As filed with the Securities and Exchange Commission on October 2, 2008
Registration No. 001-34108
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 4
to
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934
Digimarc Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization) |
26-2828185
(I.R.S. Employer Identification No.) |
|
9405 SW Gemini Drive Beaverton, Oregon (Address of principal executive offices) |
|
97008 (Zip Code) |
Registrant's telephone number, including area code:
(503) 469-4800
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class
to be so Registered |
Name of Each Exchange on
Which Each Class is to be Registered |
|
---|---|---|
Common Stock, par value $0.001 per share | The Nasdaq Stock Market LLC |
Securities to be registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company ý |
Information Required in Registration Statement
Cross-Reference Sheet Between the Information Statement and Items of Form 10
Our information statement is filed on Exhibit 99.1 to this Form 10. For your convenience, we have provided below a cross-reference sheet identifying where the items required by Form 10 can be found in the information statement.
The information required by this item is contained under the sections "Summary," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business of Digimarc Corporation" of the information statement, which sections are incorporated herein by reference.
The information required by this item is contained under the section "Risk Factors" of the information statement, which section is incorporated herein by reference.
The information required by this item is contained under the sections "Selected Historical Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the information statement, which sections are incorporated herein by reference.
The information required by this item is contained under the section "Business of Digimarc CorporationProperties and Facilities" of the information statement, which section is incorporated herein by reference.
Item 4.
Security Ownership of Certain Beneficial Owners and Management
The information required by this item is contained under the section "Security Ownership of Certain Beneficial Owners and Management" of the information statement, which section is incorporated herein by reference.
Item 5.
Directors and Executive Officers
The information required by this item is contained under the section "Management" of the information statement, which section is incorporated herein by reference.
Item 6.
Executive Compensation
The information required by this item is contained under the section "Executive Compensation" of the information statement, which section is incorporated herein by reference.
Item 7.
Certain Relationships and Related Transactions, and Director Independence
The information required by this item is contained under the sections "Our Relationship with Old Digimarc after the Spin-Off" and "Management" of the information statement, which sections are incorporated herein by reference.
The information required by this item is contained under the section "Business of Digimarc CorporationLegal Proceedings" of the information statement, which section is incorporated herein by reference.
Item 9.
Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters
The information required by this item is contained under the sections "Summary," "The Spin-Off," "Dividend Policy," "Capitalization," "Management" and "Description of Our Capital Stock" of the information statement, which sections are incorporated herein by reference.
Item 10.
Recent Sales of Unregistered Securities
Not applicable.
Item 11.
Description of Registrant's Securities to be Registered
The information required by this item is contained under the section "Description of Our Capital Stock" of the information statement, which section is incorporated herein by reference.
Item 12.
Indemnification of Officers and Directors
The information required by this item is contained under the section "Limitation of Liability and Indemnification of Directors and Officers" of the information statement, which section is incorporated herein by reference.
Item 13.
Financial Statements and Supplementary Data
The information required by this item is contained under the sections "Summary," "Pro Forma Financial Information," "Selected Historical Financial Information" and "Financial Statements" of the information statement, which sections are incorporated herein by reference.
Item 14.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 15.
Financial Statements and Exhibits
(a) Financial Statements. The information required by this item is contained under the section "Index to Financial Statements" beginning on page F-1 of the information statement, which section is incorporated herein by reference.
(b) Exhibits. The following documents are filed as exhibits hereto:
Exhibit Number
|
Exhibit Description
|
|
---|---|---|
2.1 |
|
Separation Agreement among DMRC Corporation, DMRC LLC, Digimarc Corporation and, with respect to certain sections, L-1 Identity Solutions, Inc.(2) |
3.1 |
|
Restated Certificate of Incorporation of Digimarc Corporation(2) |
3.2 |
|
Amended and Restated Bylaws of Digimarc Corporation(2) |
4.1 |
|
Specimen common stock certificate of DMRC Corporation(2) |
4.2 |
|
Rights Agreement, dated July 31, 2008, between DMRC Corporation and Computershare Trust Company, N.A. as Rights Agent(2) |
4.3 |
|
Form of Certificate of Designation of Series R Preferred Stock (attached as an exhibit to the Rights Agreement filed as Exhibit 4.2 hereto)(2) |
4.4 |
|
Form of Rights Certificate (attached as an exhibit to the Rights Agreement filed as Exhibit 4.2 hereto)(2) |
10.1 |
|
Transition Services Agreement between DMRC Corporation and Digimarc Corporation(1)(3) |
10.2 |
|
License Agreement between DMRC Corporation and L-1 Identity Solutions Operating Company(1)(3) |
10.3 |
|
Agreement, dated as of October 1, 2007, between Digimarc Corporation and The Nielsen Company(1)(3) |
10.4 |
|
Counterfeit Deterrence System Development and License Agreement, dated as of January 1, 1999(1)(3) |
*10.5 |
|
Form of Indemnification Agreement between DMRC Corporation and each of its executive officers and directors(2) |
*10.6 |
|
Form of Indemnification Agreement between Digimarc Corporation and each of its executive officers and directors (incorporated by reference to Exhibit 10.19 to Digimarc Corporation's Annual Report on Form 10-K, as filed by Digimarc Corporation with the Securities and Exchange Commission on March 13, 2006 (File No. 000-28317)) |
*10.7 |
|
Employment Agreement, dated as of July 16, 2001, between Digimarc Corporation and Bruce Davis (incorporated by reference to Exhibit 10.1 to Digimarc Corporation's Quarterly Report on Form 10-Q, as filed by Digimarc Corporation with the Securities and Exchange Commission on May 15, 2003 (File No. 000-28317)) |
*10.8 |
|
Form of Change of Control Retention Agreement entered into by and between Digimarc Corporation and each of Messrs. McConnell, Chamness and Stager (incorporated by reference to Exhibit 10.1 to Digimarc Corporation's Current Report on Form 8-K, as filed by Digimarc Corporation with the Securities and Exchange Commission on January 4, 2007 (File No. 000-28317)) |
*10.9 |
|
DMRC Corporation 2008 Incentive Plan(2) |
*10.10 |
|
Equity Compensation Program for Nonemployee Directors Under the DMRC Corporation 2008 Incentive Plan(2) |
99.1 |
|
Information Statement of Digimarc Corporation(1) |
Registrant agrees to furnish supplementally a copy of the omitted schedules and exhibits to the Securities and Exchange Commission upon request.
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: October 2, 2008
DIGIMARC CORPORATION | |||
|
|
By: |
/s/ BRUCE DAVIS Bruce Davis Chairman and Chief Executive Officer |
Exhibit
Number |
Exhibit Description
|
|
---|---|---|
2.1 |
|
Separation Agreement among DMRC Corporation, DMRC LLC, Digimarc Corporation and, with respect to certain sections, L-1 Identity Solutions, Inc.(2) |
3.1 |
|
Restated Certificate of Incorporation of Digimarc Corporation(2) |
3.2 |
|
Amended and Restated Bylaws of Digimarc Corporation(2) |
4.1 |
|
Specimen common stock certificate of DMRC Corporation(2) |
4.2 |
|
Rights Agreement, dated July 31, 2008, between DMRC Corporation and Computershare Trust Company, N.A. as Rights Agent(2) |
4.3 |
|
Form of Certificate of Designation of Series R Preferred Stock (attached as an exhibit to the Rights Agreement filed as Exhibit 4.2 hereto)(2) |
4.4 |
|
Form of Rights Certificate (attached as an exhibit to the Rights Agreement filed as Exhibit 4.2 hereto)(2) |
10.1 |
|
Transition Services Agreement between DMRC Corporation and Digimarc Corporation(1)(3) |
10.2 |
|
License Agreement between DMRC Corporation and L-1 Identity Solutions Operating Company(1)(3) |
10.3 |
|
Agreement, dated as of October 1, 2007, between Digimarc Corporation and The Nielsen Company(1)(3) |
10.4 |
|
Counterfeit Deterrence System Development and License Agreement, dated as of January 1, 1999(1)(3) |
*10.5 |
|
Form of Indemnification Agreement between DMRC Corporation and each of its executive officers and directors(2) |
*10.6 |
|
Form of Indemnification Agreement between Digimarc Corporation and each of its executive officers and directors (incorporated by reference to Exhibit 10.19 to Digimarc Corporation's Annual Report on Form 10-K, as filed by Digimarc Corporation with the Securities and Exchange Commission on March 13, 2006 (File No. 000-28317)) |
*10.7 |
|
Employment Agreement, dated as of July 16, 2001, between Digimarc Corporation and Bruce Davis (incorporated by reference to Exhibit 10.1 to Digimarc Corporation's Quarterly Report on Form 10-Q, as filed by Digimarc Corporation with the Securities and Exchange Commission on May 15, 2003 (File No. 000-28317)) |
*10.8 |
|
Form of Change of Control Retention Agreement entered into by and between Digimarc Corporation and each of Messrs. McConnell, Chamness and Stager (incorporated by reference to Exhibit 10.1 to Digimarc Corporation's Current Report on Form 8-K, as filed by Digimarc Corporation with the Securities and Exchange Commission on January 4, 2007 (File No. 000-28317)) |
*10.9 |
|
DMRC Corporation 2008 Incentive Plan(2) |
*10.10 |
|
Equity Compensation Program for Nonemployee Directors Under the DMRC Corporation 2008 Incentive Plan(2) |
99.1 |
|
Information Statement of Digimarc Corporation(1) |
Registrant agrees to furnish supplementally a copy of the omitted schedules and exhibits to the Securities and Exchange Commission upon request.
EXHIBIT 10.1
CONFIDENTIAL PORTIONS OMITTED
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT, dated as of August 1, 2008, but effective pursuant to Article VII (this Agreement ), is by and between Digimarc Corporation, a Delaware corporation ( Digimarc ), and DMRC Corporation ( DMRC ), a Delaware corporation and wholly owned subsidiary of DMRC LLC, a Delaware limited liability company ( DMRC LLC ). Digimarc and DMRC are individually referred to herein as a Party and collectively as the Parties . Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Separation Agreement (as defined below).
WHEREAS, Digimarc entered into an Agreement and Plan of Merger, dated as of March 23, 2008 (the Original Merger Agreement ), by and among Digimarc, L-1 Identity Solutions, Inc., a Delaware corporation ( L-1 ), and Dolomite Acquisition Co., a Delaware corporation and wholly owned subsidiary of L-1 ( Merger Sub ), pursuant to which Digimarc would merge with and into Merger Sub, with Digimarc continuing as a wholly owned subsidiary of L-1;
WHEREAS, Digimarc, L-1 and Merger Sub have entered into an Amended and Restated Agreement and Plan of Merger, dated as of June 29, 2008, as amended (the Merger Agreement ), which provides, among other things, for the Offer and the Merger;
WHEREAS, the Parties have entered into a Separation Agreement, dated as of the date hereof (the Separation Agreement ), pursuant to which (i) Digimarc will transfer or cause to be transferred to DMRC LLC, all of the DMRC Assets, which represent all assets used primarily in the operation of the Digital Watermarking Business, and all of the DMRC Liabilities, (ii) pursuant to Section 3.04 of the Separation Agreement, the Distribution or the Trust Transfer will occur prior to the completion of the Offer, and (iii) immediately following the Distribution or Trust Transfer, as applicable, DMRC LLC will merge with and into DMRC, with DMRC continuing as the surviving corporation (the DMRC Merger );
WHEREAS, this Agreement, the Separation Agreement, and the License Agreement between DMRC and L-1 Identity Solutions Operating Company, dated as of the date hereof (collectively, the Transaction Agreements ) set forth certain transactions that are conditions to the completion of the Offer and the Merger; and
WHEREAS, Digimarc and one or more of the Digimarc Subsidiaries or Affiliates (collectively, the Digimarc Group ), on the one hand, and DMRC and one or more of the DMRC Subsidiaries (collectively, the DMRC Group ), on the other hand, will provide certain services (the Services ) to each other in accordance with the terms and subject to the conditions set forth herein for a period described herein on and after the Distribution Date, or Trust Transfer Date, as applicable, in order to assist in the separation and transition of the Digital Watermarking Business and the continued operation and transition of the Secure ID Business.
NOW, THEREFORE, in consideration of the covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound hereby, agree as follows:
ARTICLE I
SERVICES
Section 1.1. Services Provided by the Parties . In order to continue the operation of the Secure ID Business and to facilitate the orderly and effective transition of the Digital Watermarking Business from Digimarc to DMRC and to assist in the continued operation and transition of the Secure ID Business, the DMRC Group and the Digimarc Group each shall provide to the other the Services set forth in Sections 1.2 and 1.3 , respectively (collectively, the Services ).
Section 1.2. Services Provided by the DMRC Group to the Digimarc Group . The DMRC Group shall provide the Digimarc Group, to the extent such Services may be requested by the Digimarc Group from time to time for the term of this Agreement, the following Services set forth in this Section 1.2 ( DMRC Services ). Any additional services to be provided by the DMRC Group but not specifically detailed in the schedules to this Section 1.2 (collectively, the DMRC Services Schedules ), or any change in the fees to be charged from those set forth on any DMRC Services Schedule, shall be mutually agreed upon by the Parties as an amendment to the applicable schedule.
1.2.1 Accounting and Tax Services . The DMRC Group shall provide each of the accounting and tax services specified in Schedule 1.2.1 (the DMRC Accounting and Tax Services ) to the Digimarc Group, in accordance with the terms and conditions for such DMRC Accounting and Tax Services, and at the applicable rates, fees and charges associated with such DMRC Accounting and Tax Services, as set forth on Schedule 1.2.1 .
1.2.2 Information Technology Services . The DMRC Group shall provide each of the information technology services specified in Schedule 1.2.2 (the DMRC IT Services ) to the Digimarc Group, in accordance with the terms and conditions for such DMRC IT Services, and at the applicable rates, fees and charges associated with such DMRC IT Services, as set forth on Schedule 1.2.2 .
1.2.3 Legal Services . The DMRC Group shall provide each of the legal services specified in Schedule 1.2.3 (the DMRC Legal Services ) to the Digimarc Group, in accordance with the terms and conditions for such DMRC Legal Services, and at the applicable rates, fees and charges associated with such DMRC Legal Services, as set forth on Schedule 1.2.3 .
1.2.4 Human Resources Services . The DMRC Group shall provide each of the human resources services specified in Schedule 1.2.4 (the DMRC Human Resources Services ) to the Digimarc Group, in accordance with the terms and conditions for such DMRC Human Resources Services, and at the applicable rates, fees and charges associated with such DMRC Human Resources Services, as set forth on Schedule 1.2.4 .
2
1.2.5 Other Services . To the extent fees for a specific DMRC Service to be provided to the Digimarc Group are not set forth in Schedule 1.2.1 through Schedule 1.2.4 , then the DMRC Group shall provide such additional Service in accordance with the terms and conditions listed on Schedule 1.2.5 .
Section 1.3. Services Provided by Digimarc Group to the DMRC Group . The Digimarc Group shall provide the DMRC Group, to the extent such Services may be requested by the DMRC Group from time to time for the term of this Agreement, the following Services set forth in this Section 1.3 ( Digimarc Services ). Any additional services to be provided by the Digimarc Group but not specifically detailed in the schedules to this Section 1.3 (collectively, the Digimarc Services Schedules ), or any change in the fees to be charged from those set forth on any Digimarc Services Schedule, shall be mutually agreed upon by the Parties as an amendment to the applicable schedule.
1.3.1 Accounting and Tax Services . The Digimarc Group shall provide each of the accounting and tax services specified in Schedule 1.3.1 (the Digimarc Accounting and Tax Services ) to the DMRC Group, in accordance with the terms and conditions for such Digimarc Accounting and Tax Services, and at the applicable rates, fees and charges associated with such Digimarc Accounting and Tax Services, as set forth on Schedule 1.3.1 .
1.3.2 Information Technology Services . The Digimarc Group shall provide each of the information technology services specified in Schedule 1.3.2 (the Digimarc IT Services ) to the DMRC Group, in accordance with the terms and conditions for such Digimarc IT Services, and at the applicable rates, fees and charges associated with such Digimarc IT Services, as set forth on Schedule 1.3.2 .
1.3.3 Legal Services . The Digimarc Group shall provide each of the legal services specified in Schedule 1.3.3 (the Digimarc Legal Services ) to the DMRC Group, in accordance with the terms and conditions for such Digimarc Legal Services, and at the applicable rates, fees and charges associated with such Digimarc Legal Services, as set forth on Schedule 1.3.3 .
1.3.4 Human Resources Services . The Digimarc Group shall provide each of the human resources services specified in Schedule 1.3.4 (the Digimarc Human Resources Services ) to the DMRC Group, in accordance with the terms and conditions for such Digimarc Human Resources Services, and at the applicable rates, fees and charges associated with such Digimarc Human Resources Services, as set forth on Schedule 1.3.4 .
1.3.5 Other Services . To the extent fees for a specific Digimarc Service to be provided to the DMRC Group are not set forth in Schedule 1.3.1 through Schedule 1.3.4 , then the Digimarc Group shall provide such additional Service in accordance with the terms and conditions listed on Schedule 1.3.5 .
3
ARTICLE II
PERFORMANCE OF SERVICES
Section 2.1. Manner of Performance . Each of the Parties agrees that it shall provide the Services being requested herein with the degree of care, skill, confidentiality and diligence consistent with its current practices, but in no event less than in conformance with industry standards. Each Party shall ensure that its personnel providing services hereunder, shall devote sufficient time and effort as reasonably required to perform the Services. If a dispute arises over the nature or quality of the Services, the prior practice of Digimarc with respect to the Services shall be conclusive as to the nature and quality of the Services.
Section 2.2. Provision of Information . Any data, information, equipment or general directions necessary for the Digimarc Group or DMRC Group to perform the Services shall be provided to the Party performing the Services in a timely manner.
Section 2.3. Termination of any Service . The termination of any one or more of the specific Services shall have no impact on the Digimarc Groups or the DMRC Groups obligation to continue to provide any other Services.
Section 2.4. Laws and Regulations . The Parties agree that they will provide and use the Services contemplated hereunder only in accordance with all applicable federal, state and local laws and regulations, and in accordance with the conditions, rules, regulations and specifications which may be set forth in any manuals, materials, documents or instructions provided to the Party performing such Services on or prior to the date of this Agreement.
Section 2.5. Modification of Service Levels . Prior to the end of the first calendar month following the Distribution Date, or Trust Transfer Date, as applicable, and prior to the end of each calendar month thereafter, the Parties will review the Services provided to discuss whether the Services will continue during, or terminate, the next immediately succeeding month. Each Party will notify the other in writing of the termination of any Services pursuant to Article VIII .
Section 2.6. No Representations or Warranties .
2.6.1. THE PARTIES MAKE NO EXPRESS REPRESENTATIONS OR WARRANTIES EXCEPT THOSE EXPRESSLY STATED IN THIS AGREEMENT OR THE SCHEDULES HERETO.
2.6.2. EXCEPT FOR THOSE EXPRESSLY STATED IN THIS AGREEMENT OR THE SCHEDULES HERETO, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, REPRESENTATIONS AND CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, TO THE FULL EXTENT PERMISSIBLE, INCLUDING, BUT NOT LIMITED TO, AVAILABILITY, ACCURACY, COMPLETENESS, CORRECTNESS, RELIABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT WITH RESPECT TO THE SERVICES, GOODS OR PRODUCTS FURNISHED IN CONNECTION HEREWITH.
4
Section 2.7. Employees; Use of Subcontractors . The Parties shall employ and retain the employees necessary to enable the provider to perform the Services under the terms of this Agreement. If either Party is unable to retain one or more employees necessary to provide or perform the Services for which the Party is obligated under this Agreement, each of the Parties may hire or engage one or more subcontractors to perform one or more of its Services; provided , that each of the Parties will in all cases remain responsible for its respective obligations under this Agreement, including, without limitation, with respect to the scope of the Services, the standard for Services and the content of the Services provided. Under no circumstances will DMRC be responsible for making any payments directly to any subcontractor engaged by Digimarc, nor will Digimarc be responsible for making any payments directly to any subcontractor engaged by DMRC.
ARTICLE III
CHARGES FOR SERVICES
From and after the date of this Agreement and throughout the term of this Agreement, DMRC agrees to pay to Digimarc on a monthly basis the service fees set forth on the Digimarc Services Schedules, and Digimarc agrees to pay DMRC on a monthly basis the service fees set forth on the DMRC Services Schedules. The Parties agree that, unless otherwise set forth in the DMRC Services Schedules or the Digimarc Services Schedules, the amounts to be paid for Services rendered hereunder are intended to reasonably cover each of the Digimarc Groups and the DMRC Groups costs in providing the Services.
ARTICLE IV
PAYMENT OF CHARGES AND REIMBURSEMENTS
On or before the thirtieth (30 th ) day of each month during the term of this Agreement, each Party (or its designee) shall submit to the other Party an invoice for the Services provided hereunder during the immediately preceding calendar month representing amounts determined in accordance with Article III above, if any. Subject to Section 5.2 , each Party shall remit payment to the other Party within thirty (30) days after its receipt of such invoice. Unless otherwise agreed to in writing, each Party shall remit all funds due under this Agreement to the other Party (or its designee) by wire transfer in immediately available funds based on the instructions set forth in Exhibit A , a copy of which is attached to and made a part of this Agreement.
ARTICLE V
RECORDS AND AUDITS
Section 5.1. Records Maintenance and Audits . The Parties shall, for two (2) years after the termination of this Agreement, maintain records and other evidence sufficient to accurately and properly calculate any amounts due pursuant to Article III hereof. Each of the Parties, or their respective Representatives (as defined below), shall have reasonable access, after requesting such access in writing, during normal business hours to such records for the purpose
5
of auditing and verifying the accuracy of the invoices submitted regarding such amounts due. Any such audits performed by or on behalf of Digimarc or DMRC shall be at the requesting Partys sole cost and expense , unless the results of such audit reveals a five percent (5%) or more discrepancy in favor of the requesting Party, in which case the audited Party shall pay all reasonable costs and expenses directly associated with such audit. The Party being audited shall reasonably cooperate with the auditing Partys Representatives to accomplish the audit. Each Party shall have the right to audit the other Partys books for a period of one (1) year after the month in which the Services were rendered.
Section 5.2. Disputed Amounts . In the event of a good faith dispute as to the amount or propriety of any invoice or any portions thereof submitted pursuant to Articles III and IV , the Party receiving the Services shall pay all charges on such invoice other than disputed amounts and shall promptly notify the other Party in writing of such disputed amounts. So long as the Parties are attempting in good faith and in accordance with the terms of Section 9.1 , to resolve the dispute, neither Party shall be entitled to terminate the Services related to, or that are the cause of, the disputed amounts. If it is determined, pursuant to Section 9.1 , that the Party receiving Services is required to pay all or a portion of the disputed amounts to the Party providing Services, the Party receiving the Services shall pay such amounts promptly and in no case more than five (5) days after such determination is made.
Section 5.3. Undisputed Amounts . Any statement or payment not disputed in writing by DMRC or Digimarc within six (6) months after the month in which the Services were rendered shall be considered final and no longer subject to adjustment.
ARTICLE VI
CONFIDENTIALITY
Section 6.1. Confidential Information . Each Party acknowledges that in connection with its performance under this Agreement, it may gain access to confidential material and information that is of a proprietary, technical or business nature to the other Party with respect to the Services being performed hereunder. Therefore, each Party agrees that it shall not, and shall cause each of its respective officers, directors, employees, and other agents and representatives, including attorneys, agents, customers, suppliers, contractors and consultants (collectively, such Partys Representatives ), not to disclose, reveal, divulge or communicate to any person (other than Representatives of such Party who reasonably need to know such information in providing Services hereunder) or use or otherwise exploit for its own benefit or for the benefit of any third Party, any of the other Partys Confidential Information (as defined below). If any Confidential Information is disclosed by a Party to its Representatives in connection with the Services hereunder, then the Confidential Information so disclosed shall be used only as required to perform the Services. Such Party shall use the same degree of care to prevent and restrain the unauthorized use or disclosure of the other Partys Confidential Information by any of its Representatives as they currently use for their own confidential information of a like nature, but in no event less than a reasonable standard of care. If a Party is required to disclose Confidential Information of the other Party due to a provision of applicable law, a compulsory disclosure notice of a court or governmental agency or the rules and regulations of the New York Stock
6
Exchange or Nasdaq Global Market, the Party required to make such disclosure shall promptly notify the other Party and shall assist the other Party in obtaining confidential treatment of such Confidential Information. Confidential Information of a Party means any information, material or documents relating to the business of such Party currently or formerly conducted, or proposed to be conducted, by such Party furnished to or in possession of the other Party, irrespective of the form of communication, and all notes, analyses, compilations, forecasts, data, translations, studies, memoranda or other documents prepared by or on behalf of the other Party that contain or otherwise reflect such information, material or documents. Confidential Information does not include, and there shall be no obligation hereunder with respect to, information that (a) is or becomes generally available to the public, other than as a result of a disclosure by any member of the other Party or any of its Representatives not otherwise permissible hereunder, (b) the other Party can demonstrate was or became available to such other Party from a source other than the first Party, or (c) is developed independently by the other Party without reference to the Confidential Information; provided , however , that, in the case of clause (b) above, the source of such information was not known by the other Party to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the first Party with respect to such information.
Section 6.2. Return of Confidential Information . Following termination of the Services hereunder, upon written request at any time by either Party, the Parties shall use commercially reasonable efforts to account for and return or destroy all papers, books, records and electronic records containing any Confidential Information.
Section 6.3 Injunctive Relief. The Parties acknowledge that a breach of this Article VI, will give rise to irreparable injury to a Party that is inadequately compensable in damages. Accordingly, in the event that either Party breaches this Article VI, the non-breaching Party may seek injunctive relief against the breach or threatened breach of the foregoing undertakings, in addition to any other legal remedies that may be available. The Parties acknowledge and agree that the covenants contained herein are necessary for the protection of the legitimate business interests of the Parties and are reasonable in scope and content.
ARTICLE VII
TERM OF AGREEMENT
Unless sooner terminated pursuant to Article VIII hereof, this Agreement shall become effective for a term commencing on the Distribution Date, or the Trust Transfer Date, as applicable, and ending upon the completion, or termination in accordance with Article VIII , of all Services pursuant to the terms set forth on the Digimarc Services Schedules and the DMRC Services Schedules, as may be amended from time to time.
7
ARTICLE VIII
TERMINATION
Section 8.1. Termination of Agreement .
8.1.1. This Agreement may be terminated after the Distribution Date, or Trust Transfer Date, as applicable:
(a) at the election of a non-breaching Party if the other Party fails to perform or violates any material obligation of this Agreement and fails to cure such breach within thirty (30) days after the receipt of written notice of such breach from the non-breaching Party, in which case, the non-breaching party shall have no liability for such termination;
(b) immediately (i) upon the filing by a Party of a voluntary petition in bankruptcy or insolvency or petitions for reorganization under any bankruptcy law, (ii) if a Party consents to involuntary petition in bankruptcy or if a receiving order is given against the Party under the United States Bankruptcy Code; or (iii) if an order, judgment or decree by a court of competent jurisdiction, upon the application of a creditor, is entered approving a petition seeking reorganization or appointing a receiver, trustee or liquidator of all or substantially all of such Partys assets and such order, judgment or decree continues in effect for a period of thirty (30) consecutive days; or
(c) by mutual written agreement of the Parties.
8.1.2. Notwithstanding any other provision of this Agreement, this Agreement may be terminated at any time prior to the Distribution Date, or Trust Transfer Date, as applicable, by the Board of Directors of Digimarc in the event the Merger Agreement is terminated in accordance with its terms. In the event of such termination, no Party hereto shall have any liability to the other Party hereto by reason of this Agreement.
Section 8.2. Termination of Services . At any time or from time to time, either Party may terminate any one or more of the specific Services provided hereunder by giving the other Party at least thirty (30) days prior written notice to that effect.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Dispute Resolution . The procedures for discussion and negotiation set forth in this Section 9.1 shall apply to all disputes, controversies or claims (whether arising in contract, tort or otherwise) that may arise out of or relate to, or arise under or in connection with this Agreement or the transactions contemplated hereby.
9.1.1. Primary Points of Contact . It is the intent of the Parties hereto to use their respective reasonable efforts to resolve expeditiously any dispute, controversy or claim between them with respect to the matters covered hereby that may arise from time to time on a mutually acceptable negotiated basis. In furtherance of the foregoing, each of Digimarc and DMRC shall appoint one or more employees to serve as the primary contact to address questions and consider issues that arise under this Agreement. Such Digimarc employee or employees shall be designated the Digimarc Contract Committee and such DMRC employee or employees shall
8
be designated the DMRC Contract Committee . If a dispute arises, the Digimarc Contract Committee and the DMRC Contract Committee shall consider the dispute for up to seven (7) Business Days (as defined in Section 9.7 ) following receipt of a notice from either Party hereto specifying the nature of the dispute, during which time the Digimarc Contract Committee and the DMRC Contract Committee shall meet in person at least once, and attempt to resolve the dispute.
9.1.2. Senior Management . If the dispute is not resolved by the end of the seven (7) Business Day period referred to in Section 9.1.1 , or if the Digimarc Contract Committee and the DMRC Contract Committee agree that the dispute cannot be resolved by them, either Party hereto may deliver a notice (an Escalation Notice ) demanding an in person meeting involving appropriate representatives of the Parties hereto at a senior level of management of the Parties hereto (or if the Parties agree, of the appropriate strategic business unit or division within such entity) (collectively, Senior Executives ). Thereupon, each of the Digimarc Contract Committee and the DMRC Contract Committee shall promptly prepare a memorandum stating (a)the issues in dispute and each Partys position thereon, (b) a summary of the evidence and arguments supporting each Partys positions (attaching all relevant documents), (c a summary of the negotiations that have taken place to date, and (d) the name and title of the Senior Executive or Senior Executives who shall represent each Party. The Digimarc Contract Committee and the DMRC Contract Committee shall deliver such memorandum to its respective Senior Executive or Senior Executives promptly upon receipt of such memorandum from the Digimarc Contract Committee and the DMRC Contract Committee, respectively. The Senior Executives shall meet for negotiations (which may be held telephonically) at a mutually agreed time and place within ten (10) days of receipt of the Escalation Notice, and thereafter as often as the Senior Executives deem reasonably necessary to resolve the dispute.
9.1.3. Court Actions . In the event that any Party, after complying with the provisions set forth in Sections 9.1.1 and 9.1.2 , desires to commence an action, such Party may submit the dispute, controversy or claim (or such series of related disputes, controversies or claims), to the Chancery Court of the State of Delaware or any federal court sitting in the State of Delaware. Unless otherwise agreed in writing, the Parties hereto shall continue to provide service and honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of this Section 9.1 with respect to all matters not subject to such dispute, controversy or claim.
Section 9.2. Force Majeure . Neither Party shall have any obligation to perform any specific Service hereunder if its failure to do so is caused by or results from any act of God, governmental action, natural disaster, strike, terrorism, war, insurrection or other cause or circumstances beyond its control, which acts or occurrences make it impossible for such Party to carry out its obligations under this Agreement. During the term of the force majeure event, the Party receiving the Service shall have no obligation to pay for the specific Service that the other Party does not provide as a result of the force majeure event; provided , that the Party performing the Service, shall, unless instructed otherwise by the Party receiving the Service, use commercially reasonable efforts to remove or eliminate such cause of delay or default.
9
Section 9.3. Limitation of Liability . EXCEPT IN THE CASE OF FRAUD, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND OR NATURE WHATSOEVER, INCLUDING LOST PROFITS AND GOODWILL, WITH RESPECT TO THE SERVICES PROVIDED UNDER THIS AGREEMENT.
Section 9.4. Indemnification . Subject to the limitations set forth in Section 9.3 , each Party shall release, defend (upon the other Partys request), protect, indemnify and save the other Party and its Affiliates harmless from and against all liability, claims, costs, expenses, demands, suits and causes of action of every kind and character which the first Party or any of its Affiliates may sustain or incur, arising, resulting from or related to the gross negligence, bad faith or willful misconduct of the other Party, its employees, contractors, agents or representatives in the provision of any Service.
Section 9.5. Independent Contractor . The Parties hereto agree that the Services rendered by the Digimarc Group and the DMRC Group in fulfillment of the terms and obligations of this Agreement shall be as an independent contractor and not as an employee, and with respect thereto, the Digimarc Group, the DMRC Group and their respective employees, contractors or agents are not entitled to the compensation or benefits provided by the other Party to its employees, including, without limitation, group insurance and participation in any employee benefit and pension plans. Nothing stated in this Agreement shall be construed to create an agency relationship, partnership, association or joint venture between DMRC Group and Digimarc Group. No employee, contractor or agent of either the Digimarc Group or the DMRC Group shall represent to any third-Party to be anything other than an independent contractor of the other Party. Nothing in this Agreement shall permit the Digimarc Group or DMRC Group to create or assume any obligations or commitments in the name of such Party or for such Party without the prior consent and authorization of such Party.
Section 9.6. Complete Agreement . This Agreement and the schedules and exhibits hereto, the other Transaction Agreements and other documents referred to herein and therein shall constitute the entire agreement between the Parties hereto with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.
Section 9.7. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to its conflicts of laws principles.
Section 9.8. Notices . All notices, requests and other communications to any Party hereunder shall be in writing and shall be deemed given if delivered personally, facsimiled (which is confirmed), sent by e-mail (with a return receipt) or sent by overnight courier (providing proof of delivery) to the Parties to the following addresses:
If to Digimarc or any member of the Digimarc Group subsequent to the Distribution Date, or Trust Transfer Date, as applicable, to:
10
L-1 Identity Solutions, Inc.
177 Broad Street
Stamford, CT 06901
Attention: Mark Molina
Facsimile: (203)504-1104
E-mail: mmolina@L1ID.com
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Marita A. Makinen
Facsimile: (212)310-8007
E-mail: Marita.Makinen@weil.com
and
Weil, Gotshal & Manges LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Attention: Kyle C. Krpata
Facsimile: (650) 802-3100
E-mail: Kyle.Krpata@weil.com
If to DMRC or any member of the DMRC Group, to:
DMRC Corporation
9405 SW Gemini Drive
Beaverton, OR 97008
Attention: Robert Chamness
Facsimile: (503)469-4771
E-mail: Robert.Chamness@digimarc.com
with a copy (which shall not constitute notice) to:
Perkins Coie LLP
1120 NW Couch Street
Tenth Floor
Portland, OR 97209
Attention: Roy W. Tucker and John R. Thomas
Facsimile: (503)727-2222
E-mail: rtucker@perkinscoie.com
jrthomas@perkinscoie.com
11
or such other addresses or facsimile number as such Party may hereafter specify by like notice to the other Parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day (as defined below) in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Business Day means a day except a Saturday, a Sunday or other day on which the Securities and Exchange Commission or banks in the City of New York are authorized or required by law to be closed.
Section 9.9. Amendment and Modification . This Agreement may be amended, modified or supplemented only by a written agreement signed by all of the Parties hereto.
Section 9.10. Successors and Assigns; No Third-Party Beneficiaries . This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their successors and permitted assigns, but neither this Agreement nor any of the rights, interests and obligations hereunder shall be assigned by any Party hereto without the prior written consent of the other Party. Except for the provisions of Section 9.3 , which are also for the benefit of the indemnitees, this Agreement is solely for the benefit of Digimarc and DMRC and their respective affiliates, successors and assigns, and is not intended to confer upon any other persons any rights or remedies hereunder
Section 9.11. Counterparts . This Agreement may be executed in counterparts (each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument) and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.
Section 9.12. Interpretation . The Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties hereto and shall not in any way affect the meaning or interpretation of this Agreement.
Section 9.13. Severability . If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any Party.
Section 9.14. References; Construction . References to any Schedule, Exhibit or Section, without more, are to Schedules, Exhibits and Sections to or of this Agreement. Unless otherwise expressly stated, clauses beginning with the term including or similar words set forth examples only and in no way limit the generality of the matters thus exemplified.
Section 9.15. Waivers . Except as provided in this Agreement, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representations, warranties, covenants or agreements contained in this Agreement. The waiver
12
by any Party hereto of a breach of any provision hereunder shall not operate or be construed as a waiver of any prior or subsequent breach of the same or any other provision hereunder.
Section 9.16. Specific Performance . The Parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the Parties shall be entitled to seek specific performance of the terms hereof, in addition to any other remedy at law or in equity.
Section 9.17. Waiver of Jury Trial . EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION, CLAIM, ACTION, SUIT, ARBITRATION, INQUIRY, PROCEEDING, INVESTIGATION OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PARTIES HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
Section 9.18. Further Assurances . Each of the Parties shall execute and deliver, or cause to be executed and delivered, all such instruments and shall take all such action as may reasonably be requested by the other Party in order to effectuate the intent and purposes of, and to carry out the terms of, this Agreement.
Section 9.19 Survival . The provisions of Articles IV , V , VI , and IX (other than Section 9.16 ), shall survive the expiration or termination of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
13
The Parties hereto have executed this Agreement on the date first written above, to be effective on the Distribution Date, or Trust Transfer Date, as applicable.
|
DIGIMARC CORPORATION |
|
|
|
|
|
By: |
/s/ Robert Chamness |
|
Name: |
Robert Chamness |
|
Title: |
Chief Legal Officer and Secretary |
|
|
|
|
|
|
|
DMRC CORPORATION |
|
|
|
|
|
By: |
/s/ Robert Chamness |
|
Name: |
Robert Chamness |
|
Title: |
Chief Legal Officer and Secretary |
Exhibit A
Wire Instructions
Digimarc
DMRC
Wells Fargo Bank
Portland, Oregon
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE 1.2.1
DMRC ACCOUNTING AND TAX SERVICES
(a) Services to be Provided :
DMRC will provide to Digimarc, from the current shared services group located in Beaverton, Oregon, the following accounting and tax services:
1. Transaction Processing
· payroll processing
· accounts payable processing
· travel coordination and management
· credit card program,
· IT capital leases, of which there are two,
· performance bonds,
· stock administration,
· insurance administration (Property and Casualty, or P&C, and Directors and Officers, or D&O) and treasury.
2. Regulatory Reporting for tax services
· income taxes
· property
· VAT taxes
· sales and use taxes
· business and occupation taxes
· state and nations annual corporation reporting
· other domestic and foreign reporting
· payroll tax and vendor 10099 reporting
3. Consulting Services
· In connection with transaction services and regulatory services
(b) Duration of Services : 45 days for accounts payable, accounting, tax and payroll services, with periodic extensions thereafter, provided that employees or contractors are available to perform the requested services.
(c) Fees for Services :
DMRC will make offers of employment to the individuals in the following table, and anticipates that they will be available to provide services and support in the transition. Digimarc shall pay for such services at the following rates:
Job Function |
|
Employee |
|
Rate Per
|
|
|
|
|
|
|
|
|
|
CFO |
|
Mike McConnell |
|
$ |
515 |
|
Controller |
|
John Foy |
|
$ |
135 |
|
Senior Accountant |
|
Kimberly Anderson |
|
$ |
85 |
|
Administration Manager stock, treasury, autos, credit cards, insurance |
|
Jeanne Biermann |
|
$ |
110 |
|
Financial Reporting Manager |
|
Kelvin Wong |
|
$ |
115 |
|
Executive Assistant to CFO and CIO |
|
Sue Taylor |
|
$ |
80 |
|
AP/Accounting Specialist |
|
Beverly Foster |
|
$ |
60 |
|
DMRC will not make offers of employment to the individuals in the following table, but to the extent Digimarc makes a request for such services prior to the Spin-off, DMRC will offer these individuals temporary positions as contractors. Once these individuals are severed from employment, DMRC cannot commit that they will be available to provide services and support in the transition.
Digimarc shall pay for such services at the following rates:
Job Function |
|
Contractor** |
|
Rate Per
|
|
|
|
|
|
|
|
|
|
Lead AP |
|
Joanne Black |
|
$ |
65 |
|
AP/Accounting Specialist |
|
Suzanne Farmer |
|
$ |
60 |
|
AP/Tax Compliance Support Specialist |
|
Elizabeth Robles |
|
$ |
65 |
|
Tax Director |
|
Jeff Miller |
|
$ |
150 |
|
Payroll Specialist |
|
Lori Venneberg |
|
$ |
75 |
|
Internal Controls Specialist |
|
Heather Laws |
|
$ |
100 |
|
Systems Support Specialist |
|
Deina Chen-Vu |
|
$ |
75 |
|
Accounting Manager |
|
Sharon Birrel |
|
$ |
100 |
|
Process Control Specialist |
|
Renee Halpern |
|
$ |
105 |
|
* The rates provided are estimates and fees will be billed at fully loaded cost. See Appendix 1 for rate detail.
** Upon an indication of interest from Digimarc, the individuals listed in this table will be offered the opportunity to continue working through the transition as contractors. The individuals may or may not be available to render services to DMRC and/or Digimarc at any time following the Spin-off
SCHEDULE 1.2.2
DMRC INFORMATION TECHNOLOGY SERVICES
(a) Services to be Provided :
1. The following basic computer operations services will be performed by DMRC:
a. Monitoring of systems, hardware and networks
b. Back up tape rotation
c. Facility cooling and electrical
2. Network usage to be charged based on actual usage
3. Personal services related to the data center transition and other IT related activities will be provided upon receipt of request in reasonable detail, at rates to be agreed upon by L-1 and DMRC at the time of such request
(b) Duration of Services :
For a period of 34 days following the Effective Time, L-1 and DMRC will be sharing L-1 computer equipment and operating system software within the DMRC facility. DMRC personnel will supply computer operations and maintenance for the L-1 hardware and software during this time.
(c) Fees for Services :
DMRC will make offers of employment to the individuals in the following table, and anticipates that they will be available to provide services and support in the transition. Digimarc shall pay for such services at the following rates:
Job Function |
|
Employee |
|
Rate Per Hour* |
|
|
|
|
|
|
|
|
|
Manager Infrastructure Services |
|
Josh Bickel |
|
$ |
115 |
|
Network Administrator |
|
Rick Ly |
|
$ |
85 |
|
System Administrator/Support |
|
Adam Smith |
|
$ |
60 |
|
* The rates provided are estimates and fees will be billed at fully loaded cost. See Appendix 1 for rate detail.
