereof shall be amended to be coextensive with the term of this Agreement,
and (2) the second sentence of Section 4(g) thereof shall be deleted and Section
12.8 hereof shall be substituted therefor. Any conflict between the terms of the
NDA and the terms of this Agreement shall be resolved in favor of the terms of
this Agreement.
10.2 Microsoft acknowledges that the StarSight Authorization Codes and
StarSight Protocols are highly confidential and that unauthorized use or
disclosure of such information could significantly damage the business of
StarSight. In the event Microsoft obtains rightful possession or knowledge of
StarSight Authorization Codes pursuant to this Agreement then, in addition to
its other obligations under this Section 10, Microsoft agrees that no more than
one (1) master copy and one (1) backup copy of StarSight Authorization Codes and
StarSight Protocols shall be made or maintained ("Authorized Copies"). Such
Authorized Copies will be maintained in a locked room or container when not in
use and will be accessible only by a limited number of employees who require
access to the StarSight Authorization Codes or StarSight Protocols for
incorporation into the Microsoft Licensed Products. Microsoft agrees to maintain
a written record of individual employees that actually accessed the StarSight
Product Authorization Codes or StarSight Protocols, and shall provide such
information to StarSight upon request.
10.3 The parties agree to jointly announce the signing of this
Agreement once it is fully executed. Neither party shall make any public
announcement about or otherwise disclose to any third party the terms or content
of this Agreement or the parties' discussions regarding the subject matter of
this Agreement-without the written consent of the other party, which consent
shall not be unreasonably withheld or delayed. Either party may make at any time
announcements which are advised to be made by the Parties' respective outside
counsel or that are required by applicable law, regulatory bodies, stock
exchange or stock association rules, so long as the party so required to make
the announcement, promptly after learning of such requirement, notifies the
other party of such requirement and discusses with the other party in good faith
the exact wording of any such
-22-
announcement. Each party, as applicable, agrees to request "confidential
treatment" from the appropriate regulatory authority if this Agreement must be
included as part of any public filing.
SECTION 11
SUB-LICENSES
11.1 All licenses granted herein include the right of the licensee to
grant sub-licenses of or within the scope of such licenses to a party's
Subsidiaries. Each Subsidiary so sub-licensed shall be bound by the terms and
conditions of this Agreement (other than the payment or royalties as provided in
Section 6, which shall remain the obligation of Microsoft and StarSight,
respectively) as if it were named herein in the place of such licensee. The
licensee represents to the licensor that it has the power to bind each such
Subsidiary to the terms and conditions of this Agreement and agrees to, and
shall take whatever action is necessary to, so legally bind its Subsidiaries, or
in the alternative, the licensee hereby guarantees the performance of the
obligations of its Subsidiaries hereunder. The licensee shall pay and account to
the licensor for all payments due hereunder in respect of the exercise by any
Subsidiary of the licensee of the sub-license granted to it hereunder. Any
sub-license granted to a Subsidiary shall terminate on the date such Subsidiary
ceases to be a Subsidiary.
SECTION 12
MISCELLANEOUS
12.1 Waiver. A party's failure at any time to require the other party's
performance of any obligation under this Agreement shall not affect such party's
right to require subsequent performance of that obligation. Any waiver of any
breach of any provision of this Agreement shall not be construed as a waiver of
any continuing or succeeding breach of such provision, waiver or modification of
the provision itself, or any modification of any right under this Agreement.
12.2 Assignment. Neither party may assign or otherwise transfer this
Agreement, or any of its rights, licenses or obligations hereunder, to any third
party without the prior written consent of the other and any such attempted
assignment or transfer shall be void, except in the case of the sale of all or
substantially all of the assigning party's assets relating to the licensed
products (in which case this Agreement shall be fully binding on the licensee's
successor in interest).
12.3 Express Licenses Only. The rights and licenses granted in this
Agreement are limited to those expressly recited. No rights, licenses or other
grants are made by implication, estoppel, exhaustion, operation of law or
otherwise.
12.4 Patent Marking. Microsoft shall, except as may otherwise be agreed
to in writing (such as to account for additional StarSight Licensed Patents
which issue), provide the following notice or a reasonable variation to be
agreed to in advance by the parties in writing on all Microsoft EPG Product and
with any accompanying instruction material package:
"StarSight Licensed: The manufacture and sale of EPG features
of this product was licensed from StarSight Telecast, Inc.,
which license
-23-
includes rights under U.S. Patent Nos.: 4,706,121; 5,151,789;
5,353,121; 5,479,266; and 5,479,268."