(d) Temporary Computer Room :
In consideration of DMRC providing the continuing data center space and infrastructure on DMRCs premises as requested by Digimarc, DMRC was required to build a temporary space to house its separate data center for the Digital Watermarking Business. This is an expense that DMRC would not have been required to incur but for the request that DMRC continue to house Digimarcs data center, which service will be provided pursuant to an appropriate agreement and will be managed and operated only by Digimarc employees or contractors. Digimarc understands and agrees that DMRC employees and contracts will not manage or operate the Digimarc data center. Digimarc agrees to reimburse DMRC for the reasonable costs for the build-out, maintenance and relocation of this center, at actual cost not to exceed $100,000 .
SCHEDULE 1.2.3
DMRC LEGAL SERVICES
(a) Services to be Provided :
· Litigation support
· Intellectual property protection
· Paralegal support
· Such legal services as may be required to assist in the transfer of Delayed Transfer Assets and Delayed Transfer Liabilities
Digimarc shall request such services in writing in reasonable detail.
(b) Duration of Services : Six months
(c) Fees for Services :
DMRC will make offers of employment to the individuals in the following table, and anticipates that they will be available to provide services and support in the transition. Digimarc shall pay for such services at the following rates:
Job Function |
|
Employee |
|
Rate Per Hour* |
|
|
|
|
|
|
|
|
|
Attorney |
|
Robert Chamness |
|
$ |
465 |
|
Attorney |
|
Joel Meyer |
|
$ |
240 |
|
Attorney |
|
Tom Horgan |
|
$ |
225 |
|
Attorney |
|
Steve Stewart |
|
$ |
190 |
|
Attorney |
|
Bill Conwell |
|
$ |
275 |
|
Paralegal |
|
Megan Warner |
|
$ |
85 |
|
Paralegal |
|
Lisa Parkinson |
|
$ |
85 |
|
* The rates provided are estimates and fees will be billed at fully loaded cost. See Appendix 1 for rate detail.
SCHEDULE 1.2.4
DMRC HUMAN RESOURCES SERVICES
(a) Services to be Provided :
1. Support and training in maintaining the HR Systems
a. HR Perspective HR-B HRIS
b. PilotWorks Goal Management
c. SonicRecruit Applicant Tracking System
d. Comply Policy Management System
e. Intellum Learning Management System
2. Health Plan administration support
a. 5500 filing for the 2007 and 2008 plan years
(b) Duration of Services :
1. HR Systems: For a period of up to 90 days following the Effective Time.
2. Health Plans: For a period up to 90 days following the Effective Time, for administration support and for the specific time periods for the 5500 filings for the 2007 and 2008 plan years.
(c) Fees for Services :
DMRC will make an offer of employment to the individual in the following table, and anticipates that they will be available to provide services and support in the transition. Digimarc shall pay for such services at the following rates:
Job Function |
|
Employee |
|
Rate Per Hour* |
|
|
|
|
|
|
|
|
|
HR Operations Mgr |
|
Cindy Smith |
|
$ |
165 |
|
DMRC will not make offers of employment to the individuals in the following table, but to the extent Digimarc makes a request for such services prior to the Spin-off, DMRC will offer these individuals temporary positions as contractors. Once these individuals are severed from employment, DMRC cannot commit that they will be available to provide services and support in the transition.
* The rates provided are estimates and fees will be billed at fully loaded cost. See Appendix 1 for rate detail.
Digimarc shall pay for such services at the following rates:
Job Function |
|
Contractor** |
|
Rate Per Hour* |
|
|
|
|
|
|
|
|
|
HR VP |
|
Mike Cooney |
|
$ |
360 |
|
HR Director |
|
Carol Ward |
|
$ |
280 |
|
Benefits |
|
Amanda Ihle |
|
$ |
115 |
|
** Upon an indication of interest from Digimarc, the individuals listed in this table will be offered the opportunity to continue working through the transition as contractors. The individuals may or may not be available to render services to DMRC and/or Digimarc at any time following the Spin-off.
SCHEDULE 1.2.5
DMRC OTHER SERVICES
(a) Office Space to be Provided :
Cubical and Related Work Space : DMRC will provide cubicle and attendant office space (the DMRC Office Space ) to Digimarc employees. Each cubicle will include the equipment and related amenities normally and customarily provided in the facility. L-1 personnel shall have access to conference rooms and phone rooms in accordance with the normal and customary access rules, including scheduling, applicable to DMRC Employees.
(b) Duration of Office Space Availability :
The parties will enter into an agreement wherein DMRC will provide workspace to employees of L1/Digimarc within the Beaverton facility. DMRC Office Space will be provided for a period of up to one year after the Effective Time, with periodic extensions thereafter if excess capacity remains.
(c) Rent for Office Space :
DMRC will charge Digimarc for the use of DMRC Office Space at DMRCs cost, which will be calculated using the following equation:
Rent = TBFC x L1 Employees / Total Employees
Total Beaverton Facility Cost (TBFC). The total facilities cost will include all costs for rent, utilities, pass-through expenses, taxes and related amounts incurred in operating the Beaverton facility.
L1 Employees. The total number of persons located at the Beaverton facility as employees or contractors who are on the L1 or Digimarc payroll
Total Employees. The total number of persons located at the Beaverton facility as employees or contractors
(d) Reimbursement of Direct Expense :
Any direct expenses incurred by DMRC on behalf of L1/Digimarc, such as long distance expenses, copying and office supplies, and any moving or similar expenses actually incurred, will be itemized and billed regularly. If L-1 desires to partition the space by constructing a wall, the costs of construction will be billed to L-1.
Employee Specific |
|
General Overhead |
|
|
|
Per hour
|
|
|
|
|
||||||||||||||||||||||||
Classification |
|
Name |
|
Base Pay |
|
100% Bonus |
|
On Target
|
|
Individual
|
|
Facilities
|
|
IT Cost
|
|
Executive
|
|
Board of
|
|
Non-Labor
|
|
Finance
|
|
Actual 2008
|
|
Hr Cost
|
|
Fully burdened
|
|
year of
|
|
Classification |
|
Rounded to
|
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Accontant |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Treasury |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Lead AP |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Clerical |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Clerical |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Controller |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Accounting Manager |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Project |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Process |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
CFO |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
TAX |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Clerical |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Exec Assistant |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Payroll |
|
[**] |
Finance: |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
F&A |
|
[**] |
HR |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
VP HR |
|
[**] |
HR |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
HR Director |
|
[**] |
HR |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Benefits Specialist |
|
[**] |
HR |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
HR Manager |
|
[**] |
General Counsel |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Lawyer |
|
[**] |
General Counsel |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
CLO |
|
[**] |
General Counsel |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Lawyer |
|
[**] |
General Counsel |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Lawyer |
|
[**] |
General Counsel |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Paralegal |
|
[**] |
IP Legal |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Lawyer |
|
[**] |
IP Legal |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Lawyer |
|
[**] |
IP Legal |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Paralegal |
|
[**] |
IP Legal |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Lawyer |
|
[**] |
IT |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
IT
|
|
[**] |
IT |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Network |
|
[**] |
IT |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Help Desk |
|
[**] |
IT |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Business Support |
|
[**] |
IT |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
CIO |
|
[**] |
IT |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Network |
|
[**] |
IT |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Help Desk |
|
[**] |
IT |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
Network |
|
[**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Note 1 |
|
Beaverton Facilities Cost of $[**] allocated to 107 FTE heads located in Beaverton. |
Note 2 |
|
IT Costs net of allocations to Programs of $[**] allocated to 463.25 FTE - (w/o Salaries, $[**] allocated to 463.25) |
Note 3 |
|
Executive Costs of $[**] allocated to 463.25 FTE |
Note 4 |
|
Board of Director costs of $[**] allocated to 463.25 FTE |
Note 5 |
|
General Counsel costs of $[**] allocated to 463.25 FTE - (w/o Salaries, [**] allocated to 463.25) |
Note 6 |
|
Finance Costs of $[**] allocated to 463.25 FTE -(w/o Salaries, $[**] allocated to 463.25) |
Note 7 |
|
Actual Stock Comp to be expensed in 2008 |
Note 8 |
|
HR cost of $[**] allocated to 463.25 FTE ($[**] allocated to 463.25) |
Note 9 |
|
2080 is the total number hours in one year, less 10 Holidays and 20 FTO days, 1 week a year for sabbatical would be 1800 Hours available, assumed 10% administrative time so that would be 1620 billable hours |
|
|
|
|
|
** Please Note: All Stay Bonus/Severance costs to be billed directly |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE 1.3.2
DIGIMARC INFORMATION TECHNOLOGY SERVICES
(a) Services to be Provided :
1. Network Charges based on usage
2. Email
3. Dynamics Great Plains (5 licenses)
4. Share Point environments
(b) Duration of Services :
For a period of up to 34 days following the Effective Time, DMRC will use the shared systems listed above.
(c) Fees for Services :
DMRC will use without any usage fee or cost the shared systems listed above.
The following individuals will be either employees or contractors of Digimarc following the Spin-off. Upon request for services, DMRC shall pay for such services at the following rates:
Job Function |
|
Employee |
|
Rate Per
|
|
|
|
|
|
|
|
|
|
CIO |
|
John May |
|
$ |
225 |
|
Director Delivery Services |
|
Alan Carr |
|
$ |
130 |
|
Systems Administrator |
|
Mark Fleming |
|
$ |
90 |
|
Help Desk and Cell Phone Support |
|
Tim Putney |
|
$ |
65 |
|
* The rates provided are estimates and fees will be billed at fully loaded cost.
SCHEDULE 1.3.3
DIGIMARC LEGAL SERVICES
(a) Services to be Provided :
Digimarc shall provide to DMRC such legal services as DMRC may reasonably request to assist in the continued operation and transition of the Digital Watermarking Business, including Delayed Transfer Assets and Delayed Transfer Liabilities. These services may involve certain current Digimarc Legal employees (identified below with an asterisk) if they remain employees of surviving Digimarc, either as permanent employees or as transition employees.
DMRC shall request such services in writing in reasonable detail
(b) Duration of Services : Six months.
(c) Fees for Services :
DMRC shall pay for such services at the following rates:
Job Function |
|
Employee |
|
Rate Per
|
|
|
|
|
|
|
|
|
|
Attorney |
|
Barbara Giliberti |
|
$ |
180 |
|
Attorney |
|
Jacob Carroll |
|
$ |
105 |
|
Attorney |
|
Mark Molina |
|
$ |
610 |
|
Attorney |
|
Alan Roth |
|
$ |
180 |
|
Attorney |
|
Charles Taylor |
|
$ |
140 |
|
* The rates provided are estimates and fees will be billed at fully loaded cost.
EXHIBIT 10.2
CONFIDENTIAL PORTIONS OMITTED
LICENSE AGREEMENT
This LICENSE AGREEMENT (this Agreement ) is entered into as of August 1, 2008 by and between DMRC Corporation, a Delaware corporation, and its Affiliates ( DMRC ), and L-1 Identity Solutions Operating Company, a Delaware corporation, and its Affiliates (the Company ).
RECITALS
WHEREAS, L-1 Identity Solutions, Inc., a Delaware Corporation ( L-1 Identity Solutions ), Dolomite Acquisition Co., a Delaware corporation and wholly-owned subsidiary of L-1 Identity Solutions and Digimarc Corporation, a Delaware corporation ( Digimarc Corporation ), are parties to that certain Amended and Restated Agreement and Plan of Merger, dated as of June 29, 2008, as amended (the Merger Agreement ), pursuant to which, among other things, Digimarc Corporation will become a wholly-owned subsidiary of L-1 Identity Solutions;
WHEREAS, as contemplated by the Merger Agreement, Digimarc Corporation, DMRC and DMRC LLC, a Delaware limited liability company and wholly-owned subsidiary of Digimarc Corporation ( DMRC LLC ) are parties to that certain Separation Agreement, dated as of August 1, 2008 (the Separation Agreement ), in accordance with which, among other things, Digimarc Corporation is transferring or causing to be transferred to DMRC LLC or a DMRC Subsidiary (as defined in the Separation Agreement) certain assets on the Restructuring Date (as defined in the Separation Agreement);
WHEREAS, following the Distribution (as defined in the Separation Agreement) or the Trust Transfer (as defined in the Separation Agreement), as applicable, DMRC LLC will merge with and into DMRC pursuant to the DMRC Merger Agreement (as defined in the Separation Agreement);
WHEREAS, as contemplated by the Merger Agreement and in connection with the Separation Agreement and the Restructuring (as defined in the Separation Agreement), the Company desires certain licenses to the DMRC Patents, the IDMarc Software and the Digimarc Marks (each as defined below), and DMRC desires to grant such licenses to the Company on the terms and conditions set forth below; and
WHEREAS, as contemplated by the Merger Agreement and in connection with the Separation Agreement and the Restructuring, DMRC desires a certain license to the Company Patents (as defined below), and the Company desires to grant such license to DMRC on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained herein and in the Merger Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Company and DMRC, the Company and DMRC agree as follows:
1. DEFINITIONS
1.1 Acceptance Time shall have the meaning set forth in the Merger Agreement.
1.2 Affiliate means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. For this purpose, control (including, without limitation, with its correlative meanings, controlled by, and under common control with) means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.
1.3 Company Patents means all: (a) U.S. and foreign patents and patent applications owned by Digimarc Corporation as of the Distribution Date (as defined in the Separation Agreement) or the Trust Transfer Date (as defined in the Separation Agreement), as applicable, including, without limitation, the patents and patent applications set forth on Schedule A attached hereto; (b) continuations, continuations-in-part (but only to the extent of any claims therein that are entitled to claim priority from any of the foregoing in subclause (a) above), divisionals, provisionals, substitutes, reissues, re-examinations, extensions or renewals of any of the foregoing in subclause (a) above, and all patents issuing from any of the foregoing in this subclause (b); and (c) foreign patents or patent applications that are entitled to claim priority from any patent or patent application in subclause (a) above.
1.4 Digimarc Marks means the Marks set forth on Schedule B attached hereto and all applications, registrations, renewals and extensions therefor.
1.5 Digital Watermarking Field means digital watermarking, media fingerprinting (pattern recognition but not including any biometric identifiers), digital rights management and other media management approaches.
1.6 DMRC Digital Watermarking Platform means DMRCs proprietary digital watermarking platform.
1.7 DMRC Patents means all: (a) U.S. and foreign patents and patent applications owned by DMRC as of the Distribution Date or the Trust Transfer Date, as applicable, including, without limitation, the patents and patent applications set forth on Schedule E-H attached hereto; (b) continuations, continuations-in-part (but only to the extent of any claims therein that are entitled to claim priority from any of the foregoing in subclause (a) above), divisionals, provisionals, substitutes, reissues, re-examinations, extensions or renewals of any of the foregoing in subclause (a) above, and all patents issuing from any of the foregoing in this subclause (b); and (c) foreign patents or patent applications that are entitled to claim priority from any patent or patent application in subclause (a) above.
1.8 IDMarc Software means (a) the software application product in object code format set forth on Schedule C attached hereto and documentation related thereto, as such software application product in object code format and documentation exist as of the Distribution Date or the Trust Transfer Date, as applicable, and (b) all bug fixes and workarounds to errors in such application product created or developed by or for DMRC in connection with the training
2
and technical assistance to be provided by DMRC to the Company pursuant to Section 2.2(c) below.
1.9 IDMarc Source Code means the source code of the IDMarc Software and documentation related thereto, as such source code and documentation exist as of the Distribution Date or the Trust Transfer Date, as applicable. For the avoidance of doubt, IDMarc Source Code does not include the source code of the DMRC Digital Watermarking Platform.
1.10 Person means an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity, including, without limitation, a governmental authority.
1.11 Prior Agreements means the agreements set forth on Schedule D hereto, the terms and conditions of which were in effect prior to the date of the Merger Agreement and include a patent license under any of the DMRC Patents within the Secure ID Field, which agreements Digimarc Corporation entered into prior to the date of the Merger Agreement and, in accordance with the Separation Agreement, has assigned to DMRC. Schedule D includes, to the extent not precluded by confidentiality obligations to a third party, the scope of the licenses granted by Digimarc Corporation in each such agreement with respect to any DMRC Patents, IDMarc Software and/or IDMarc Source Code and the expiration date of each such license.
1.12 Secure ID Field means domestic or international: driver licenses, passports, national, federal, state or local government identity cards and any other national, federal, state or local government issued credentials.
2. LICENSE GRANTS TO THE COMPANY
2.1 License to DMRC Patents . Subject to the terms and conditions of this Agreement, DMRC grants to the Company, under the DMRC Patents, a worldwide, fully paid-up, royalty-free, perpetual, irrevocable license to make, have made, develop, have developed, use, have used, sell, have sold, offer to sell, have offered to sell, import, have imported, export, have exported and otherwise exploit and have exploited any products and services, and practice and have practiced any method, solely within the Secure ID Field.
The foregoing license granted in this Section 2.1 is exclusive for a period of five (5) years from the Acceptance Time, except to the extent of, and during the duration of, any license under any of the DMRC Patents granted by Digimarc Corporation to a third party under any Prior Agreement, which license includes the right for such third party to exercise such license within the Secure ID Field. After such five (5) year period, this license shall become non-exclusive.
The foregoing license granted in this Section 2.1 is sublicensable on a standalone basis without DMRCs prior written consent.
3
2.2 IDMarc Software .
(a) License . Subject to the terms and conditions of this Agreement, DMRC grants to the Company, under DMRCs rights in the IDMarc Software, a worldwide, fully paid-up, royalty-free, perpetual, irrevocable license to:
(i) use, have used, reproduce, have reproduced, perform, have performed, display, have displayed and otherwise exploit and have exploited the IDMarc Software in object code format in the Secure ID Field;
(ii) use, have used and reproduce and have reproduced the IDMarc Source Code in connection with the Companys exercise of the license granted in the foregoing clause (i) of this Section 2.2(a) in the Secure ID Field;
(iii) modify and have modified, and create and have created derivative works of, the IDMarc Source Code in connection with the Companys exercise of the license granted in the foregoing clause (i) of this Section 2.2(a) in the Secure ID Field ( IDMarc Derivative Works ); and
(iv) use, have used, reproduce, have reproduced, perform, have performed, display, have displayed and otherwise exploit and have exploited IDMarc Derivative Works in the Secure ID Field.
The foregoing license granted in this Section 2.2(a) is exclusive.
The license rights granted in the foregoing subclauses (i) and (iv) in this Section 2.2(a) are sublicensable through multiple tiers of sublicensees without DMRCs consent.
The Company may not grant any sublicenses under the license rights granted in the foregoing subclauses (ii) or (iii) in this Section 2.2(a) without DMRCs prior written consent.
(b) Delivery . Within ten (10) business days after the Acceptance Time, DMRC shall deliver to the Company, in a format and manner mutually agreed upon by both parties in writing, a complete and accurate copy of (i) the IDMarc Software in object code format (and documentation therefor) and (ii) the IDMarc Source Code (and documentation therefor).
(c) Training and Technical Assistance . DMRC shall provide to the Company reasonable training and technical assistance sufficient to enable the Company to use and market the IDMarc Software and IDMarc Source Code.
(d) Service Terms and Conditions . DMRC and the Company agree that any maintenance and support services by DMRC with respect to the IDMarc Software, any customization services by DMRC related to the IDMarc Software, IDMarc Source Code and/or DMRC Digital Watermarking Platform, any other services by DMRC related to the IDMarc Software, IDMarc Source Code and/or DMRC Digital Watermarking Platform (other than the training and technical assistance to be provided by DMRC to the Company pursuant to Section 2.2(c) above), and any research, development, engineering, quality assurance, preparing,
4
obtaining and maintaining jointly owned patents, project management, reporting, and such other services or activities as the parties may mutually agree shall be provided by DMRC in accordance with this Agreement and the Service Terms and Conditions attached hereto as Schedule I ( Service Terms and Conditions ).
2.3 License to Digimarc Marks . Subject to the terms and conditions of this Agreement, DMRC grants to the Company under DMRCs rights in the Digimarc Marks, a non-exclusive, worldwide, fully paid-up, royalty-free, irrevocable, non-sublicensable license to use and have used the Digimarc Marks in the Secure ID Field for a period of one (1) year after the Acceptance Time (or such longer period of time as the parties may mutually agree in writing); except that the Company shall have no obligation to remove, terminate, decommission or otherwise cease, desist or retract usage of any of the Digimarc Marks that are associated with any data, documents, hardware, software, products or services directly or indirectly manufactured, sold, licensed, distributed or otherwise exploited by Digimarc Corporation or any representative of Digimarc Corporation prior to the Acceptance Time.
Although the foregoing license in this Section 2.3 is for a period of one (1) year, the parties agree that such license is a transition license and that the Company will use good faith efforts to stop using the Digimarc Marks as soon as reasonably practical after the Acceptance Time.
Any use of the Digimarc Marks by the Company under the license granted in this Section 2.3 will be in substantially the same manner as the use of the Digimarc Marks immediately prior to the Acceptance Time, unless otherwise agreed by the Company and DMRC in writing. The Company will maintain the quality of the products and services offered under the Digimarc Marks at least at the level of quality of Digimarc Corporations products and services in the Secure ID Field immediately prior to the Acceptance Time.
Any goodwill arising out of or relating to the Companys use of the Digimarc Marks shall inure to the sole benefit of DMRC. The Company shall execute any documents reasonably requested by DMRC to evidence DMRCs ownership of such Digimarc Marks on DMRCs request.
2.4 Reservation of Rights by DMRC . All rights not expressly granted by DMRC to the Company in this Article 2 or in any Statement of Work under the Service Terms and Conditions are reserved by DMRC. Without limiting the generality of the foregoing sentence, the Company acknowledges and agrees that nothing in this Agreement shall be construed or interpreted as a grant, by implication or otherwise, of any license to the Company other than the licenses set forth in Section 2.1, Section 2.2(a) and Section 2.3 above and any licenses set forth in any Statement of Work.
3. LICENSE GRANT TO DMRC
3.1 License to Company Patents . Subject to the terms and conditions of this Agreement, the Company grants to DMRC, under the Company Patents, a worldwide, fully paid-up, royalty-free, perpetual, irrevocable license to make, have made, develop, have developed, use, have used, sell, have sold, offer to sell, have offered to sell, import, have imported, export, have exported and otherwise exploit and have exploited any products and services, and practice and have practiced any method, solely within the Digital Watermarking Field.
5
Subject to the following paragraph in this Section 3.1, the foregoing license granted in this Section 3.1 is sublicensable on a standalone basis without the Companys prior written consent.
During the five (5)-year period immediately following the Acceptance Time: (a) DMRC shall include in any standalone patent license agreement pursuant to which DMRC grants any third party a patent license under any of the DMRC Patents and/or a patent sublicense under any of the Company Patents specific language to the effect that such license and/or sublicense, as the case may be, does not grant such third party any express or implied patent rights in the Secure ID Field; and (b) DMRCs right to grant sublicenses on a standalone basis is subject to Section 4.10 (Non-Competition and Non-Solicitation) of the Separation Agreement.
3.2 Reservation of Rights by the Company . All rights not expressly granted by the Company to DMRC in this Article 3 are reserved by the Company. Without limiting the generality of the foregoing sentence, DMRC acknowledges and agrees that nothing in this Agreement shall be construed or interpreted as a grant, by implication or otherwise, of any license to DMRC other than the license set forth in Section 3.1 above.
4. OWNERSHIP
4.1 Ownership by DMRC . As between the parties, subject to the licenses granted by DMRC to the Company under Section 2.1, Section 2.2(a) and Section 2.3 above, DMRC retains and owns all right, title and interest in and to the DMRC Patents, IDMarc Software, IDMarc Source Code, DMRC Digital Watermarking Platform and Digimarc Marks.
4.2 Ownership by the Company . As between the parties, subject to the license granted by the Company to DMRC under Section 3.1 above, the Company retains and owns all right, title and interest in and to all (a) Company Patents and (b) IDMarc Derivative Works (subject to DMRCs ownership of the underlying original IDMarc Software and IDMarc Source Code as set forth in Section 4.1 above).
5. PROSECUTION AND MAINTENANCE; ENFORCEMENT
5.1 Prosecution and Maintenance .
(a) Prosecution and Maintenance of the DMRC Patents . As between the parties, DMRC shall be responsible for filing, prosecuting and maintaining the DMRC Patents, at its sole expense and discretion. The parties acknowledge and agree that DMRC shall not be obligated to prosecute or maintain any patent or patent application included in the DMRC Patents.
(b) Prosecution and Maintenance of the Company Patents . As between the parties, the Company shall be responsible for filing, prosecuting and maintaining the Company Patents, at its sole cost and discretion. The parties acknowledge and agree that the Company shall not be obligated to prosecute or maintain any patent or patent application included in the Company Patents.
5.2 Third Party Infringement; Enforcement . Each party shall reasonably promptly notify the other party in writing of any actual or reasonably suspected infringement of which
6
such party becomes aware of (a) any DMRC Patent or the IDMarc Software by a third party in the Secure ID Field or (b) any Company Patent by a third party in the Digital Watermarking Field. Nothing in this Agreement or otherwise shall obligate either party to police the DMRC Patents, Company Patents or IDMarc Software or otherwise attempt to discover or investigate any third party infringement thereof. The parties agree to discuss in good faith the possible resolution or abatement of any such infringement of any DMRC Patent or the IDMarc Software in the Secure ID Field or any Company Patent in the Digital Watermarking Field; provided , however , that (i) DMRC shall not be obligated to take any action against any third party with respect to any actual or alleged infringement of any DMRC Patent or the IDMarc Software, which action, if taken at all, shall be in DMRCs sole discretion and (ii) the Company shall not be obligated to take any action against any third party with respect to any actual or alleged infringement of any Company Patent, which action, if taken at all, shall be in the Companys sole discretion.
6. TERM
6.1 Term . This Agreement shall become effective at the Acceptance Time and shall continue in full force and effect in perpetuity, except that:
(a) the license granted by DMRC in Section 2.1 above with respect to the DMRC Patents shall terminate upon the expiration of the last-to-expire of the DMRC Patents;
(b) the license granted by DMRC in Section 2.3 above with respect to the Digimarc Marks shall terminate one (1) year (or such longer period of time as the parties may mutually agree in writing) after the Acceptance Time, except as otherwise expressly set forth in Section 2.3; and
(c) the license granted by the Company in Section 3.1 above with respect to the Company Patents shall terminate upon the expiration of the last-to-expire of the Company Patents.
7. WARRANTY DISCLAIMER
AS BETWEEN THE COMPANY AND DMRC, (A) NEITHER THE COMPANY NOR DMRC MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE COMPANY PATENTS (IN THE CASE OF THE COMPANY) OR THE DMRC PATENTS, THE IDMARC SOFTWARE, THE IDMARC SOURCE CODE, THE DMRC DIGITAL WATERMARKING PLATFORM OR THE DIGIMARC MARKS (IN THE CASE OF DMRC)), (B) THE COMPANY SPECIFICALLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE COMPANY PATENTS AND (C) DMRC SPECIFICALLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE DMRC PATENTS, THE IDMARC SOFTWARE, THE IDMARC SOURCE CODE, THE DMRC DIGITAL WATERMARKING PLATFORM OR THE DIGIMARC MARKS.
7
8. LIMITATION OF LIABILITY
NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, IN NO EVENT SHALL THE COMPANY OR DMRC BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY (A) CONSEQUENTIAL, INDIRECT, INCIDENTAL OR SPECIAL DAMAGES OR (B) LOST PROFITS OR LOST BUSINESS, EVEN IF THE REMEDIES PROVIDED FOR IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN IF EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9. CONFIDENTIALITY
9.1 Confidential Information . Confidential Information means any confidential or proprietary information of a party, including, without limitation, know-how, trade secrets, algorithms, source code, specifications, methods of processing, manufacture and production, techniques, research, development, inventions (whether or not patentable or reduced or practice), ideas, concepts, drawings and schematics. Without limiting the generality of the foregoing, the parties acknowledge and agree that (a) the unpublished patent applications included in the DMRC Patents and the IDMarc Source Code are Confidential Information of DMRC and (b) the unpublished patent applications included in the Company Patents and the IDMarc Derivative Works are Confidential Information of the Company.
9.2 Confidentiality Obligations . Each party (the Receiving Party ) that receives or otherwise obtains Confidential Information of the other party (the Disclosing Party ) agrees to (a) keep the Disclosing Partys Confidential Information confidential and not disclose or make available any of the Disclosing Partys Confidential Information to any third party without the prior written consent of the Disclosing Party (except in accordance with clause (d) or clause (e) below in this Section 9.2), (b) use the Disclosing Partys Confidential Information only as necessary to perform its obligations and exercise its rights under this Agreement, (c) use at least the same degree of care in keeping the Disclosing Partys Confidential Information confidential as it uses for its own Confidential Information of a similar nature (but in no event less than a reasonable degree of care), (d) limit access to the Disclosing Partys Confidential Information to the Receiving Partys Affiliates and authorized sublicensees who have a need to access or know such Confidential Information for the purpose of exercising such Affiliates or sublicensees rights under this Agreement or the applicable sublicenses, as the case may be, provided that such Affiliate or sublicensee is bound in writing to confidentiality obligations at least as protective of the Confidential Information of the Disclosing Party as the confidentiality provisions of this Agreement, and (e) limit access to the Disclosing Partys Confidential Information to its employees and contractors, and cause each of its Affiliates and sublicensees to limit access to the Receiving Partys Confidential Information to its respective employees and contractors, who have a need to access or know such Confidential Information for the purpose of the Receiving Party, such Affiliate or such sublicensee to exercise its rights under this Agreement or the applicable sublicense, as the case may be, provided that such employees and contractors are bound in writing to confidentiality obligations at least as protective of the Confidential Information of the Disclosing Party as the confidentiality provisions of this Agreement. Except
8
as otherwise expressly provided in this Agreement, nothing in this Agreement is intended to grant to a party any rights in or to any Confidential Information of the other party.
9.3 Exceptions . The Receiving Party shall not be obligated under Section 9.2 above with respect to any information the Receiving Party can document (a) is or, through no improper action or inaction by the Receiving Party or any Affiliate, employee, consultant or advisor of the Receiving Party, becomes generally available and known to the public, (b) was rightfully in its possession or known by it without any obligation of confidentiality prior to receipt from the Disclosing Party, (c) was rightfully disclosed to it without restriction by a third party that, to the Receiving Partys knowledge, was authorized to make such disclosure, (d) was independently developed by the Receiving Party without the use of or reference to any Confidential Information of the Disclosing Party or (e) is disclosed by the Disclosing Party to a third party without restriction on such third partys rights to disclose or use the same. Notwithstanding the foregoing in this Section 9.3, all Confidential Information of Digimarc Corporation existing prior to the Restructuring Date and transferred by Digimarc Corporation to DMRC in accordance with the Separation Agreement shall, for the purpose of this Agreement, be deemed the Confidential Information of DMRC, and the exceptions in clause (b) and clause (d) in this Section 9.3 above will not be applicable thereto.
9.4 Disclosure Required by Law . In the event the Receiving Party is requested or required by law, regulation or judicial process to disclose any Confidential Information of the Disclosing Party, the Receiving Party shall provide reasonable advance written notice to the Disclosing Party of any such request or requirement so that the Disclosing Party may seek confidential treatment of such Confidential Information prior to its disclosure (whether through protective orders or otherwise). If, in the absence of a protective order, other confidential treatment or waiver under this Agreement, the Receiving Party is advised by its legal counsel that such Receiving Party is legally required to disclose such Confidential Information, the Receiving Party may disclose such Confidential Information without liability under this Agreement, provided that the Receiving Party exercises commercially reasonable efforts to obtain reliable assurances that confidential treatment will be accorded any such Confidential Information prior to its disclosure and discloses only the minimum amount of such Confidential Information necessary to comply with such legal requirements.
10. MISCELLANEOUS
10.1 Assignment . Except as set forth in any other Transaction Agreement (as defined in the Separation Agreement), neither this Agreement nor any of the rights, interests or obligations under this Agreement will be assigned, in whole or in part, by operation of Law (as defined in the Merger Agreement) or otherwise, by either of the parties without the prior written consent of the other party, except (a) for assignments in connection with the acquisition of beneficial ownership of fifty percent (50%) or more of the voting securities of such party, including by way of merger or any other business combination, or the sale of all or substantially all assets of such party, and (b) that either party may assign any or all of its rights, interests or obligations under this Agreement to any one or more of its direct or indirect wholly owned Subsidiaries (as defined in the Merger Agreement) or DMRC Subsidiaries (as defined in the Separation Agreement); provided that no such assignment will relieve the assigning party from any of its obligations under this Agreement. Subject to the preceding sentence, this Agreement
9
will be binding upon, inure to the benefit of, and be enforceable by the Company and DMRC and their respective successors and assigns.
10.2 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, applicable to contracts executed in and to be performed entirely within that State.
10.3 Amendment . Except as otherwise permitted herein, this Agreement and its provisions may be amended, supplemented, changed, discharged, modified or terminated only by a writing signed by both parties hereto.
10.4 Waiver . No waiver of any provision of this Agreement shall be effective unless made in writing and signed by both of the parties hereto. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach, and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such partys rights or privileges hereunder or shall be deemed a waiver of such partys rights to exercise the same at any subsequent time or times hereunder.
10.5 Notices . All notices, requests and other communications to a party hereunder shall be in writing and shall be deemed given if delivered personally, facsimiled (which is confirmed), sent by email (with a return receipt) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses:
If to the Company, to:
L-1 Identity Solutions Operating Company
c/o L-1 Identity Solutions, Inc.
177 Broad Street
Stamford, CT 06901
Attention: Mark Molina
Facsimile: (203) 504-1104
E-mail: mmolina@L1ID.com
with copies (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Marita A. Makinen
Facsimile: (212) 310-8007
E-mail: marita.makinen@weil.com
and
10
Weil, Gotshal & Manges LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Attention: Kyle C. Krpata
Facsimile: (802) 650-3100
E-mail: kyle.krpata@weil.com
If to DMRC, to:
DMRC Corporation
9405 SW Gemini Drive
Beaverton, OR 97008
Attention: Robert Chamness, Secretary and Chief Legal Officer
Facsimile: (503) 469-4771
E-mail: Robert.Chamness@Company.com
or such other address or facsimile number as either party may hereafter specify by like notice to the other party hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 pm in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.
10.6 Entire Agreement; Third-Party Beneficiaries . This Agreement (including the Schedules hereto and other agreements referred to herein) (a) constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (b) except as expressly set forth in this Agreement, is not intended to and shall not confer upon any person or entity other than the parties hereto any rights or remedies hereunder.
10.7 Independent Contractor . Each party hereto is acting as, and shall be considered, an independent contractor, and no relationship of partnership, joint venture, employment, franchise, agency or similar arrangement is being created pursuant to or by virtue of this Agreement.
10.8 No Authority to Bind Other Party . In no event shall either party have any authority to negotiate or enter into any contract or commitment for or on behalf of, or in the name of, the other party, or otherwise possess any authority to bind such other party in matters of contract, indebtedness or otherwise, without the prior written approval in each instance of such other party. Neither party shall represent itself as having any such authority, express or implied, from the other party.
10.9 Severability . If any term or other provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, provisions and conditions of this Agreement shall
11
nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
10.10 Remedies Cumulative . The rights and remedies available under this Agreement or otherwise available shall be cumulative of all other rights and remedies and may be exercised successively.
10.11 Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
10.12 Headings . The headings in this Agreement are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.
|
L-1 IDENTITY SOLUTIONS |
||
|
OPERATING COMPANY |
||
|
|
||
|
|
||
|
By: |
/s/ Robert V. La Penta |
|
|
|
Name: |
Robert V. LaPenta |
|
|
Title: |
President and Chief Executive |
|
|
Officer |
|
|
|
||
|
|
||
|
DMRC CORPORATION |
||
|
|
||
|
|
||
|
By: |
/s/ Robert Chamness |
|
|
|
Name: |
Robert Chamness |
|
|
Title: |
Chief Legal Officer and |
|
|
Secretary |
13
Schedule A
Company Patents
Docket
|
|
Country |
|
Case Type |
|
Relation
|
|
Filing Type |
|
Status |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1003X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
10/942,321 |
|
9/14/2004 |
|
|
|
|
|
LASER ENGRAVING METHODS AND COMPOSITIONS, AND ARTICLES HAVING LASER ENGRAVING THEREON |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1010X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
10/913,015 |
|
8/6/2004 |
|
|
|
|
|
STATISTICAL QUALITY ASSESSMENT OF FINGERPRINTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1029X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
10/954,966 |
|
9/29/2004 |
|
|
|
|
|
IDENTIFICATION DOCUMENT WITH THREE DIMENSIONAL IMAGE OF BEARER |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1032X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
10/965,232 |
|
10/13/2004 |
|
|
|
|
|
FRAUD PREVENTION IN ISSUANCE OF IDENTIFICATION CREDENTIALS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1035X-CA |
|
Canada |
|
Regular |
|
Original Filing |
|
National |
|
Filed |
|
2540227 |
|
10/20/2004 |
|
|
|
|
|
DOCUMENT LAMINATE FORMED FROM DIFFERENT POLYESTER MATERIALS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1035X-EP |
|
European Patent Convention |
|
Regular |
|
Original Filing |
|
European Patent Case |
|
Filed |
|
4795889.7 |
|
10/20/2004 |
|
|
|
|
|
DOCUMENT LAMINATE FORMED FROM DIFFERENT POLYESTER MATERIALS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1038X |
|
United States |
|
Regular |
|
Original Filing |
|
National |
|
Filed |
|
11/025,786 |
|
12/28/2004 |
|
|
|
|
|
ID DOCUMENT STRUCTURE WITH PATTERN COATING PROVIDING VARIABLE SECURITY FEATURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1045X |
|
United States |
|
Regular |
|
Original Filing |
|
National |
|
Filed |
|
11/096,229 |
|
3/30/2005 |
|
|
|
|
|
IMAGE DESTRUCT FEATURE USED WITH IMAGE RECEIVING LAYERS IN SECURE DOCUMENTS |
Docket
|
|
Country |
|
Case Type |
|
Relation
|
|
Filing Type |
|
Status |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1046X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
10/991,354 |
|
11/16/2004 |
|
|
|
|
|
MULTIPLE IMAGE SECURITY FEATURES FOR IDENTIFICATION DOCUMENTS AND METHODS OF MAKING SAME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1050X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
11/007,058 |
|
12/7/2004 |
|
|
|
|
|
USE OF PEARLESCENT AND OTHER PIGMENTS TO CREATE A SECURITY DOCUMENT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1054X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/020,651 |
|
12/23/2004 |
|
|
|
|
|
OPTICALLY VARIABLE PERSONALIZED INDICIA FOR IDENTICATION DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1079X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/078,655 |
|
3/11/2005 |
|
|
|
|
|
TAMPER EVIDENT ADHESIVE AND IDENTIFICATION DOCUMENT INCLUDING SAME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1087X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/095,923 |
|
3/30/2005 |
|
|
|
|
|
HARD COAT AND IMAGE RECEIVING LAYER STRUCTURES FOR IDENTIFICATION DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1091X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/106,364 |
|
4/13/2005 |
|
|
|
|
|
RETROREFLECTIVE SECURITY FEATURES IN SECURE DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1097X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/112,965 |
|
4/22/2005 |
|
|
|
|
|
MULTIFUNCTION ALL IN ONE CAPTURE STATION FOR CREATING IDENTIFICATION DOCUMENTS |
Docket
|
|
Country |
|
Case Type |
|
Relation
|
|
Filing Type |
|
Status |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1181X |
|
Patent Cooperation Treaty |
|
Regular |
|
Original Filing |
|
Patent Cooperation Treaty |
|
Filed |
|
PCT/US06/10633 |
|
3/22/2006 |
|
|
|
|
|
IMAGE DESTRUCT FEATURE USED WITH IMAGE RECEIVING LAYERS IN SECURE DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1204X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
11/472,507 |
|
6/20/2006 |
|
|
|
|
|
COVERT VARIABLE INFORMATION ON ID DOCUMENTS AND METHODS OF MAKING SAME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1210X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/460,207 |
|
7/26/2006 |
|
|
|
|
|
FORENSIC FEATURE FOR SECURE DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1211X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/460,129 |
|
7/26/2006 |
|
|
|
|
|
INTERLOCKING DOCUMENT SECURITY FEATURES USING INCOMPATIBLE INKS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1243X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
11/567,061 |
|
12/5/2006 |
|
|
|
|
|
INK WITH COHESIVE FAILURE AND IDENTIFICATION DOCUMENT INCLUDING SAME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1251X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/613,891 |
|
12/20/2006 |
|
|
|
|
|
METHODS AND SYSTEMS TO HELP DETECT IDENTITY FRAUD |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1272X |
|
United States |
|
Regular |
|
Continuation-In-Part |
|
National |
|
Filed |
|
11/625,665 |
|
1/22/2007 |
|
|
|
|
|
SECURE CORE MATERIAL FOR DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1303X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
11/737,533 |
|
4/19/2007 |
|
|
|
|
|
LASER ETCHED SECURITY FEATURES FOR IDENTIFICATION DOCUMENTS AND METHODS OF MAKING SAME |
Docket
|
|
Country |
|
Case Type |
|
Relation
|
|
Filing Type |
|
Status |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1320X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
11/757,539 |
|
6/4/2007 |
|
|
|
|
|
FRAUD DETERRENCE IN CONNECTION WITH IDENTITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1322X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
11/758,609 |
|
6/5/2007 |
|
|
|
|
|
THREE DIMENSIONAL DATA STORAGE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1326X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/765,987 |
|
6/20/2007 |
|
|
|
|
|
IMAGE, VIDEO OR AUDIO FILTERING BEFORE BIOMETRIC RECOGNITION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1337X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/849,168 |
|
8/31/2007 |
|
|
|
|
|
LASER MARKING OF PIGMENT LAYERS ON DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1338X |
|
Patent Cooperation Treaty |
|
Regular |
|
Original Filing |
|
Patent Cooperation Treaty |
|
Filed |
|
PCT/US07/77450 |
|
8/31/2007 |
|
|
|
|
|
LASER MARKING OF PIGMENT LAYERS ON DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1340X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
11/866,315 |
|
10/2/2007 |
|
|
|
|
|
SYSTEMS AND METHODS FOR RECOGNITION OF INDIVIDUALS USING MULTIPLE BIOMETRIC SEARCHES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1380X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
11/963,198 |
|
12/21/2007 |
|
|
|
|
|
METHOD AND SYSTEM FOR MONITORING AND PROVIDING NOTIFICATION REGARDING IDENTITY DOCUMENT USAGE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1406X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Filed |
|
12/136,681 |
|
6/10/2008 |
|
|
|
|
|
ID DOCUMENT STRUCTURE WITH PATTERN COATING PROVIDING VARIABLE SECURITY FEATURES |
Docket
|
|
Country |
|
Case Type |
|
Relation
|
|
Filing Type |
|
Status |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1408X |
|
United States |
|
Regular |
|
Original Filing |
|
National |
|
Filed |
|
12/141,800 |
|
6/18/2008 |
|
|
|
|
|
PERSONALIZING ID DOCUMENT IMAGES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0734 |
|
United States |
|
Regular |
|
Original Filing |
|
National |
|
Filed |
|
10/330,034 |
|
12/24/2002 |
|
|
|
|
|
SYSTEMS, COMPOSITIONS, AND METHODS FOR FULL COLOR LASER ENGRAVING OF ID DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0735-CA |
|
Canada |
|
Regular |
|
Original Filing |
|
National |
|
Filed |
|
2470600 |
|
12/24/2002 |
|
|
|
|
|
SYSTEMS, COMPOSITIONS, AND METHODS FOR FULL COLOR LASER ENGRAVING OF ID DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0735-EP |
|
European Patent Convention |
|
Regular |
|
Original Filing |
|
European Patent Case |
|
Filed |
|
2805980.6 |
|
12/24/2002 |
|
|
|
|
|
SYSTEMS, COMPOSITIONS, AND METHODS FOR FULL COLOR LASER ENGRAVING OF ID DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0735-HK |
|
Hong Kong |
|
Regular |
|
Original Filing |
|
National |
|
Filed |
|
5101943.1 |
|
3/7/2005 |
|
|
|
|
|
SYSTEMS, COMPOSITIONS, AND METHODS FOR FULL COLOR LASER ENGRAVING OF ID DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0792 |
|
United States |
|
Regular |
|
Original Filing |
|
National |
|
Filed |
|
10/370,421 |
|
2/19/2003 |
|
|
|
|
|
SECURITY METHODS EMPLOYING DRIVERS LICENSES AND OTHER DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1122 |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Filed |
|
11/146,896 |
|
6/6/2005 |
|
|
|
|
|
FACIAL DATABASE METHODS AND SYSTEMS |
Docket
|
|
Country |
|
Case Type |
|
Relation
|
|
Filing Type |
|
Status |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0725X-CN |
|
China P.R. |
|
Regular |
|
Original Filing |
|
National |
|
Granted |
|
2826030.9 |
|
12/20/2002 |
|
ZL 02826030.9 |
|
5/16/2007 |
|
LASER ENGRAVING METHODS AND COMPOSITIONS, AND ARTICLES HAVING LASER ENGRAVING THEREON |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0725X-HK (CN) |
|
Hong Kong |
|
Confirmation/Pipeline |
|
Original Filing |
|
National |
|
Granted |
|
5111519.4 |
|
12/14/2005 |
|
1079597 |
|
1/25/2008 |
|
LASER ENGRAVING METHODS AND COMPOSITIONS, AND ARTICLES HAVING LASER ENGRAVING THEREON |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0728X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Granted |
|
10/325,434 |
|
12/18/2002 |
|
6,817,530 |
|
11/16/2004 |
|
MULTIPLE IMAGE SECURITY FEATURES FOR IDENTIFICATION DOCUMENTS AND METHODS OF MAKING SAME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0729X-CA |
|
Canada |
|
Regular |
|
Original Filing |
|
National |
|
Granted |
|
2470094 |
|
12/18/2002 |
|
2470094 |
|
12/4/2007 |
|
MULTIPLE IMAGE SECURITY FEATURES FOR IDENTIFICATION DOCUMENTS AND METHODS OF MAKING SAME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0732X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Granted |
|
10/330,032 |
|
12/24/2002 |
|
7,063,264 |
|
6/20/2006 |
|
COVERT VARIABLE INFORMATION ON IDENTIFICATION DOCUMENTS AND METHODS OF MAKING SAME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0736X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Granted |
|
10/330,033 |
|
12/24/2002 |
|
7,207,494 |
|
4/24/2007 |
|
LASER ETCHED SECURITY FEATURES FOR IDENTIFICATION DOCUMENTS AND METHODS OF MAKING SAME |
Docket
|
|
Country |
|
Case Type |
|
Relation
|
|
Filing Type |
|
Status |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0737X-CA |
|
Canada |
|
Regular |
|
Original Filing |
|
National |
|
Granted |
|
2,470,547 |
|
12/24/2002 |
|
2470547 |
|
5/20/2008 |
|
LASER ETCHED SECURITY FEATURES FOR IDENTIFICATION DOCUMENTS AND METHODS OF MAKING SAME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0887X |
|
United States |
|
Regular |
|
Original Filing |
|
National |
|
Granted |
|
10/676,375 |
|
9/30/2003 |
|
7,364,085 |
|
4/29/2008 |
|
IDENTIFICATION DOCUMENT WITH PRINTING THAT CREATES MOVING AND THREE DIMENSIONAL IMAGE EFFECTS WITH PULSED ILLUMINATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0899X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Granted |
|
10/686,005 |
|
10/14/2003 |
|
7,277,891 |
|
10/2/2007 |
|
SYSTEMS AND METHODS FOR RECOGNITION OF INDIVIDUALS USING MULTIPLE BIOMETRIC SEARCHES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0972X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Granted |
|
10/825,852 |
|
4/16/2004 |
|
7,225,991 |
|
6/5/2007 |
|
THREE DIMENSIONAL DATA STORAGE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P0999X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Granted |
|
10/870,678 |
|
6/16/2004 |
|
7,086,666 |
|
8/8/2006 |
|
IDENTIFICATION CARD WITH EMBEDDED HALFTONE IMAGE SECURITY FEATURE PERCEPTIBLE IN TRANSMITTED LIGHT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1041X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Granted |
|
10/979,770 |
|
11/1/2004 |
|
7,314,162 |
|
1/1/2008 |
|
METHOD AND SYSTEM FOR REPORTING IDENTITY DOCUMENT USAGE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1042X |
|
United States |
|
Converted Provisional |
|
Original Filing |
|
National |
|
Granted |
|
10/980,144 |
|
11/1/2004 |
|
7,225,977 |
|
6/5/2007 |
|
FRAUD DETERRENCE IN CONNECTION WITH IDENTITY DOCUMENTS |
Docket
|
|
Country |
|
Case Type |
|
Relation
|
|
Filing Type |
|
Status |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1051X |
|
United States |
|
Regular |
|
Original Filing |
|
National |
|
Granted |
|
11/014,195 |
|
12/15/2004 |
|
7,131,585 |
|
11/7/2006 |
|
INVENTORY MANAGEMENT SYSTEM AND METHODS FOR SECURE IDENTIFICATION DOCUMENT ISSUANCE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P1132X |
|
United States |
|
Regular |
|
Continuation |
|
National |
|
Granted |
|
11/196,786 |
|
8/2/2005 |
|
7,278,580 |
|
10/9/2007 |
|
IDENTIFICATION DOCUMENT WITH INTEGRATED CIRCUIT AND ANTENNA IN A LAYERED DOCUMENT STRUCTURE |
Schedule B
Digimarc Marks
Digimarc
Digimarc ID Systems
D & Design (Circle D)
Schedule C
IDMarc Software
The IDMarc software application product comprised of the following components:
· AAMVA SDK (used with driver licenses in the United States and Canada);
· Travel and International ID Documents SDK (used with government issued credentials outside of the United States and Canada); and
· IDMarc Validator component (used in Digimarc Corporations Document Authentication and Document Inspector products used for reading IDMarc-related watermarks from government issued credentials).
Schedule D
Prior Agreements
Name of
|
|
Date of
|
|
Scope of License/Rights |
|
Expiration
|
|
|
|
|
|
|
|
[**] |
|
|
|
All rights that DMRC has in U.S. Patent Nos. [**] and those applications claiming priority to such patents, and any resulting patents from said applications claiming priority to such patents . |
|
Life of Patents |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Schedule E-H
DMRC Patents
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
EWG-065 |
|
09/099,864 |
|
6/18/1998 |
|
6,320,680 |
|
11/20/2001 |
|
STOCASTIC SCANNING DOCUMENTS TO CHANGE MOIRE EFFECTS |
|
|
|
|
|
|
|
|
|
|
|
EWG-065 C1 |
|
09/930,603 |
|
8/15/2001 |
|
6,631,015 |
|
10/7/2003 |
|
STOCASTIC SCANNING DOCUMENTS TO CHANGE MOIRE EFFECTS |
|
|
|
|
|
|
|
|
|
|
|
EWG-069 |
|
09/138,061 |
|
8/21/1998 |
|
6,229,924 |
|
5/8/2001 |
|
METHOD AND APPARATUS FOR VIDEO WATERMARKING VIDEO IMAGES |
|
|
|
|
|
|
|
|
|
|
|
EWG-069 C1 |
|
09/778,307 |
|
2/6/2001 |
|
6,798,894 |
|
9/28/2004 |
|
METHOD AND APPARATUS FOR VIDEO WATERMARKING VIDEO IMAGES |
|
|
|
|
|
|
|
|
|
|
|
EWG-070 |
|
08/731,291 |
|
10/11/1996 |
|
7,047,241 |
|
5/16/2006 |
|
SYSTEM AND METHOD FOR MANAGING DIGITAL CREATIVE WORKS |
|
|
|
|
|
|
|
|
|
|
|
EWG-076 US |
|
09/784,391 |
|
2/15/2001 |
|
7,298,864 |
|
11/20/2007 |
|
DIGITAL WATERMARKS AS A GATEWAY AND CONTROL MECHANISM |
|
|
|
|
|
|
|
|
|
|
|
EWG-077 |
|
09/165,142 |
|
10/1/1998 |
|
6,421,070 |
|
7/16/2002 |
|
SMART IMAGES AND IMAGE BOOKMARKING FOR AN INTERNET BROWSER |
|
|
|
|
|
|
|
|
|
|
|
EWG-080- C1 |
|
10/011,129 |
|
11/9/2001 |
|
6,970,573 |
|
11/29/2005 |
|
SELF VALIDATING SECURITY DOCUMENTS UTILIZING WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
EWG-080- US |
|
09/442,780 |
|
11/18/1999 |
|
6,389,151 |
|
5/14/2002 |
|
PRINTING AND VALIDATION OF SELF VALIDATING SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
EWG-081 |
|
09/130,624 |
|
8/6/1998 |
|
6,324,573 |
|
11/27/2001 |
|
Linking of computers using information steganographically embedded in data objects |
|
|
|
|
|
|
|
|
|
|
|
EWG-081-C1 |
|
09/920,396 |
|
8/1/2001 |
|
6,590,998 |
|
7/8/2003 |
|
Network linking method using information embedded in data objects that have inherent noise |
|
|
|
|
|
|
|
|
|
|
|
EWG-082 |
|
08/746,613 |
|
11/12/1996 |
|
6,122,403 |
|
9/19/2000 |
|
COMPUTER SYSTEM LINKED BY USING INFORMATION IN DATA OBJECTS |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
EWG-085- C1 |
|
09/616,462 |
|
7/14/2000 |
|
6,332,031 |
|
12/18/2001 |
|
Multiple Watermarking Techniques |
|
|
|
|
|
|
|
|
|
|
|
EWG-090-US |
|
09/302,663 |
|
4/30/1999 |
|
6,442,284 |
|
8/27/2002 |
|
WATERMARK DETECTION UTILIZING REGIONS WITH HIGHER PROBABILITY OF SUCCESS |
|
|
|
|
|
|
|
|
|
|
|
EWG-091-US |
|
09/527,971 |
|
3/17/2000 |
|
6,988,202 |
|
1/17/2006 |
|
PRE-FILTERING TO INCREASE SIGNAL TO NOISE RATIO |
|
|
|
|
|
|
|
|
|
|
|
EWG-109 US |
|
09/444,770 |
|
11/22/1999 |
|
6,366,680 |
|
4/2/2002 |
|
ADJUSTING AN ELECTRONIC CAMERA TO ACQUIRE A WATERMARKED IMAGE |
|
|
|
|
|
|
|
|
|
|
|
EWG-109-C1 |
|
10/002,352 |
|
11/13/2001 |
|
6,546,116 |
|
4/8/2003 |
|
Adjusting an Electronic Camera to Acquire an Image |
|
|
|
|
|
|
|
|
|
|
|
EWG-126 US |
|
09/694,465 |
|
10/23/2000 |
|
6,763,122 |
|
7/13/2004 |
|
WATERMARKING AN IMAGE IN COLOR PLANE SEPARATIONS AND DETECTING SUCH WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
EWG-136 US |
|
09/771,340 |
|
1/26/2001 |
|
7,072,487 |
|
7/4/2006 |
|
WATERMARK DETECTION USING ADAPTIVE COLOR PROJECTIONS |
|
|
|
|
|
|
|
|
|
|
|
EWG-140 |
|
09/803,167 |
|
3/9/2001 |
|
6,961,442 |
|
11/1/2005 |
|
WATERMARKING A CARRIER ON WHICH AN IMAGE WILL BE PLACED OR PROJECTED |
|
|
|
|
|
|
|
|
|
|
|
EWG-145 |
|
09/895,063 |
|
6/29/2001 |
|
7,218,751 |
|
5/15/2007 |
|
GENERATING SUPER RESOLUTION DIGITAL IMAGES |
|
|
|
|
|
|
|
|
|
|
|
EWG-156 |
|
10/066,116 |
|
1/30/2002 |
|
6,899,475 |
|
5/31/2005 |
|
WATERMARKING A PAGE DESCRIPTION LANGUAGE FILE |
|
|
|
|
|
|
|
|
|
|
|
EWG-162 |
|
10/113,099 |
|
3/29/2002 |
|
7,111,170 |
|
9/19/2006 |
|
DISTRIBUTED SYSTEM FOR RESPONDING TO WATERMARKED DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
EWG-164 US |
|
10/154,621 |
|
5/22/2002 |
|
6,973,197 |
|
12/6/2005 |
|
WATERMARKING WITH SEPARATE APPLICATION OF THE GRID AND PAYLOAD SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
EWG-166 US |
|
10/209,053 |
|
7/30/2002 |
|
6,700,995 |
|
3/2/2004 |
|
APPLYING DIGITAL WATERMARKS USING DOT GAIN CORRECTION |
|
|
|
|
|
|
|
|
|
|
|
G0186 |
|
08/543,161 |
|
10/13/1995 |
|
5,765,152 |
|
6/9/1998 |
|
SYSTEM AND METHOD FOR MANAGING COPYRIGHTED ELECTRONIC MEDIA |
Sch E (US Granted Patents)
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0028 48857 |
|
08/967,693 |
|
11/12/1997 |
|
6,122,392 |
|
9/19/2000 |
|
SIGNAL PROCESSING TO HIDE PLURAL-BIT INFORMATION IN IMAGE, VIDEO, AND AUDIO DATA |
|
|
|
|
|
|
|
|
|
|
|
P0030 49623 |
|
08/969,072 |
|
11/12/1997 |
|
5,809,160 |
|
9/15/1998 |
|
METHOD FOR ENCODING AUXILIARY DATA WITHIN A SOURCE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
P0032 49625 |
|
07/923,841 |
|
7/31/1992 |
|
5,721,788 |
|
2/24/1998 |
|
METHOD AND SYSTEM FOR DIGITAL IMAGE SIGNATURES |
|
|
|
|
|
|
|
|
|
|
|
P0034 50157 |
|
09/074,034 |
|
5/6/1998 |
|
6,449,377 |
|
9/10/2002 |
|
METHODS AND SYSTEMS FOR WATERMARK PROCESSING OF LINE ART IMAGES |
|
|
|
|
|
|
|
|
|
|
|
P0035 50180S |
|
09/074,632 |
|
5/7/1998 |
|
5,930,377 |
|
7/27/1999 |
|
METHOD FOR ENCODING AUXILIARY DATA WITHIN A SOURCE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
P0037 50724 |
|
09/127,502 |
|
7/31/1998 |
|
6,345,104 |
|
2/5/2002 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P0039 50848 |
|
09/186,962 |
|
11/5/1998 |
|
7,171,016 |
|
1/30/2007 |
|
METHOD FOR MONITORING INTERNET DISSEMINATION OF IMAGE, VIDEO AND/OR AUDIO FILES |
|
|
|
|
|
|
|
|
|
|
|
P0040 50895 |
|
09/164,859 |
|
10/1/1998 |
|
6,374,036 |
|
4/16/2002 |
|
METHOD AND APPARATUS FOR COPY ONCE WATERMARK FOR VIDEO RECORDING |
|
|
|
|
|
|
|
|
|
|
|
P0041 50928 |
|
09/172,324 |
|
10/13/1998 |
|
6,064,737 |
|
5/16/2000 |
|
ANTI-PIRACY SYSTEM FOR WIRELESS TELEPHONY |
|
|
|
|
|
|
|
|
|
|
|
P0043 51177 |
|
09/169,088 |
|
10/8/1998 |
|
6,111,954 |
|
8/29/2000 |
|
STEGANOGRAPHIC METHODS AND MEDIA FOR PHOTOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P0044 51194 |
|
09/185,380 |
|
11/3/1998 |
|
6,549,638 |
|
4/15/2003 |
|
METHOD AND SOFTWARE FOR EVIDENCING ILLICIT USE OF A SYSTEM |
|
|
|
|
|
|
|
|
|
|
|
P0045 51475 |
|
09/198,022 |
|
11/23/1998 |
|
6,546,112 |
|
4/8/2003 |
|
SECURITY DOCUMENT WITH STEGANOGRAPHICALLY-ENCODED AUTHENTICATION DATA |
|
|
|
|
|
|
|
|
|
|
|
P0048 52164 |
|
09/287,940 |
|
4/7/1999 |
|
6,580,819 |
|
6/17/2003 |
|
WATERMARKING METHODS, APPARATUSES, AND APPLICATIONS |
|
|
|
|
|
|
|
|
|
|
|
P0052 52354 |
|
09/293,601 |
|
4/15/1999 |
|
6,427,020 |
|
7/30/2002 |
|
METHODS AND DEVICES FOR RECOGNIZING BANKNOTES AND RESPONDING ACCORDINGLY |
Sch E (US Granted Patents)
Sch E (US Granted Patents)
Sch E (US Granted Patents)
Docket |
|
Application |
|
Application |
|
Patent |
|
|
|
|
Number |
|
Number |
|
Date |
|
Number |
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0106 60058 |
|
09/452,021 |
|
11/30/1999 |
|
7,044,395 |
|
5/16/2006 |
|
EMBEDDING AND READING IMPERCEPTIBLE CODES ON OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P0107 60068 |
|
09/473,396 |
|
12/28/1999 |
|
6,577,746 |
|
6/10/2003 |
|
WATERMARK-BASED OBJECT LINKING AND EMBEDDING |
|
|
|
|
|
|
|
|
|
|
|
P0108 60069 |
|
09/473,075 |
|
12/28/1999 |
|
6,560,349 |
|
5/6/2003 |
|
AUDIO MONITORING USING STEGANOGRAPHIC INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
P0109 60070 |
|
09/502,543 |
|
2/10/2000 |
|
6,625,297 |
|
9/23/2003 |
|
SELF-ORIENTING WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0112 60076 |
|
09/464,307 |
|
12/15/1999 |
|
6,286,036 |
|
9/4/2001 |
|
AUDIO- AND GRAPHICS-BASED LINKING TO INTERNET |
|
|
|
|
|
|
|
|
|
|
|
P0113 60077 |
|
09/476,460 |
|
12/30/1999 |
|
6,813,366 |
|
11/2/2004 |
|
STEGANOGRAPHIC DECODING WITH TRANSFORM TO SPATIAL DOMAIN |
|
|
|
|
|
|
|
|
|
|
|
P0117 60086 |
|
09/482,786 |
|
1/13/2000 |
|
7,010,144 |
|
3/7/2006 |
|
ASSOCIATING DATA WITH IMAGES IN IMAGING SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
P0122 60094 |
|
09/482,752 |
|
1/13/2000 |
|
6,330,335 |
|
12/11/2001 |
|
AUDIO STEGANOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P0123 60096 |
|
09/484,742 |
|
1/18/2000 |
|
6,983,051 |
|
1/3/2006 |
|
METHODS FOR AUDIO WATERMARKING AND DECODING |
|
|
|
|
|
|
|
|
|
|
|
P0124 60097 |
|
09/498,223 |
|
2/3/2000 |
|
6,574,350 |
|
6/3/2003 |
|
DIGITAL WATERMARKING EMPLOYING BOTH FRAIL AND ROBUST WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0130 60103 |
|
09/496,858 |
|
2/2/2000 |
|
6,307,950 |
|
10/23/2001 |
|
METHODS AND SYSTEMS FOR EMBEDDING DATA IN IMAGES |
|
|
|
|
|
|
|
|
|
|
|
P0132 60108 |
|
09/502,187 |
|
2/10/2000 |
|
6,289,108 |
|
9/11/2001 |
|
METHODS FOR DETECTING ALTERATION OF AUDIO AND IMAGES |
|
|
|
|
|
|
|
|
|
|
|
P0134 60112 |
|
09/503,881 |
|
2/14/2000 |
|
6,614,914 |
|
9/2/2003 |
|
WATERMARK EMBEDDER AND READER |
|
|
|
|
|
|
|
|
|
|
|
P0135 60113 |
|
09/612,177 |
|
7/6/2000 |
|
6,681,029 |
|
1/20/2004 |
|
DECODING STEGANOGRAPHIC MESSAGES EMBEDDED IN MEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0136 60114 |
|
09/504,239 |
|
2/15/2000 |
|
6,965,682 |
|
11/15/2005 |
|
DATA TRANSMISSION BY WATERMARK PROXY |
|
|
|
|
|
|
|
|
|
|
|
P0139 60117 |
|
09/553,084 |
|
4/19/2000 |
|
6,590,996 |
|
7/8/2003 |
|
COLOR ADAPTIVE WATERMARKING |
|
|
|
|
|
|
|
|
|
|
|
P0140 60126 |
|
09/526,982 |
|
3/15/2000 |
|
6,516,079 |
|
2/4/2003 |
|
DIGITAL WATERMARK SCREENING AND DETECTION STRATEGIES |
Sch E (US Granted Patents)
Docket |
|
Application |
|
Application |
|
Patent |
|
|
|
|
Number |
|
Number |
|
Date |
|
Number |
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0141 60130 |
|
09/516,302 |
|
2/29/2000 |
|
6,449,379 |
|
9/10/2002 |
|
VIDEO STEGANOGRAPHY METHODS AVOIDING INTRODUCTION OF FIXED PATTERN NOISE |
|
|
|
|
|
|
|
|
|
|
|
P0142 60131 |
|
09/520,406 |
|
3/8/2000 |
|
6,266,430 |
|
7/24/2001 |
|
AUDIO OR VIDEO STEGANOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P0143 60134 |
|
09/520,926 |
|
3/8/2000 |
|
6,353,672 |
|
3/5/2002 |
|
STEGANOGRAPHY USING DYNAMIC CODES |
|
|
|
|
|
|
|
|
|
|
|
P0146 60137 |
|
09/525,865 |
|
3/15/2000 |
|
6,611,607 |
|
8/26/2003 |
|
INTEGRATING DIGITAL WATERMARKS IN MULTIMEDIA CONTENT |
|
|
|
|
|
|
|
|
|
|
|
P0150 60153 |
|
09/553,001 |
|
4/19/2000 |
|
6,535,617 |
|
3/18/2003 |
|
REMOVAL OF FIXED PATTERN NOISE AND OTHER FIXED PATTERNS FROM MEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0151 60154 |
|
09/543,125 |
|
4/5/2000 |
|
7,143,949 |
|
12/5/2006 |
|
INTERNET-LINKING SCANNER |
|
|
|
|
|
|
|
|
|
|
|
P0152 60156 |
|
09/547,664 |
|
4/12/2000 |
|
7,206,820 |
|
4/17/2007 |
|
SYSTEM FOR LINKING FROM OBJECTS TO REMOTE RESOURCES |
|
|
|
|
|
|
|
|
|
|
|
P0157 60168 |
|
09/566,533 |
|
5/8/2000 |
|
6,424,725 |
|
7/23/2002 |
|
DETERMINING TRANSFORMATIONS OF MEDIA SIGNALS WITH EMBEDDED CODE |
|
|
|
|
|
|
|
|
|
|
|
P0158 60176 |
|
09/563,664 |
|
5/2/2000 |
|
6,505,160 |
|
1/7/2003 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P0160 60178 |
|
09/561,407 |
|
4/27/2000 |
|
6,567,533 |
|
5/20/2003 |
|
METHOD AND APPARATUS FOR DISCERNING IMAGE DISTORTION BY REFERENCE TO ENCODED MARKER SIGNALSMETHOD AND APPARATUS FOR DISCERNING IMAGE DISTORTION BY REFERENCE TO ENCODED MARKER SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0163 60183 |
|
09/562,524 |
|
5/1/2000 |
|
6,724,912 |
|
4/20/2004 |
|
DIGITAL WATERMARKING OF PHYSICAL OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P0164 60184 |
|
09/562,049 |
|
5/1/2000 |
|
7,191,156 |
|
3/13/2007 |
|
DIGITAL WATERMARKING SYSTEM |
|
|
|
|
|
|
|
|
|
|
|
P0165 60185 |
|
09/563,663 |
|
5/2/2000 |
|
7,346,184 |
|
3/18/2008 |
|
PROCESSING METHODS COMBINING MULTIPLE FRAMES OF IMAGE DATA (as amended) |
|
|
|
|
|
|
|
|
|
|
|
P0167 60191 |
|
09/585,678 |
|
6/1/2000 |
|
7,043,048 |
|
5/9/2006 |
|
CAPTURING AND ENCODING UNIQUE USER ATTRIBUTES IN MEDIA SIGNALS |
Sch E (US Granted Patents)
Docket |
|
Application |
|
Application |
|
Patent |
|
|
|
|
Number |
|
Number |
|
Date |
|
Number |
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0170 60194 |
|
09/571,422 |
|
5/15/2000 |
|
6,947,571 |
|
9/20/2005 |
|
CELL PHONES WITH OPTICAL CAPABILITIES, AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
|
|
P0172 60196 |
|
09/574,668 |
|
5/18/2000 |
|
6,522,769 |
|
2/18/2003 |
|
RECONFIGURING A WATERMARK DETECTOR |
|
|
|
|
|
|
|
|
|
|
|
P0174 60198 |
|
09/597,209 |
|
6/20/2000 |
|
6,411,725 |
|
6/25/2002 |
|
WATERMARK ENABLED VIDEO OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P0176 60200 |
|
09/619,266 |
|
7/19/2000 |
|
6,594,373 |
|
7/15/2003 |
|
MULTI-CARRIER WATERMARKS USING CARRIER SIGNALS MODULATED WITH AUXILIARY MESSAGES |
|
|
|
|
|
|
|
|
|
|
|
P0177 60201 |
|
09/618,948 |
|
7/19/2000 |
|
6,385,329 |
|
5/7/2002 |
|
WAVELET DOMAIN WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0178 60202 |
|
09/596,658 |
|
6/19/2000 |
|
6,631,198 |
|
10/7/2003 |
|
PERCEPTUAL MODELING OF MEDIA SIGNALS BASED ON LOCAL CONTRAST AND DIRECTIONAL EDGES |
|
|
|
|
|
|
|
|
|
|
|
P0179 60204 |
|
09/578,551 |
|
5/25/2000 |
|
6,970,886 |
|
11/29/2005 |
|
CONSUMER DRIVEN METHODS FOR ASSOCIATING CONTENT IDENTIFIERS WITH RELATED WEB ADDRESSES |
|
|
|
|
|
|
|
|
|
|
|
P0180 60205 |
|
09/829,980 |
|
4/11/2001 |
|
6,459,803 |
|
10/1/2002 |
|
METHOD FOR ENCODING AUXILIARY DATA WITHIN A SOURCE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
P0182 60207 |
|
09/585,727 |
|
5/31/2000 |
|
6,807,534 |
|
10/19/2004 |
|
SYSTEM AND METHOD FOR MANAGING COPYRIGHTED ELECTRONIC MEDIA |
|
|
|
|
|
|
|
|
|
|
|
P0183 60208 |
|
09/585,726 |
|
5/31/2000 |
|
6,944,298 |
|
9/13/2005 |
|
ENCODING AND DECODING AUXILIARY CODES IN AUDIO SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0188 60232 |
|
09/626,984 |
|
7/27/2000 |
|
6,542,620 |
|
4/1/2003 |
|
SIGNAL PROCESSING TO HIDE PLURAL-BIT INFORMATION IN IMAGE, VIDEO, AND AUDIO DATA |
|
|
|
|
|
|
|
|
|
|
|
P0191 60243 |
|
09/626,985 |
|
7/27/2000 |
|
6,567,534 |
|
5/20/2003 |
|
METHODS AND SYSTEMS FOR WATERMARK PROCESSING OF LINE ART IMAGES |
|
|
|
|
|
|
|
|
|
|
|
P0192 60244 |
|
09/758,532 |
|
1/10/2001 |
|
7,224,995 |
|
5/29/2007 |
|
DATA ENTRY METHOD AND SYSTEM |
|
|
|
|
|
|
|
|
|
|
|
P0193 60251 |
|
09/618,779 |
|
7/17/2000 |
|
6,535,618 |
|
3/18/2003 |
|
IMAGE CAPTURE DEVICE WITH STEGANOGRAPHIC DATA EMBEDDING |
|
|
|
|
|
|
|
|
|
|
|
P0195 60253 |
|
09/625,577 |
|
7/25/2000 |
|
6,788,800 |
|
9/7/2004 |
|
AUTHENTICATING OBJECTS USING EMBEDDED DATA |
Sch E (US Granted Patents)
Docket |
|
Application |
|
Application |
|
Patent |
|
|
|
|
Number |
|
Number |
|
Date |
|
Number |
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0196 60254 |
|
09/629,401 |
|
8/1/2000 |
|
6,522,770 |
|
2/18/2003 |
|
MANAGEMENT OF DOCUMENTS AND OTHER OBJECTS USING OPTICAL DEVICES |
|
|
|
|
|
|
|
|
|
|
|
P0197 60255 |
|
09/630,243 |
|
7/31/2000 |
|
6,735,324 |
|
5/11/2004 |
|
DIGITAL WATERMARKS AND TRADING CARDS |
|
|
|
|
|
|
|
|
|
|
|
P0203 60264 |
|
09/645,779 |
|
8/24/2000 |
|
6,714,683 |
|
3/30/2004 |
|
WAVELET BASED FEATURE MODULATION WATERMARKS AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
|
|
P0204 60265 |
|
09/640,806 |
|
8/17/2000 |
|
6,438,231 |
|
8/20/2002 |
|
EMULSION FILM MEDIA EMPLOYING STEGANOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P0208 60276 |
|
09/659,125 |
|
9/11/2000 |
|
6,952,485 |
|
10/4/2005 |
|
WATERMARK ENCODING AND DECODING IN PERIPHERALS AND PERIPHERAL DRIVERS |
|
|
|
|
|
|
|
|
|
|
|
P0210 60286 |
|
09/661,900 |
|
9/14/2000 |
|
6,674,876 |
|
1/6/2004 |
|
WATERMARKING IN THE TIME-FREQUENCY DOMAIN |
|
|
|
|
|
|
|
|
|
|
|
P0219 60302 |
|
09/689,226 |
|
10/11/2000 |
|
6,694,041 |
|
2/17/2004 |
|
HALFTONE WATERMARKING AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
|
|
P0221 60304 |
|
09/679,262 |
|
10/4/2000 |
|
6,965,873 |
|
11/15/2005 |
|
ELECTRONIC COMMERCE USING OPTICAL INPUT DEVICE |
|
|
|
|
|
|
|
|
|
|
|
P0222 60305 |
|
09/689,250 |
|
10/11/2000 |
|
6,512,837 |
|
1/28/2003 |
|
WATERMARKS CARRYING CONTENT DEPENDENT SIGNAL METRICS FOR DETECTING AND CHARACTERIZING SIGNAL ALTERATION |
|
|
|
|
|
|
|
|
|
|
|
P0223 60306 |
|
09/689,293 |
|
10/11/2000 |
|
6,683,966 |
|
1/27/2004 |
|
WATERMARKING RECURSIVE HASHES INTO FREQUENCY DOMAIN |
|
|
|
|
|
|
|
|
|
|
|
P0226 60310 |
|
09/690,773 |
|
10/17/2000 |
|
7,003,731 |
|
2/21/2006 |
|
USER CONTROL AND ACTIVATION OF WATERMARK ENABLED OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P0227 60311 |
|
09/657,148 |
|
9/7/2000 |
|
6,647,128 |
|
11/11/2003 |
|
METHOD FOR MONITORING INTERNET DISSEMINATION OF IMAGE, VIDEO, AND/OR AUDIO FILES |
|
|
|
|
|
|
|
|
|
|
|
P0233 60324 |
|
09/733,005 |
|
12/7/2000 |
|
6,513,717 |
|
2/4/2003 |
|
INTEGRATED CURSOR CONTROL AND SCANNER |
|
|
|
|
|
|
|
|
|
|
|
P0239 |
|
09/935,755 |
|
8/22/2001 |
|
7,116,781 |
|
10/3/2006 |
|
COUNTERACTING GEOMETRIC DISTORTIONS IN WATERMARKING |
Sch E (US Granted Patents)
Docket |
|
Application |
|
Application |
|
Patent |
|
|
|
|
Number |
|
Number |
|
Date |
|
Number |
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0243 |
|
09/709,255 |
|
11/8/2000 |
|
7,261,612 |
|
8/28/2007 |
|
METHODS AND SYSTEMS FOR READ-ALOUD BOOKS |
|
|
|
|
|
|
|
|
|
|
|
P0245 |
|
09/545,174 |
|
4/6/2000 |
|
6,775,392 |
|
8/10/2004 |
|
COMPUTER SYSTEM LINKED BY USING INFORMATION IN DATA OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P0246 |
|
09/560,976 |
|
4/28/2000 |
|
6,553,129 |
|
4/22/2003 |
|
COMPUTER SYSTEM LINKED BY USING INFORMATION IN DATA OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P0249 |
|
09/731,456 |
|
12/6/2000 |
|
7,346,776 |
|
3/18/2008 |
|
AUTHENTICATING MEDIA SIGNALS BY ADJUSTING FREQUENCY CHARACTERISTICS TO REFERENCE VALUES |
|
|
|
|
|
|
|
|
|
|
|
P0251 |
|
09/733,425 |
|
12/8/2000 |
|
6,442,285 |
|
8/27/2002 |
|
CONTROLLING OPERATION OF A DEVICE USING A RE-CONFIGURABLE WATERMARK DETECTOR |
|
|
|
|
|
|
|
|
|
|
|
P0252 |
|
09/916,207 |
|
7/25/2001 |
|
6,959,386 |
|
10/25/2005 |
|
HIDING ENCRYPTED MESSAGES IN INFORMATION CARRIERS |
|
|
|
|
|
|
|
|
|
|
|
P0253 |
|
09/737,609 |
|
12/13/2000 |
|
6,633,654 |
|
10/14/2003 |
|
PERCEPTUAL MODELING OF MEDIA SIGNALS BASED ON LOCAL CONTRAST AND DIRECTIONAL EDGES |