For each unit of Microsoft EPG Product which is or includes hardware, the above
notice or the reasonable variation of such notice as mutually agreed to in
writing must be affixed to the hardware and be visible. For each unit of
Microsoft EPG Product which is embodied in software this notice may appear in an
"about-box" or may be embedded as a character (Ascii) string which appears in
the executable software code when it is viewed or printed. Microsoft's failure
to comply with the foregoing requirements shall not constitute a breach of this
Agreement; provided, upon learning of such failure, Microsoft promptly corrects
it.
12.5 Each party as "Granting Party" grants to the other party the right
to obtain upon request and to the extent and subject to the terms and conditions
under which the Granting Party has the right to do so at the time of such
request, a license of or within the scope granted herein with respect to any
patent which would otherwise qualify as a Licensed Patent of the Granting Party,
but for payment to third parties as set forth in the definition of Licensed
Patents. Such license shall be granted under a separate agreement at a royalty
rate or other payment payable by the Granting Party to a third party for
granting of such license or the exercise of rights thereunder.
12.6 Payments, Notices and Other Communications.
12.6.1 All notices and other communications required or permitted under
this Agreement shall be in writing and shall be given in one of the following
ways:
(i) by overnight courier;
(ii) by registered or certified mail; or
(iii) by facsimile followed by registered or certified mail.
Such notices shall be delivered to the parties at the following
addresses (or at such other address as a party may specify by written notice to
the other);
If to StarSight:
StarSight Telecast, Inc.
00000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxx
Vice President Intellectual Property,
General Counsel
-24-
If to Microsoft:
Microsoft Corporation
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Senior Product Manager
Consumer Platforms Division
With a copy to:
Law and Corporate Affairs (same address)
Either party may change its address by a notice given to the other
party in the manner set forth above. Notices and communications shall be deemed
to have been given upon receipt when delivered personally or by overnight
courier, or ten (10) days after posting if sent by registered or certified mail;
or upon receipt by facsimile, provided the original copy is received by
registered or certified mail within ten (10) days after facsimile transmission.
12.6.2 Royalty reports, as described in Section 6.2, shall be sent by
overnight delivery, or faxed and then mailed within five (5) days as set forth
below.
If to StarSight:
StarSight Telecast Inc.
Attention: Chief Accounting Officer
00000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
United States of America
Facsimile Number: (000) 000-0000
If to Microsoft
Microsoft Corporation
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
Attn: Special Agreements/ Dept. 551
Fax number (000) 000-0000
12.6.3 All payments by Microsoft as set forth in Section 6.1 shall be
paid via automated clearing house payment, check sent by overnight delivery or
bank wire transfer to:
-25-
Attention: [REDACTED***]
ABA Routing Number: [REDACTED***]
12.6.4 All payments by StarSight as set forth in Section 6.1 shall be
paid via automated clearing house payment, check sent by overnight delivery or
bank wire transfer to:
Attention: [REDACTED***]
ABA Routing Number: [REDACTED***]
12.7 Partial Invalidity. If any provision of this Agreement shall be
found or held to be invalid or unenforceable in any jurisdiction in which this
Agreement is being performed or enforced, the remainder of this Agreement shall
be valid and enforceable, and the parties shall use their best efforts to
negotiate a substitute valid and enforceable provision that most nearly effect
the parties' intent in entering into this Agreement.
12.8 Governing Law. The validity, construction, and performance of this
Agreement shall be governed by and interpreted in accordance with the laws of
the State of California, USA, without regard to conflicts of laws provision.
12.9 Section Headings. The heading to sections and this Agreement are
to facilitate reference only and do not form a part of this Agreement, and shall
not in any way affect the interpretation thereof.
12.10 Entire Agreement. The terms and conditions herein contained
constitute the entire agreement between the parties regarding the subject matter
hereof, and supersede all previous agreements and understandings, whether oral
or written, between the parties hereto with respect to the subject matter
hereof. No modification, alteration, addition or change in the terms hereof
shall be binding on either party hereto unless reduced to writing and duly
executed by the parties in the same manner as the execution of this Agreement.
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
-26-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the dates set forth below.
MICROSOFT: STARSIGHT:
MICROSOFT CORPORATION STARSIGHT TELECAST, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxxx
-------------------------------------- ---------------------------
Xxxxx X. Xxxxxx Xxxxx Xxxxxxxx
Senior Vice President Chief Executive Officer
Consumer Platforms Division
Date: December 20, 1996 Date: December 20, 1996
------------------------------------ -----------------------
-27-
APPENDIX A
MICROSOFT DELIVERABLES AND SCHEDULE
1. Deliverables Defined
Microsoft shall deliver to StarSight at least one copy of each
Microsoft EPG Product and associated development tool (e.g., software developer
kit ("SDK") and driver developer kit ("DDK"))("EPG Development Tools") as such
products and tools become available, as determined by Microsoft. Microsoft shall
deliver the Microsoft EPG Products and EPG Development Tools in pre-release and
final Versions.