|
|
|
|
|
|
|
|
|
|
|
P0279 |
|
09/758,404 |
|
1/10/2001 |
|
6,301,369 |
|
10/9/2001 |
|
IMAGE MARKING TO PERMIT LATER IDENTIFICATION |
|
|
|
|
|
|
|
|
|
|
|
P0280 |
|
09/758,523 |
|
1/10/2001 |
|
6,567,535 |
|
5/20/2003 |
|
STEGANOGRAPHIC SYSTEM WITH CHANGING OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
P0281 |
|
09/758,531 |
|
1/10/2001 |
|
6,430,302 |
|
8/6/2002 |
|
STEGANOGRAPHICALLY ENCODING A FIRST IMAGE IN ACCORDANCE WITH A SECOND IMAGE |
|
|
|
|
|
|
|
|
|
|
|
P0282 |
|
09/758,398 |
|
1/10/2001 |
|
6,757,406 |
|
6/29/2004 |
|
STEGANOGRAPHIC IMAGE PROCESSING |
|
|
|
|
|
|
|
|
|
|
|
P0284 |
|
09/761,280 |
|
1/16/2001 |
|
6,522,771 |
|
2/18/2003 |
|
PROCESSING SCANNED SECURITY DOCUMENTS NOTWITHSTANDING CORRUPTIONS SUCH AS ROTATION |
|
|
|
|
|
|
|
|
|
|
|
P0292 |
|
09/764,975 |
|
1/17/2001 |
|
6,760,463 |
|
7/6/2004 |
|
WATERMARKING METHODS AND MEDIA |
|
|
|
|
|
|
|
|
|
|
|
P0297 |
|
09/769,017 |
|
1/24/2001 |
|
6,829,368 |
|
12/7/2004 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
Sch E (US Granted Patents)
Docket |
|
Application |
|
Application |
|
Patent |
|
|
|
|
Number |
|
Number |
|
Date |
|
Number |
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0302 |
|
09/790,322 |
|
2/21/2001 |
|
7,111,168 |
|
9/19/2006 |
|
DIGITAL WATERMARKING SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
P0306 |
|
09/775,934 |
|
2/2/2001 |
|
6,823,075 |
|
11/23/2004 |
|
AUTHENTICATION WATERMARKS FOR PRINTED OBJECTS AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
|
|
P0320 |
|
09/803,369 |
|
3/9/2001 |
|
7,051,086 |
|
5/23/2006 |
|
Method of linking on-line data to printed documents |
|
|
|
|
|
|
|
|
|
|
|
P0321 |
|
09/795,339 |
|
2/27/2001 |
|
6,580,808 |
|
6/17/2003 |
|
METHOD AND APPARATUS FOR DISCERNING IMAGE DISTORTION BY REFERENCE TO ENCODED MARKER SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0323 |
|
09/800,093 |
|
3/5/2001 |
|
7,061,510 |
|
6/13/2006 |
|
GEO-REFERENCING OF AERIAL IMAGERY USING EMBEDDED IMAGE IDENTIFIERS AND CROSS-REFERENCED DATA SETS |
|
|
|
|
|
|
|
|
|
|
|
P0325 |
|
09/811,366 |
|
3/15/2001 |
|
6,985,600 |
|
1/10/2006 |
|
PRINTING MEDIA AND METHODS EMPLOYING DIGITAL WATERMARKING |
|
|
|
|
|
|
|
|
|
|
|
P0331 |
|
09/810,080 |
|
3/16/2001 |
|
7,373,513 |
|
5/13/2008 |
|
TRANSMARKING OF MULTIMEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0332 |
|
09/810,000 |
|
3/16/2001 |
|
7,142,691 |
|
11/28/2006 |
|
WATERMARK EMBEDDING FUNCTIONS IN RENDERING DESCRIPTION FILES |
|
|
|
|
|
|
|
|
|
|
|
P0333 |
|
09/810,079 |
|
3/16/2001 |
|
7,020,303 |
|
3/28/2006 |
|
FEATURE-BASED WATERMARKS AND WATERMARK DETECTION STRATEGIES |
|
|
|
|
|
|
|
|
|
|
|
P0337 |
|
09/833,013 |
|
4/10/2001 |
|
7,249,257 |
|
7/24/2007 |
|
DIGITALLY WATERMARKED MAPS AND SIGNS AND RELATED NAVIGATIONAL TOOLS |
|
|
|
|
|
|
|
|
|
|
|
P0346 |
|
09/872,199 |
|
5/31/2001 |
|
6,675,146 |
|
1/6/2004 |
|
AUDIO OR VIDEO STEGANOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P0348 |
|
09/841,789 |
|
4/24/2001 |
|
6,590,997 |
|
7/8/2003 |
|
FILES AND METHODS EMPLOYING COMMON INFORMATION IN BOTH HEADER AND STEGANOGRAPHIC EMBEDDING |
|
|
|
|
|
|
|
|
|
|
|
P0351 |
|
09/963,344 |
|
9/25/2001 |
|
6,993,149 |
|
1/31/2006 |
|
EMBEDDING DIGITAL WATERMARKS IN SPOT COLORS |
|
|
|
|
|
|
|
|
|
|
|
P0359 |
|
09/842,282 |
|
4/24/2001 |
|
7,024,016 |
|
4/4/2006 |
|
DIGITAL WATERMARKING APPARATUS AND METHODS |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0360 |
|
09/882,279 |
|
6/14/2001 |
|
6,751,320 |
|
6/15/2004 |
|
METHOD AND SYSTEM FOR PREVENTING REPRODUCTION OF PROFESSIONAL PHOTOGRAPHS |
|
|
|
|
|
|
|
|
|
|
|
P0361 |
|
09/840,016 |
|
4/20/2001 |
|
6,760,464 |
|
7/6/2004 |
|
HALFTONE WATERMARKING AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
|
|
P0363 |
|
09/840,018 |
|
4/20/2001 |
|
7,209,571 |
|
4/24/2007 |
|
AUTHENTICATING METADATA AND EMBEDDING METADATA IN WATERMARKS OF MEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0366 |
|
09/858,336 |
|
5/15/2001 |
|
7,098,931 |
|
8/29/2006 |
|
IMAGE MANAGEMENT SYSTEMS AND METHODS USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0376 |
|
09/858,189 |
|
5/14/2001 |
|
7,185,201 |
|
2/27/2007 |
|
CONTENT IDENTIFIERS TRIGGERING CORRESPONDING RESPONSES |
|
|
|
|
|
|
|
|
|
|
|
P0378 |
|
09/898,901 |
|
7/2/2001 |
|
6,721,440 |
|
4/13/2004 |
|
LOW VISIBILITY WATERMARKS USING AN OUT-OF-PHASE COLOR |
|
|
|
|
|
|
|
|
|
|
|
P0379 |
|
09/888,339 |
|
6/21/2001 |
|
7,302,574 |
|
11/27/2007 |
|
CONTENT IDENTIFIERS TRIGGERING CORRESPONDING RESPONSES THROUGH COLLABORATIVE PROCESSING |
|
|
|
|
|
|
|
|
|
|
|
P0383 |
|
09/916,216 |
|
7/25/2001 |
|
6,678,392 |
|
1/13/2004 |
|
METHOD FOR ENCODING AUXILIARY DATA WITHIN A SOURCE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
P0384 |
|
09/895,748 |
|
6/29/2001 |
|
6,542,927 |
|
4/1/2003 |
|
LINKING OF COMPUTERS BASED ON STEGANOGRAPHICALLY EMBEDDED DATA |
|
|
|
|
|
|
|
|
|
|
|
P0387 |
|
09/895,867 |
|
6/28/2001 |
|
6,483,927 |
|
11/19/2002 |
|
SYNCHRONIZING READERS OF HIDDEN AUXILIARY DATA IN QUANTIZATION-BASED DATA HIDING SCHEMES |
|
|
|
|
|
|
|
|
|
|
|
P0392 |
|
09/938,870 |
|
8/23/2001 |
|
7,246,239 |
|
7/17/2007 |
|
DIGITAL WATERMARKS FOR CHECKING AUTHENTICITY OF PRINTED OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P0394 |
|
09/895,794 |
|
6/29/2001 |
|
6,560,350 |
|
5/6/2003 |
|
METHODS FOR DETECTING ALTERATION OF AUDIO |
|
|
|
|
|
|
|
|
|
|
|
P0395 |
|
09/898,914 |
|
7/3/2001 |
|
6,771,796 |
|
8/3/2004 |
|
METHODS FOR IDENTIFYING EQUIPMENT USED IN COUNTERFEITING |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0411 |
|
09/923,762 |
|
8/6/2001 |
|
6,608,911 |
|
8/19/2003 |
|
DIGITALLY WATERMARKING HOLOGRAMS FOR USE WITH SMART CARDS |
|
|
|
|
|
|
|
|
|
|
|
P0414 |
|
09/924,281 |
|
8/7/2001 |
|
7,362,781 |
|
4/22/2008 |
|
WIRELESS METHODS AND DEVICES EMPLOYING STEGANOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P0415 |
|
09/933,863 |
|
8/20/2001 |
|
6,763,123 |
|
7/13/2004 |
|
DETECTION OF OUT-OF-PHASE LOW VISIBILITY WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0416 |
|
09/940,872 |
|
8/27/2001 |
|
7,068,809 |
|
6/27/2006 |
|
SEGMENTATION IN DIGITAL WATERMARKING |
|
|
|
|
|
|
|
|
|
|
|
P0417 |
|
10/189,157 |
|
7/3/2002 |
|
6,647,130 |
|
11/11/2003 |
|
PRINTABLE INTERFACES AND DIGITAL LINKING WITH EMBEDDED CODES |
|
|
|
|
|
|
|
|
|
|
|
P0418 |
|
09/941,365 |
|
8/28/2001 |
|
6,385,330 |
|
5/7/2002 |
|
METHOD FOR ENCODING AUXILIARY DATA WITHIN A SOURCE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
P0419 |
|
09/945,244 |
|
8/31/2001 |
|
7,013,021 |
|
3/14/2006 |
|
WATERMARK DETECTION UTILIZING REGIONS WITH HIGHER PROBABILITY OF SUCCESS |
|
|
|
|
|
|
|
|
|
|
|
P0422 |
|
09/939,298 |
|
8/24/2001 |
|
6,804,379 |
|
10/12/2004 |
|
DIGITAL WATERMARKS AND POSTAGE |
|
|
|
|
|
|
|
|
|
|
|
P0423 |
|
09/941,243 |
|
8/28/2001 |
|
7,058,697 |
|
6/6/2006 |
|
Internet linking from image content |
|
|
|
|
|
|
|
|
|
|
|
P0428 |
|
09/945,243 |
|
8/31/2001 |
|
6,718,046 |
|
4/6/2004 |
|
LOW VISIBILITY WATERMARK USING TIME DECAY FLUORESCENCE |
|
|
|
|
|
|
|
|
|
|
|
P0430 |
|
09/951,142 |
|
9/10/2001 |
|
6,961,444 |
|
11/1/2005 |
|
TIME AND OBJECT BASED MASKING FOR VIDEO WATERMARKING |
|
|
|
|
|
|
|
|
|
|
|
P0432 |
|
09/951,143 |
|
9/10/2001 |
|
7,277,468 |
|
10/2/2007 |
|
MEASURING QUALITY OF SERVICE OF BROADCAST MULTIMEDIA SIGNALS USING DIGITAL WATERMARK ANALYSES |
|
|
|
|
|
|
|
|
|
|
|
P0436 |
|
09/960,228 |
|
9/20/2001 |
|
7,248,715 |
|
7/24/2007 |
|
DIGITALLY WATERMARKING PHYSICAL MEDIA |
|
|
|
|
|
|
|
|
|
|
|
P0442 |
|
09/963,343 |
|
9/25/2001 |
|
6,654,887 |
|
11/25/2003 |
|
STEGANOGRAPHY DECODING METHODS EMPLOYING ERROR INFORMATION\n |
|
|
|
|
|
|
|
|
|
|
|
P0451 |
|
10/033,363 |
|
10/25/2001 |
|
6,975,745 |
|
12/13/2005 |
|
SYNCHRONIZING WATERMARK DETECTORS IN GEOMETRICALLY DISTORTED SIGNALS |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0463 |
|
09/975,739 |
|
10/10/2001 |
|
6,750,985 |
|
6/15/2004 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P0472 |
|
09/978,332 |
|
10/16/2001 |
|
6,724,914 |
|
4/20/2004 |
|
PROGRESSIVE WATERMARK DECODING ON A DISTRIBUTED COMPUTING PLATFORM |
|
|
|
|
|
|
|
|
|
|
|
P0476 |
|
10/003,717 |
|
10/22/2001 |
|
6,920,232 |
|
7/19/2005 |
|
WATERMARK ENCODING USING ARBITRARY FEATURES |
|
|
|
|
|
|
|
|
|
|
|
P0477 |
|
10/002,954 |
|
10/23/2001 |
|
7,042,470 |
|
5/9/2006 |
|
USING EMBEDDED STEGANOGRAPHIC IDENTIFIERS IN SEGMENTED AREAS OF GEOGRPHIC IMAGES AND CHARACTERISTICS CORRESPONDING TO IMAGERY DATA DERIVED FROM AERIAL PLATFORMS |
|
|
|
|
|
|
|
|
|
|
|
P0478 |
|
10/164,899 |
|
6/4/2002 |
|
7,043,052 |
|
5/9/2006 |
|
DIGITAL AUTHENTICATION WITH ANALOG DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P0486 |
|
10/077,354 |
|
2/15/2002 |
|
7,054,461 |
|
5/30/2006 |
|
AUTHENTICATING PRINTED DOCUMENTS USING DIGITAL WATERMARKS ASSOCIATED WITH MULTIDIMENSIONAL QUALITY METRICS |
|
|
|
|
|
|
|
|
|
|
|
P0491 |
|
10/016,881 |
|
12/14/2001 |
|
6,533,385 |
|
3/18/2003 |
|
METHOD FOR DETERMINING A PRINTERS SIGNATURE AND THE NUMBER OF DOTS PER INCH PRINTED IN A DOCUMENT TO PROVIDE PROOF THAT THE PRINTER PRINTED A PARTICULAR DOCUMENT |
|
|
|
|
|
|
|
|
|
|
|
P0494 |
|
09/997,400 |
|
11/28/2001 |
|
6,950,519 |
|
9/27/2005 |
|
GEOGRAPHICALLY WATERMARKED IMAGERY AND METHODS |
|
|
|
|
|
|
|
|
|
|
|
P0495 |
|
09/998,763 |
|
11/29/2001 |
|
6,738,495 |
|
5/18/2004 |
|
WATERMARKING ENHANCED TO WITHSTAND ANTICIPATED CORRUPTIONS |
|
|
|
|
|
|
|
|
|
|
|
P0496 |
|
10/012,992 |
|
12/7/2001 |
|
6,728,390 |
|
4/27/2004 |
|
METHODS AND SYSTEMS USING MULTIPLE WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0497 |
|
10/012,703 |
|
12/7/2001 |
|
6,744,906 |
|
6/1/2004 |
|
METHODS AND SYSTEMS USING MULTIPLE WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0509 |
|
10/017,678 |
|
12/13/2001 |
|
7,050,603 |
|
5/23/2006 |
|
WATERMARK-ENCODED VIDEO, AND RELATED METHODS |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0511 |
|
10/032,282 |
|
12/20/2001 |
|
6,975,744 |
|
12/13/2005 |
|
DETECTION OF MULTIPLE WATERMARKS AND IMPROVED WATERMARK CALIBRATION SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0512 |
|
10/032,212 |
|
12/20/2001 |
|
6,965,683 |
|
11/15/2005 |
|
ROUTING NETWORKS FOR USE WITH WATERMARK SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
P0513 |
|
10/027,783 |
|
12/19/2001 |
|
7,289,643 |
|
10/30/2007 |
|
METHOD, APPARATUS AND PROGRAMS FOR GENERATING AND UTILIZING CONTENT SIGNATURES |
|
|
|
|
|
|
|
|
|
|
|
P0531 |
|
10/029,229 |
|
12/21/2001 |
|
7,123,740 |
|
10/17/2006 |
|
Watermark systems and methods |
|
|
|
|
|
|
|
|
|
|
|
P0533 |
|
09/228,224 |
|
1/11/1999 |
|
6,442,283 |
|
8/27/2002 |
|
Multimedia Data Embedding |
|
|
|
|
|
|
|
|
|
|
|
P0534 |
|
10/360,794 |
|
4/30/2001 |
|
7,366,908 |
|
4/29/2008 |
|
DIGITAL WATERMARKING WITH CONTENT DEPENDENT KEYS AND AUTOCORRELATION PROPERTIES FOR SYNCHRONIZATION |
|
|
|
|
|
|
|
|
|
|
|
P0536 |
|
10/118,846 |
|
4/8/2002 |
|
6,694,042 |
|
2/17/2004 |
|
METHODS FOR DETERMINING CONTENTS OF MEDIA |
|
|
|
|
|
|
|
|
|
|
|
P0545 |
|
10/115,444 |
|
4/2/2002 |
|
6,891,959 |
|
5/10/2005 |
|
HIDING INFORMATION OUT-OF-PHASE IN COLOR CHANNELS |
|
|
|
|
|
|
|
|
|
|
|
P0546 |
|
08/918,125 |
|
8/27/1997 |
|
6,282,299 |
|
8/28/2001 |
|
METHOD AND APPARATUS FOR VIDEO WATERMARKING USING PERCEPTUAL MASKS |
|
|
|
|
|
|
|
|
|
|
|
P0547 |
|
08/918,126 |
|
8/27/1997 |
|
6,272,634 |
|
8/7/2001 |
|
DIGITAL WATERMARKING TO RESOVE MULTIPLE CLAIMS OF OWNERSHIP |
|
|
|
|
|
|
|
|
|
|
|
P0548 |
|
08/918,122 |
|
8/27/1997 |
|
6,031,914 |
|
2/29/2000 |
|
METHOD AND APPARATUS FOR EMBEDDING DATA, INCLUDING WATERMARKS, IN HUMAN PERCEPTIBLE IMAGES |
|
|
|
|
|
|
|
|
|
|
|
P0549 |
|
08/921,931 |
|
8/27/1997 |
|
6,226,387 |
|
5/1/2001 |
|
METHOD AND APPARATUS FOR SCENE-BASED VIDEO WATERMARKING |
|
|
|
|
|
|
|
|
|
|
|
P0562 |
|
10/074,677 |
|
2/11/2002 |
|
6,763,124 |
|
7/13/2004 |
|
EMBEDDING DIGITAL WATERMARKS IN SPOT COLORS |
|
|
|
|
|
|
|
|
|
|
|
P0564 |
|
10/052,895 |
|
1/17/2002 |
|
6,993,150 |
|
1/31/2006 |
|
HALFTONE PRIMITIVE WATERMARKING AND RELATED APPLICATIONS |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0573 |
|
10/056,276 |
|
1/23/2002 |
|
6,519,352 |
|
2/11/2003 |
|
ENCODING AND DECODING IN ACCORDANCE WITH STEGANOGRAPHICALLY-CONVEYED DATA |
|
|
|
|
|
|
|
|
|
|
|
P0581 |
|
10/273,311 |
|
10/16/2002 |
|
7,054,465 |
|
5/30/2006 |
|
Data hiding method and system for embedding and extracting information in signals |
|
|
|
|
|
|
|
|
|
|
|
P0588 |
|
10/100,233 |
|
3/13/2002 |
|
6,664,976 |
|
12/16/2003 |
|
IMAGE MANAGEMENT SYSTEMS AND METHODS USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0589 |
|
08/918,891 |
|
8/27/1997 |
|
6,061,793 |
|
5/9/2000 |
|
METHOD AND APPARATUS FOR EMBEDDING DATA, INCLUDING WATERMARKS, IN HUMAN PERCEPTIBLE SOUNDS |
|
|
|
|
|
|
|
|
|
|
|
P0591 |
|
10/102,026 |
|
3/19/2002 |
|
6,968,057 |
|
11/22/2005 |
|
EMULSION PRODUCTS AND IMAGERY EMPLOYING STEGANOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P0592 |
|
10/102,269 |
|
3/19/2002 |
|
6,987,861 |
|
1/17/2006 |
|
SECURITY ARRANGEMENTS FOR PRINTED DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P0593 |
|
10/118,468 |
|
4/5/2002 |
|
7,095,871 |
|
8/22/2006 |
|
DIGITAL ASSET MANAGEMENT AND LINKING MEDIA SIGNALS WITH RELATED DATA USING WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0595 |
|
10/105,013 |
|
3/22/2002 |
|
6,580,809 |
|
6/17/2003 |
|
QUANTIZATION-BASED DATA HIDING EMPLOYING CALIBRATION AND LOCALLY ADAPTIVE QUANTIZATION |
|
|
|
|
|
|
|
|
|
|
|
P0597 |
|
10/108,256 |
|
3/25/2002 |
|
6,654,480 |
|
11/25/2003 |
|
AUDIO APPLIANCE AND MONITORING DEVICE RESPONSIVE TO WATERMARK DATA |
|
|
|
|
|
|
|
|
|
|
|
P0599 |
|
10/113,398 |
|
3/27/2002 |
|
7,068,811 |
|
6/27/2006 |
|
PROTECTING IMAGES WITH IMAGE MARKINGS |
|
|
|
|
|
|
|
|
|
|
|
P0600 |
|
10/113,818 |
|
3/28/2002 |
|
6,804,376 |
|
10/12/2004 |
|
EQUIPMENT EMPLOYING WATERMARK-BASED AUTHENTICATION FUNCTION |
|
|
|
|
|
|
|
|
|
|
|
P0601 |
|
10/113,910 |
|
3/28/2002 |
|
6,850,626 |
|
2/1/2005 |
|
METHODS EMPLOYING MULTIPLE WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0602 |
|
10/112,647 |
|
3/28/2002 |
|
7,054,462 |
|
5/30/2006 |
|
INFERRING OBJECT STATUS BASED ON DETECTED WATERMARK DATA |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0603 |
|
10/113,854 |
|
3/28/2002 |
|
7,054,463 |
|
5/30/2006 |
|
DATA ENCODING USING FRAIL WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0604 |
|
10/115,582 |
|
4/2/2002 |
|
6,912,295 |
|
6/28/2005 |
|
ENHANCING EMBEDDING OF OUT-OF-PHASE SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0605 |
|
10/115,441 |
|
4/2/2002 |
|
6,804,377 |
|
10/12/2004 |
|
DETECTING INFORMATION HIDDEN OUT-OF-PHASE IN COLOR CHANNELS |
|
|
|
|
|
|
|
|
|
|
|
P0606 |
|
10/118,653 |
|
4/8/2002 |
|
6,917,724 |
|
7/12/2005 |
|
METHODS FOR OPENING FILE ON COMPUTER VIA OPTICAL SENSING |
|
|
|
|
|
|
|
|
|
|
|
P0607 |
|
10/118,847 |
|
4/8/2002 |
|
6,694,043 |
|
2/17/2004 |
|
METHOD OF MONITORING PRINT DATA FOR TEXT ASSOCIATED WITH A HYPERLINK |
|
|
|
|
|
|
|
|
|
|
|
P0608 |
|
10/120,260 |
|
4/9/2002 |
|
6,567,780 |
|
5/20/2003 |
|
AUDIO WITH HIDDEN IN-BAND DIGITAL DATA |
|
|
|
|
|
|
|
|
|
|
|
P0617 |
|
10/126,921 |
|
4/18/2002 |
|
7,266,704 |
|
9/4/2007 |
|
USER-FRIENDLY RIGHTS MANAGEMENT SYSTEMS AND METHODS |
|
|
|
|
|
|
|
|
|
|
|
P0621 |
|
10/132,060 |
|
4/24/2002 |
|
7,046,819 |
|
5/16/2006 |
|
ENCODED REFERENCE SIGNAL FOR DIGITAL WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0625 |
|
10/147,228 |
|
5/15/2002 |
|
7,171,018 |
|
1/30/2007 |
|
PORTABLE DEVICES AND METHODS EMPLOYING DIGITAL WATERMARKING |
|
|
|
|
|
|
|
|
|
|
|
P0629 |
|
10/170,223 |
|
6/10/2002 |
|
6,978,036 |
|
12/20/2005 |
|
TAMPER-RESISTANT AUTHENTICATION TECHNIQUES FOR IDENTIFICATION DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P0631 |
|
09/367,797 |
|
2/20/1998 |
|
7,269,734 |
|
9/11/2007 |
|
INVISIBLE DIGITAL WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0639 |
|
10/142,260 |
|
5/8/2002 |
|
6,647,129 |
|
11/11/2003 |
|
METHOD AND SYSTEM FOR ENCODING IMAGE AND AUDIO CONTENT |
|
|
|
|
|
|
|
|
|
|
|
P0641 |
|
10/172,506 |
|
6/14/2002 |
|
6,869,023 |
|
3/22/2005 |
|
LINKING DOCUMENTS THROUGH DIGITAL WATERMARKING |
|
|
|
|
|
|
|
|
|
|
|
P0643 |
|
10/165,751 |
|
6/6/2002 |
|
6,754,377 |
|
6/22/2004 |
|
METHODS AND SYSTEMS FOR MARKING PRINTED DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P0645 |
|
10/172,734 |
|
6/13/2002 |
|
7,263,202 |
|
8/28/2007 |
|
WATERMARKING TO CONTROL VIDEO RECORDING |
|
|
|
|
|
|
|
|
|
|
|
P0647 |
|
10/172,353 |
|
6/13/2002 |
|
6,614,915 |
|
9/2/2003 |
|
IMAGE CAPTURE AND MARKING |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0649 |
|
10/172,769 |
|
6/14/2002 |
|
7,039,214 |
|
5/2/2006 |
|
EMBEDDING WATERMARK COMPONENTS DURING SEPARATE PRINTING STAGES |
|
|
|
|
|
|
|
|
|
|
|
P0664 |
|
10/229,382 |
|
8/26/2002 |
|
6,751,337 |
|
6/15/2004 |
|
DIGITAL WATERMARK DETECTING WITH WEIGHTING FUNCTION |
|
|
|
|
|
|
|
|
|
|
|
P0665 |
|
10/246,494 |
|
9/17/2002 |
|
7,113,614 |
|
9/26/2006 |
|
EMBEDDING AUXILIARY SIGNALS WITH MULTIPLE COMPONENTS INTO MEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0667 |
|
10/202,367 |
|
7/22/2002 |
|
6,704,869 |
|
3/9/2004 |
|
EXTRACTING DIGITAL WATERMARKS USING LOGARITHMIC SAMPLING AND SYMMETRICAL ATTRIBUTES |
|
|
|
|
|
|
|
|
|
|
|
P0668 |
|
10/215,389 |
|
8/7/2002 |
|
6,718,047 |
|
4/6/2004 |
|
WATERMARK EMBEDDER AND READER |
|
|
|
|
|
|
|
|
|
|
|
P0669 |
|
10/208,735 |
|
7/29/2002 |
|
6,922,480 |
|
7/26/2005 |
|
METHODS FOR ENCODING SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P0673 |
|
10/209,756 |
|
7/31/2002 |
|
6,778,682 |
|
8/17/2004 |
|
REDUNDANTLY EMBEDDING AUXILIARY DATA IN SOURCE SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0676 |
|
10/242,300 |
|
9/11/2002 |
|
7,027,612 |
|
4/11/2006 |
|
MARKING PHYSICAL OBJECTS AND RELATED SYSTEMS AND METHODS |
|
|
|
|
|
|
|
|
|
|
|
P0677 |
|
10/218,021 |
|
8/12/2002 |
|
6,993,152 |
|
1/31/2006 |
|
HIDING GEO-LOCTION DATA THROUGH ARRANGEMENT OF OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P0682 |
|
10/195,515 |
|
7/16/2002 |
|
7,103,197 |
|
9/5/2006 |
|
ARRANGEMENTS FOR EMBEDDING SUBLIMINAL DATA IN IMAGERY |
|
|
|
|
|
|
|
|
|
|
|
P0683 |
|
10/237,142 |
|
9/5/2002 |
|
7,151,854 |
|
12/19/2006 |
|
PATTERN RECOGNITION OF OBJECTS IN IMAGE STREAMS |
|
|
|
|
|
|
|
|
|
|
|
P0687 |
|
10/241,367 |
|
9/10/2002 |
|
7,113,596 |
|
9/26/2006 |
|
EMBEDDING INFORMATION RELATED TO A SUBJECT OF AN IDENTIFICATION DOCUMENT IN THE IDENTIFICATION DOCUMENT |
|
|
|
|
|
|
|
|
|
|
|
P0697 |
|
10/302,753 |
|
11/22/2002 |
|
7,072,490 |
|
7/4/2006 |
|
SYMMETRY WATERMARK |
|
|
|
|
|
|
|
|
|
|
|
P0701 |
|
10/277,617 |
|
10/21/2002 |
|
7,224,819 |
|
5/29/2007 |
|
INTEGRATING DIGITAL WATERMARKS IN MULTIMEDIA CONTENT |
|
|
|
|
|
|
|
|
|
|
|
P0702 |
|
10/278,742 |
|
10/21/2002 |
|
7,006,661 |
|
2/28/2006 |
|
DIGITAL WATERMARKING SYSTEMS AND METHODS |
Sch E (US Granted Patents)
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0777 |
|
10/352,338 |
|
1/27/2003 |
|
6,771,797 |
|
8/3/2004 |
|
WATERMARKS CARRYING CONTENT DEPENDENT SIGNAL METRICS FOR DETECTING AND CHARACTERIZING SIGNAL ALTERATION |
|
|
|
|
|
|
|
|
|
|
|
P0778 |
|
09/522,678 |
|
3/10/2000 |
|
6,963,884 |
|
11/8/2005 |
|
RECOVERABLE DIGITAL CONTENT DEGRADATION: METHOD AND APPARATUS |
|
|
|
|
|
|
|
|
|
|
|
P0779 |
|
09/404,292 |
|
9/23/1999 |
|
7,197,156 |
|
3/27/2007 |
|
METHOD AND APPARATUS FOR EMBEDDING AUXILIARY INFORMATION WITHIN ORIGINAL DATA |
|
|
|
|
|
|
|
|
|
|
|
P0780 |
|
09/404,291 |
|
9/23/1999 |
|
7,055,034 |
|
5/30/2006 |
|
METHOD AND APPARATUS FOR ROBUST EMBEDDED DATA |
|
|
|
|
|
|
|
|
|
|
|
P0781 |
|
09/801,515 |
|
3/7/2001 |
|
7,127,744 |
|
10/24/2006 |
|
METHOD AND APPARATUS TO PROTECT MEDIA EXISTING IN AN INSECURE FORMAT |
|
|
|
|
|
|
|
|
|
|
|
P0783 |
|
10/358,447 |
|
2/4/2003 |
|
6,744,907 |
|
6/1/2004 |
|
IMAGE CAPTURE METHODS AND DEVICES EMPLOYING STEGANOGRAPHIC PROCESSING |
|
|
|
|
|
|
|
|
|
|
|
P0786 |
|
10/371,995 |
|
2/20/2003 |
|
7,254,249 |
|
8/7/2007 |
|
DIGITAL WATERMARKING IMAGE SIGNALS ON-CHIP |
|
|
|
|
|
|
|
|
|
|
|
P0787 |
|
10/366,541 |
|
2/12/2003 |
|
6,804,378 |
|
10/12/2004 |
|
METHODS AND PRODUCTS EMPLOYING BIOMETRICS AND STEGANOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P0788 |
|
10/367,092 |
|
2/13/2003 |
|
7,113,615 |
|
9/26/2006 |
|
WATERMARK EMBEDDER AND READER |
|
|
|
|
|
|
|
|
|
|
|
P0807 |
|
10/379,393 |
|
3/3/2003 |
|
7,263,203 |
|
8/28/2007 |
|
DIGITAL WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0815 |
|
10/400,159 |
|
3/25/2003 |
|
7,181,022 |
|
2/20/2007 |
|
AUDIO WATERMARKING TO CONVEY AUXILIARY INFORMATION, MEDIA EMBODYING SAME |
|
|
|
|
|
|
|
|
|
|
|
P0817 |
|
10/405,951 |
|
4/1/2003 |
|
7,003,132 |
|
2/21/2006 |
|
EMBEDDING HIDDEN AUXILIARY CODE SIGNALS IN MEDIA |
|
|
|
|
|
|
|
|
|
|
|
P0818 |
|
10/435,517 |
|
5/8/2003 |
|
7,006,662 |
|
2/28/2006 |
|
REVERSIBLE WATERMARKING USING EXPANSION, RATE CONTROL AND ITERATIVE EMBEDDING |
|
|
|
|
|
|
|
|
|
|
|
P0823 |
|
10/418,025 |
|
4/16/2003 |
|
7,340,076 |
|
3/4/2008 |
|
DIGITAL WATERMARKS FOR UNMANNED VEHICLE NAVIGATION |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0828 |
|
10/423,834 |
|
4/25/2003 |
|
7,197,160 |
|
3/27/2007 |
|
GEOGRAPHIC INFORMATION SYSTEMS USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0838 |
|
09/522,312 |
|
3/9/2000 |
|
6,868,497 |
|
3/15/2005 |
|
METHOD AND APPARATUS FOR AUTOMATIC ID MANAGEMENT |
|
|
|
|
|
|
|
|
|
|
|
P0839 |
|
10/448,544 |
|
5/29/2003 |
|
6,917,691 |
|
7/12/2005 |
|
SUBSTITUTING INFORMATION BASED ON WATERMARK-ENABLED LINKING |
|
|
|
|
|
|
|
|
|
|
|
P0841 |
|
10/460,092 |
|
6/11/2003 |
|
7,286,684 |
|
10/23/2007 |
|
SECURE DOCUMENT DESIGN CARRYING AUXILIARY MACHINE READABLE INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
P0842 |
|
10/460,274 |
|
6/11/2003 |
|
6,959,100 |
|
10/25/2005 |
|
SECURE DOCUMENT DESIGN WITH MACHINE READABLE, VARIABLE MESSAGE ENCODED IN A VISIBLE REGISTRATION PATTERN |
|
|
|
|
|
|
|
|
|
|
|
P0844 |
|
10/465,769 |
|
6/18/2003 |
|
6,882,737 |
|
4/19/2005 |
|
DIGITALLY WATERMARKING HOLOGRAMS FOR IDENTITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P0854 |
|
10/617,571 |
|
7/11/2003 |
|
6,987,862 |
|
1/17/2006 |
|
VIDEO STEGANOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P0857 |
|
10/620,211 |
|
7/14/2003 |
|
6,915,002 |
|
7/5/2005 |
|
MULTI-CARRIER WATERMARKS USING CARRIER MODULATED WITH AUXILIARY MESSAGES |
|
|
|
|
|
|
|
|
|
|
|
P0859 |
|
10/636,515 |
|
8/6/2003 |
|
7,152,021 |
|
12/19/2006 |
|
COMPUTING DISTORTION OF MEDIA SIGNALS USING EMBEDDED DATA WITH REPETITIVE STRUCTURE AND LOG-POLAR MAPPING |
|
|
|
|
|
|
|
|
|
|
|
P0867 |
|
10/642,451 |
|
8/14/2003 |
|
7,050,201 |
|
5/23/2006 |
|
METHOD AND APPARATUS FOR ENCODING PAPER WITH INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
P0870 |
|
10/684,213 |
|
10/10/2003 |
|
7,088,844 |
|
8/8/2006 |
|
PERCEPTUAL MODELING OF MEDIA SIGNALS BASED ON LOCAL CONTRAST AND DIRECTIONAL EDGES |
|
|
|
|
|
|
|
|
|
|
|
P0871 |
|
10/648,105 |
|
8/25/2003 |
|
6,975,746 |
|
12/13/2005 |
|
INTEGRATING DIGITAL WATERMARKS IN MULTIMEDIA CONTENT |
|
|
|
|
|
|
|
|
|
|
|
P0876 |
|
10/656,076 |
|
9/4/2003 |
|
7,016,516 |
|
3/21/2006 |
|
DIGITAL AUTHENTICATION WITH DIGITAL AND ANALOG DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P0879 |
|
10/683,560 |
|
10/9/2003 |
|
7,181,042 |
|
2/20/2007 |
|
DIGITAL AUTHENTICATION WITH DIGITAL AND ANALOG DOCUMENTS |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0892 |
|
10/669,310 |
|
9/23/2003 |
|
6,993,153 |
|
1/31/2006 |
|
SELF-ORIENTING WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P0898 |
|
10/693,269 |
|
10/23/2003 |
|
6,882,738 |
|
4/19/2005 |
|
METHODS AND TANGIBLE OBJECTS EMPLOYING TEXTURED MACHINE READABLE DATA |
|
|
|
|
|
|
|
|
|
|
|
P0914 |
|
10/723,731 |
|
11/26/2003 |
|
7,171,020 |
|
1/30/2007 |
|
METHOD FOR UTILIZING FRAGILE WATERMARK FOR ENHANCED SECURITY |
|
|
|
|
|
|
|
|
|
|
|
P0922 |
|
10/742,637 |
|
12/19/2003 |
|
7,376,242 |
|
5/20/2008 |
|
QUANTIZATION-BASED DATA EMBEDDING IN MAPPED DATA |
|
|
|
|
|
|
|
|
|
|
|
P0923 |
|
10/753,984 |
|
1/5/2004 |
|
7,330,562 |
|
2/12/2008 |
|
WATERMARKING IN THE TIME-FREQUENCY DOMAIN |
|
|
|
|
|
|
|
|
|
|
|
P0932 |
|
10/856,678 |
|
5/28/2004 |
|
6,993,154 |
|
1/31/2006 |
|
MEASURING DIGITAL WATERMARK STRENGTH USING ERROR CORRECTION CODING METRICS |
|
|
|
|
|
|
|
|
|
|
|
P0933 |
|
10/781,056 |
|
2/17/2004 |
|
7,020,349 |
|
3/28/2006 |
|
HALFTONE WATERMARKS AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
|
|
P0934 |
|
10/778,762 |
|
2/13/2004 |
|
7,099,492 |
|
8/29/2006 |
|
Method of steganographically embedding geo-location data in media |
|
|
|
|
|
|
|
|
|
|
|
P0965 |
|
10/817,456 |
|
4/2/2004 |
|
7,377,421 |
|
5/27/2008 |
|
METHODS AND SYSTEMS FOR INTERACTING WITH PRINTED ARTICLES, SUCH AS POSTERS |
|
|
|
|
|
|
|
|
|
|
|
P0966 |
|
10/818,938 |
|
4/5/2004 |
|
6,996,252 |
|
2/7/2006 |
|
LOW VISIBILITY WATERMARK USING TIME DECAY FLUORESCENCE |
|
|
|
|
|
|
|
|
|
|
|
P0967 |
|
10/819,716 |
|
4/6/2004 |
|
7,062,069 |
|
6/13/2006 |
|
DIGITAL WATERMARK EMBEDDING AND DECODING USING ENCRYPTION KEYS |
|
|
|
|
|
|
|
|
|
|
|
P0968 |
|
10/821,414 |
|
4/9/2004 |
|
7,035,427 |
|
4/25/2006 |
|
METHOD AND SYSTEM FOR MANAGING, ACCESSING AND PAYING FOR THE USE OF COPYRIGHTED ELECTRONIC MEDIA |
|
|
|
|
|
|
|
|
|
|
|
P0971 |
|
10/823,514 |
|
4/12/2004 |
|
7,027,614 |
|
4/11/2006 |
|
HIDING INFORMATION TO REDUCE VISUAL ARTIFACTS |
|
|
|
|
|
|
|
|
|
|
|
P0976 |
|
10/826,970 |
|
4/15/2004 |
|
7,352,878 |
|
4/1/2008 |
|
HUMAN PERCEPTUAL MODEL APPLIED TO RENDERING OF WATERMARKED SIGNALS |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P0976 |
|
10/826,970 |
|
4/15/2004 |
|
7,352,878 |
|
4/1/2008 |
|
HUMAN PERCEPTUAL MODEL APPLIED TO RENDERING OF WATERMARKED SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P0977 |
|
10/828,930 |
|
4/20/2004 |
|
7,227,972 |
|
6/5/2007 |
|
PROGRESSIVE WATERMARK DECODING ON A DISTRIBUTED COMPUTING PLATFORM |
|
|
|
|
|
|
|
|
|
|
|
P0978 |
|
10/830,975 |
|
4/22/2004 |
|
7,152,786 |
|
12/26/2006 |
|
IDENTIFICATION DOCUMENT INCLUDING EMBEDDED DATA |
|
|
|
|
|
|
|
|
|
|
|
P0992 |
|
10/856,682 |
|
5/27/2004 |
|
7,184,570 |
|
2/27/2007 |
|
METHODS AND SYSTEMS FOR STEGANOGRAPHIC PROCESSING |
|
|
|
|
|
|
|
|
|
|
|
P0998 |
|
10/869,320 |
|
6/15/2004 |
|
7,130,087 |
|
10/31/2006 |
|
METHODS AND APPARATUS TO PRODUCE SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P1015 |
|
10/914,052 |
|
8/6/2004 |
|
7,164,413 |
|
1/16/2007 |
|
ENHANCED INPUT PERIPHERAL |
|
|
|
|
|
|
|
|
|
|
|
P1025 |
|
10/941,059 |
|
9/13/2004 |
|
7,213,757 |
|
5/8/2007 |
|
EMERGING SECURITY FEATURES FOR IDENTIFICATION DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P1030 |
|
10/953,134 |
|
9/28/2004 |
|
7,139,408 |
|
11/21/2006 |
|
TRANSFORM DOMAIN WATERMARKING OF IMAGE SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
P1036 |
|
10/972,286 |
|
10/21/2004 |
|
7,062,070 |
|
6/13/2006 |
|
IMAGE MARKING ADAPTED TO THE IMAGE |
|
|
|
|
|
|
|
|
|
|
|
P1047 |
|
10/992,614 |
|
11/17/2004 |
|
7,305,104 |
|
12/4/2007 |
|
AUTHENTICATION OF IDENTIFICATION DOCUMENTS USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P1062 |
|
11/051,442 |
|
2/3/2005 |
|
7,136,502 |
|
11/14/2006 |
|
PRINTING MEDIA AND METHODS EMPLOYING DIGITAL WATERMARKING |
|
|
|
|
|
|
|
|
|
|
|
P1068 |
|
11/060,919 |
|
2/17/2005 |
|
7,164,780 |
|
1/16/2007 |
|
DIGITAL WATERMARKING APPARATUS AND METHODS |
|
|
|
|
|
|
|
|
|
|
|
P1069 |
|
11/060,975 |
|
2/17/2005 |
|
7,177,443 |
|
2/13/2007 |
|
METHOD AND APPARATUS FOR ASSOCIATING IDENTIFIERS WITH CONTENT |
|
|
|
|
|
|
|
|
|
|
|
P1070 |
|
11/074,997 |
|
3/7/2005 |
|
7,068,812 |
|
6/27/2006 |
|
DECODING HIDDEN DATA FROM IMAGERY |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P1071 |
|
11/074,520 |
|
3/7/2005 |
|
7,136,503 |
|
11/14/2006 |
|
ENCODING HIDDEN DATA |
|
|
|
|
|
|
|
|
|
|
|
P1089 |
|
11/101,188 |
|
4/6/2005 |
|
7,370,190 |
|
5/6/2008 |
|
DATA PROCESSING SYSTEMS AND METHODS |
|
|
|
|
|
|
|
|
|
|
|
P1092 |
|
11/132,031 |
|
5/17/2005 |
|
7,174,031 |
|
2/6/2007 |
|
METHODS FOR USING WIRELESS PHONES HAVING OPTICAL CAPABILITIES |
|
|
|
|
|
|
|
|
|
|
|
P1094 |
|
11/106,186 |
|
4/13/2005 |
|
7,076,084 |
|
7/11/2006 |
|
METHODS AND OBJECTS EMPLOYING MACHINE READABLE DATA |
|
|
|
|
|
|
|
|
|
|
|
P1101 |
|
11/127,442 |
|
5/11/2005 |
|
7,321,667 |
|
1/22/2008 |
|
DATA HIDING THROUGH ARRANGEMENT OF OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P1118 |
|
11/145,514 |
|
6/3/2005 |
|
7,184,572 |
|
2/27/2007 |
|
USING STEGANOGRAPHIC ENCODED INFORMATION WITH MAPS |
|
|
|
|
|
|
|
|
|
|
|
P1119 |
|
11/145,515 |
|
6/3/2005 |
|
7,209,573 |
|
4/24/2007 |
|
SUBSTITUTING IMAGES IN COPIES BASED ON DIGITAL WATERMARKS |
|
|
|
|
|
|
|
|
|
|
|
P1131 |
|
11/191,328 |
|
7/27/2005 |
|
7,248,717 |
|
7/24/2007 |
|
SECURING MEDIA CONTENT WITH STEGANOGRAPHIC ENCODING |
|
|
|
|
|
|
|
|
|
|
|
P1147 |
|
11/265,766 |
|
11/1/2005 |
|
7,197,164 |
|
3/27/2007 |
|
TIME-VARYING VIDEO WATERMARK |
|
|
|
|
|
|
|
|
|
|
|
P1152 |
|
11/280,835 |
|
11/15/2005 |
|
7,369,676 |
|
5/6/2008 |
|
ROUTING NETWORKS FOR USE WITH CONTENT LINKING SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
P1155 |
|
11/286,154 |
|
11/23/2005 |
|
7,269,275 |
|
9/11/2007 |
|
PHYSICAL OBJECTS AND VALIDATION OF PHYSICAL OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
P1161 |
|
11/312,247 |
|
12/19/2005 |
|
7,239,734 |
|
7/3/2007 |
|
AUTHENTICATION OF IDENTIFICATION DOCUMENTS AND BANKNOTES |
|
|
|
|
|
|
|
|
|
|
|
P1165 |
|
11/317,474 |
|
12/22/2005 |
|
7,242,790 |
|
7/10/2007 |
|
VIDEO STEGANOGRAPHY |
|
|
|
|
|
|
|
|
|
|
|
P1170 |
|
11/345,648 |
|
1/31/2006 |
|
7,286,685 |
|
10/23/2007 |
|
HALFTONE WATERMARKING AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
|
|
P1186 |
|
11/380,181 |
|
4/25/2006 |
|
7,313,251 |
|
12/25/2007 |
|
METHOD AND SYSTEM FOR MANAGING AND CONTROLLING ELECTRONIC MEDIA |
|
|
|
|
|
|
|
|
|
|
|
P1191 |
|
11/382,459 |
|
5/9/2006 |
|
7,330,563 |
|
2/12/2008 |
|
DOCUMENTS, ARTICLES AND AUTHENTICATION OF DOCUMENTS AND ARTICLES |
|
|
|
|
|
|
|
|
|
|
|
P1201 |
|
11/420,977 |
|
5/30/2006 |
|
7,266,217 |
|
9/4/2007 |
|
MULTIPLE WATERMARKS IN CONTENT |
Sch E (US Granted Patents)
Docket
|
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
P1202 |
|
11/452,662 |
|
6/13/2006 |
|
7,369,678 |
|
5/6/2008 |
|
DIGITAL WATERMARK AND STEGANOGRAPHIC DECODING |
|
|
|
|
|
|
|
|
|
|
|
P1207 |
|
11/456,809 |
|
7/11/2006 |
|
7,305,117 |
|
12/4/2007 |
|
METHODS AND TANGIBLE OBJECTS EMPLOYING MACHINE READABLE DATA |
|
|
|
|
|
|
|
|
|
|
|
P1218 |
|
11/466,392 |
|
8/22/2006 |
|
7,372,976 |
|
5/13/2008 |
|
CONTENT INDEXING AND SEARCHING USING CONTENT IDENTIFIERS AND ASSOCIATED METADATA |
|
|
|
|
|
|
|
|
|
|
|
P1224 |
|
11/536,459 |
|
9/28/2006 |
|
7,280,672 |
|
10/9/2007 |
|
IMAGE DATA PROCESSING |
|
|
|
|
|
|
|
|
|
|
|
P1254 |
|
11/622,202 |
|
1/11/2007 |
|
7,330,564 |
|
2/12/2008 |
|
DIGITAL WATERMARKING APPARATUS AND METHODS |
|
|
|
|
|
|
|
|
|
|
|
P1261 |
|
11/621,839 |
|
1/10/2007 |
|
7,313,253 |
|
12/25/2007 |
|
METHODS AND TANGIBLE OBJECTS EMPLOYING MACHINE READABLE DATA IN PHOTO-REACTIVE MATERIALS |
|
|
|
|
|
|
|
|
|
|
|
P1281 |
|
11/672,313 |
|
2/7/2007 |
|
7,359,528 |
|
4/15/2008 |
|
MONITORING OF VIDEO OR AUDIO BASED ON IN-BAND DATA AND OUT-OF-BAND DATA |
|
|
|
|
|
|
|
|
|
|
|
P1292 |
|
11/679,004 |
|
2/26/2007 |
|
7,349,555 |
|
3/25/2008 |
|
DOCUMENTS AND APPARATUS TO ENCODE DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
P1306 |
|
11/739,534 |
|
4/24/2007 |
|
7,362,879 |
|
4/22/2008 |
|
SUBSTITUTING OBJECTS BASED ON STEGANOGRAPHIC ENCODING |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-069-JP |
|
Japan |
|
2000-508081 |
|
8/24/1998 |
|
4068301 |
|
1/18/2008 |
|
METHOD AND APPARATUS FOR VIDEO WATERMARKING VIDEO IMAGES |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-080- DE |
|
Germany |
|
99958983.1 |
|
11/13/1999 |
|
69923781.5-08 |
|
2/16/2005 |
|
PRINTING AND VALIDATION OF SELF VALIDATING SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-080- EP |
|
European Patent Convention |
|
99958983.1 |
|
11/13/1999 |
|
1131769 |
|
2/16/2005 |
|
PRINTING AND VALIDATION OF SELF VALIDATING SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-080- FR |
|
France |
|
99958983.1 |
|
11/13/1999 |
|
1131769 |
|
2/16/2005 |
|
PRINTING AND VALIDATION OF SELF VALIDATING SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-080- UK |
|
Great Britain |
|
99958983.1 |
|
11/13/1999 |
|
1131769 |
|
2/16/2005 |
|
PRINTING AND VALIDATION OF SELF VALIDATING SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-085- AU |
|
Australia |
|
24634/99 |
|
1/20/1999 |
|
747372 |
|
8/29/2002 |
|