2. Schedule for Delivery
To be agreed upon by the parties.
3. License Grant
The license grants for each Microsoft EPG Product and EPG Development
Tool shall be the standard Microsoft license grants for such products and tools.
At a minimum, however, the StarSight shall be entitled to and is hereby granted
at least the following license rights with respect to each Microsoft EPG Product
and EPG Development Tool:
3.1 Microsoft EPG Products. Microsoft grants StarSight the
following limited, non- exclusive rights:
StarSight may use the Microsoft EPG Products to design, develop, and
test StarSight products and services and associated development tools and
infrastructure products for use with Microsoft EPG Products, EPG Development
Tools and infrastructure products.
3.2 EPG Development Tools. Microsoft grants StarSight the
following limited, non- exclusive rights:
a. Software Product. StarSight may install and use the EPG
Development Tools to design, develop, and test software application products for
use with Microsoft EPG Products ("Application").
b. Sample Code. StarSight may modify the sample source code
located in the EPG Development Tools "samples" directories ("Sample Code") to
design, develop, and test StarSight's Application. StarSight may also reproduce
and distribute the Sample Code in object code form along with any modifications
it makes to the Sample Code, provided that StarSight complies with the
Distribution Requirements described below. For purposes of this section,
"modifications" shall mean enhancements to the functionality of the Sample Code.
A-1
c. Redistributable Code. Portions of the EPG Development Tools
are designated as "Redistributable Code."
d. Distribution Requirements. StarSight may copy and
redistribute the Sample Code and/or Redistributable Code (collectively
"Redistributable Components") as described above, provided that (i) StarSight
distributes the Redistributable Components only in conjunction with, and as a
part of its Application; (ii) StarSight's Application adds significant and
primary functionality to the Redistributable Components; (iii) the
Redistributable Components only operate in conjunction with Microsoft EPG
Products; (iv) StarSight does not permit further redistribution of the
Redistributable Components by its end-user customers; (v) StarSight does not use
Microsoft's name, logo, or trademarks to market its Application; (vi) StarSight
includes a valid copyright notice on its Application; and (vii) StarSight agrees
to indemnify, hold harmless, and defend Microsoft from and against any claims or
lawsuits, including attorneys' fees, that arise or result from the use or
distribution of its Application, except to the extent such claims or lawsuits
arise as a consequence of the Microsoft Deliverables.
e. Pre-Release Code. In the event, the EPG Development Tools
contain pre-release code, then StarSight is hereby advised that is not at the
level of performance and compatibility of the final, generally available,
product offering. These portions of the EPG Development Tools may not operate
correctly and may be substantially modified prior to first commercial shipment.
Microsoft is not obligated to make this or any later version of the EPG
Development Tools commercially available. Microsoft grants StarSight the right
to distribute test versions of its Application created using the pre-release
code provided StarSight complies with the Distribution Requirements described in
Section 3.2(d) of this Appendix A and the following additional provisions: (i)
StarSight must xxxx the test version of its Application "BETA" and (ii)
StarSight is solely responsible for updating its customers with versions of its
Application that operate satisfactorily with the final commercial release of the
pre-release code.
4. Support
In addition to such direct support from Microsoft technical personnel
as Microsoft deems necessary, support for StarSight's use of the Microsoft
Deliverables shall be in accordance with Microsoft's standard support offerings.
X-0
XXXXXXXX X
STARSIGHT DELIVERABLES AND SCHEDULE
1. Deliverables Defined
StarSightshall deliver to Microsoft technical information, trade
secrets and specifications regarding [REDACTED***], decryption of the StarSight
data stream, StarSight data formats and other technologies, all as StarSight
deems necessary, to facilitate the compatibility of Microsoft EPG Products with
StarSight's data and transmission network and to assist Microsoft in the
development of the StarSight Data Loader and a data security mechanism
(collectively "StarSight Deliverables").
2. Schedule for Delivery
To be agreed upon by the parties.
3. License Grant
StarSight grants Microsoft the following limited, non-exclusive rights:
Microsoft may use the StarSight Deliverables to design, develop, and test
Microsoft EPG Products and associated development tools and infrastructure
products for use with StarSight products and services.
4. Support
In addition to such direct support from StarSight technical personnel
as StarSight deems necessary, support for Microsoft's use of the StarSight
Deliverables shall be in accordance with StarSight's standard support offerings.