Multiple Watermarking Techniques |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-085- DE |
|
Germany |
|
99904182.5 |
|
1/20/1999 |
|
69937044.2-08 |
|
9/5/2007 |
|
Multiple Watermarking Techniques |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-085- EP |
|
European Patent Convention |
|
99904182.5 |
|
1/20/1999 |
|
1050005 |
|
9/5/2007 |
|
Multiple Watermarking Techniques |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-085- FR |
|
France |
|
99904182.5 |
|
1/20/1999 |
|
1050005 |
|
9/5/2007 |
|
Multiple Watermarking Techniques |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-085- GB |
|
Great Britain |
|
99904182.5 |
|
1/20/1999 |
|
1050005 |
|
9/5/2007 |
|
Multiple Watermarking Techniques |
|
|
|
|
|
|
|
|
|
|
|
|
|
EWG-085- HK |
|
Hong Kong |
|
1102966.5 |
|
4/25/2001 |
|
1032464B |
|
12/7/2007 |
|
Multiple Watermarking Techniques |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0017 44769S |
|
Japan |
|
514,635/95 |
|
11/16/1994 |
|
3649731 |
|
2/25/2005 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0018 44770S |
|
European Patent Convention |
|
95909196.8 |
|
11/16/1994 |
|
737387 |
|
4/9/2003 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS\n\npublication # EP 737387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0018 44770S-DE |
|
Germany |
|
95909196.8 |
|
11/16/1994 |
|
69432480.9 |
|
4/9/2003 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0018 44770S-FR |
|
France |
|
95909196.8 |
|
11/16/1994 |
|
737387 |
|
4/9/2003 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0018 44770S-NL |
|
Netherland |
|
95909196.8 |
|
11/16/1994 |
|
737387 |
|
4/9/2003 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0018 44770S-UK |
|
Great Britain |
|
95909196.8 |
|
11/16/1994 |
|
737387 |
|
4/9/2003 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0026 48701S |
|
European Patent Convention |
|
96917808.6 |
|
5/7/1996 |
|
824821 |
|
4/17/2002 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0026 48701S-DE |
|
Germany |
|
96917808.6 |
|
5/7/1996 |
|
69620751.61 |
|
4/17/2002 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0026 48701S-FI |
|
Finland |
|
96917808.6 |
|
5/7/1996 |
|
824821 |
|
4/17/2002 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0026 48701S-FR |
|
France |
|
96917808.6 |
|
5/7/1996 |
|
824821 |
|
4/17/2002 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0026 48701S-IT |
|
Italy |
|
96917808.6 |
|
5/7/1996 |
|
824821 |
|
4/17/2002 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0026 48701S-NL |
|
Netherland |
|
96917808.6 |
|
5/7/1996 |
|
824821 |
|
4/17/2002 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0026 48701S-SE |
|
Sweden |
|
96917808.6 |
|
5/7/1996 |
|
824821 |
|
4/17/2002 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0026 48701S-UK |
|
Great Britain |
|
96917808.6 |
|
5/7/1996 |
|
824821 |
|
4/17/2002 |
|
STEGANOGRAPHY SYSTEMS |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0027 48702 |
|
Canada |
|
2,218,957 |
|
5/7/1996 |
|
2,218,957 |
|
1/25/2005 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0029 49622S |
|
Canada |
|
2,101,673 |
|
7/30/1993 |
|
2,101,673 |
|
8/23/2005 |
|
METHOD AND SYSTEM FOR DIGITAL IMAGE SIGNATURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0031 49624DIV |
|
Japan |
|
2005-136454 |
|
8/2/1993 |
|
3837432 |
|
8/4/2006 |
|
METHOD AND SYSTEM FOR DIGITAL IMAGE SIGNATURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0031 49624DIV1 |
|
Japan |
|
2006-177155 |
|
8/2/1993 |
|
4004528 |
|
8/31/2007 |
|
METHOD AND SYSTEM FOR DIGITAL IMAGE SIGNATURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0031 49624DIV2 |
|
Japan |
|
2006-177158 |
|
8/2/1993 |
|
4009655 |
|
9/7/2007 |
|
METHOD AND SYSTEM FOR DIGITAL IMAGE SIGNATURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0065 53010 |
|
European Patent Convention |
|
99113163.2 |
|
7/7/1999 |
|
981113 |
|
9/14/2005 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0065 53010-CH |
|
Switzerland |
|
99113163.2 |
|
7/7/1999 |
|
981113 |
|
9/14/2005 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0065 53010-DE |
|
Germany |
|
99113163.2 |
|
7/7/1999 |
|
69927218.1-08 |
|
9/14/2005 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0065 53010-FR |
|
France |
|
99113163.2 |
|
7/7/1999 |
|
981113 |
|
9/14/2005 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0065 53010-GB |
|
Great Britain |
|
99113163.2 |
|
7/7/1999 |
|
981113 |
|
9/14/2005 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0066 53039 |
|
European Patent Convention |
|
99116359.3 |
|
11/16/1994 |
|
959620 |
|
1/12/2005 |
|
VIDEO WITH HIDDEN IN-BAND DIGITAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0066 53039-DE |
|
Germany |
|
99116359.3 |
|
11/16/1994 |
|
69434237.8 |
|
1/12/2005 |
|
VIDEO WITH HIDDEN IN-BAND DIGITAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0066 53039-ES |
|
Spain |
|
99116359.3 |
|
11/16/1994 |
|
959620 |
|
1/12/2005 |
|
VIDEO WITH HIDDEN IN-BAND DIGITAL DATA |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0066 53039-FR |
|
France |
|
99116359.3 |
|
11/16/1994 |
|
959620 |
|
1/12/2005 |
|
VIDEO WITH HIDDEN IN-BAND DIGITAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0066 53039-UK |
|
Great Britain |
|
99116359.3 |
|
11/16/1994 |
|
959620 |
|
1/12/2005 |
|
VIDEO WITH HIDDEN IN-BAND DIGITAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0067 53040 |
|
European Patent Convention |
|
99116366.8 |
|
11/16/1994 |
|
959621 |
|
2/28/2001 |
|
VIDEO COPY CONTROL WITH PLURAL EMBEDDED SIGNALS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0067 53040-DE |
|
Germany |
|
99116366.8 |
|
11/16/1994 |
|
69426787.2-08 |
|
2/28/2001 |
|
VIDEO COPY CONTROL WITH PLURAL EMBEDDED SIGNALS (From 53040) |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0067 53040-NL |
|
Netherland |
|
99116366.8 |
|
11/16/1994 |
|
959621 |
|
2/28/2001 |
|
VIDEO COPY CONTROL WITH PLURAL EMBEDDED SIGNALS (From 53040) |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0067 53040-UK |
|
Great Britain |
|
99116366.8 |
|
11/16/1994 |
|
959621 |
|
2/28/2001 |
|
VIDEO COPY CONTROL WITH PLURAL EMBEDDED SIGNALS (From 53040) |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0067 53040L-FR |
|
France |
|
99116366.8 |
|
11/16/1994 |
|
959621 |
|
2/28/2001 |
|
VIDEO COPY CONTROL WITH PLURAL EMBEDDED SIGNALS (From 53040) |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0131 60105 |
|
European Patent Convention |
|
104810.7 |
|
5/7/1996 |
|
1003324 |
|
7/16/2003 |
|
FORGERY-RESISTANT DOCUMENTS WITH IMAGES CONVEYING SECRET AND RELATED METHODS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0131 60105-CH |
|
Switzerland |
|
104810.7 |
|
5/7/1996 |
|
1003324 |
|
7/16/2003 |
|
FORGERY-RESISTANT DOCUMENTS WITH IMAGES CONVEYING SECRET\nAND RELATED METHODS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0131 60105-DE |
|
Germany |
|
104810.7 |
|
5/7/1996 |
|
69629134.7 |
|
7/16/2003 |
|
FORGERY-RESISTANT DOCUMENTS WITH IMAGES CONVEYING SECRET\nAND RELATED METHODS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0131 60105-FR |
|
France |
|
104810.7 |
|
5/7/1996 |
|
1003324 |
|
7/16/2003 |
|
FORGERY-RESISTANT DOCUMENTS WITH IMAGES CONVEYING SECRET\nAND RELATED METHODS |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0131 60105-GB |
|
Great Britain |
|
104810.7 |
|
5/7/1996 |
|
1003324 |
|
7/16/2003 |
|
FORGERY-RESISTANT DOCUMENTS WITH IMAGES CONVEYING SECRET\nAND RELATED METHODS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0131 60105-NL |
|
Netherland |
|
104810.7 |
|
5/7/1996 |
|
1003324 |
|
7/16/2003 |
|
FORGERY-RESISTANT DOCUMENTS WITH IMAGES CONVEYING SECRET\nAND RELATED METHODS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0186 60230-DE |
|
Germany |
|
116604 |
|
5/7/1996 |
|
69625626.6 |
|
1/2/2003 |
|
INITIATING A LINK BETWEEN COMPUTERS BASED ON THE DECODING OF AN ADDRESS STEGANOGRAPHCAILLY EMBEEDED IN AN AUDIO OBJECT |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0186 60230L |
|
European Patent Convention |
|
116604 |
|
5/7/1996 |
|
1049320 |
|
1/2/2003 |
|
INITIATING A LINK BETWEEN COMPUTERS BASED ON THE DECODING OF AN ADDRESS STEGANOGRAPHCAILLY EMBEEDED IN AN AUDIO OBJECT |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0186 60230L-FI |
|
Finland |
|
116604 |
|
5/7/1996 |
|
1049320 |
|
1/2/2003 |
|
INITIATING A LINK BETWEEN COMPUTERS BASED ON THE DECODING OF\nAN ADDRESS STEGANOGRAPHCAILLY EMBEEDED IN AN AUDIO OBJECT |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0186 60230L-FR |
|
France |
|
116604 |
|
5/7/1996 |
|
1049320 |
|
1/2/2003 |
|
INITIATING A LINK BETWEEN COMPUTERS BASED ON THE DECODING OF\nAN ADDRESS STEGANOGRAPHCAILLY EMBEEDED IN AN AUDIO OBJECT |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0186 60230L-GB |
|
Great Britain |
|
116604 |
|
5/7/1996 |
|
1049320 |
|
1/2/2003 |
|
INITIATING A LINK BETWEEN COMPUTERS BASED ON THE DECODING OF\nAN ADDRESS STEGANOGRAPHCAILLY EMBEEDED IN AN AUDIO OBJECT |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0186 60230L-NL |
|
Netherland |
|
116604 |
|
5/7/1996 |
|
1049320 |
|
1/2/2003 |
|
INITIATING A LINK BETWEEN COMPUTERS BASED ON THE DECODING OF\nAN ADDRESS STEGANOGRAPHCAILLY EMBEEDED IN AN AUDIO OBJECT |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0186 60230L-SE |
|
Sweden |
|
116604 |
|
5/7/1996 |
|
1049320 |
|
1/2/2003 |
|
INITIATING A LINK BETWEEN COMPUTERS BASED ON THE DECODING OF\nAN ADDRESS STEGANOGRAPHCAILLY EMBEEDED IN AN AUDIO OBJECT |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0207 60273 |
|
Hong Kong |
|
105849.2 |
|
9/15/2000 |
|
HK1026796 |
|
7/9/2004 |
|
FORGERY-RESISTANT DOCUMENTS WITH IMAGES CONVEYING SECRET\nDATA, ND RELATED METHODS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0212 60293W |
|
Australia |
|
25629/99 |
|
4/14/1999 |
|
761566 |
|
9/25/2003 |
|
DIGITAL WATERMARKING AND BANKNOTES (filed in Australia 9/28/00) |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0214 60295 |
|
Great Britain |
|
23204.1 |
|
4/14/1999 |
|
2353168 |
|
4/14/1999 |
|
DIGITAL WATERMARKING AND BANKNOTES |
|
|
|
|
|
|
|
|
|
|
|
|
|
P021560296-DIV1 |
|
Japan |
|
2006-130650 |
|
4/14/1999 |
|
4071261 |
|
1/25/2008 |
|
DIGITAL WATERMARKING AND BANKNOTES |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0265 |
|
China P.R. |
|
99808918.4 |
|
6/24/1999 |
|
99808918.4 |
|
1/23/2008 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0272 |
|
Singapore |
|
200100009-0 |
|
6/24/1999 |
|
78503 |
|
4/29/2005 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0273 |
|
Canada |
|
2,338,618 |
|
6/24/1999 |
|
2,338,618 |
|
7/4/2006 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0294 |
|
Hong Kong |
|
1100928.6 |
|
2/9/2001 |
|
1030122 |
|
5/9/2003 |
|
COMPUTER LINKING METHODS EMPLOYING AUDIO OR VISUAL DATA\nOBJECTS (Based on 60230) |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0336 |
|
European Patent Convention |
|
1107905 |
|
5/7/1996 |
|
1137251 |
|
3/3/2004 |
|
TRANSFORM DOMAIN USE OF STEGANOGRAPHICALLY EMBEDDED DATA TO\nDISCERN IMAGE DISTORTION\n\nPublication EP 1 137 251 A2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0336-CH |
|
Switzerland |
|
1107905 |
|
5/7/1996 |
|
1137251 |
|
3/3/2004 |
|
TRANSFORM DOMAIN USE OF STEGANOGRAPHICALLY EMBEDDED DATA TO\nDISCERN IMAGE DISTORTION |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0336-DE |
|
Germany |
|
1107905 |
|
5/7/1996 |
|
69631806.7 |
|
3/3/2004 |
|
TRANSFORM DOMAIN USE OF STEGANOGRAPHICALLY EMBEDDED DATA TO\nDISCERN IMAGE DISTORTION |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0336-FR |
|
France |
|
1107905 |
|
5/7/1996 |
|
1137251 |
|
3/3/2004 |
|
TRANSFORM DOMAIN USE OF STEGANOGRAPHICALLY EMBEDDED DATA TO\nDISCERN IMAGE DISTORTION |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0336-NL |
|
Netherland |
|
1107905 |
|
5/7/1996 |
|
1137251 |
|
3/3/2004 |
|
TRANSFORM DOMAIN USE OF STEGANOGRAPHICALLY EMBEDDED DATA TO\nDISCERN IMAGE DISTORTION |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0336-UK |
|
Great Britain |
|
1107905 |
|
5/7/1996 |
|
1137251 |
|
3/3/2004 |
|
TRANSFORM DOMAIN USE OF STEGANOGRAPHICALLY EMBEDDED DATA TO\nDISCERN IMAGE DISTORTION |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0339 |
|
Hong Kong |
|
1101761.4 |
|
3/12/2001 |
|
1031013 |
|
2/21/2003 |
|
DIGITAL WATERMARKING AND BANKNOTES - From 60295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0399 |
|
South Korea |
|
10-2001-7011504 |
|
3/10/2000 |
|
746018 |
|
7/30/2007 |
|
SIGNAL PROCESSING METHODS, DEVICES, AND APPLICATIONS FOR DIGITAL RIGHTS MANAGEMENT KEN LEVY CASE!!! |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0632L |
|
Australia |
|
975218 |
|
2/20/1998 |
|
741906 |
|
12/13/2001 |
|
INVISIBLE DIGITAL WATERMARKS (Telstra) |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0655-KR-DIV |
|
South Korea |
|
10-2006-7001790 |
|
1/25/2006 |
|
799477 |
|
1/24/2008 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0658 |
|
South Korea |
|
10-2002-7010746 |
|
2/14/2001 |
|
799090 |
|
1/23/2008 |
|
WATERMARK ENCODER AND DECODER ENABLED SOFTWARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0679W |
|
Great Britain |
|
219190.6 |
|
4/14/1999 |
|
2375254 |
|
12/24/2002 |
|
DIGITAL WATERMARKING AND BANKNOTES |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0739 |
|
European Patent Convention |
|
1954827 |
|
7/20/2001 |
|
EP1311973 |
|
4/4/2007 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0739-DE |
|
Germany |
|
1954827 |
|
7/20/2001 |
|
60127689.2 |
|
4/4/2007 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0739-FR |
|
France |
|
1954827 |
|
7/20/2001 |
|
EP1311973 |
|
4/4/2007 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0739-GB |
|
Great Britain |
|
1954827 |
|
7/20/2001 |
|
EP1311973 |
|
4/4/2007 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0743 |
|
Australia |
|
2001277047 |
|
7/20/2001 |
|
2001277047 |
|
1/17/2008 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0749 |
|
Australia |
|
2001277147 |
|
7/24/2001 |
|
2001277147 |
|
8/31/2006 |
|
AUTHENTICATION WATERMARKS FOR PRINTED OBJECTS AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0800-CA |
|
Canada |
|
2,422,081 |
|
10/25/2001 |
|
2,422,081 |
|
8/21/2007 |
|
DIGITALLY MARKED OBJECTS AND PROMOTIONAL METHODS |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0862 |
|
European Patent Convention |
|
3021209.6 |
|
11/16/1994 |
|
1389011 |
|
2/27/2008 |
|
A METHOD OF EMBEDDING A STEGANOGRAPHIC CODE IN AN IMAGE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0862-DE |
|
Germany |
|
3021209.6 |
|
11/16/1994 |
|
1389011 |
|
2/27/2008 |
|
A METHOD OF EMBEDDING A STEGANOGRAPHIC CODE IN AN IMAGE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0862-FR |
|
France |
|
3021209.6 |
|
11/16/1994 |
|
1389011 |
|
2/27/2008 |
|
A METHOD OF EMBEDDING A STEGANOGRAPHIC CODE IN AN IMAGE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0862-GB |
|
Great Britain |
|
3021209.6 |
|
11/16/1994 |
|
1389011 |
|
2/27/2008 |
|
A METHOD OF EMBEDDING A STEGANOGRAPHIC CODE IN AN IMAGE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0862-IT |
|
Italy |
|
3021209.6 |
|
11/16/1994 |
|
1389011 |
|
2/27/2008 |
|
A METHOD OF EMBEDDING A STEGANOGRAPHIC CODE IN AN IMAGE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0862-NE |
|
Netherland |
|
3021209.6 |
|
11/16/1994 |
|
1389011 |
|
2/27/2008 |
|
A METHOD OF EMBEDDING A STEGANOGRAPHIC CODE IN AN IMAGE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0862-SP |
|
Spain |
|
3021209.6 |
|
11/16/1994 |
|
1389011 |
|
2/27/2008 |
|
A METHOD OF EMBEDDING A STEGANOGRAPHIC CODE IN AN IMAGE SIGNAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0960-JP |
|
Japan |
|
2004-224727 |
|
5/7/1996 |
|
3949679 |
|
4/27/2007 |
|
STEGANOGRAPHY SYSTEMS- DIV OF 48700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
P1019-DE |
|
Germany |
|
4020890.2 |
|
11/13/1999 |
|
69937972.5-08 |
|
1/9/2008 |
|
Photographic Identification Document |
|
|
|
|
|
|
|
|
|
|
|
|
|
P1019-EP |
|
European Patent Convention |
|
4020890.2 |
|
11/13/1999 |
|
1484710 |
|
1/9/2008 |
|
Photographic Identification Document |
|
|
|
|
|
|
|
|
|
|
|
|
|
P1019-FR |
|
France |
|
4020890.2 |
|
11/13/1999 |
|
1484710 |
|
1/9/2008 |
|
Photographic Identification Document |
|
|
|
|
|
|
|
|
|
|
|
|
|
P1019-GB |
|
Great Britain |
|
4020890.2 |
|
11/13/1999 |
|
1484710 |
|
1/9/2008 |
|
Photographic Identification Document |
Sch F (Foreign Granted)
Docket
|
|
Country |
|
Application
|
|
Application
|
|
Patent
|
|
Issue Date |
|
Title |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0265-HK |
|
Hong Kong |
|
5111612 |
|
12/15/2005 |
|
HK1077147 |
|
5/9/2008 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
P0655 |
|
South Korea |
|
10-2002-7009576 |
|
1/25/2001 |
|
827215 |
|
4/28/2008 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
EWG-065-C2 |
|
10/678,584 |
|
10/3/2003 |
|
EXPLOITING RANDOM MOTION DURING SCANNING TO YIELD IMPROVED IMAGE |
|
|
|
|
|
|
|
EWG-070-C1 |
|
09/337,637 |
|
6/21/1999 |
|
SYSTEM AND METHOD FOR MANAGING DIGITAL CREATIVE WORKS |
|
|
|
|
|
|
|
P0102 60049 |
|
09/587,493 |
|
6/2/2000 |
|
USING CLASSIFICATION TECHNIQUES IN DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P0115 60081 |
|
09/476,686 |
|
12/30/1999 |
|
WATERMARK-BASED PERSONAL AUDIO APPLIANCE |
|
|
|
|
|
|
|
P0116 60085 |
|
09/479,304 |
|
1/6/2000 |
|
WIRELESS METHODS AND DEVICES EMPLOYING STEGANOGRAPHY |
|
|
|
|
|
|
|
P0133 60109 |
|
09/502,542 |
|
2/10/2000 |
|
METHOD AND SYSTEM FOR FACILITATING ON-LINE SHOPPING |
|
|
|
|
|
|
|
P0147 60138 |
|
09/531,076 |
|
3/18/2000 |
|
SYSTEM FOR LINKING FROM OBJECTS TO REMOTE RESOURCES |
|
|
|
|
|
|
|
P0159 60177 |
|
09/538,493 |
|
3/30/2000 |
|
METHODS AND SYSTEMS FOR INSERTING WATERMARKS IN DIGITAL SIGNALS |
|
|
|
|
|
|
|
P0161 60181 |
|
09/562,517 |
|
5/1/2000 |
|
DIGITAL WATERMARKS IN TV AND RADIO BROADCASTS, FOR AUGMENTING BROADCASTED CONTENT THROUGH LNKS TO INFORMATION, ENTERTAINMENT, AND COMMERCE OPPORTUNITIES |
|
|
|
|
|
|
|
P0171 60195 |
|
09/574,726 |
|
5/18/2000 |
|
MUSIC METHODS AND SYSTEMS |
|
|
|
|
|
|
|
P0194 60252 |
|
09/620,019 |
|
7/20/2000 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
P0201 60259 |
|
09/636,102 |
|
8/10/2000 |
|
WATERMARK ENCODING AND DECODER ENABLED SOFTWARE AND DEVICES |
|
|
|
|
|
|
|
P0216 60299 |
|
09/670,113 |
|
9/26/2000 |
|
METHODS OF PROCESSING TEXT FOUND IN IMAGES |
|
|
|
|
|
|
|
P0224 60307 |
|
09/689,289 |
|
10/11/2000 |
|
PRINTING MEDIA AND METHODS EMPLOYING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P0228 60316 |
|
09/697,015 |
|
10/25/2000 |
|
ACCESS CONTROL SYSTEM AND METHODS |
|
|
|
|
|
|
|
P0231 60319 |
|
09/697,009 |
|
10/25/2000 |
|
DIGITALLY MARKED OBJECTS AND PROMOTIONAL METHODS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P0327 |
|
10/090,775 |
|
3/6/2002 |
|
NETWORK LINKING METHOD USING INDEX MODULATED ON DATA |
|
|
|
|
|
|
|
P0331 |
|
09/810,080 |
|
3/16/2001 |
|
TRANSMARKING OF MULTIMEDIA SIGNALS |
|
|
|
|
|
|
|
P0367 |
|
09/853,835 |
|
5/10/2001 |
|
DIGITAL WATERMARKING APPARATUS, SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P0381 |
|
10/118,849 |
|
4/8/2002 |
|
METHOD FOR MONITORING INTERNET DISSEMINATION OF IMAGE, VIDEO, AND/OR AUDIO FILES |
|
|
|
|
|
|
|
P0414 |
|
09/924,281 |
|
8/7/2001 |
|
WIRELESS METHODS AND DEVICES EMPLOYING STEGANOGRAPHY |
|
|
|
|
|
|
|
P0431 |
|
09/952,475 |
|
9/11/2001 |
|
CONTENT SENSITIVE CONNECTED CONTENT |
|
|
|
|
|
|
|
P0435 |
|
09/952,384 |
|
9/11/2001 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
P0468 |
|
10/035,830 |
|
10/18/2001 |
|
CONTENT AUTHENTICATION AND RECOVERY USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P0483 |
|
10/045,654 |
|
10/26/2001 |
|
INCLUDING A METRIC IN A DIGITAL WATERMARK FOR MEDIA AUTHENTICATION |
|
|
|
|
|
|
|
P0487 |
|
10/053,488 |
|
11/2/2001 |
|
PARALLEL PROCESSING OF DIGITAL WATERMARKING OPERATIONS |
|
|
|
|
|
|
|
P0490 |
|
10/002,225 |
|
11/20/2001 |
|
WATERMARK COMMUNICATION AND CONTROL SYSTEMS |
|
|
|
|
|
|
|
P0502 |
|
10/017,677 |
|
12/13/2001 |
|
FORENSIC DIGITAL WATERMARKING WITH VARIABLE ORIENTATION AND PROTOCOLS |
|
|
|
|
|
|
|
P0530 |
|
10/028,751 |
|
12/21/2001 |
|
WATERMARK AND FINGERPRINT SYSTEMS FOR MEDIA\n\n \n |
|
|
|
|
|
|
|
P0534 |
|
10/360,794 |
|
4/30/2001 |
|
DIGITAL WATERMARKING WITH CONTENT DEPENDENT KEYS AND AUTOCORRELATION PROPERTIES FOR SYNCHRONIZATION |
|
|
|
|
|
|
|
P0569 |
|
10/060,049 |
|
1/28/2002 |
|
EFFICIENT INTERACTIVE TV |
|
|
|
|
|
|
|
P0585 |
|
10/086,180 |
|
2/25/2002 |
|
DISTRIBUTION AND USE OF TRUSTED PHOTOS |
|
|
|
|
|
|
|
P0616 |
|
10/122,141 |
|
4/12/2002 |
|
WATERMARK SYSTEMS AND METHODS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P0620 |
|
10/158,385 |
|
5/29/2002 |
|
LAYERED SECURITY IN DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P0627 |
|
10/139,147 |
|
5/2/2002 |
|
DIGITAL WATERMARKING METHODS AND RELATED TOY AND GAME APPLICATIONS |
|
|
|
|
|
|
|
P0642 |
|
10/193,719 |
|
7/10/2002 |
|
VARIABLE MESSAGE CODING PROTOCOLS FOR ENCODING AUXILIARY DATA IN MEDIA SIGNALS |
|
|
|
|
|
|
|
P0644 |
|
10/172,735 |
|
6/13/2002 |
|
WATERMARKING AND ELECTRONIC PROGRAM GUIDES |
|
|
|
|
|
|
|
P0646 |
|
10/172,733 |
|
6/13/2002 |
|
WATERMARKING TO SET VIDEO USAGE PERMISSIONS |
|
|
|
|
|
|
|
P0661 |
|
10/186,175 |
|
6/27/2002 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
|
|
|
|
|
|
|
P0691 |
|
10/300,921 |
|
11/19/2002 |
|
WATERMARK PLACEMENT IN WATERMARKING OF TIME VARYING MEDIA SIGNALS |
|
|
|
|
|
|
|
P0699 |
|
10/274,290 |
|
10/18/2002 |
|
WATERMARK EMBEDDER AND READER |
|
|
|
|
|
|
|
P0706 |
|
10/275,197 |
|
10/30/2002 |
|
DIGITAL WATERMARKING SYSTEM |
|
|
|
|
|
|
|
P0707 |
|
10/286,517 |
|
11/1/2002 |
|
AUTHENTICATION USING A DIGITAL WATERMARK |
|
|
|
|
|
|
|
P0722 |
|
10/307,497 |
|
11/27/2002 |
|
METHOD AND APPARATUS FOR TRANSACTION CARD SECURITY UTILIZING EMBEDDED IMAGE DATA |
|
|
|
|
|
|
|
P0752 |
|
10/319,404 |
|
12/12/2002 |
|
REVERSIBLE WATERMARKING |
|
|
|
|
|
|
|
P0755 |
|
10/319,413 |
|
12/13/2002 |
|
PROGRESSIVE IMAGE QUALITY CONTROL USING WATERMARKING |
|
|
|
|
|
|
|
P0761 |
|
10/326,575 |
|
12/20/2002 |
|
PERSONAL DOCUMENT AUTHENTICATION SYSTEM USING WATERMARKING |
|
|
|
|
|
|
|
P0770 |
|
10/349,322 |
|
1/21/2003 |
|
TEMPORAL SYNCHRONIZATION OF VIDEO AND AUDIO SIGNALS |
|
|
|
|
|
|
|
P0782 |
|
09/522,744 |
|
3/10/2000 |
|
METHOD AND APPARATUS FOR INTELLIGENT CONTENT SCRAMBLING |
|
|
|
|
|
|
|
P0785 |
|
10/366,629 |
|
2/12/2003 |
|
DIGITAL WATERMARKING AND TELEVISION SERVICES |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P0805 |
|
10/383,156 |
|
3/5/2003 |
|
METHODS FOR DECODING WATERMARK DATA FROM AUDIO, AND CONTROLLING AUDIO DEVICES IN ACCORDANCE THEREWITH |
|
|
|
|
|
|
|
P0806 |
|
10/382,359 |
|
3/4/2003 |
|
DIGITAL WATERMARKING SECURITY SYSTEMS |
|
|
|
|
|
|
|
P0821 |
|
10/435,612 |
|
5/8/2003 |
|
TRANSFORMING DATA FILES INTO LOGICAL STORAGE UNITS FOR AUXILIARY DATA THROUGH REVERSIBLE WATERMARKS |
|
|
|
|
|
|
|
P0827 |
|
10/423,489 |
|
4/25/2003 |
|
IMAGE MANAGEMENT SYSTEM AND METHODS USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P0835 |
|
10/449,827 |
|
5/29/2003 |
|
LAYERED SECURITY IN DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P0837 |
|
10/602,549 |
|
6/23/2003 |
|
EMBEDDED DATA WINDOWS IN AUDIO SEQUENCES AND VIDEO FRAMES |
|
|
|
|
|
|
|
P0851 |
|
10/613,913 |
|
7/3/2003 |
|
COLOR ADAPTIVE WATERMARKING |
|
|
|
|
|
|
|
P0855 |
|
10/622,180 |
|
7/16/2003 |
|
DIGITAL WATERMARKING AND FINGERPRINTING APPLICATIONS FOR COPY PROTECTION |
|
|
|
|
|
|
|
P0856 |
|
10/622,079 |
|
7/16/2003 |
|
FINGERPRINTING APPLICATIONS |
|
|
|
|
|
|
|
P0860 |
|
10/636,505 |
|
8/6/2003 |
|
DIGITAL WATERMARKING OF LOW BIT RATE VIDEO |
|
|
|
|
|
|
|
P0869 |
|
10/686,547 |
|
10/14/2003 |
|
DIGITAL WATERMARKING FOR IDENTIFICATION DOCUMENTS |
|
|
|
|
|
|
|
P0872 |
|
10/469,474 |
|
8/27/2003 |
|
QUANTIZATION-BASED DATA HIDING EMPLOYING CALIBRATION AND LOCALLY ADAPTIVE QUANTIZATION |
|
|
|
|
|
|
|
P0877 |
|
10/656,930 |
|
9/4/2003 |
|
DIGITAL AUTHENTICATION WITH DIGITAL AND ANALOG DOCUMENTS |
|
|
|
|
|
|
|
P0880 |
|
10/658,808 |
|
9/8/2003 |
|
METHOD FOR INCREASING THE FUNCTIONALITY OF A MEDIA PLAYER/RECORDER DEVICE OR AN APPLICATION PROGRAM |
|
|
|
|
|
|
|
P0881 |
|
10/666,929 |
|
9/18/2003 |
|
DIGITALLY WATERMARKING DOCUMENTS ASSOCIATED WITH VEHICLES |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P0895 |
|
10/686,495 |
|
10/14/2003 |
|
IDENTIFICATION DOCUMENT AND RELATED METHODS |
|
|
|
|
|
|
|
P0904 |
|
10/742,510 |
|
12/19/2003 |
|
COLOR LASER ENGRAVING AND DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P0912 |
|
10/723,181 |
|
11/26/2003 |
|
AUTOMATED METHODS FOR DISTINGUISHING COPIES FROM ORIGINAL PRINTED OBJECTS |
|
|
|
|
|
|
|
P0915 |
|
10/843,866 |
|
5/11/2004 |
|
DIGITAL WATERMARKING SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P0922 |
|
10/742,637 |
|
12/19/2003 |
|
QUANTIZATION-BASED DATA EMBEDDING IN MAPPED DATA |
|
|
|
|
|
|
|
P0925-RE |
|
10/766,750 |
|
1/27/2004 |
|
METHOD FOR SURVEYING DISSEMINATION OF PROPRIETARY EMPIRICAL DATA |
|
|
|
|
|
|
|
P0929 |
|
10/764,430 |
|
1/23/2004 |
|
PAPER PRODUCTS AND PHYSICAL OBJECTS AS MEANS TO ACCESS AND CONTROL A COMPUTER OR TO NAVIGATE OVER OR ACT AS A PORTAL ON A NETWORK |
|
|
|
|
|
|
|
P0930 |
|
10/774,312 |
|
2/5/2004 |
|
WATERMARKING SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P0935 |
|
10/781,145 |
|
2/17/2004 |
|
SYSTEM AND METHOD FOR MANAGING COPYRIGHTED ELECTRONIC MEDIA |
|
|
|
|
|
|
|
P0936 |
|
10/794,395 |
|
3/5/2004 |
|
EVALUATING OBJECTS INCLUDING MACHINE-READABLE INDICIA |
|
|
|
|
|
|
|
P0941 |
|
10/841,970 |
|
5/6/2004 |
|
METHODS FOR READING WATERMARKS IN UNKNOWN DATA TYPES, AND DVD DRIVES WITH SUCH FUNCTIONALITY |
|
|
|
|
|
|
|
P0943 |
|
10/791,213 |
|
3/1/2004 |
|
APPLYING DIGITAL WATERMARKS USING PRINTING PROCESS CORRECTION |
|
|
|
|
|
|
|
P0944 |
|
10/792,400 |
|
3/2/2004 |
|
PRINTER DRIVER SEPARATELY APPLYING WATERMARK AND INFORMATION |
|
|
|
|
|
|
|
P0945 |
|
10/794,770 |
|
3/3/2004 |
|
INTEGRATING AND ENHANCING SEARCHING OF MEDIA CONTENT AND BIOMETRIC DATABASES |
|
|
|
|
|
|
|
P0947 |
|
10/795,123 |
|
3/5/2004 |
|
CONTENT
IDENTIFICATION, PERSONAL DOMAIN, COPYRIGHT NOTIFICATION, METADATA AND
|
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P0950 |
|
10/797,617 |
|
3/9/2004 |
|
IMAGE PROCESSING USING EMBEDDED REGISTRATION DATA TO DETERMINE AND COMPENSATE FOR GEOMETRIC TRANSFORMATION |
|
|
|
|
|
|
|
P0951 |
|
10/797,920 |
|
3/9/2004 |
|
METHOD AND APPARATUS FOR CONTENT IDENTIFICATION/CONTROL |
|
|
|
|
|
|
|
P0956 |
|
10/804,581 |
|
3/18/2004 |
|
SYNCHRONIZING BROADCAST CONTENT WITH CORRESPONDING NETWORK CONTENT |
|
|
|
|
|
|
|
P0962 |
|
10/816,175 |
|
3/31/2004 |
|
OPTICALLY VARIABLE DEVICES WITH ENCRYPTED EMBEDDED DATA FOR AUTHENTICATION OF IDENTIFICATION DOCUMENTS |
|
|
|
|
|
|
|
P0965 |
|
10/817,456 |
|
4/2/2004 |
|
METHODS AND SYSTEMS FOR INTERACTING WITH PRINTED ARTICLES, SUCH AS POSTERS |
|
|
|
|
|
|
|
P0975 |
|
10/823,997 |
|
4/13/2004 |
|
PORTABLE DEVICES AND METHODS EMPLOYING DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P0979 |
|
10/836,094 |
|
4/29/2004 |
|
FRAGILE AND EMERGING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P0980 |
|
10/839,328 |
|
5/4/2004 |
|
APPARATUS FOR RENDERING CONTENT |
|
|
|
|
|
|
|
P0981 |
|
10/839,305 |
|
5/4/2004 |
|
METHODS FOR PLAYING PROTECTED CONTENT |
|
|
|
|
|
|
|
P0982 |
|
10/839,067 |
|
5/4/2004 |
|
METHODS TO SECURELY PACKAGE CONTENT |
|
|
|
|
|
|
|
P0988 |
|
10/850,579 |
|
5/19/2004 |
|
DIGITAL WATERMARKS AND TRADING CARDS |
|
|
|
|
|
|
|
P0991 |
|
10/857,266 |
|
5/28/2004 |
|
CONTENT OBJECTS WITH COMPUTER INSTRUCTIONS STEGANOGRAPHICALLY ENCODED THEREIN, AND ASSOCIATED METHODS |
|
|
|
|
|
|
|
P0993 |
|
10/858,820 |
|
6/1/2004 |
|
IDENTIFICATION DOCUMENT INCLUDING MULTIPLE WATERMARKS |
|
|
|
|
|
|
|
P0994 |
|
10/861,317 |
|
6/3/2004 |
|
ECONOMICALLY SECURE DIGITAL MASS MEDIA SYSTEMS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P0995 |
|
10/866,172 |
|
6/10/2004 |
|
DIGITAL WATERMARKING WITH VARIABLE ORIENTATION AND PROTOCOLS |
|
|
|
|
|
|
|
P0996 |
|
10/869,178 |
|
6/15/2004 |
|
DIGITAL WATERMARKING OF TONAL AND NON-TONAL COMPONENTS OF MEDIA SIGNALS |
|
|
|
|
|
|
|
P1001 |
|
10/871,349 |
|
6/17/2004 |
|
WATERMARKING ELECTRONIC TEXT DOCUMENTS |
|
|
|
|
|
|
|
P1008 |
|
10/887,242 |
|
7/7/2004 |
|
EMBEDDED DATA IN GAMING OBJECTS FOR AUTHENTICATION AND ASSOCIATION OF BEHAVIOR AND INFORMATION |
|
|
|
|
|
|
|
P1009 |
|
10/893,141 |
|
7/15/2004 |
|
CONVEYING FINGERPRINT MINUTIAE WITH DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1012 |
|
10/893,149 |
|
7/16/2004 |
|
UNIQUELY LINKING SECURITY ELEMENTS IN IDENTIFICATION DOCUMENTS |
|
|
|
|
|
|
|
P1024 |
|
10/940,409 |
|
9/13/2004 |
|
MULTI-CHANNEL DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P1028 |
|
10/954,632 |
|
9/29/2004 |
|
METHODS AND APPARATUSES FOR PRINTER RECALIBRATION |
|
|
|
|
|
|
|
P1037 |
|
10/973,934 |
|
10/25/2004 |
|
DIGITAL WATERMARKING APPARATUS AND METHODS |
|
|
|
|
|
|
|
P1043 |
|
10/989,737 |
|
11/15/2004 |
|
MACHINE-READABLE SECURITY FEATURES FOR PRINTED OBJECTS |
|
|
|
|
|
|
|
P1052 |
|
11/009,694 |
|
12/10/2004 |
|
OPTIMIZED DIGITAL WATERMARKING FUNCTIONS FOR STREAMING DATA |
|
|
|
|
|
|
|
P1053 |
|
11/004,711 |
|
12/3/2004 |
|
SYSTEMS AND METHODS OF MANAGING AUDIO AND OTHER MEDIA |
|
|
|
|
|
|
|
P1058 |
|
11/040,168 |
|
1/20/2005 |
|
SYNCHRONICATION OF DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1059 |
|
11/039,720 |
|
1/19/2005 |
|
METHODS AND ARRANGEMENTS EMPLOYING DIGITAL CONTENT ITEMS |
|
|
|
|
|
|
|
P1060 |
|
11/051,502 |
|
2/3/2005 |
|
DIGITAL WATERMARKING IMAGE SIGNALS ON-CHIP AND PHOTOGRAPHIC TRAVEL LOGS THROUGH DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P1063 |
|
11/050,888 |
|
2/3/2005 |
|
AUTHENTICATION OF PHYSICAL AND ELECTRONIC MEDIA OBJECTS USING DIGITAL WATERMARKS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1064 |
|
11/050,407 |
|
2/2/2005 |
|
MANAGING AND INDEXING CONTENT ON A NETWORK WITH IMAGE BOOKMARKS AND DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1066 |
|
11/058,917 |
|
2/15/2005 |
|
COLLATERAL DATA COMBINED WITH USER CHARACTERISTICS TO SELECT WEB SITE |
|
|
|
|
|
|
|
P1074 |
|
11/082,179 |
|
3/15/2005 |
|
WATERMARK PAYLOAD ENCRYPTION METHODS AND SYSTEMS |
|
|
|
|
|
|
|
P1075 |
|
11/082,217 |
|
3/15/2005 |
|
WATERMARK PAYLOAD ENCRYPTION FOR MEDIA INCLUDING MULTIPLE WATERMARKS |
|
|
|
|
|
|
|
P1077 |
|
11/080,352 |
|
3/14/2005 |
|
METHOD AND APPARATUS FOR AUTOMATIC ID MANAGEMENT |
|
|
|
|
|
|
|
P1080 |
|
11/082,182 |
|
3/15/2005 |
|
ASSOCIATING MEDIA THROUGH STEGANOGRAPHY |
|
|
|
|
|
|
|
P1081 |
|
11/084,689 |
|
3/17/2005 |
|
DIGITAL WATERMARKING FOR WORKFLOW |
|
|
|
|
|
|
|
P1083 |
|
11/096,225 |
|
3/30/2005 |
|
RECOVERABLE DIGITAL CONTENT DEGRADATION: METHOD AND APPARATUS |
|
|
|
|
|
|
|
P1084 |
|
11/090,968 |
|
3/23/2005 |
|
DIGITALLY WATERMARKING HOLOGRAMS |
|
|
|
|
|
|
|
P1089 |
|
11/101,188 |
|
4/6/2005 |
|
DATA PROCESSING SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P1110 |
|
11/152,686 |
|
6/13/2005 |
|
DIGITAL WATERMARKING METHODS, PROGRAMS AND APPARATUS |
|
|
|
|
|
|
|
P1111W |
|
11/152,684 |
|
6/13/2005 |
|
DIGITAL ASSET MANAGEMENT, TARGETED SEARCHING AND DESKTOP SEARCHING USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1112 |
|
11/152,685 |
|
6/13/2005 |
|
METADATA MANAGEMENT AND GENERATION USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1113 |
|
11/325,131 |
|
1/3/2006 |
|
METHODS FOR AUDIO WATERMARKING AND DECODING |
|
|
|
|
|
|
|
P1114W |
|
11/140,540 |
|
5/26/2005 |
|
DIGITAL WATERMARK KEY GENERATION |
|
|
|
|
|
|
|
P1115 |
|
11/143,088 |
|
6/1/2005 |
|
CONDITIONING IMAGERY TO BETTER RECEIVE STEGANOGRAPHIC ENCODING |
|
|
|
|
|
|
|
P1116W |
|
11/142,827 |
|
5/31/2005 |
|
WATERMARKING A PAGE DESCRIPTION LANGUAGE FILE |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1120 |
|
11/153,901 |
|
6/14/2005 |
|
LOW VISIBLE DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1124 |
|
11/153,520 |
|
6/14/2005 |
|
AUDIO/VIDEO COMMERCE APPLICATION ARCHITECTURAL FRAMEWORK |
|
|
|
|
|
|
|
P1127W |
|
11/187,783 |
|
7/22/2005 |
|
METHODS FOR STEGANOGRAPHIC ENCODING MEDIA |
|
|
|
|
|
|
|
P1128 |
|
11/208,441 |
|
8/19/2005 |
|
RIGHTS MANAGEMENT SYSTEMS AND METHODS USING DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P1134 |
|
11/198,892 |
|
8/4/2005 |
|
ASSOCIATING DATA WITH IMAGES IN IMAGING SYSTEMS |
|
|
|
|
|
|
|
P1135L |
|
11/198,004 |
|
8/5/2005 |
|
FAST SIGNAL DETECTION AND DISTRIBUTED COMPUTING IN PORTABLE COMPUTING DEVICES |
|
|
|
|
|
|
|
P1139 |
|
11/228,033 |
|
9/14/2005 |
|
HIERARCHICAL WATERMARK DETECTOR |
|
|
|
|
|
|
|
P1140S |
|
11/231,553 |
|
9/20/2005 |
|
BACKGROUND WATERMARK PROCESSING |
|
|
|
|
|
|
|
P1141 |
|
11/226,847 |
|
9/13/2005 |
|
STEGANOGRAPHIC ENCODING AND DECODING OF AUXILIARY CODES IN MEDIA SIGNALS |
|
|
|
|
|
|
|
P1142L |
|
11/238,183 |
|
9/27/2005 |
|
GEOGRAPHICALLY WATERMARKED IMAGERY AND METHODS |
|
|
|
|
|
|
|
P1143 |
|
11/244,429 |
|
10/4/2005 |
|
WATERMARK ENCODING AND DECODING |
|
|
|
|
|
|
|
P1144L |
|
11/244,907 |
|
10/5/2005 |
|
LINKING FROM PAPER INVOICES AND STATEMENTS TO ON-LINE RESOURCES |
|
|
|
|
|
|
|
P1145 |
|
11/258,733 |
|
10/25/2005 |
|
HIDING AND DETECTING MESSAGES IN MEDIA SIGNALS |
|
|
|
|
|
|
|
P1148 |
|
11/265,544 |
|
11/2/2005 |
|
INTERNET LINKING FROM AUDIO AND IMAGE CONTENT |
|
|
|
|
|
|
|
P1149 |
|
11/270,802 |
|
11/8/2005 |
|
AUTHENTICATING IDENTIFICATION AND SECURITY DOCUMENTS |
|
|
|
|
|
|
|
P1151 |
|
11/274,758 |
|
11/14/2005 |
|
DATA TRANSMISSION BY WATERMARK PROXY |
|
|
|
|
|
|
|
P1152 |
|
11/280,835 |
|
11/15/2005 |
|
ROUTING NETWORKS FOR USE WITH CONTENT LINKING SYSTEMS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1154 |
|
11/286,146 |
|
11/23/2005 |
|
REGISTERING WITH COMPUTER SYSTEMS |
|
|
|
|
|
|
|
P1156 |
|
11/286,134 |
|
11/23/2005 |
|
CONSUMER DRIVEN METHODS FOR ASSOCIATING CONTENT IDENTIFIERS WITH RELATED WEB ADDRESSES |
|
|
|
|
|
|
|
P1157 |
|
11/295,345 |
|
12/5/2005 |
|
WATERMARKING DIFFERENT AREAS OF DIGITAL IMAGES WITH DIFFERENT INTENSITIES |
|
|
|
|
|
|
|
P1159 |
|
11/302,972 |
|
12/13/2005 |
|
INTEGRATING DIGITAL WATERMARKS IN MULTIMEDIA CONTENT |
|
|
|
|
|
|
|
P1160 |
|
11/302,974 |
|
12/13/2005 |
|
WATERMARK ORIENTATION SIGNALS CONVEYING PAYLOAD DATA |
|
|
|
|
|
|
|
P1164 |
|
11/317,327 |
|
12/22/2005 |
|
STEGANOGRAPHICALLY ENCODED VIDEO, AND RELATED METHODS |
|
|
|
|
|
|
|
P1167 |
|
11/331,430 |
|
1/11/2006 |
|
WATERMARK-BASED PERSONAL AUDIO APPLIANCE |
|
|
|
|
|
|
|
P1171 |
|
11/361,672 |
|
2/24/2006 |
|
SAFEGUARDING PRIVATE INFORMATION THROUGH DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P1172 |
|
11/349,743 |
|
2/7/2006 |
|
DIGITAL WATERMARK DETECTION UTILIZING HOST CARRIER INFORMATION |
|
|
|
|
|
|
|
P1173 |
|
11/359,756 |
|
2/21/2006 |
|
USER CONTROL AND ACTIVATION OF WATERMARK ENABLED OBJECTS |
|
|
|
|
|
|
|
P1174 |
|
11/360,002 |
|
2/21/2006 |
|
EMBEDDING HIDDEN AUXILIARY CODE SIGNALS IN MEDIA |
|
|
|
|
|
|
|
P1175 |
|
11/361,671 |
|
2/24/2006 |
|
DIGITAL WATERMARKING SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P1176 |
|
11/362,430 |
|
2/24/2006 |
|
GEOGRAPHIC-BASED WATERMARKING KEYS |
|
|
|
|
|
|
|
P1177 |
|
11/365,976 |
|
2/28/2006 |
|
REVERSIBLE WATERMARKING USING EXPANSION, RATE CONTROL AND ITERATIVE EMBEDDING |
|
|
|
|
|
|
|
P1179 |
|
11/371,374 |
|
3/7/2006 |
|
BATCH IDENTIFIER REGISTRATION AND EMBEDDING IN MEDIA SIGNALS |
|
|
|
|
|
|
|
P1182 |
|
11/389,560 |
|
3/23/2006 |
|
DIGITAL WATERMARKING AND FINGERPRINTING INCLUDING SYNCHRONIZATION, LAYERING, VERSION CONTROL, AND COMPRESSED EMBEDDING |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1188 |
|
11/381,295 |
|
5/2/2006 |
|
ACTIVE IMAGES THROUGH DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P1190 |
|
11/382,453 |
|
5/9/2006 |
|
EMBEDDING GEO-LOCATION INFORMATION IN MEDIA |
|
|
|
|
|
|
|
P1192 |
|
11/382,207 |
|
5/8/2006 |
|
CAPTURING AND ENCODING UNIQUE USER ATTRIBUTES IN MEDIA SIGNALS |
|
|
|
|
|
|
|
P1193 |
|
11/382,427 |
|
5/9/2006 |
|
METHOD AND SYSTEM FOR INTERNET ACCESS |
|
|
|
|
|
|
|
P1194 |
|
11/382,850 |
|
5/11/2006 |
|
DIGITAL MEDIA METHODS |
|
|
|
|
|
|
|
P1195 |
|
11/382,855 |
|
5/11/2006 |
|
CONTENT PROTECTION ARRANGEMENTS |
|
|
|
|
|
|
|
P1197 |
|
11/383,684 |
|
5/16/2006 |
|
EMBEDDING AND READING CODES ON OBJECTS |
|
|
|
|
|
|
|
P1198 |
|
11/383,742 |
|
5/16/2006 |
|
ENCODING AND DECODING SIGNALS FOR DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P1199 |
|
11/419,718 |
|
5/22/2006 |
|
METHOD AND APPARATUS FOR ENCODING SUBSTRATES WITH INFORMATION |
|
|
|
|
|
|
|
P1200 |
|
11/420,580 |
|
5/26/2006 |
|
METHODS AND APPARATUS FOR ROBUST EMBEDDED DATA |
|
|
|
|
|
|
|
P1202 |
|
11/452,662 |
|
6/13/2006 |
|
DIGITAL WATERMARK AND STEGANOGRAPHIC DECODING |
|
|
|
|
|
|
|
P1203 |
|
11/427,265 |
|
6/28/2006 |
|
DIGITAL WATERMARK DETECTION USING PREDETERMINED COLOR PROJECTIONS |
|
|
|
|
|
|
|
P1208 |
|
11/456,813 |
|
7/11/2006 |
|
CURVE FITTING FOR SYNCHRONIZING READERS OF HIDDEN AUXILIARY DATA |
|
|
|
|
|
|
|
P1209 |
|
11/458,639 |
|
7/19/2006 |
|
METHODS AND SYSTEMS FOR INSERTING WATERMARKS IN DIGITAL SIGNALS |
|
|
|
|
|
|
|
P1214 |
|
11/498,528 |
|
8/2/2006 |
|
PERCEPTUAL MODELING OF MEDIA SIGNALS FOR DATA HIDING |
|
|
|
|
|
|
|
P1216 |
|
11/465,405 |
|
8/17/2006 |
|
DIGITAL WATERMARKING COMPRESSED VIDEO CAPTURED FROM ARIAL SENSORS |
|
|
|
|
|
|
|
P1218 |
|
11/466,392 |
|
8/22/2006 |
|
CONTENT INDEXING AND SEARCHING USING CONTENT IDENTIFIERS AND ASSOCIATED METADATA |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1219 |
|
11/468,258 |
|
8/29/2006 |
|
IMAGE MANAGEMENT SYSTEM AND METHODS USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1220 |
|
11/530,391 |
|
9/8/2006 |
|
SYSTEMS AND METHODS FACILITATING COMMUNICATION WITH REMOTE COMPUTERS |
|
|
|
|
|
|
|
P1221 |
|
11/527,361 |
|
9/25/2006 |
|
IDENTIFICATION DOCUMENT AND RELATED METHODS |
|
|
|
|
|
|
|
P1222 |
|
11/535,895 |
|
9/27/2006 |
|
HIDING CODES IN INPUT DATA |
|
|
|
|
|
|
|
P1223 |
|
11/536,487 |
|
9/28/2006 |
|
METHOD, APPARATUS AND PROGRAMS FOR GENERATING AND UTILIZING CONTENT SIGNATURES |
|
|
|
|
|
|
|
P1227 |
|
11/537,965 |
|
10/2/2006 |
|
DIGITAL WATERMARKED IMAGERY, VIDEO, MAPS AND SIGNS |
|
|
|
|
|
|
|
P1228 |
|
11/538,368 |
|
10/3/2006 |
|
PROVIDING TRAVEL-LOGS BASED ON HIDDEN GEO-LOCATION METADATA |
|
|
|
|
|
|
|
P1229 |
|
11/543,431 |
|
10/4/2006 |
|
GEOGRAPHIC INFORMATION SYSTEMS USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1230 |
|
11/545,081 |
|
10/5/2006 |
|
DIGITAL WATERMARKING, STEGANOGRAPHIC DATA HIDING AND INDEXING CONTENT |
|
|
|
|
|
|
|
P1231 |
|
11/544,990 |
|
10/5/2006 |
|
DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1232 |
|
11/553,406 |
|
10/26/2006 |
|
METHODS FOR STEGANOGRAPHIC ENCODING MEDIA |
|
|
|
|
|
|
|
P1233 |
|
11/552,436 |
|
10/24/2006 |
|
METHODS AND APPARATUS TO PROCESS MEDIA |
|
|
|
|
|
|
|
P1234 |
|
11/548,167 |
|
10/10/2006 |
|
WATERMARK SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P1235 |
|
11/551,607 |
|
10/20/2006 |
|
ASSOCIATING FIRST AND SECOND WATERMARKS WITH AUDIO OR VIDEO CONTENT |
|
|
|
|
|
|
|
P1237 |
|
11/557,832 |
|
11/8/2006 |
|
PRINTING MEDIA AND METHODS EMPLOYING DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P1241 |
|
11/562,357 |
|
11/21/2006 |
|
WATERMARKING COMPRESSED DATA |
|
|
|
|
|
|
|
P1242 |
|
11/564,225 |
|
11/28/2006 |
|
WATERMARK EMBEDDING FUNCTIONS ADAPTED FOR TRANSMISSION CHANNELS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1244 |
|
11/567,128 |
|
12/5/2006 |
|
DIGITAL WATERMARKING APPLICATIONS |
|
|
|
|
|
|
|
P1245 |
|
11/614,921 |
|
12/21/2006 |
|
CONTENT METADATA DIRECTORY SERVICES |
|
|
|
|
|
|
|
P1247 |
|
11/613,123 |
|
12/19/2006 |
|
PATTERN RECOGNITION OF OBJECTS IN IMAGE STREAMS |
|
|
|
|
|
|
|
P1248 |
|
11/612,959 |
|
12/19/2006 |
|
COMPUTING DISTORTION OF MEDIA SIGNALS USING EMBEDDED DATA WITH REPETITIVE STRUCTURE AND LOG-POLAR MAPPING |
|
|
|
|
|
|
|
P1249 |
|
11/613,088 |
|
12/19/2006 |
|
AUTHENTICATION METHODS AND SYSTEMS INCLUDING EMBEDDED AUXILIARY DATA |
|
|
|
|
|
|
|
P1250 |
|
11/613,876 |
|
12/20/2006 |
|
METHODS, APPARATUS AND PROGRAMS FOR GENERATING AND UTILIZING CONTENT SIGNATURES |
|
|
|
|
|
|
|
P1252 |
|
11/614,942 |
|
12/21/2006 |
|
CONTENT METADATA DIRECTORY SERVICES |
|
|
|
|
|
|
|
P1253 |
|
11/614,947 |
|
12/21/2006 |
|
RULES DRIVEN PAN ID METADATA ROUTING SYSTEM AND NETWORK |
|
|
|
|
|
|
|
P1255 |
|
11/619,123 |
|
1/2/2007 |
|
METHODS, SYSTEMS, AND SUB-COMBINATIONS USEFUL IN MEDIA IDENTIFICATION |
|
|
|
|
|
|
|
P1257 |
|
11/620,993 |
|
1/8/2007 |
|
VISUAL CONTENT-BASED INTERNET SEARCH METHODS AND SUB-COMBINATIONS |
|
|
|
|
|
|
|
P1258 |
|
11/620,999 |
|
1/8/2007 |
|
AUDIO-BASED INTERNET SEARCH METHODS AND SUB-COMBINATIONS |
|
|
|
|
|
|
|
P1259 |
|
11/621,877 |
|
1/10/2007 |
|
METHODS TO EVALUATE IMAGES, VIDEO AND DOCUMENTS |
|
|
|
|
|
|
|
P1260 |
|
11/621,905 |
|
1/10/2007 |
|
APPARATUS TO PROCESS IMAGES, VIDEO AND OBJECTS |
|
|
|
|
|
|
|
P1262 |
|
11/621,459 |
|
1/9/2007 |
|
STEGANOGRAPHICALLY ENCODING METALLIC, SHINY OR SPECULAR SURFACES |
|
|
|
|
|
|
|
P1263 |
|
11/621,254 |
|
1/9/2007 |
|
ENHANCED PERIPHER INPUT |
|
|
|
|
|
|
|
P1265 |
|
11/622,373 |
|
1/11/2007 |
|
METHODS UTILIZING STEGANOGRAPHY |
|
|
|
|
|
|
|
P1267 |
|
11/625,125 |
|
1/19/2007 |
|
CAPTURING PHYSICAL FEATURE DATA |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1268 |
|
11/625,139 |
|
1/19/2007 |
|
METHODS AND CARDS EMPLOYING OPTICAL PHENOMENA |
|
|
|
|
|
|
|
P1269 |
|
11/625,162 |
|
1/19/2007 |
|
OBJECT PROCESSING EMPLOYING MOVEMENT |
|
|
|
|
|
|
|
P1270 |
|
11/671,371 |
|
2/5/2007 |
|
METHODS AND DEVICES EMPLOYING OPTICAL SENSORS AND/OR STEGANOGRAPHY |
|
|
|
|
|
|
|
P1271 |
|
11/670,841 |
|
2/2/2007 |
|
WIRELESS METHODS AND DEVICES EMPLOYING STEGANOGRAPHY |
|
|
|
|
|
|
|
P1273 |
|
11/626,150 |
|
1/23/2007 |
|
IDENTIFICATION DOCUMENTS AND AUTHENTICATION OF SUCH DOCUMENTS |
|
|
|
|
|
|
|
P1275 |
|
11/691,938 |
|
3/27/2007 |
|
METHOD AND APPARATUS FOR EMBEDDING AUXILIARY INFORMATION WITHIN ORIGINAL DATA |
|
|
|
|
|
|
|
P1276 |
|
11/671,291 |
|
2/5/2007 |
|
METHOD AND APPARATUS FOR CONTENT MANAGEMENT |
|
|
|
|
|
|
|
P1277 |
|
11/670,852 |
|
2/2/2007 |
|
WATERMARKING TO CONVEY AUXILIARY INFORMATION, AND MEDIA EMBODYING SAME |
|
|
|
|
|
|
|
P1278 |
|
11/668,927 |
|
1/30/2007 |
|
METHODS FOR MONITORING AUDIO AND IMAGES ON THE INTERNET |
|
|
|
|
|
|
|
P1279 |
|
11/669,016 |
|
1/30/2007 |
|
SOFT ERROR DECODING OF STEGANOGRAPHIC DATA |
|
|
|
|
|
|
|
P1281 |
|
11/672,313 |
|
2/7/2007 |
|
MONITORING OF VIDEO OR AUDIO BASED ON IN-BAND DATA AND OUT-OF-BAND DATA |
|
|
|
|
|
|
|
P1282 |
|
11/672,330 |
|
2/7/2007 |
|
DIGITAL WATERMARKING METHODS, SYSTEMS AND APPARATUS |
|
|
|
|
|
|
|
P1283 |
|
11/671,848 |
|
2/6/2007 |
|
METHODS AND DEVICES EMPLOYING CONTENT IDENTIFIERS |
|
|
|
|
|
|
|
P1284 |
|
11/671,888 |
|
2/6/2007 |
|
METHODS AND DEVICES EMPLOYING CONTENT IDENTIFIERS |
|
|
|
|
|
|
|
P1285 |
|
11/671,869 |
|
2/6/2007 |
|
METHODS AND DEVICES EMPLOYING CONTENT IDENTIFIERS |
|
|
|
|
|
|
|
P1286 |
|
11/672,354 |
|
2/7/2007 |
|
DIGITAL WATERMARKING METHODS, SYSTEMS AND APPARATUS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1287 |
|
11/673,931 |
|
2/12/2007 |
|
METHOD AND APPARATUS FOR ASSOCIATING IDENTIFIERS WITH CONTENT |
|
|
|
|
|
|
|
P1288 |
|
11/675,461 |
|
2/15/2007 |
|
AUTHENTICATING SIGNALS AND IDENTIFICATION AND SECURITY DOCUMENTS |
|
|
|
|
|
|
|
P1289 |
|
11/676,942 |
|
2/20/2007 |
|
AUDIO ENCODING TO CONVEY AUXILIARY INFORMATION, AND MEDIA EMBODYING SAME |
|
|
|
|
|
|
|
P1290 |
|
11/675,505 |
|
2/15/2007 |
|
DIGITAL AUTHENTICATION WITH DIGITAL AND ANALOG DOCUMENTS |
|
|
|
|
|
|
|
P1294 |
|
11/678,474 |
|
2/23/2007 |
|
METHODS AND SYSTEMS FOR STEGANOGRAPHIC PROCESSING |
|
|
|
|
|
|
|
P1295 |
|
11/682,802 |
|
3/6/2007 |
|
CONTENT PROCESSING METHODS USING REVERSIBLE WATERMARKING |
|
|
|
|
|
|
|
P1297 |
|
11/688,682 |
|
3/20/2007 |
|
ELECTRONIC FORMS INCLUDING DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P1299 |
|
11/695,523 |
|
4/2/2007 |
|
DIGITAL WATERMARK SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P1300 |
|
11/697,610 |
|
4/6/2007 |
|
IMPROVEMENTS IN SPEECH RECOGNITION, AND RELATED SYSTEMS |
|
|
|
|
|
|
|
P1301 |
|
11/733,094 |
|
4/9/2007 |
|
AUCTION METHODS AND SYSTEMS |
|
|
|
|
|
|
|
P1302 |
|
11/735,292 |
|
4/13/2007 |
|
METHODS AND SYSTEMS USEFUL IN LINKING FROM OBJECTS TO REMOTE RESOURCES |
|
|
|
|
|
|
|
P1304 |
|
11/738,973 |
|
4/23/2007 |
|
FINGERPRINTING OF MEDIA SIGNALS |
|
|
|
|
|
|
|
P1305 |
|
11/739,387 |
|
4/24/2007 |
|
SENSING DATA FROM PHYSICAL OBJECTS |
|
|
|
|
|
|
|
P1306 |
|
11/739,534 |
|
4/24/2007 |
|
SUBSTITUTING OBJECTS BASED ON STEGANOGRAPHIC ENCODING |
|
|
|
|
|
|
|
P1307 |
|
11/739,614 |
|
4/24/2007 |
|
AUTHENTICATING METADATA AND EMBEDDING METADATA IN WATERMARKS OF MEDIA SIGNALS |
|
|
|
|
|
|
|
P1309 |
|
11/740,140 |
|
4/25/2007 |
|
METHODS AND SYSTEMS RESPONSIVE TO FEATURES SENSED FROM IMAGERY OR OTHER DATA |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1310 |
|
11/745,909 |
|
5/8/2007 |
|
SECURITY FEATURES FOR OBJECTS AND METHOD REGARDING SAME |
|
|
|
|
|
|
|
P1311 |
|
11/746,804 |
|
5/10/2007 |
|
METHODS AND SYSTEMS EMPLOYING DIGITAL CONTENT |
|
|
|
|
|
|
|
P1312 |
|
11/746,811 |
|
5/10/2007 |
|
METHODS AND SYSTEMS EMPLOYING DIGITAL CONTENT |
|
|
|
|
|
|
|
P1313 |
|
11/748,851 |
|
5/15/2007 |
|
METHODS FOR GENERATING ENHANCED DIGITAL IMAGES |
|
|
|
|
|
|
|
P1314 |
|
11/752,137 |
|
5/22/2007 |
|
VIDEO STEGANOGRAPHY OR ENCODING |
|
|
|
|
|
|
|
P1315 |
|
11/754,919 |
|
5/29/2007 |
|
INTEGRATING STEGANOGRAPHIC ENCODING IN MULIMEDIA CONTENT |
|
|
|
|
|
|
|
P1316 |
|
60/939,580 |
|
5/22/2007 |
|
ROBUST SPECTRAL ENCODING METHOD |
|
|
|
|
|
|
|
P1317 |
|
11/754,126 |
|
5/25/2007 |
|
GESTURAL TECHNIQUES WITH WIRELESS MOBILE PHONE DEVICES |
|
|
|
|
|
|
|
P1318 |
|
11/756,418 |
|
5/31/2007 |
|
GESTURAL USE OF WIRELESS MOBILE PHONE DEVICES TO SIGNAL TO REMOTE SYSTEMS |
|
|
|
|
|
|
|
P1319 |
|
11/756,432 |
|
5/31/2007 |
|
WIRELESS MOBILE PHONE METHODS |
|
|
|
|
|
|
|
P1321 |
|
11/758,573 |
|
6/5/2007 |
|
DISTRIBUTED CONTENT IDENTIFICATION |
|
|
|
|
|
|
|
P1323 |
|
11/761,953 |
|
6/12/2007 |
|
ADAPTIVE PREDICTION FILTERING FOR DIGITAL WATERMARKING |
|
|
|
|
|
|
|
P1324 |
|
11/775,728 |
|
7/10/2007 |
|
METHODS EMPLOYING TOPICAL SUBJECT CRITERIA IN VIDEO PROCESSING |
|
|
|
|
|
|
|
P1325 |
|
11/775,734 |
|
7/10/2007 |
|
METHODS EMPLOYING TOPICAL SUBJECT CRITERIA IN VIDEO PROCESSING |
|
|
|
|
|
|
|
P1327 |
|
11/825,258 |
|
7/3/2007 |
|
IDENTIFICATION AND PROTECTION OF SECURITY DOCUMENTS |
|
|
|
|
|
|
|
P1328 |
|
11/775,726 |
|
7/10/2007 |
|
PROVIDING REPORTS ASSOCIATED WITH VIDEO AND AUDIO CONTENT |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1329 |
|
11/779,061 |
|
7/17/2007 |
|
DIGITAL WATERMARKS FOR CHECKING AUTHENTICITY OF PRINTED OBJECTS |
|
|
|
|
|
|
|
P1330 |
|
11/781,677 |
|
7/23/2007 |
|
DIGITAL WATERMARKING MAPS AND SIGNS, AND RELATED NAVIGATIONAL TOOLS |
|
|
|
|
|
|
|
P1331 |
|
11/781,781 |
|
7/23/2007 |
|
SECURING MEDIA CONTENT WITH STEGANOGRAPHIC ENCODING |
|
|
|
|
|
|
|
P1332 |
|
11/835,142 |
|
8/7/2007 |
|
EMBEDDING LOCATION DATA IN VIDEO |
|
|
|
|
|
|
|
P1333 |
|
11/866,145 |
|
10/2/2007 |
|
ASSESSING QUALITY OF SERVICE USING DIGITAL WATERMARK INFORMATION |
|
|
|
|
|
|
|
P1334 |
|
11/846,449 |
|
8/28/2007 |
|
DIGITAL WATERMARKS |
|
|
|
|
|
|
|
P1335 |
|
11/847,231 |
|
8/29/2007 |
|
MACHINE-READABLE FEATURES FOR OBJECTS |
|
|
|
|
|
|
|
P1336 |
|
11/847,914 |
|
8/30/2007 |
|
RIGHTS MANAGEMENT SYSTEM AND METHODS |
|
|
|
|
|
|
|
P1339 |
|
11/865,557 |
|
10/1/2007 |
|
RIGHTS MANAGEMENT SYSTEMS AND METHODS USING CONTENT IDENTIFIERS |
|
|
|
|
|
|
|
P1341 |
|
11/867,480 |
|
10/4/2007 |
|
METHODS FOR LINKING FROM OBJECTS TO REMOTE RESOURCES |
|
|
|
|
|
|
|
P1342 |
|
60/978,077 |
|
10/5/2007 |
|
CONTENT SERIALIZATION BY VARYING CONTENT PROPERTIES, INCLUDING VARYING MASTER COPY WATERMARK PROPERTIES |
|
|
|
|
|
|
|
P1345 |
|
11/874,054 |
|
10/17/2007 |
|
ASSOCIATING OBJECTS WITH CORRESPONDING BEHAVIORS |
|
|
|
|
|
|
|
P1346 |
|
11/875,551 |
|
10/19/2007 |
|
WIRELESS METHODS AND DEVICES EMPLOYING STEGANOGRAPHY |
|
|
|
|
|
|
|
P1347 |
|
11/876,583 |
|
10/22/2007 |
|
METHODS FOR CONTROLLING RENDERING OF IMAGES AND VIDEO |
|
|
|
|
|
|
|
P1348 |
|
11/923,355 |
|
10/24/2007 |
|
EMBEDDING DATA IN AUDIO AND DETECTING EMBEDDED DATA IN AUDIO |
|
|
|
|
|
|
|
P1349 |
|
11/877,450 |
|
10/23/2007 |
|
DIGITAL WATERMARKING APPARATUS AND METHODS |
|
|
|
|
|
|
|
P1350 |
|
11/877,463 |
|
10/23/2007 |
|
DETECTING MEDIA AREAS LIKELY OF HOSTING WATERMARKS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1351 |
|
11/877,518 |
|
10/23/2007 |
|
SECURE DOCUMENTS WITH HIDDEN SIGNALS, AND RELATED METHODS AND SYSTEMS |
|
|
|
|
|
|
|
P1352 |
|
11/877,486 |
|
10/23/2007 |
|
DIGITAL WATERMARK SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P1354 |
|
11/877,832 |
|
10/24/2007 |
|
CONTENT PROTECTION ARRANGEMENTS |
|
|
|
|
|
|
|
P1355 |
|
11/932,161 |
|
10/31/2007 |
|
CONTENT MANAGEMENT OF PUBLIC/PRIVATE CONTENT, INCLUDING USE OF DIGITAL WATERMARKS TO ACCESS PRIVATE CONTENT |
|
|
|
|
|
|
|
P1356 |
|
11/925,261 |
|
10/26/2007 |
|
AUDIO ENCODING TO CONVEY AUXILIARY INFORMATION, AND MEDIA EMBODYING SAME |
|
|
|
|
|
|
|
P1357 |
|
11/926,942 |
|
10/29/2007 |
|
EMBEDDING DATA IN AND DETECTING EMBEDDED DATA FROM VIDEO OBJECTS |
|
|
|
|
|
|
|
P1358 |
|
11/928,300 |
|
10/30/2007 |
|
VIDEO WATERMARKING USING TEMPORAL ANALYSIS |
|
|
|
|
|
|
|
P1359 |
|
11/929,137 |
|
10/30/2007 |
|
WATERMARKING USING MULTIPLE WATERMARKS AND KEYS, INCLUDING KEYS DEPENDENT ON THE HOST SIGNAL |
|
|
|
|
|
|
|
P1360 |
|
11/932,839 |
|
10/31/2007 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
|
|
|
|
|
|
|
P1361 |
|
11/925,303 |
|
10/26/2007 |
|
STEGANOGRAPHIC ENCODING AND DETECTING FOR VIDEO SIGNALS |
|
|
|
|
|
|
|
P1362 |
|
11/924,914 |
|
10/26/2007 |
|
SYSTEMS AND METHODS FOR PROCESSING CONTENT OBJECTS |
|
|
|
|
|
|
|
P1363 |
|
11/925,594 |
|
10/26/2007 |
|
USING OBJECT IDENTIFIERS WITH CONTENT DISTRIBUTION |
|
|
|
|
|
|
|
P1364 |
|
11/925,510 |
|
10/26/2007 |
|
AUTHENTICATION OF OBJECTS USING STEGANOGRAPHY |
|
|
|
|
|
|
|
P1365 |
|
11/925,602 |
|
10/26/2007 |
|
METHODS, OBJECTS AND APPARATUS EMPLOYING MACHINE READABLE DATA |
|
|
|
|
|
|
|
P1366 |
|
11/927,075 |
|
10/29/2007 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1367 |
|
11/927,168 |
|
10/29/2007 |
|
DIGITAL AUTHENTICATION WITH ANALOG DOCUMENTS |
|
|
|
|
|
|
|
P1368 |
|
11/927,117 |
|
10/29/2007 |
|
AUTHENTICATION OF IDENTIFICATION DOCUMENTS |
|
|
|
|
|
|
|
P1369 |
|
11/932,288 |
|
10/31/2007 |
|
NETWORK LINKING METHODS AND APPARATUS |
|
|
|
|
|
|
|
P1371 |
|
11/940,017 |
|
11/14/2007 |
|
DIGITAL WATERMARK SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P1372 |
|
11/940,837 |
|
11/15/2007 |
|
PHYSICAL CREDENTIALS AND RELATED METHODS |
|
|
|
|
|
|
|
P1373 |
|
11/941,268 |
|
11/16/2007 |
|
METHODS AND SYSTEMS RESPONSIVE TO FEATURES SENSED FROM IMAGERY OR OTHER DATA |
|
|
|
|
|
|
|
P1375 |
|
11/943,361 |
|
11/20/2007 |
|
DIGITAL WATERMARKS AS A GATEWAY AND CONTROL MECHANISM |
|
|
|
|
|
|
|
P1376 |
|
11/945,859 |
|
11/27/2007 |
|
CONTENT IDENTIFIERS |
|
|
|
|
|
|
|
P1377 |
|
61/016,321 |
|
12/21/2007 |
|
OPTIMIZING CONTENT FINGERPRINT SEARCHING AND CACHE MANAGEMENT |
|
|
|
|
|
|
|
P1378 |
|
12/001,764 |
|
12/11/2007 |
|
METHODS FOR MARKING IMAGES |
|
|
|
|
|
|
|
P1379 |
|
11/961,625 |
|
12/20/2007 |
|
METHODS FOR ANALYZING ELECTRONIC MEDIA INCLUDING VIDEO AND AUDIO |
|
|
|
|
|
|
|
P1381 |
|
12/014,690 |
|
1/15/2008 |
|
WAVELET DOMAIN WATERMARKS |
|
|
|
|
|
|
|
P1382 |
|
12/017,636 |
|
1/22/2008 |
|
DATA HIDING IN MEDIA |
|
|
|
|
|
|
|
P1383 |
|
12/030,135 |
|
2/12/2008 |
|
WATERMARKING EMPLOYING THE TIME-FREQUENCY DOMAIN |
|
|
|
|
|
|
|
P1384 |
|
61/034,850 |
|
3/11/2008 |
|
SOFTWARE WATERMARKING |
|
|
|
|
|
|
|
P1385 |
|
12/048,072 |
|
3/13/2008 |
|
METHOD AND SYSTEM FOR DETERMINING CONTENT TREATMENT |
|
|
|
|
|
|
|
P1386 |
|
12/050,000 |
|
3/17/2008 |
|
METHODS COMBINING MULTIPLE FRAMES OF IMAGE DATA |
Sch G (US Pending)
Docket Number |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
P1387 |
|
12/050,820 |
|
3/18/2008 |
|
WATERMARKNG A MEDIA SIGNAL BY ADJUSTING FREQUENCY COMAIN VALUES AND ADAPTING TO THE MEDIA SIGNAL |
|
|
|
|
|
|
|
P1388 |
|
12/057,745 |
|
3/28/2008 |
|
PERCEPTIBILITY MODEL APPLIED TO WATERMARK SIGNALS |
|
|
|
|
|
|
|
P1389 |
|
12/059,954 |
|
3/31/2008 |
|
LAYERED ABSTRACTION SYSTEMS AND METHODS FOR PERSISTENT CONTENT IDENTITY |
|
|
|
|
|
|
|
P1390 |
|
12/103,513 |
|
4/15/2008 |
|
APPARATUS AND METHODS TO PROCESS VIDEO OR AUDIO |
|
|
|
|
|
|
|
P1391 |
|
12/105,647 |
|
4/18/2008 |
|
METHOD AND APPARATUSES FOR PRINTER RECALIBRATION |
|
|
|
|
|
|
|
P1392 |
|
12/106,815 |
|
4/21/2008 |
|
WIRELESS METHODS USING SIGNATURE CODES |
|
|
|
|
|
|
|
P1393 |
|
12/107,484 |
|
4/22/2008 |
|
SUBSTITUTING OR REPLACING COMPONENTS IN MEDIA OBJECTS BASED ON STEGANOGRAPHIC ENCODING |
|
|
|
|
|
|
|
P1394 |
|
12/109,573 |
|
4/25/2008 |
|
CORRECTING IMAGE CAPTURE DISTORTION |
|
|
|
|
|
|
|
P1395 |
|
12/114,612 |
|
5/2/2008 |
|
METHODS FOR IDENTIFYING AUDIO OR VIDEO CONTENT |
|
|
|
|
|
|
|
P1397 |
|
12/116,633 |
|
5/7/2008 |
|
SYSTEMS AND METHODS FACILITATING COMMUNICATION WITH REMOTE COMPUTERS |
|
|
|
|
|
|
|
P1398 |
|
12/115,341 |
|
5/5/2008 |
|
DATA PROCESSING SYSTEMS AND METHODS |
|
|
|
|
|
|
|
P1399 |
|
12/116,143 |
|
5/6/2008 |
|
ROUTING NETWORKS FOR USE WITH CONTENT LINKING SYSTEMS |
|
|
|
|
|
|
|
P1400 |
|
12/116,117 |
|
5/6/2008 |
|
DETECTING EMBEDDED SIGNALS IN MEDIA CONTENT USING COINCIDENCE METRICS |
|
|
|
|
|
|
|
P1401 |
|
12/116,645 |
|
5/7/2008 |
|
CONTROLLING USE OF AUDIO OR IMAGE CONTENT |
|
|
|
|
|
|
|
P1402 |
|
12/120,150 |
|
5/13/2008 |
|
CONTENT INDEXING AND SEARCHING USING CONTENT IDENTIFIERS AND ASSOCIATED METADATA |
Sch G (US Pending)
Sch H (Foreign Pending)
Docket Number |
|
Country |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
|
|
53039-DIV-HK |
|
Hong Kong |
|
5108893.6 |
|
10/6/2005 |
|
VIDEO WITH HIDDEN IN-BAND DIGITAL DATA |
|
|
|
|
|
|
|
|
|
53039-EP-DIV |
|
European Patent Convention |
|
4030490.9 |
|
11/16/1994 |
|
VIDEO WITH HIDDEN IN-BAND DIGITAL DATA |
|
|
|
|
|
|
|
|
|
EWG-085- CA |
|
Canada |
|
2,318,564 |
|
1/20/1999 |
|
Multiple Watermarking Techniques |
|
|
|
|
|
|
|
|
|
P0019 44771-CA |
|
Canada |
|
2,174,413 |
|
11/16/1994 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS |
|
|
|
|
|
|
|
|
|
P0025 48700 |
|
Japan |
|
534,258/96 |
|
5/7/1996 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
P0025 48700DIV1 |
|
Japan |
|
2007-124835 |
|
5/7/1996 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
P0025 48700DIV2 |
|
Japan |
|
2007-124838 |
|
5/7/1996 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
P0027 48702-DIV |
|
Canada |
|
2,483,419 |
|
5/7/1996 |
|
STEGANOGRAPHY SYSTEMS |
|
|
|
|
|
|
|
|
|
P0029 49622-DIV |
|
Canada |
|
2,504,316 |
|
7/30/1993 |
|
METHOD AND SYSTEM FOR DIGITAL IMAGE SIGNATURES |
|
|
|
|
|
|
|
|
|
P0031 49624DIV3 |
|
Japan |
|
2007-208188 |
|
8/9/2007 |
|
METHOD AND SYSTEM FOR DIGITAL IMAGE SIGNATURES |
|
|
|
|
|
|
|
|
|
P0031 49624DIV4 |
|
Japan |
|
2007-108405 |
|
4/17/2007 |
|
METHOD AND SYSTEM FOR DIGITAL IMAGE SIGNATURES |
|
|
|
|
|
|
|
|
|
P0075 60002 |
|
European Patent Convention |
|
97924752.5 |
|
5/16/1997 |
|
COMPUTER SYSTEM LINKED BY USING INFORMATION IN DATA OBJECTS |
|
|
|
|
|
|
|
|
|
P0213 60294 |
|
Canada |
|
2,326,565 |
|
4/14/1999 |
|
DIGITAL WATERMARKING AND BANKNOTES |
|
|
|
|
|
|
|
|
|
P021560296-DIV2 |
|
Japan |
|
2007-303525 |
|
4/14/1999 |
|
DIGITAL WATERMARKING AND BANKNOTES |
|
|
|
|
|
|
|
|
|
P0265-DIV1 |
|
China P.R. |
|
2.0071E+11 |
|
6/24/1999 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
Sch H (Foreign Pending)
Docket Number |
|
Country |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
|
|
P0265-HK |
|
Hong Kong |
|
5111612 |
|
12/15/2005 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
P0266 |
|
India |
|
IN/PCT/2001/00029 |
|
6/24/1999 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
P0267 |
|
European Patent Convention |
|
99931962.7 |
|
6/24/1999 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
P0271 |
|
South Africa |
|
20010615 |
|
6/24/1999 |
|
DIGITAL WATERMARKS AND METHODS FOR SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
P0277 |
|
Hong Kong |
|
106041.6 |
|
9/25/2000 |
|
COMPUTER SYSTEM LINKED BY USING INFORMATION IN DATA OBJECTS |
|
|
|
|
|
|
|
|
|
P0398 |
|
Japan |
|
604,566/2000 |
|
3/10/2000 |
|
SIGNAL PROCESSING METHODS, DEVICES, AND APPLICATIONS FOR DIGITAL RIGHTS MANAGEMENT |
|
|
|
|
|
|
|
|
|
P0401 |
|
Canada |
|
2,364,433 |
|
3/10/2000 |
|
SIGNAL PROCESSING METHODS, DEVICES, AND APPLICATIONS FOR DIGITAL RIGHTS MANAGEMENT\nKEN LEVY CASE!!! |
|
|
|
|
|
|
|
|
|
P0453 |
|
Canada |
|
2,373,208 |
|
5/18/2000 |
|
METHODS AND SYSTEMS FOR PROCESSING AUDIO |
|
|
|
|
|
|
|
|
|
P0454 |
|
European Patent Convention |
|
936096.7 |
|
5/18/2000 |
|
METHODS AND SYSTEMS EMPLOYING DIGITAL WATERMARKING IN MUSIC AND OTHER MEDIA |
|
|
|
|
|
|
|
|
|
P0455 |
|
Japan |
|
P2000-618895 |
|
5/18/2000 |
|
METHODS AND SYSTEMS EMPLOYING DIGITAL WATERMARKING IN MUSIC AND OTHER MEDIA |
|
|
|
|
|
|
|
|
|
P0456 |
|
South Korea |
|
10-2001-7014759 |
|
5/18/2000 |
|
METHODS AND SYSTEMS EMPLOYING DIGITAL WATERMARKING IN MUSIC AND OTHER MEDIA |
Sch H (Foreign Pending)
Docket Number |
|
Country |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
|
|
P0457S-DIV |
|
Australia |
|
200505804 |
|
5/15/2000 |
|
METHODS AND SYSTEMS FOR CONTROLLING COMPUTERS OR LINKING TO INTERNET RESOURCES FROM PHYSICAL AND ELECTRONIC OBJECTS |
|
|
|
|
|
|
|
|
|
P0458 |
|
Canada |
|
2,373,511 |
|
5/15/2000 |
|
METHODS AND SYSTEMS FOR CONTROLLING COMPUTERS OR LINKING TO INTERNET RESOURCES FROM PHYSICAL AND ELECTRONIC OBJECTS |
|
|
|
|
|
|
|
|
|
P0460 |
|
Japan |
|
P2000-618954 |
|
5/15/2000 |
|
METHODS AND SYSTEMS FOR CONTROLLING COMPUTERS OR LINKING INTERNET RESOURCES FROM PHYSICAL AND ELECTRONIC OBJECTS |
|
|
|
|
|
|
|
|
|
P0461 |
|
South Korea |
|
10-2001-7014758 |
|
5/15/2000 |
|
METHODS AND SYSTEMS FOR CONTROLLING COMPUTERS OR LINKING TO INTERNET RESOURCES FROM PHYSICAL AND ELECTRONIC OBJECTS |
|
|
|
|
|
|
|
|
|
P0634 |
|
Japan |
|
2001-549260 |
|
12/21/2000 |
|
DIGITAL WATERMARKS AS DATA PROXIES |
|
|
|
|
|
|
|
|
|
P0635 |
|
South Korea |
|
10-2002-7008469 |
|
12/21/2000 |
|
DIGITAL WATERMARKS AS DATA PROXIES |
|
|
|
|
|
|
|
|
|
P0636 |
|
Japan |
|
2001-552328 |
|
1/11/2001 |
|
AUTHENTICATING METADATA AND EMBEDDING METADATA IN WATERMARKS OF MEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
P0637 |
|
South Korea |
|
10-2002-7009046 |
|
1/11/2001 |
|
AUTHENTICATING METADATA AND EMBEDDING METADATA IN WATERMARKS OF MEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
P0638 |
|
European Patent Convention |
|
1942456.3 |
|
1/11/2001 |
|
AUTHENTICATING METADATA AND EMBEDDING METADATA IN WATERMARKS OF MEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
P0653L |
|
Japan |
|
2001-555365 |
|
1/25/2001 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
Sch H (Foreign Pending)
Docket Number |
|
Country |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
|
|
P0654 |
|
European Patent Convention |
|
1906702.4 |
|
1/25/2001 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
|
|
|
|
|
|
|
|
|
P0655 |
|
South Korea |
|
10-2002-7009576 |
|
1/25/2001 |
|
CONNECTED AUDIO AND OTHER MEDIA OBJECTS |
|
|
|
|
|
|
|
|
|
P0656 |
|
Japan |
|
2001-560828 |
|
2/14/2001 |
|
WATERMARK ENCODER AND DECODER ENABLED SOFTWARE |
|
|
|
|
|
|
|
|
|
P0657 |
|
European Patent Convention |
|
1909242.8 |
|
2/14/2001 |
|
WATERMARK ENCODER AND DECODER ENABLED SOFTWARE |
|
|
|
|
|
|
|
|
|
P0658-DIV-KR |
|
South Korea |
|
10-2007-7014559 |
|
2/14/2001 |
|
WATERMARK ENCODER AND DECODER ENABLED SOFTWARE |
|
|
|
|
|
|
|
|
|
P0670 |
|
Japan |
|
2001-570009 |
|
3/16/2001 |
|
TRANSMARKING, WATERMARK EMBEDDING FUNCTIONS AS RENDERING COMMANDS, AND FEATURE-BASED WATERMARKING OF MULTIMEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
P0671 |
|
European Patent Convention |
|
1920399.1 |
|
3/16/2001 |
|
TRANSMARKING, WATERMARK EMBEDDING FUNCTIONS AS RENDERING COMMANDS, AND FEATURE-BASED WATERMARKING OF MULTIMEDIA SIGNALS |
|
|
|
|
|
|
|
|
|
P0738-EP |
|
European Patent Convention |
|
2797258.7 |
|
12/9/2002 |
|
FORENSIC DIGITAL WATERMARKING WITH VARIABLE ORIENTATION AND PROTOCOLS |
|
|
|
|
|
|
|
|
|
P0738-JP |
|
Japan |
|
2003-553418 |
|
12/9/2002 |
|
FORENSIC DIGITAL WATERMARKING WITH VARIABLE ORIENTATION AND PROTOCOLS |
|
|
|
|
|
|
|
|
|
P0739EP-DIV |
|
European Patent Convention |
|
7004478.9 |
|
7/20/2001 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
|
|
P0740 |
|
South Korea |
|
10-2003-7000844 |
|
7/20/2001 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
|
|
P0741 |
|
Japan |
|
2002-514579 |
|
7/20/2001 |
|
USING EMBEDDED DATA WITH FILE SHARING |
Sch H (Foreign Pending)
Docket Number |
|
Country |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
|
|
P0742 |
|
Canada |
|
2416530 |
|
7/20/2001 |
|
USING EMBEDDED DATA WITH FILE SHARING |
|
|
|
|
|
|
|
|
|
P0744 |
|
Japan |
|
2002-515380 |
|
7/30/2001 |
|
DIGITAL WATERMARKS AND TRADING CARDS |
|
|
|
|
|
|
|
|
|
P0745 |
|
European Patent Convention |
|
1954933.6 |
|
7/24/2001 |
|
AUTHENTICATION WATERMARKS FOR PRINTED OBJECTS AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
P0747 |
|
Japan |
|
2002-514649 |
|
7/24/2001 |
|
AUTHENTICATION WATERMARKS FOR PRINTED OBJECTS AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
P0768-HK |
|
Hong Kong |
|
3101649 |
|
3/6/2003 |
|
WATERMARK ENCODER AND DECODER ENABLED SOFTWARE |
|
|
|
|
|
|
|
|
|
P0790-EP |
|
European Patent Convention |
|
3709137.8 |
|
2/14/2003 |
|
AUTHENTICATING PRINTED DOCUMENTS USING DIGITAL WATERMARKS ASSOCIATED WITH MULTIDIMENSIONAL QUALITY METRICS (Pitney Bowes) |
|
|
|
|
|
|
|
|
|
P0795-JP |
|
Japan |
|
2002-535062 |
|
10/10/2001 |
|
HALFTONE WATERMARKING AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
P0795-JP-DIV |
|
Japan |
|
2006-083301 |
|
10/10/2001 |
|
HALFTONE WATERMARKING AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
P0801-EP |
|
European Patent Convention |
|
1988889 |
|
10/25/2001 |
|
DIGITALLY MARKED OBJECTS AND PROMOTIONAL METHODS |
|
|
|
|
|
|
|
|
|
P0802-AU |
|
Australia |
|
2002211634 |
|
10/10/2001 |
|
HALFTONE WATERMARKING AND RELATED APPLICATIONS |
|
|
|
|
|
|
|
|
|
P0863S |
|
European Patent Convention |
|
3021208.8 |
|
5/7/1996 |
|
METHOD OF EMBEDDING A MACHINE READABLE STEGANOGRAPHIC CODE IN A DOCUMENT |
|
|
|
|
|
|
|
|
|
P0894-CA |
|
Canada |
|
2,502,232 |
|
10/14/2003 |
|
IDENTIFICATION DOCUMENTS AND RELATED METHODS |
|
|
|
|
|
|
|
|
|
P0894-EP |
|
European Patent Convention |
|
3779118.3 |
|
10/14/2003 |
|
IDENTIFICATION DOCUMENTS AND RELATED METHODS |
Sch H (Foreign Pending)
Docket Number |
|
Country |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
|
|
P0894-HK |
|
Hong Kong |
|
6100621.1 |
|
1/13/2006 |
|
IDENTIFICATION DOCUMENTS AND RELATED METHODS |
|
|
|
|
|
|
|
|
|
P0913-EP |
|
European Patent Convention |
|
3790079.2 |
|
11/26/2003 |
|
SYSTEMS AND METHODS FOR AUTHENTICATION OF PRINT MEDIA |
|
|
|
|
|
|
|
|
|
P0913-JP |
|
Japan |
|
3790079.2 |
|
11/26/2003 |
|
SYSTEMS AND METHODS FOR AUTHENTICATION OF PRINT MEDIA |
|
|
|
|
|
|
|
|
|
P0920S-EP |
|
European Patent Convention |
|
2744779.6 |
|
7/1/2002 |
|
HIDING INFORMATION OUT-OF-PHASE IN COLOR CHANNELS |
|
|
|
|
|
|
|
|
|
P0946-EP |
|
European Patent Convention |
|
4718025.2 |
|
3/5/2004 |
|
CAMERA AND DIGITAL WATERMARKING SYSTEMS AND METHODS |
|
|
|
|
|
|
|
|
|
P0946-JP |
|
Japan |
|
2006-509158 |
|
3/5/2004 |
|
CAMERA AND DIGITAL WATERMARKING SYSTEMS AND METHODS |
|
|
|
|
|
|
|
|
|
P0946-KR |
|
South Korea |
|
10-2550-7016613 |
|
3/5/2004 |
|
CAMERA AND DIGITAL WATERMARKING SYSTEMS AND METHODS |
|
|
|
|
|
|
|
|
|
P0948-EP |
|
European Patent Convention |
|
4718023.7 |
|
3/5/2004 |
|
CONTENT IDENTIFICATION, PERSONAL DOMAIN, COPYRIGHT NOTIFICATION, METADATA AND E-COMMERCE |
|
|
|
|
|
|
|
|
|
P0948-JP |
|
Japan |
|
P22006-509157 |
|
3/5/2004 |
|
CONTENT IDENTIFICATION, PERSONAL DOMAIN, COPYRIGHT NOTIFICATION, METADATA AND E-COMMERCE |
|
|
|
|
|
|
|
|
|
P0969-JP |
|
Japan |
|
2004-114515 |
|
11/16/1994 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS- DIV OF 44769 |
|
|
|
|
|
|
|
|
|
P0969-JP-DIV |
|
Japan |
|
2007-025998 |
|
11/16/1994 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS- DIV OF 44769 |
|
|
|
|
|
|
|
|
|
P1013-CA |
|
Canada |
|
2532296 |
|
7/16/2004 |
|
UNIQUELY LINKING SECURITY ELEMENTS IN IDENTIFICATION DOCUMENTS |
Sch H (Foreign Pending)
Docket Number |
|
Country |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
|
|
P1013-EP |
|
European Patent Convention |
|
4778348.5 |
|
7/16/2004 |
|
UNIQUELY LINKING SECURITY ELEMENTS IN IDENTIFICATION DOCUMENTS |
|
|
|
|
|
|
|
|
|
P1013-HK |
|
Hong Kong |
|
6105861.9 |
|
5/22/2006 |
|
UNIQUELY LINKING SECURITY ELEMENTS IN IDENTIFICATION DOCUMENTS |
|
|
|
|
|
|
|
|
|
P1040-JP |
|
Japan |
|
2004-326916 |
|
11/16/1994 |
|
IDENTIFICATION/AUTHENTICATION CODING METHOD AND APPARATUS - Div of 44769 |
|
|
|
|
|
|
|
|
|
P1061-EP |
|
European Patent Convention |
|
5722787.8 |
|
2/3/2005 |
|
DIGITAL WATERMARKING IMAGE SIGNALS ON-CHIP AND PHOTOGRAPHIC TRAVEL LOGS THROUGH DIGITAL WATERMARKING |