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
B-1
APPENDIX C
STARSIGHT TRADEMARKS
TRADEMARK INT'L CLASS COUNTRY APPLICATION/
REGISTRATION NO.
STARSIGHT Class 9 United States Registration No. 1,968,793
STARSIGHT Class 38 United States Registration No. 1,883,116
STAR DESIGN Class 9 United States Registration No. 1,973,971
STAR DESIGN Class 38 United States Registration No. 1,915,871
STARSIGHT (AND
STAR DESIGN) Class 9 United States Registration No. 1,968,794
STARSIGHT (AND
STAR DESIGN) Class 38 United States Registration No. 1,921,168
STARSIGHT Canada [REDACTED***]
STARSIGHT Classes 9 and 38 France Registration No. 94/540158
STARSIGHT Classes 9 and 38 Germany [REDACTED***]
STARSIGHT (AND
STAR DESIGN) Classes 9 and 38 Germany [REDACTED***]
STARSIGHT Class 9 Japan [REDACTED***]
STARSIGHT Class 00 Xxxxx [REDACTED***]
STARSIGHT Class 0 Xxxxxx Xxxxxxxxxxxx Xx. 000000
STARSIGHT Class 38 Mexico Registration No. 496517
STARSIGHT Classes 9 and 38 United Kingdom [REDACTED***]
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
C-1
APPENDIX D
MICROSOFT ROYALTY REPORTING FORM
For Quarter Ending ___________________
6.1.2
--------------------- ----------------------------------------- ------------------- ---------------------- ---------------------
QTY SOLD OR ROYALTY RATE
(6.2.1(a)) INVOICED [REDACTED***] ROYALTY DUE
VERSION NUMBER DESCRIPTION OF MICROSOFT (A) (B) (A x B)
EPG PRODUCT and Identification
of Service Provider (as applicable)
--------------------- ----------------------------------------- ------------------- ---------------------- ---------------------
--------------------- ----------------------------------------- ------------------- ---------------------- ---------------------
--------------------- ----------------------------------------- ------------------- ---------------------- ---------------------
--------------------- ----------------------------------------- ------------------- ---------------------- ---------------------
--------------------- ----------------------------------------- ------------------- ---------------------- ---------------------
SUBTOTAL DUE $
--------------------
6.1.3
--------------------- ---------------------------------------- ---------------------------------------- ------------------------
ADVERTISING
REVENUES NET ADVERTISING REVENUES
RECEIVED* TOTAL ALLOWANCES* RECEIVED (A - B) ROYALTY DUE
(A) (B) (C) [REDACTED***]
--------------------- ---------------------------------------- ---------------------------------------- ------------------------
--------------------- ---------------------------------------- ---------------------------------------- ------------------------
--------------------- ---------------------------------------- ---------------------------------------- ------------------------
--------------------- ---------------------------------------- ---------------------------------------- ------------------------
--------------------- ---------------------------------------- ---------------------------------------- ------------------------
--------------------- ---------------------------------------- ---------------------------------------- ------------------------
TOTAL ROYALTY DUE FOR QUARTER ENDING $
------------------------
*Attach itemization including description and amount.
--------------------------------------------------------------------------------------------------------------- -----------------
TOTAL ROYALTY DUE (6.1.2 + 6.1.3) FOR QUARTER ENDING $
--------------------------------------------------------------------------------------------------------------- -----------------
I certify that this report is a true and accurate representation of the amounts due and owing StarSight to the best
of my knowledge and information.
By:________________________________________ Printed Name:________________________________ Date:_____________________
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
D-1
APPENDIX E
STARSIGHT ROYALTY REPORTING FORM
For Quarter Ending ________________
6.1.4
----------------------- ------------------------ ---------------------------------------- -------------------------------------
SUBSCRIPTION REVENUES NET SUBSCRIPTION REVENUES
RECEIVED* TOTAL ALLOWANCES* RECEIVED (A - B) ROYALTY DUE
(A) (B) (C) [REDACTED***]
----------------------- ------------------------ ---------------------------------------- -------------------------------------
----------------------- ------------------------ ---------------------------------------- -------------------------------------
----------------------- ------------------------ ---------------------------------------- -------------------------------------
----------------------- ------------------------ ---------------------------------------- -------------------------------------
----------------------- ------------------------ ---------------------------------------- -------------------------------------
----------------------- ------------------------ ---------------------------------------- -------------------------------------
TOTAL ROYALTY DUE FOR QUARTER ENDING $
-------------------------------------
*Attach itemization including description and amount.
I certify that this report is a true and accurate representation of the amounts
due and owing Microsoft to the best of my knowledge and information.
By:________________________________________ Printed Name:________________________________ Date:_____________________
--------------------------------------------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
E-1