|
|
|
|
|
|
|
|
|
P1061-JP |
|
Japan |
|
2006-552319 |
|
2/3/2005 |
|
DIGITAL WATERMARKING IMAGE SIGNALS ON-CHIP AND PHOTOGRAPHIC TRAVEL LOGS THROUGH DIGITAL WATERMARKING |
|
|
|
|
|
|
|
|
|
P1076-EP |
|
European Patent Convention |
|
5729199.9 |
|
3/18/2005 |
|
WATERMARK PAYLOAD ENCRYPTION METHODS AND SYSTEMS |
|
|
|
|
|
|
|
|
|
P1082-JP |
|
Japan |
|
2007-504140 |
|
3/18/2005 |
|
SYNCHRONIZING BROADCAST CONTENT WITH CORRESPONDING NETWORK CONTENT |
|
|
|
|
|
|
|
|
|
P1123-JP |
|
Japan |
|
2007-518107 |
|
6/13/2005 |
|
DIGITAL ASSET MANAGEMENT, TARGETED SEARCHING AND DESKTOP SEARCHING USING DIGITAL WATERMARKS |
|
|
|
|
|
|
|
|
|
P1136-CN |
|
China P.R. |
|
2.0058E+11 |
|
8/5/2005 |
|
FAST SIGNAL DETECTION AND DISTRIBUTED COMPUTING IN PORTABLE COMPUTING DEVICES |
|
|
|
|
|
|
|
|
|
P1136-EP |
|
European Patent Convention |
|
5783829.4 |
|
8/5/2005 |
|
FAST SIGNAL DETECTION AND DISTRIBUTED COMPUTING IN PORTABLE COMPUTING DEVICES |
Sch H (Foreign Pending)
Docket Number |
|
Country |
|
Application Number |
|
Application Date |
|
Title |
|
|
|
|
|
|
|
|
|
P1136-JP |
|
Japan |
|
2007-524987 |
|
8/5/2005 |
|
FAST SIGNAL DETECTION AND DISTRIBUTED COMPUTING IN PORTABLE COMPUTING DEVICES |
|
|
|
|
|
|
|
|
|
P1150-EP |
|
European Patent Convention |
|
5818684.2 |
|
11/8/2005 |
|
AUTHENTICATING IDENTIFICATION AND SECURITY DOCUMENTS |
|
|
|
|
|
|
|
|
|
P1246 |
|
Patent Cooperation Treaty |
|
PCT/US06/62523 |
|
12/21/2006 |
|
RULES DRIVEN PAN ID METADATA ROUTING SYSTEM AND NETWORK |
|
|
|
|
|
|
|
|
|
P1266 |
|
Patent Cooperation Treaty |
|
PCT/US07/60788 |
|
1/19/2007 |
|
METHODS, SYSTEMS, AND SUBCOMBINATIONS USEFUL WITH PHYSICAL ARTICLES |
|
|
|
|
|
|
|
|
|
P1280 |
|
Patent Cooperation Treaty |
|
PCT/US07/061693 |
|
2/6/2007 |
|
GEOGRAPHIC-BASED WATERMARKING KEYS |
|
|
|
|
|
|
|
|
|
P1291 |
|
Patent Cooperation Treaty |
|
PCT/US07/62608 |
|
2/22/2007 |
|
SAFEGUARDING PRIVATE INFORMATION THROUGH DIGITAL WATERMARKING |
|
|
|
|
|
|
|
|
|
P1374 |
|
Patent Cooperation Treaty |
|
PCT/US07/84933 |
|
11/16/2007 |
|
METHODS AND SYSTEMS RESPONSIVE TO FEATURES SENSED FROM IMAGERY OR OTHER DATA |
|
|
|
|
|
|
|
|
|
P1246-CA |
|
Canada |
|
not yet assigned |
|
12/21/2006 |
|
RULES DRIVEN PAN ID METADATA ROUTING SYSTEM AND NETWORK |
|
|
|
|
|
|
|
|
|
P1246-JP |
|
Japan |
|
not yet assigned |
|
12/21/2006 |
|
RULES DRIVEN PAN ID METADATA ROUTING SYSTEM AND NETWORK |
Schedule I
Service Terms and Conditions
Schedule I to License Agreement
Service Terms and Conditions
Capitalized terms used but not otherwise defined in these Service Terms and Conditions shall have the meanings given to such terms in the License Agreement to which these Service Terms and Conditions are attached as Schedule I (License Agreement) or in the Separation Agreement, as the case may be.
ARTICLE I
SERVICES
DMRC shall provide services to the Company to maintain and support the IDMarc Software and to customize the IDMarc Software, IDMarc Source Code and/or DMRC Digital Watermarking Platform for use and exploitation by the Company within the Secure ID Field, and any other services related to the IDMarc Software, IDMarc Source Code and/or DMRC Digital Watermarking Platform (other than the training and technical assistance to be provided by DMRC to the Company pursuant to Section 2.2(c) of the License Agreement). DMRC may also provide services to the Company mutually agreed upon by the parties relating to research, development, engineering, quality assurance, preparing, obtaining and maintaining jointly owned patents, project management, reporting, and such other services or activities as the parties may mutually agree. All of the foregoing services in this Article I are collectively referred to as Services .
ARTICLE II
PERFORMANCE OF SERVICES
Section 2.1. Manner of Performance . DMRC shall provide the Services being requested herein with the degree of care, skill, confidentiality and diligence consistent with its current practices, but in no event less than in conformance with industry standards. Subject to Section 2.2 below, DMRC shall ensure that its personnel providing services hereunder shall devote sufficient time and effort as reasonably required to perform the Services.
Section 2.2. Statement of Work . All Services will be provided by DMRC pursuant to a written Statement of Work mutually agreed upon and signed by DMRC and the Company (each a Statement of Work ). If the amount of work requested by the Company in a calendar quarter will exceed the expected quarterly hours of one full-time equivalent employee, the parties will reach agreement on the particular services to be performed and expenditures to be made by DMRC before the work begins.
Each Statement of Work shall be successively numbered (i.e., 1, 2, 3 and so on) and include, among other things mutually agreed upon by DMRC and the Company, a description of the work or services to be provided and any deliverables (and specifications therefor), any fees for such
work, services and deliverables, a timetable for completion of such work, services and deliverables, and any maintenance and support obligations relating to such deliverables. Any such Statement of Work shall take into account DMRCs available resources.
DMRC and the Company agree that each party shall designate, and set forth in each Statement of Work, the name of a qualified representative of such party to serve as the primary point of contact for all communications relating to the performance of such Statement of Work. Neither party shall be obligated under any Statement of Work unless and until such Statement of Work is signed by a duly authorized representative of each party.
If DMRC reasonably believes that any requested changes to a Statement of Work will result in additional expenditures exceeding any pre-approved expenditures by the Company in such Statement of Work, it shall so inform the Company. If the Company and DMRC agree to the requested changes and such additional expenditures, they shall amend such Statement of Work to reflect such changes.
Section 2.3. Provision of Information . Any data, information, equipment or general directions necessary for DMRC to perform the Services shall be provided to DMRC in a timely manner.
Section 2.4. Laws and Regulations . The parties agree that they will provide and use the results of the Services contemplated hereunder only in accordance with all applicable federal, state and local laws and regulations, and in accordance with the conditions, rules, regulations and specifications which may be set forth in any manuals, materials, documents or instructions provided to DMRC on or prior to the date of any Statement of Work.
Section 2.5. No Representations or Warranties .
2.5.1. THE PARTIES MAKE NO EXPRESS REPRESENTATIONS OR WARRANTIES EXCEPT THOSE EXPRESSLY STATED IN THESE SERVICE TERMS AND CONDITIONS OR ANY STATEMENT OF WORK.
2.5.2. EXCEPT FOR THOSE EXPRESSLY STATED IN THESE SERVICE TERMS AND CONDITIONS OR ANY STATEMENT OF WORK, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, REPRESENTATIONS AND CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, TO THE FULL EXTENT PERMISSIBLE, INCLUDING, BUT NOT LIMITED TO, AVAILABILITY, ACCURACY, COMPLETENESS, CORRECTNESS, RELIABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT WITH RESPECT TO THE SERVICES, GOODS OR PRODUCTS FURNISHED IN CONNECTION HEREWITH.
Section 2.6. Employees; Use of Subcontractors . DMRC shall employ the employees necessary to enable it to perform the Services under the terms of the applicable Statement of Work. If DMRC is unable to retain one or more employees necessary to provide or perform the Services for which DMRC is obligated under any Statement of Work, DMRC may hire or engage one or more subcontractors to perform one or more of such Services; provided , that DMRC will in all cases remain responsible for its respective obligations under such Statement of
Work, these Service Terms and Conditions and the License Agreement, including, without limitation, with respect to the scope of the Services, the standard for Services and the content of the Services provided. Under no circumstances will the Company be responsible for making any payments directly to any subcontractor engaged by DMRC.
ARTICLE III
CHARGES FOR SERVICES
DMRC agrees that any fees charged to the Company with respect to any Services provided under any Statement of Work will be commercially reasonable fees that DMRC charges to its other similarly situated customers for similar services.
ARTICLE IV
PAYMENT OF CHARGES AND REIMBURSEMENTS
Section 4.1. Invoice and Payment . On or before the 30th day of each month during the term of any Statement of Work and, if payments are due, after such term, DMRC shall submit to the Company an invoice for the Services provided under such Statement of Work during the immediately preceding calendar month representing amounts determined in accordance with Article III above, if any. Subject to Section 5.2 below, the Company shall remit payment to DMRC within thirty (30) days after its receipt of such invoice. Unless otherwise agreed to in writing, the Company shall remit all funds due under any Statement of Work to DMRC (or its designee) by wire transfer in immediately available funds.
Section 4.2. Out-of-pocket Expenditures . The invoice shall also be accompanied by an itemization of those out-of-pocket expenditures reasonably incurred by DMRC in performing the Services.
ARTICLE V
RECORDS AND AUDITS
Section 5.1. Records Maintenance and Audits . DMRC shall, for two (2) years after the completion or termination of any Statement of Work, maintain records and other evidence sufficient to accurately and properly calculate any amounts due pursuant to Articles III and IV hereof. The Company, or any of its officers, directors, employees, and other agents and representatives, including attorneys, agents, customers, suppliers, contractors and consultants (collectively, Representatives ), shall have reasonable access, after requesting such access in writing, during normal business hours to such records for the purpose of auditing and verifying the accuracy of the invoices submitted regarding such amounts due; provided, however, that DMRC may redact such records to preserve the confidentiality of DMRC Confidential Information (as defined in the License Agreement) that is not necessary to verify the accuracy of the invoices. Any such audits performed by or on behalf of the Company shall be at the Companys sole cost and expense, unless the results of such audit reveals a five percent (5%) or
more discrepancy in favor of the Company, in which case DMRC shall pay all reasonable costs and expenses directly associated with such audit. DMRC shall reasonably cooperate with the Companys Representatives to accomplish the audit. The Company shall have the right to audit DMRCs books for a period of one (1) year after the month in which the Services were rendered.
Section 5.2. Disputed Amounts . In the event of a good-faith dispute as to the amount or propriety of any invoice or any portions thereof submitted pursuant to Articles III and IV , the Company shall pay all charges on such invoice other than disputed amounts and shall promptly notify DMRC in writing of such disputed amounts. As long as the parties are attempting in good faith to resolve the dispute, neither party shall be entitled to terminate the Services related to, or that are the cause of, the disputed amounts.
Section 5.3. Undisputed Amounts . Any statement or payment not disputed in writing by the Company within one (1) year after the month in which the Services were rendered shall be considered final and no longer subject to adjustment.
ARTICLE VI
INTELLECTUAL PROPERTY
Section 6.1. Intellectual Property and Technology Arising from the Services .
6.1.1. Intellectual Property and Technology arising from the Services and jointly developed, created or conceived by the Company and DMRC shall be jointly owned by the parties as equal co-owners (the Jointly Owned IP ).
6.1.2. Other Intellectual Property and Technology arising from the Services and solely developed, created or conceived by DMRC shall be owned by DMRC and, subject to Section 6.2 below, exclusively licensed to the Company for the Secure ID Field. DMRC agrees to grant such exclusive license in each relevant Statement of Work.
Section 6.2 Services Outside of the Secure ID Field . If any project mutually agreed by the parties to be included in the Services will apply outside of the Secure ID Field or will apply both within and outside of the Secure ID Field, the scope of the exclusive license to be granted as set forth in Section 6.1.2 above for such work will be commensurate with such application. The parties may also discuss licensing to the Company pre-existing rights to DMRC Patents and/or other DMRC patents supporting such application. This clause is subject to any agreements that DMRC has entered into prior to any such project being agreed upon by DMRC and the Company.
Section 6.3. No Implied Licenses . Nothing contained in these Service Terms and Conditions will be construed as conferring by implication, estoppel or otherwise, any license or other right under any Intellectual Property rights of either party except as expressly set forth in these Service Terms and Conditions, any Statement of Work or the License Agreement.
Section 6.4. Patent Prosecution . The parties shall endeavor to identify potentially patentable inventions arising from the Services relating to the Jointly Owned IP. As such inventions are
identified and the filing of patent applications is agreed upon by the parties, (a) DMRC will have primary responsibility to manage the process of applying for, prosecuting and maintaining patents relating to Jointly Owned IP that is primarily related to the Digital Watermarking Field and (b) the Company will have primary responsibility to manage the process of applying for, prosecuting and maintaining patents relating to Jointly Owned IP that is primarily related to the Secure ID Field (DMRC (in the case of (a)) and the Company (in the case of (b)), each a Prosecuting Party ). All patents and patent applications that claim any Jointly Owned IP shall be jointly owned by DMRC and the Company.
The parties shall agree upon a process enabling the non-Prosecuting Party to have prior review of patent applications relating to Jointly Owned IP for which the Prosecuting Party is responsible for preparing and prosecuting. DMRC and the Company shall share the reasonable expenses (including reasonable in-house or outside attorneys fees, filing fees and maintenance costs) incurred by the Prosecuting Party in the prosecution and maintenance of such patent applications and resulting patents on an equal (50/50) basis, including reasonable expenses incurred after the termination of the relevant Statement of Work or the License Agreement.
Notwithstanding the foregoing, either party may decide, at any time, that it does not wish to pay its share of the costs of applying for, prosecuting or maintaining any patent or patent application relating to Jointly Owned IP, which decision can be made on a jurisdiction by jurisdiction basis. In that event, the other party has the option either to abandon such patent or patent application, or to proceed on its own to pay the remaining costs of applying for, prosecuting or maintaining such patent or patent application. If either party elects not to pay its share of the costs of applying for, prosecuting or maintaining such patent or patent application, notwithstanding that the other party may elect to apply for, prosecute and maintain such patent or patent application, the parties respective ownership and rights in such patent or patent application shall otherwise remain unchanged.
All costs and expenses reasonably incurred by the Prosecuting Party that are to be paid by the non-Prosecuting Party pursuant to this Section 6.4 shall be invoiced by the Prosecuting Party and paid by the non-Prosecuting Party pursuant to Article IV above.
Section 6.5. Exploitation of Jointly Owned IP . Each party shall have the right to fully exploit the Jointly Owned IP (including any patents that claim any Jointly Owned IP). Each party shall be entitled to retain all revenue obtained by it from third parties (without reporting or accounting to the other) as a result of any revenue generating activities with respect to any Jointly Owned IP.
ARTICLE VII
CONFIDENTIALITY
Section 7.1. Source Code for DMRC Digital Watermarking Platform .
7.1.1 Before any source code for the DMRC Digital Watermarking Platform or any other digital watermarking source code (excluding the IDMarc Source Code) shall be provided to
the Company, the parties will agree on the obligations of the Company to adopt and maintain a very high level of security related to maintaining the confidentiality of such source code.
7.1.2 The Company agrees to use any such source code in its possession, custody or control for the sole and exclusive purpose of exploitation by the Company within the Secure ID Field (and for any other purpose as DMRC and the Company may mutually agree upon in writing or in any Statement of Work).
7.1.3. The Company agrees not to assign, sell, distribute, license or otherwise transfer any of such source code in a manner inconsistent with the License Agreement, these Service Terms and Conditions or any Statement of Work.
7.1.4. The Company shall advise DMRC immediately in the event that the Company learns or has reason to believe that any person to whom the Company has given access to such source code, or any portion thereof, has violated or intends to violate the terms of this Service Terms and Conditions. The Company shall, at the Companys expense, reasonably cooperate with DMRC in seeking injunctive or other equitable relief against any such person.
ARTICLE VIII
TERM OF SERVICE TERMS AND CONDITIONS
Unless sooner terminated pursuant to Article IX hereof or extended as mutually agreed upon in writing by DMRC and the Company, these Service Terms and Conditions shall be effective for a term commencing at the Acceptance Time and ending five (5) years after the Acceptance Time.
ARTICLE IX
TERMINATION
Section 9.1. Termination of Service Terms and Conditions or Statement of Work . These Service Terms and Conditions or any Statement of Work may be terminated after the Acceptance Time:
(a) at the election of a non-breaching party if the other party fails to perform or violates any material obligation of these Service Terms and Conditions or any Statement of Work and fails to cure such breach within thirty (30) days after the receipt of written notice of such breach from the non-breaching party, in which case, the non-breaching party shall have no liability for such termination;
(b) immediately (i) upon the filing by a party of a voluntary petition in bankruptcy or insolvency or petitions for reorganization under any bankruptcy law, (ii) if a party consents to involuntary petition in bankruptcy or if a receiving order is given against the party under the United States Bankruptcy Code; or (iii) if an order, judgment or decree by a court of competent jurisdiction, upon the application of a creditor, is entered approving a petition seeking
reorganization or appointing a receiver, trustee or liquidator of all or substantially all of such partys assets and such order, judgment or decree continues in effect for a period of sixty (60) consecutive days; or
(c) by mutual written agreement of the parties.
[The remainder of this page intentionally left blank.]
EXHIBIT 10.3
CONFIDENTIAL PORTIONS OMITTED
AGREEMENT
This is an agreement (the Agreement) between Digimarc Corporation, a Delaware Corporation, having a place of business at 9405 SW Gemini Drive, Beaverton, Oregon 97008, and its subsidiaries (Digimarc), and The Nielsen Company (US), Inc., a New York Corporation, having a place of business at 770 Broadway, New York, New York 10003, its Su bsidiaries and Affiliates (Nielsen) .
Nielsen Affiliates are The Nielsen Company, B.V., a Netherlands corporation, and any of the Subsidiaries of The Nielsen Company, B.V. that are not also a Subsidiary of Nielsen (US). Nielsen Subsidiaries include any corporation, partnership or other entity in which a party holds, directly or indirectly, ownership of, or the right to vote on behalf of, more than forty percent (40%) of its voting stock or other voting equity interests, for so long as such ownership or right to vote exists. An entity in which Nielsen owns more than forty percent (40%) of its voting stock or other voting equity interests but less than a majority of the voting stock or other voting equity interests, is not considered a Subsidiary under this definition unless that entity agrees in writing to be bound to all applicable provisions of this Agreement.
The effective date of this Agreement is October 1, 2007 (Effective Date) and the parties hereby further agree:
1. IP Ownership and License Grants.
1.1. Digimarc Patents . Digimarc Patents means all patents and patent applications owned by Digimarc that Digimarc has the right to license, and any reissues, continuations, continuations-in-part, divisionals, extensions, re-examinations, substitutions and renewals of any such patents and patent applications and any and all foreign counterparts and equivalents of the foregoing; excluding U.S. Patent Nos. [**], and any reissues, continuations, continuations-in-part, divisionals, extensions, re-examinations, substitutions, renewals and foreign counterparts and equivalents of those patents.
1.2. Current Nielsen Products and Services . Subject to the terms and conditions of this Agreement, as of January 1, 2008 (the License Initiation Date), Digimarc hereby grants to Nielsen a worldwide[**] (except as set forth in Section 6.4) license under the Digimarc Patents to make, have made, use, import, Sell and Offer to Sell Current Nielsen Products and Services. Current Nielsen Products and Services means [**] .
1.3. CIMR Products and Services . Subject to the terms and conditions of this Agreement, as of the License Initiation Date, Digimarc hereby grants to Nielsen a worldwide[**] (except as set forth in Section 6.4) license under the Digimarc Patents to make, have made, use, import, Sell and Offer to Sell the CIMR Products and Services. CIMR Products and Services means products and
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
services that are made or offered by and/or for Nielsen and that are provided to customers by Nielsen and described in Appendix D, and any improvements and other modifications, that are developed and marketed as a result of this Agreement, using [**].
1.4. Technology and Patents Developed Pursuant to Services Agreement . All (a) technology and patents arising from Services performed by Digimarc for Nielsen and paid for by Nielsen and (b) technology and patents that are jointly developed by Nielsen and Digimarc arising from Digimarc Services (collectively, the [**] Technology) shall be [**] owned by [**]. For so long as both the Current Nielsen Products and Services and CIMR Products and Services licenses are in effect and subject to Digimarcs pre-existing agreements (as of the Effective Date, and as may be amended and/or extended from time to time in ways consistent with the relevant terms as they exist as of the Effective Date), Digimarc covenants that it shall [**] right, license or permission in or to any [**] Technology [**] the fields of CIMR Products and Services and [**]in which Nielsen conducts such activities as of the Effective Date ([**]).
1.5. License Limitations and Exclusions .
1.5.1. Pre-existing License . The licenses for Current Nielsen Products and Services and CIMR Products and Services do not cover products and services covered by the license from Digimarc to [**], later [**] to Nielsen [**].
1.5.2. Excluded Applications . Neither Current Nielsen Products and Services nor CIMR Products and Services shall include: [**] .
1.5.3. Sell and Offer to Sell Defined . The terms Sell and Offer to Sell and other forms of such terms, with respect to software products, mean the granting of licenses to use such software products in accordance with this Agreement.
1.5.4. No implied licenses . Nothing contained in this Agreement will be construed as conferring by implication, estoppel or otherwise, any license or other right under any patent rights or other industrial or intellectual property rights of either party except for the licenses expressly granted herein. For the avoidance of doubt, the licenses for Current Nielsen Products and Services and CIMR Products and Services do not authorize Nielsen to grant any license concerning any Digimarc Patents that is not in connection with the use of CIMR Products and Services or Current Nielsen Products and Services.
2. Royalties and Other Consideration for Licenses.
2.1. Consideration Exchanged. The minimum royalty payments and ongoing royalties and fees for Digimarc Services set forth in this Agreement provide
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
partial consideration for several elements of value provided by Digimarc including: (i) licenses for both Current Nielsen Products and Services and CIMR Products and Services; (ii) use of Digimarcs technology and market development work prior to the Effective Date; (iii) [**]; (iv) [**]; and (v) foregoing potential claims against alleged use of Digimarc Patents by Nielsen in Current Nielsen Products and Services while that license is in place.
2.2. Current Nielsen Products and Services . The license for Current Nielsen Products and Services shall remain in effect for so long as Nielsen is in compliance with payments of CIMR Royalties and Digimarc Service Fees, the Nielsen Commitment of Resources, and all other material terms of this Agreement. The license will become permanent once Nielsen has paid [**]. The fully paid up license to Current Nielsen Products and Services will [**], and will continue in effect prospectively and perpetually without further fees or royalties to Digimarc, and will not be thereafter terminable. [**].
2.3. CIMR Products and Services. The license for CIMR Products and Services shall be royalty bearing:
2.3.1. Royalties . Nielsen will pay to Digimarc royalties on CIMR Net Revenues for each year (a Royalty Year), as follows:
In Royalty Year One (Jan.1-Sept. 30, 2008) |
|
[**]% |
In Royalty Year Two (Oct. 1, 2008-Sept. 30, 2009) |
|
[**]% |
In Royalty Year Three |
|
[**]% |
In Royalty Year Four |
|
[**]% |
In Royalty Year Five; and each year thereafter |
|
[**]%. |
2.3.2 CIMR Net Revenues . CIMR Net Revenues means all revenues recognized by Nielsen that are received from, attributable to, or derived from, the CIMR Products and Services, such as revenue from [**] fees, from [**], from [**] fees, from [**] fees, from [**] fees and from [**], less: (i) any [**]. All CIMR Net Revenues, including Other Non-Interest Income, shall be calculated in good faith by Nielsen in accordance with United States generally accepted accounting principles (GAAP).
2.3.3 Minimum Royalties. Regardless of the level of CIMR Net Revenues, Nielsen shall pay to Digimarc, on an equal quarterly basis, annual minimum royalties as follows:
In Royalty Year One - |
|
$[**]; |
In Royalty Year Two - |
|
$[**]; |
In Royalty Year Three - |
|
$[**]; |
In Royalty Year Four - |
|
$[**]; and |
In Royalty Year Five - |
|
$[**]. |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.3.4 Royalty Payments. With the exception of the Royalty Year One payments, quarterly payments of the annual minimum royalties shall be due on the first day of the quarter, e.g., the first quarterly payment for Royalty Year Two shall be due on October 1, 2008. The three quarterly payments (of $[**]) for Royalty Year One shall be due on January 1, 2008, April 1, 2008, and July 1, 2008.
2.3.5 Reports. Within sixty (60) days after the end of each quarter in each Royalty Year, Nielsen will submit to Digimarc a statement in writing, in the form attached as Appendix B (the Quarterly License Reporting Statement), including with respect to that quarter: (a) all CIMR Net Revenues; (b) the royalties owed to Digimarc under this Agreement based on such CIMR Net Revenues; and (c) such other information reasonably necessary to enable Digimarc to verify Nielsens calculation of royalties payable .
2.3.6 Payment of Royalties in Excess of Minimums. Within sixty (60) days after the end of each quarter of each Royalty Year, Nielsen shall pay to Digimarc the amount of the royalties owed for that quarter if earned royalties for that Royalty Year to date exceed the annual Minimum Royalties owed for that Royalty Year. Royalty payments (including annual Minimum Royalties) are nonrefundable and any unused portions of annual Minimum Royalties do not carry forward into future Royalty Years.
2.3.7 Credits. If Nielsen has to reverse previously recognized CIMR Net Revenues reported under a previous Quarterly License Reporting Statement submitted to Digimarc in any Royalty Year in which Nielsen paid royalties exceeding the minimum annual royalty, Nielsen can claim a credit on a subsequent Quarterly License Reporting Statement in the same quarter it reverses this revenue on its income statement to the extent that it did actually pay royalties exceeding the minimum annual royalty for that Royalty Year. Such credit will not exceed the amount of royalties to be paid in the then-current quarter, but the unused credit may be carried over to succeeding quarters until exhausted.
2.3.8 Books and Records. Nielsen will maintain documents with respect to the CIMR Net Revenues in accordance with United States generally accepted accounting principles (GAAP) and will make complete and accurate entries concerning all transactions relevant to this Agreement. All such documents will be kept available by Nielsen for no less than three (3) years after the end of each Royalty Year or until the resolution of any dispute between the parties concerning the payment of royalties that arises within that three-year period.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.3.9 Audit. For a period of three (3) years following the end of any Royalty Year, or until the resolution of any dispute concerning the accuracy of any Quarterly License Reporting Statement submitted during that Royalty Year and arising within that three-year period, Digimarc (and its designated agents) shall have the right to inspect and examine relevant Nielsen documents relating to the calculation of royalties, provided, however, that Nielsen may redact such documents to preserve the confidentiality of Nielsen proprietary information that is not necessary to verify the calculation of royalties. Any such inspection and examination will take place upon reasonable prior written notice to Nielsen, during Nielsens regular business hours and no more than once a year. The cost of such inspection and examination will be borne by Digimarc unless there is an actual underpayment of more than five percent (5%) by Nielsen in that Royalty Year, in which case Nielsen will pay the reasonable out-of-pocket cost of the inspection and examination.
2.3.10 Overdue Amounts. Digimarc will be entitled to charge, and Nielsen will pay, interest on any overdue amounts or underpayments under this Agreement at the rate of one percent (1%) per month (or part thereof), or at such lower rate as may be the maximum rate allowed under applicable law.
3. Digimarc Services.
3.1. Authorized Services. Digimarc will perform services for Nielsen relating to the CIMR Products and Services (the Digimarc Services), including research, development, engineering, quality assurance, market research and development, strategic planning, strategy development, business development, preparing, obtaining and maintaining patents, project management, reporting, and such other services or activities as the parties may mutually agree. Digimarc will perform the Digimarc Services in good faith and with a reasonable standard of quality, but in no event with a standard of quality less than that Digimarc employs for services Digimarc performs for itself . The Digimarc Services shall not include any time or labor spent by Digimarc in its own strategic planning or the management of its own organization, outside of the management of the specific activities to be conducted as part of such Services.
3.2 Annual Plan. The particular services to be performed and expenditures to be made by Digimarc shall be set forth in an annual plan and budget (the Annual Plan). The parties shall mutually agree upon a process for determining the Annual Plan, which shall state reasonable and specific objectives to be met by Digimarc, and which shall take into account Nielsens strategic goals and operational experience, Digimarcs resources and capabilities to assist Nielsen in achieving those goals, and the market conditions then prevailing. The parties shall also mutually agree upon an informal process for change management and for resolving disputes concerning determination of the Annual Plan. In all events,
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Digimarc shall make resources available in each year covered by a timely submitted and reasonable Annual Plan (a Plan Year) sufficient to perform the Services identified in the Annual Plan. The first Plan Year will begin on October 1, 2007, prior to completion of the Annual Plan, based upon a short statement of work to be agreed upon by the parties. The first Annual Plan will be determined as soon as practicable thereafter, and no later than December 15, 2007. Successive Annual Plans shall be determined no later than ninety (90) days prior to the beginning of each subsequent Plan Year. If Digimarc reasonably believes that any requested changes to the Annual Plan will result in additional expenditures exceeding those approved by Nielsen in the Annual Plan, it shall so inform Nielsen. If Nielsen and Digimarc agree to the requested changes and such additional expenditures, they shall amend the Annual Plan to reflect such changes. Unless Nielsen authorizes such additional expenditures in writing, Nielsen shall not be obligated to pay for Services in excess of the larger of (a) the amount set forth in the Annual Plan (including as amended pursuant to the preceding sentence) or (b) the Service Minimum Fee (as defined below).
3.3 Quarterly Reporting and Review. Within thirty (30) days following the end of each quarter during each Plan Year, Digimarc shall provide reports stating its progress in achieving the objectives set forth in the Annual Plan, and describing in detail the Services performed and expenditures made in that quarter. The parties shall mutually agree upon a process for a joint quarterly review of Digimarcs progress in achieving the objectives set forth in the Annual Plan, and for considering any changes that either Nielsen or Digimarc may propose to the Annual Plan.
3.4 Minimum Service Fees. Subject to any termination of its obligation to engage Digimarc to perform Services, Nielsen shall pay, in equal quarterly payments as set forth below, the following minimum annual amounts for Services in each Plan Year (the Minimum Service Fees):
Annual Plan Period |
|
Plan Year 1 |
|
Plan Year 2 |
|
Plan Years 3-5
|
|
|||
|
|
|
|
|
|
|
|
|||
Minimum Fees |
|
$ |
[**] |
|
$ |
[**] |
|
$ |
[**] |
|
Quarterly payments of such fees, including Minimum Service Fees, will be due and payable to Digimarc only for those quarters in which Digimarc performs Services in accordance with a timely submitted and reasonable Annual Plan, at such levels as would be sufficient to generate the Minimum Service Fees as set forth above; or if Nielsen fails to timely submit a reasonable Annual Plan, in which Digimarc was ready, willing and able to perform such level of Services. Quarterly Minimum Service Fee payments are due and payable to Digimarc on the first day of each quarter in which the Services are to be provided. There will be no Minimum Service Fee for the first quarter (beginning October 1, 2007) of the first Plan Year. The Plan Year 1 Minimum Service Fees, less actual fees earned in that first quarter, will be spread evenly over the remaining quarters of that Year.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
3.5 Labor Rates. Labor rates charged for Services will be as shown in Appendix A. The labor rates will be increased by five percent per year, reflecting an estimate of average rates of wage and benefits cost inflation, and may otherwise be adjusted by mutual agreement of the parties.
3.6 Services Payment Schedule and Invoice. Digimarc shall furnish an invoice to Nielsen following each quarter of any Plan Year. The invoice shall be accompanied by an itemization of the Services actually performed in that quarter, including an identification of individual timekeepers, their respective hours and rates, and the nature of the work performed by them with reference to the objectives of the Annual Plan. The invoice shall also be accompanied by an itemization of those out-of-pocket expenditures reasonably incurred by Digimarc in performing the Services, reimbursement of which shall be included in the Minimum Service Fees. Within thirty (30) days of receipt of such invoice, Nielsen shall pay for Services actually performed by Digimarc in accordance with the then-current Annual Plan in that quarter to the extent that the Services actually performed by Digimarc within that Plan Year to date, as reflected in the cumulative quarterly invoices for that Plan Year, exceed the Minimum Service Fees owed for that Plan Year cumulatively to date. If the amount of Services actually performed and invoiced in that quarter, when added to the amount of Services actually performed and invoiced in prior quarters of that Plan Year, is less than the Minimum Service Fees owed for that Plan Year cumulatively to date, Nielsen shall [**].
3.7 Audit Rights. For a period of three (3) years following the end of any Plan Year, or until resolution of a dispute concerning the accuracy of the invoices or quarterly reports for a particular Plan Year arising within that three-year period, Nielsen (and its designated agents) shall have the right to inspect and examine Digimarcs books and records relating to the Digimarc Services, including time records and activity logs, for the purpose of determining whether Digimarcs invoices and quarterly reports for that Plan Year are accurate; provided, however, that Digimarc may redact such documents to preserve the confidentiality of Digimarc proprietary information that is not necessary to verify the accuracy of the invoices or quarterly reports . Any such inspection and examination will take place upon reasonable prior written notice to Digimarc, during regular business hours and no more than once a year. Digimarc shall promptly refund to Nielsen any amount that the audit shows was overpaid by Nielsen in that Plan Year per the Agreement and, if the overpayment is greater than 5% of the total payment for that Plan Year, Digimarc shall also pay the reasonable out-of-pocket costs of the inspection and examination.
3.8 Nielsen Commitment of Resources. For so long as the CIMR Products and Services license remains in effect, Nielsen shall use its reasonable best efforts to develop and support the CIMR Products and Services, including the commitment of a reasonable amount of marketing, financial and organizational resources. In furtherance of those efforts, Nielsen shall prepare an annual plan for the development and support of the CIMR Products and Services business, shall invite Digimarc to
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
advise and contribute to the formation of such plan, and shall share such plan with Digimarc.
3.9 Digimarc Opportunity [**] . For so long as [**], Nielsen shall provide Digimarc with a reasonable opportunity to [**].
3.10 Limitations on Digimarc Services [**] . For as long as Nielsen is timely paying Digimarc for Digimarc Services, Digimarc shall not [**].
3.11 Patent Prosecution . The parties shall endeavor to identify potentially patentable inventions arising from the Digimarc Services relating to the [**] Technology. As such inventions are identified and the filing of patent applications is agreed upon, [**] will have primary responsibility to manage the process of applying for and maintaining patents relating to the [**] Technology. The parties shall agree upon a process enabling [**] to have substantial prior review and participation in the preparation of patent applications relating to [**] Technology. [**] and [**] shall [**] the reasonable expenses incurred by [**] in the prosecution and maintenance of such patents on [**] basis, including expenses incurred after the termination of the Services. Notwithstanding the foregoing, either party may decide, at any time, that it does not wish to pay its share of the costs of applying for or maintaining patents relating to [**] Technology, which decision can be made on a jurisdiction by jurisdiction basis. In that event, the other party has the option either to abandon the application or patent, or to proceed on its own to pay the remaining costs of applying for or maintaining the patent. If either elects not to pay its share of the costs of applying for or maintaining such patent, notwithstanding that the other party may elect to apply for and maintain such patent, the parties respective ownership and rights in that patent shall otherwise remain unchanged. For so long as the Services portion of this Agreement shall be in effect, all reasonable costs reasonably incurred by [**] that are to be paid by [**] pursuant to this provision shall be invoiced by [**] and included in [**] .
3.12 Patent Enforcement . Unless limited by the covenant of Section 1.4, each party shall have the right to defend or prosecute its rights in and to the [**] Technology, in its own name, on its own behalf, and at its own expense. Each party shall be entitled to retain all revenue obtained by it from third parties (without accounting to the other) as a result of any revenue generating activities.
3.13 Nielsen Data Rights Retention . Nielsen retains the sole right to use or grant to any third party the right to use, any [**], as well as [**]. Digimarc will have no right to use or grant any rights of usage of any [**].
3.14 Assertion and Defense of Patents. Except as provided in this section, all defense and litigation of Digimarc Patents will remain the sole responsibility of Digimarc. Digimarc has no duty to enforce any patents. All defense and litigation of patents owned or controlled by Nielsen independent of Digimarc (the Nielsen Patents), will remain the sole responsibility of Nielsen. Nielsen has no duty to
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Digimarc to enforce any Nielsen Patents. For so long as Nielsen enjoys a covenant concerning certain [**] Technology, Nielsen has the right, as between Digimarc and Nielsen, to bring suit against third parties for infringement of those patents within those fields and may, if it deems it necessary, join Digimarc as a party to such lawsuits. In such event, Nielsen shall be solely responsible for all costs of such litigations and shall be entitled to retain the proceeds from any such case to the extent they relate to infringement occurring within the [**] fields. Any proceeds relating to infringement occurring outside the [**] field shall be shared with Digimarc on [**] basis, after the deduction of [**].
4. Remedies for Breach .
4.1. Responsibility for Performance . Nielsen (US) shall be solely responsible for its performance under this Agreement. A breach by a Subsidiary or by an Affiliate shall be deemed to be a breach by Nielsen (US).
4.2. Remedies for Breach . If either party materially breaches this Agreement, the non-breaching party may, in addition to other remedies at law and in equity, terminate this Agreement. Prior to terminating this Agreement for breach, the non-breaching party must first give the breaching party written notice specifying in detail the alleged breach. The breaching party shall then have sixty (60) days to cure such breach.
5. Termination .
5.1 Nielsen Option to Terminate After Two Years. Within thirty days after the second anniversary of the Effective Date, Nielsen may terminate this Agreement if, in its reasonable judgment, the market opportunity for CIMR Products and Services has not been realized. Notwithstanding the foregoing, the parties agree that the market opportunity will be considered to have been realized if the CIMR Products and Services generate CIMR Net Revenues of at least $[**] in [**].
5.2 Nielsen Option to Terminate After Five Years. Nielsen may terminate this Agreement at any time after the f ifth anniversary of the Effective Date for any reason or no reason.
5.3 Termination by Digimarc Due to Patent Challenges by Nielsen. If Nielsen files an action challenging the validity or enforceability of any Digimarc Patents (except as a defense or counterclaim to an action for infringement brought by Digimarc or its assignee), Digimarc can: (i) before the Current Nielsen Products and Services license becomes permanent under Section 2.2, terminate either or both of the Current Nielsen Products and Services license and/or the CIMR Products and Services license; and (ii) after that time, terminate the CIMR Products and Services license.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
5.4 Termination of CIMR License Due to Failure to Meet Working Requirements. Following any Royalty Year after Royalty Year Five of this Agreement, Digimarc may terminate the CIMR Products and Services license, with prospective effect only, if Nielsen does not pay Digimarc: (a) at least $[**] in royalties for a Royalty Year within sixty (60) days following the end of that Royalty Year; or (b) if royalties for a Royalty Year are less than $[**], a lump sum payment equal to the difference, to be made within sixty (60) days following the end of that Royalty Year.
5.5 Notice of Termination. Any termination of this Agreement by either party for any reason other than the material breach of the other party shall be made on no less than ninety (90) days notice to the other party.
5.6 Effects of Termination . Termination of this Agreement by either party prior to the fifth anniversary of the Effective Date will automatically terminate the licenses for CIMR Products and Services and for Current Nielsen Products and Services, unless Nielsen agrees to pay, and does pay, [**], in that latter case, only the license for CIMR Products and Services will automatically terminate. Thereafter, if Nielsen elects to terminate after five years pursuant to Section 5.2, the license for CIMR Products and Services will automatically terminate. In the event of termination of either or both licenses for any reason, [**]. In other words, [**]. Digimarc will not be barred from [**]. If either, or both, of the Current Nielsen Products and Services or the CIMR Products and Services licenses are terminated, the covenant in Section 1.4 with respect to [**] Technology shall automatically terminate. After termination of the CIMR Products and Services license, Nielsen shall have no right to use trade secrets or other information and plans of Digimarc in the CIMR Products and Services. [**].
6. Other Provisions.
6.1. Press Release . The parties will issue a mutually agreeable press release, similar to the one in Appendix C, relating to the subject matter of this Agreement no later than four days after execution of this Agreement. Except as expressly permitted herein, neither party will make public announcements or issue press releases relating to this Agreement without the prior written consent of the other party, which consent or refusal will not be unreasonably withheld.
6.2. Confidentiality . Each party agrees that it will treat this Agreement as confidential and will handle confidential information of the other party in a manner consistent with the policies and practices of that party for handling its own confidential information. Notwithstanding the foregoing, either party may provide a copy of this Agreement to a third party considering in good faith a bona fide transaction as contemplated in Section 6.4, provided that such third party agrees in writing to be bound to a confidentiality agreement customary to such transactions and prohibiting use of its knowledge of this Agreement or its
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
provisions for any competitive purpose. Upon request by the disclosing party with respect to specifically identified information, the receiving party will return to the disclosing party or destroy all of the confidential information in the receiving partys possession or control furnished to it by the disclosing party which the receiving party does not need to retain in order to perform any obligations imposed, or exercise any rights (including rights of ownership) acquired, by this Agreement, and shall certify in writing its return or destruction of such confidential information. If the receiving party is subject to judicial or governmental proceedings or is subject to government regulations requiring disclosure of confidential information of the disclosing party, then prior to disclosing such information, the receiving party will provide the disclosing party with reasonable prior notice for the disclosing party to seek a protective order for confidential treatment of the confidential information and will only disclose that information that is necessary and required. If the entire Agreement is terminated, the obligations set out in this Section will extend for a period of [**] years from this termination date, except that the confidential information of the disclosing party that is specifically identified by it as a trade secret will be protected for a period of [**] years.
6.3. Non-solicitation . Neither party will, directly or through a third party, during the period of the Digimarc Services and for a period of [**] after the end of such Services, solicit or entice away those key employees of the other party specifically identified to it by name in Appendix E hereto (as may be amended from time to time at the sole discretion of either party), provided that the foregoing will not prohibit either party from hiring or soliciting to hire any person (a) responding to general advertising or general solicitations (including solicitations by recruiting firms retained by a party and not directed at the employees of the other party), or (b) who has been terminated by another party, or (c) has not been employed by the other party during the [**] preceding any such action.
6.4. Assignment . Neither party may assign any of its rights or obligations under this Agreement to any person without the prior written consent of the other, and any such purported assignment shall be null and void from inception; provided, however, that (a) either party may assign all its rights and delegate all its obligations hereunder to a single person without such approval in connection with: (i) a merger, consolidation, reorganization, statutory conversion, amalgamation or similar corporate transaction, or (ii) a sale or other disposition of all or substantially all of its assets in the businesses relating to this Agreement, and (b) Nielsen may assign all its rights and delegate all its responsibilities to an Affiliate in connection with a restructuring or reorganization of Nielsen. In the event that Digimarc assigns this Agreement to [**] (an Assignee) pursuant to this provision, the Digimarc Patents subject to the licenses granted in this Agreement shall include [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
6.5. Bankruptcy . Any intellectual property licenses and rights granted to either party hereunder or pursuant hereto are, and will be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (Code) licenses of intellectual property, as defined under the Code. Notwithstanding any provision contained herein to the contrary, if a party is under any proceeding under the Code and the trustee in bankruptcy of that party, or that party as a debtor in possession, rightfully elects to reject this Agreement, then the other party pursuant to the relevant portions of Section 365(n) of the Code may retain any and all of such other partys licenses and rights hereunder to the maximum extent permitted by law.
6.6. Tolling. Nielsen agrees to toll any statute of limitations and any time limitation on damages under [**] relative to [**]. In return for this tolling agreement, Digimarc will not [**].
6.7. Limitations on Damages. NEITHER DIGIMARC NOR NIELSEN WILL BE LIABLE UNDER ANY CIRCUMSTANCES OR ANY LEGAL OR EQUITABLE THEORY, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, RELIANCE, PUNITIVE OR SPECIAL DAMAGES ARISING OUT OF THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
6.8. Infringement Remedies. Nothing in this Agreement prevents either party from seeking any available remedies under patent law for any patent infringement by the other party in periods when the party does not have a license to that activity including any remedies available under 35 U.S.C. 281, 283, 284 and 285.
6.9. Governing Law, Jurisdiction and Venue. This Agreement shall be governed by New York law. Effective as of the termination date of either license in this Agreement, Digimarc may seek judgment and remedies for alleged infringement of its patents in any forum where jurisdiction and venue are proper, including the United States International Trade Commission or Government Customs Service proceedings, for alleged infringement occurring before the License Initiation Date or after any such license termination date. All other matters concerning the interpretation of, or performance under, this Agreement will be resolved in the state or federal courts in New York applying New York law and jurisdiction and venue will be proper in such New York courts.
6.10. No Waiver. Each and all of the various rights, powers and remedies of the parties will be considered to be cumulative with and in addition to any other rights, powers and remedies which such parties may have at law or in equity in the event of breach of any of the terms of this Agreement. The exercise or partial exercises of any rights, powers or remedies will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party. In no event will any waiver of any rights hereunder constitute the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
waiver of such rights in any future instance unless the waiver so specifies in writing.
6.11. Notices . All notices of breach or early termination must be made in writing. Any written notice under this Agreement will be sent by email with a hard copy sent via certified mail, return receipt requested, or by recognized courier service with tracking capabilities. The notice will be deemed effective as of the earlier of (i) the date of delivery, as evidenced by a delivery receipt or the addressees registry, or (ii) five business days after sending notice to the correct address in the authorized manner. The addresses of the parties, as set forth above, will be used for any such notice unless either party hereafter designates a substitute address in writing in accordance with this provision.
The contacts to address the notices to are:
For Digimarc: Reed Stager, Executive Vice President; with a co-copy to: General Counsel; and
For Nielsen: James M. OHara, President, Media Product Leadership; with a co-copy to: General Counsel.
6.12. Integration . This Agreement embodies the entire agreement of the parties hereto regarding the subject matter herein, and supersedes and cancels any and all previous negotiations, agreements or commitments with respect to them.
6.13. Severability . If any provision of this Agreement is held to be void or unenforceable, the parties agree that such determination will not result in the nullity or unenforceability of the remaining portions of this Agreement. The parties further agree to replace such void or unenforceable provisions of this Agreement with valid and enforceable provisions that will achieve, to the extent legally permissible, the economic, business and other purposes of the void or unenforceable provisions and that reflect the intent of the parties when entering into this Agreement.
6.14. Amendments . This Agreement may not be modified in any manner except by an instrument in writing duly signed by each of the parties hereto.
6.15. Construction . Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule or construction to the effect that ambiguities are to be resolved against the drafting party will not apply in interpreting this Agreement.
6.16. No Agency. Nothing in this Agreement will be construed as creating any agency, partnership or other form of joint enterprise between Digimarc and Nielsen. The relationship between Digimarc and Nielsen will at all times be that
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
of independent contractors. Neither party will have authority to contract for or bind the other in any manner whatsoever.
6.17. Other Documents. Each party hereto will execute any documents which may be necessary or advisable to carry out or effectuate the foregoing.
6.18. Survival. Upon expiration or termination of this Agreement, rights to payment under this Agreement and the provisions set out in Sections 2.3.5-2.3.10, 3.11-3.14, 4, 5.6 and 6.2-6.19 will remain in effect.
6.19. Counterparts. This Agreement may be executed in separate counterparts, and by facsimile, each of which will be deemed an original, and when executed, separately or together, will constitute a single original instrument, effective in the same manner as if the parties had executed one and the same instrument.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DIGIMARC CORPORATION |
THE NIELSEN COMPANY (US), |
|||
|
INC. |
|||
|
|
|||
By: |
/s/ Robert P. Chamness |
|
By: |
/s/ James OHara |
(Signature) |
(Signature) |
|||
|
|
|||
Robert P. Chamness |
Name: James OHara |
|||
|
(Please print) |
|||
|
|
|||
CLO and Secretary |
Title: President-Media Product Leadership |
|||
|
|
|||
Date: November 27, 2007 |
Date: November 27, 2007 |
|||
Exhibit 10.4
CONFIDENTIAL PORTIONS OMITTED
COUNTERFEIT DETERRENCE SYSTEM
DEVELOPMENT AND LICENSE AGREEMENT
This Counterfeit Deterrence System Development and License Agreement (the Agreement) is made
Between
DIGIMARC CORPORATION , a corporation incorporated under the laws of Oregon and having its head office at One Centerpointe Drive, Suite 500, Lake Oswego, Oregon. U.S.A. 97035-8615 (Digimarc)
and
[**]
Recitals
Digimarc has expertise in, and owns extensive intellectual property, including patents, patent applications, copyrights and trade secrets, related to digital watermarks, counterfeit deterrence, copyright protection, and device control.
[**] possesses or will possess the right to grant licences in respect of intellectual property rights related to the application of such intellectual property to the detection and deterrence of bank note counterfeiting.
Digimarc and [**] have cooperated in the development of means, using such intellectual property, to detect and deter the counterfeiting of bank notes [**].
The CDS is an improvement to Digimarcs existing copyright protection system for deterring personal computer-based counterfeiting of bank notes.
The CDS has [**].
[**] In return, [**] will acquire the exclusive right, as more particularly detailed herein, to grant and direct Digimarc to grant licenses to [**] the CDS [**] and [**].
[**] is also investing in certain improvements to [**] and a broadening of the deployment of the [**] across the personal computer industry. In return, [**] during the term of the Agreement [**], as more particularly detailed herein.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
In consideration of these premises, the covenants set out in this Agreement and other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree as follows:
1. DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions - Whenever used in this Agreement, the following words and terms shall have the meanings set out below:
Agreement means these articles of agreement, including the Schedules, and those documents as specified or referenced in this Agreement as forming part of the Agreement, all as may be amended from time to time;
Allowable Cost means a cost of the kind identified in Schedule I;
Arbitration Agreement means the Arbitration Agreement dated June 21, 1999, a copy of which is attached as Schedule E;
[**] has the meaning assigned to it by clause 5.1;
[**] means that technology, if any, from the technology described in Schedule F in respect of which from time to time [**] after discussion between the [**] and the [**], [**] offers, and Digimarc accepts in writing, a [**] on the [**] in clause 8.2 to use, design or implement the CDS and all Intellectual Property Rights in that [**];
Business Day means a day on which both [**] and Digimarc are open for business at their respective addresses noted above;
CDS Technology collectively, means whatever of the [**], the Digimarc Technology and the Project Technology is incorporated into the CDS;
Confidential Information means information disclosed during the Term of this Agreement in any form which, if disclosed in tangible form, is labelled Confidential, Proprietary or with a similar legend, or if disclosed orally is information that by its nature would be understood to be confidential to the Discloser;
Counterfeit Deterrence System or CDS or System means a system for [**] that includes, without limitation, [**]. The System incorporates means for [**];
Deliverable for a [**] means a task to be performed or an item to be delivered by Digimarc to [**], identified in the Statement of Work for [**], and in the case of a Deliverable [**] Digimarcs obligations to [**] with the Escrow Agent as part of the Technical Information;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Designated Country means a country , the [**] of which is designated in writing by [**] effective on the Effective Date, and any additional country as may be designated by [**] in writing to Digimarc from time to time;
[**] means those portions of the Project Technology and the Digimarc Technology which relate to [**] including [**];
Device means a [**] for a general purpose [**], or a device [**];
[**] means the [**] of a [**];
Digimarc Contract Authority means the President of Digimarc;
Digimarc Project Manager means the Project Manager appointed by Digimarc in accordance with the provisions of clause 4.1;
Digimarc Technology means:
(a) the technology partially described in Schedule G developed or owned by Digimarc prior to [**] to the extent that it forms part of the CDS,
(b) all Improvements to the technology described in (a) made by or on behalf of Digimarc other than under this Agreement to the extent that they form part of the CDS,
(c) all Improvements to the technology described in (a) made by or on behalf of Digimarc under this Agreement to the extent that they relate to or form part of the CDS, and
(d) all Intellectual Property Rights in all such technology and Improvements;
Digital Watermark refers to [**] (including [**]) that are [**] from [**] by [**] of [**], which [**] of [**] and yet do not significantly [**] from the aesthetics of the [**] or [**] thereby. Examples include, but are not limited to:
1. generally imperceptible changes to [**] or placement in [**];
2. [**] of a substrate, where the [**] substantially uniform to human touch;
3. slight localized changes to [**] or [**] of a printed document;
4. slight changes to [**]; or
5. [**] of substantially [**];
Discloser means a party which has disclosed or otherwise made available its Confidential Information to the other party;
DLA Contract Authority means the Contract Authority designated by [**] in writing to Digimarc from time to time;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DLA Project Manager means the project manager appointed by the DLA Contract Authority from time to time on notice to the Digimarc Contract Authority who shall also serve as the person primarily responsible to conduct inspections on behalf of [**];
[**] ;
[**] ;
[**] ;
Effective Date means [**];
[**] ;
[**] ;
[**] ;
Escrow Agent means [**], or any mutually acceptable new custodian appointed pursuant to clause 11.2 or 11.3 of the Escrow Agreement;
Escrow Agreement means the agreement in the form attached as Schedule M;
Escrowed Materials means any and all materials deposited or to be deposited by Digimarc with the Escrow Agent under this Agreement and the Escrow Agreement including the Technical Information and Improvements pertaining to the CDS Technology which shall include but not be limited to the following:
1. details of the deposit including: full name and version details, number of media items, media type and density, file or archive format, list or retrieval commands, archive hardware and operating system details;
2 name and functionality of each module or application of the Escrowed Materials;
3. names and versions of development tools;
4. documentation describing the procedures for building, compiling, executing and using the software which forms part of the Escrowed Materials ([**]);
5. hardcopy directory listings and tables of the contents of the computer media, manuals and other materials; and
6. name and contact details of employee(s) with knowledge of how to maintain and support the Escrowed Materials;
Feasibility Work means that portion of [**] performed by Digimarc between [**] and the date of signature of this Agreement;
Improvement means any change in the CDS Technology or the Technical Information made by or at the direction of Digimarc after [**] which enhances, whether by
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
improvement, enhancement, correction, addition or otherwise, the properties, characteristics or manufacture of the CDS including, for greater certainty, [**];
Integration Support means the consulting and programming services to be provided by Digimarc to a [**] on the terms described in Schedule P attached to assist the [**] to ensure that the [**];
Intellectual Property Rights means all intellectual property rights existing now and in the future including, without limitation, trade secrets, copyright, database rights, know-how, topographies, patents and patent applications;
[**] means an entity responsible for [**];
Licensed [**] means an [**] licensed by Digimarc pursuant to clause 2.8;
[**] means an entity, regardless of whether it has a legal status distinct from that of an [**] pursuant to clause 2.9;
Other [**] Technology means any of the technology described in Schedule F which is not [**] Technology, but in respect of which Digimarc elects, on written notice given to the DLA Contract Authority prior to the expiry of the [**] of the Project, to obtain a licence on the terms set out in clause 8.2 to use in relation to [**] for a Security Purpose in accordance with clause 9.2;
Person means any individual or other legal entity, including without limitation a sole proprietorship, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, or a natural person in the capacity of trustee, executor, administrator or other legal representative;
[**] ;
[**] ;
[**] ;
[**] ;
[**] means the tasks and Deliverables identified in the [**] attached as Schedule B to be performed or produced [**];
[**] means the tasks and Deliverables identified in the [**] attached as Schedule C to be performed or produced [**];
[**] means the tasks and Deliverables identified in the [**] attached as Schedule D to be performed or produced [**];
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Problem Report means a report of a problem addressing as many of the topics specified in Schedule R as are relevant to a reasonable understanding of the problem;
Project Technology means the technology described in Schedule H developed by or on behalf of Digimarc under this Agreement after [**], all Improvements to that technology or to the [**] Technology or to the Other [**] Technology, and all Intellectual Property Rights in that technology and those Improvements;
Properly Embedded when used in reference to a [**] means that the [**] is [**] in accordance with the written instructions provided by Digimarc with the [**] used to [**] and is capable of passing the Verification Test;
Recipient means a party to which the Confidential Information of the other party has been disclosed or otherwise made available;
Schedule means a schedule to this Agreement;
[**] ;
Security Purpose means the purpose of [**];
Security Requirements means the requirements for physical security including, without limitation, electronic systems security set out in Schedule J;
Specifications for the CDS or any part thereof means the specifications for the CDS or part thereof accepted by [**] under this Agreement;
[**] ;
Statement of Work means the Statement of Work set out in Schedules B, C or D as applicable;
System Support means the maintenance and other support for the CDS described in Schedule O attached;
Technical Information means all information including, without limitation, source code, programming instructions, algorithms, software and other works of authorship, manufacturing and technical data, drawings, specifications, instruction manuals, user manuals, procedures, facilities, prices, suppliers lists and all other information comprising or relating to the development of the CDS Technology, or any part thereof, or the application of the CDS Technology, or any part thereof, in the [**];
Term means the period commencing on the Effective Date and ending on [**];
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Training means the training in the use and operation of the [**] described in Schedule Q;
Verification Test means a test or tests developed by Digimarc as part of the [**] to determine if [**]; and
Work means the Work that is required to be performed by Digimarc in order to complete the tasks and deliver the Deliverables and otherwise comply with its obligations under this Agreement.
1.2 Interpretation - In this Agreement:
1.2.1 unless otherwise specified, all references to money amounts are to the currency of the United States of America;
1.2.2 the use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such Person or Persons or circumstances as the context otherwise permits;
1.2.3 whenever a provision of this Agreement requires an acceptance, approval or consent by a party to this Agreement and notice of such acceptance, approval or consent is not delivered within the applicable time, then the party shall be conclusively deemed to have withheld the acceptance, consent or approval;
1.2.4 unless otherwise specified, the number of days within or following which any payment is to be made or act is to be done shall be interpreted to be continuous and shall be calculated by excluding the day on which the period commences and including the day which ends the period and by extending the period to the next Business Day if the last day of the period is not a Business Day;
1.2.5 unless otherwise specified, the order of precedence for interpreting this Agreement shall be:
(a) this Agreement, excluding Schedules;
(b) the Schedules; and
(c) as between the delivery schedules forming part of a Statement of Work, and other provisions of such Statement of Work, the delivery schedules shall take precedence.
1.2.6 for greater certainty, a party or representative to which this Agreement grants the right to make a decision or determination in the sole discretion of the party or representative is not required to act reasonably in making the decision or determination and no such decision or determination may be challenged by the other party under the Arbitration Agreement or otherwise;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
1.2.7 the words includes or including will be construed as meaning included without limitation and including without limitation as the case may be; and
1.2.8 a clause or Schedule, unless the context requires otherwise, is a reference to a clause to, a Schedule of, or a paragraph of a Schedule to, this Agreement, as amended from time to time in accordance with this Agreement.
1.3 Applicable Law - This Agreement shall be construed in accordance with the laws of England to the exclusion of its rules of conflicts of laws.
1.4 Schedules - The Schedules to this Agreement, listed below, are an integral part of this Agreement:
Schedule |
|
Description |
Schedule A |
|
System Description |
Schedule B |
|
[**] |
Schedule C |
|
[**] |
Schedule D |
|
[**] |
Schedule E |
|
Arbitration Agreement |
Schedule F |
|
[**] |
Schedule G |
|
Digimarc Technology |
Schedule H |
|
Project Technology |
Schedule I |
|
[**] |
Schedule J |
|
Security Requirements |
Schedule K-1 |
|
[**] |
Schedule K-2 |
|
[**] - Non-[**] |
Schedule L-1 |
|
[**] |
Schedule L-2 |
|
[**] - Non-[**] |
Schedule M |
|
Escrow Agreement |
Schedule N |
|
Progress Reporting and Project Reviews |
Schedule O |
|
System Support Services Agreement |
Schedule P |
|
Fees for Integration Support and Verification Testing |
Schedule Q |
|
Training |
Schedule R |
|
Problem Report |
Schedule S |
|
Proforma Invoice |
Schedule T |
|
Form of Deed of Adherence |
Schedule U |
|
Form of Comfort Letter |
2. SCOPE OF THE WORK
2.1 Digimarc shall perform [**] in accordance with the [**] and, subject to [**] acceptance of the corresponding Offer described in clause 2.3, the [**] in accordance with the [**] and the [**] in accordance with the [**].
2.2 On or before (i) [**] and (ii) [**], Digimarc shall deliver to [**] and the DLA Project Manager a written proposal (the Proposal) for the Work to be done [**], which Proposal will
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
be in the form of a proposed amendment to this Agreement and will include, but not be limited to:
(a) changes to the Statement of Work for [**];
(b) an estimate of the [**] to be incurred by Digimarc in connection with Digimarcs performance of the Work for [**]; and
(c) the nature, timing and estimated quantity of the effort which will be required from [**] to enable Digimarc to perform the Work as proposed [**] including, for greater certainty, the assistance reasonably required from [**].
2.3 The Proposal for [**] when delivered by Digimarc to [**] pursuant to clause 2.2 shall be deemed to constitute an irrevocable offer (the Offer) to amend the Agreement. Digimarc undertakes and represents that each Proposal will be prepared with all due care and diligence and that at the date of [**] acceptance of each Offer it will not be aware of any matters within its reasonable control which might or will adversely affect its ability to perform the Work for the applicable Phase.
2.4 The Offer (i) for [**] shall remain open until [**] and (ii) for the [**] shall remain open until [**] for written acceptance by [**] at its sole discretion. If requested by the DLA Contract Authority at least seven (7) days before the expiry date for an Offer, Digimarc shall prepare and submit a revised Offer to take into account any reasonable revisions and clarifications to the original Offer requested by the DLA Contract Authority and [**] will have ten (10) days from receipt of the revised Offer to accept it.
2.5 Effective immediately on [**] acceptance of the Offer or revised Offer in respect of a [**], the Statement of Work [**] and all other relevant provisions of this Agreement will be deemed to have been amended to reflect the Proposal as accepted by [**].
2.6 The Term will continue notwithstanding that [**] elects not to accept the Offer for [**].
2.7 Pending acceptance, or express or implied rejection by [**] of the Offer as provided in clause 2.4, the DLA Contract Authority may, in his or her sole discretion, authorize Digimarc to perform all or part of the Work described in the Offer (or other Work as agreed between the parties respective Contract Authorities). If [**] accepts the Offer for [**], all such authorized Work will be deemed to form part of the Work [**] to which the Offer relates. In any event, [**] shall compensate Digimarc for such authorized Work as though it were [**].
2.8 Commencing no later than ten (10) Business Days after every written request made during the Term by the DLA Contract Authority, Digimarc shall make an irrevocable offer, which offer shall remain open for acceptance within sixty (60) days from the date of receipt by [**] to which the Offer is addressed, to grant to an [**] a [**] to [**] in connection with the [**] of the [**] on terms no less favourable to that [**] than those set out in whichever of Schedules K-1 and K-2 is applicable.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.9 Commencing no later than ten (10) Business Days after every written request made during the Term by the DLA Contract Authority or a [**], Digimarc shall make an irrevocable offer, which offer shall remain open for acceptance within sixty (60) days of receipt by the [**] to which the Offer is addressed, to:
(a) [**] designated by the DLA Contract Authority or a [**] a [**] to [**] in connection with [**] of a [**], on terms no less favourable to the [**] than those set out in whichever of Schedules L-1 and L-2 is applicable; and
(b) [**] referred to in clause 2.9(a) at no charge and provide the Training to the [**] for the charges to the [**] described in clause 2.12 within ten (10) Business Days after the [**] acceptance of the offer to [**], or at such other time as may be agreed between Digimarc and the [**].
2.10 No later than sixty (60) Business Days after every written request made by a [**] during the Term, Digimarc shall provide Integration Support to the [**] on a date or dates agreed between Digimarc and the [**] for the charges described in clause 2.12 provided that in 1999 the sixty (60) Business Day limit shall apply only to the first three [**] which require such services.
2.11 No later than twenty (20) Business Days after every written request made by [**] or a [**] during the Term, Digimarc shall conduct Verification Tests of [**] on a date or dates agreed between Digimarc and the [**] or the [**], as the case may be, for the charges specified in clause 2.12.
2.12 The amount charged by Digimarc to the [**] or Licensed [**] for the Training, Integration Support and Verification Tests provided:
(i) before the [**], will be determined in accordance with the provisions of Schedule P;
(ii) [**], will not be greater than the charge then paid to Digimarc for similar support by Digimarcs most favoured customer.
2.13 At any time during the Term following [**] which [**] elects to proceed with as described in clause 2.4 Digimarc shall on receipt of a written request from a [**].
2.14 Digimarc shall report to the DLA Contract Authority at least once each calendar quarter of the Term on Improvements and [**] which Digimarc has made or caused to be made since the last report. Promptly following notice by the DLA Contract Authority, Digimarc [**] the [**] provided to the [**] designated by the DLA Contract Authority to [**] the [**]. Digimarc shall in any event issue the [**] to the [**]. The [**] of such [**] by Digimarc (i) before [**] of the [**] and (ii) following [**] of the [**] and will be [**]. Notwithstanding the foregoing, [**] an Improvement into [**] employed by it in [**]. Digimarc shall [**] the System Support for the two (2) versions of [**] which preceded the then current version of [**] or for all versions of
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[**] released within twenty-four (24) months prior to the date of issue of the [**], [**] at [**] to the [**] above the [**] for the System Support.
2.15 Digimarc shall obtain at its own expense all licenses or permits required to be obtained from the Government of the United States in order for Digimarc to comply with its obligations under this Agreement including, without limitation, to [**] and Escrowed Materials, and grant the associated licenses, to [**] and other licensees.
2.16 Digimarc acknowledges and confirms [**] right to enforce clauses 2.9 and 2.11 by an application for specific performance or otherwise.
3. PRICE AND PAYMENT
3.1 In addition to the amounts payable in accordance with clause 8, [**] shall pay Digimarc [**] for the [**] to the Digimarc Technology granted to [**] under clause 8 of this Agreement by the later of (a) five (5) Business Days after the date that the Escrow Agent notifies [**] that it has taken possession of the reproductions of the Technical Information for the CDS Technology under clause 8.7 and successfully verified that Technical Information in accordance with the Verification Process (as defined in the Escrow Agreement), and (b) thirty (30) days after this Agreement is signed by both parties. Both parties will use their best efforts to ensure the activities in a) are completed within 30 days after this Agreement is signed.
3.2 Subject to the limits set out in this Agreement and unless otherwise expressly set out herein, [**] shall [**] Digimarc for all the [**] reasonably and properly incurred by Digimarc during each calendar month to perform [**], and any other Work authorized by [**] in writing, plus a [**] on the [**] (the [**]). Digimarc shall invoice [**] monthly in arrears for such Costs and [**]. Each invoice shall specify the time spent by the staff and sub-contractors of Digimarc in performing the Work and shall give a [**] of the [**] in the form attached as Schedule S.
3.3 The amount which [**] is required to pay Digimarc for the [**] incurred in performing the [**] and [**] in calendar year 1999 will not be greater than [**]. The amount which [**] is required to reimburse Digimarc for the [**] incurred in performing [**], respectively, will not be greater than the estimates for that Work accepted by [**] pursuant to the provisions of clause 2.4. Digimarc shall complete all relevant work notwithstanding that it is unable to recover [**] incurred in relation thereto due to the operation of the limits set out in this clause 3.3.
3.4 Except as otherwise expressly provided herein, the total amount which [**] will be liable to pay Digimarc for or in connection with the [**] and [**] for [**] will not be greater than [**] and, assuming that (i) [**] has accepted Digimarcs Offer for [**] and, (ii) [**] does not terminate this Agreement as permitted herein prior to the date on which Digimarc completes [**] in accordance with the provisions of this Agreement, not less than [**], subject to Digimarc having performed the Work equal to this amount of [**] and [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
3.5 If [**] elects not to proceed with [**] as described in clause 2.4 above, and at the time of such election [**] has not served notice of breach, or termination for Digimarcs default, under clause 15, [**] shall pay Digimarc an amount equal to [**] of the total amount paid for [**] and the corresponding [**] for the Work done during the previous nine (9) months.
3.6 [**] shall pay Digimarc each amount which [**] owes Digimarc under this Agreement no later than thirty (30) days after the later of the payment due date and the date on which [**] receives a detailed and correct invoice for the amount.
3.7 For a period commencing on the Effective Date and ending on the date [**] following the last date on which Digimarc issues an invoice to [**] for [**], Digimarc shall maintain proper, up-to-date, accurate and complete books, records and other documentation substantiating [**] invoiced under this Agreement including, without limitation, time sheets showing the hours spent on each task which forms part of the Work and receipts for all disbursements. Digimarc shall produce such books, records and documentation to [**] or its representatives for inspection and copying at all reasonable times on request by the DLA Project Manager.
3.8 Except as otherwise expressly provided in this Agreement, [**] shall pay Digimarc all sales, use, goods and services or other similar taxes levied by any government in the [**] which Digimarc is obliged to collect and remit to such government(s) in connection with any amount paid by [**] to Digimarc under this Agreement. Such payments by [**] shall be in addition to those set forth in clause 3.4.
3.9 Digimarc is responsible for, and shall indemnify [**] against, and hold [**] harmless from, the payment of all taxes levied by any government on or in respect of Digimarcs income and any amounts required by law to be paid in respect of social benefits for Digimarcs employees relating to or arising out of the performance of the Work by Digimarc. If required by law, [**] shall deduct all such taxes and amounts from the amounts otherwise payable to Digimarc and remit them to the appropriate authorities.
3.10 [**] may set off against any amount which [**] owes Digimarc under or in connection with this Agreement any amount which Digimarc owes [**] under or in connection with this Agreement.
4. PROJECT MANAGEMENT
4.1 Digimarc shall designate a responsible individual with adequate authority and competence as the Digimarc Project Manager whose responsibilities, in addition to those expressly set out in this Agreement, shall be to serve as project leader and primary interface with [**].
4.2 The DLA Project Manager shall be responsible for coordinating fulfilment by [**] of its obligations under this Agreement including the provision of all the general information about [**] that Digimarc may reasonably require in order to perform its obligations under this Agreement. The DLA Project Manager shall have no authority to amend this Agreement,
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
approve payments or approve or accept Deliverables or other Work or Proposals on behalf of [**], all of which actions shall be within the exclusive authority of [**].
4.3 The Digimarc Project Manager shall be responsible for coordinating the performance of the Work by Digimarc but shall have no authority to agree to an amendment of this Agreement on behalf of Digimarc which action shall be within the exclusive authority of the Digimarc Contract Authority.
4.4 Either partys Project Manager or Contract Authority may from time to time appoint one or more persons to represent him or her on prior written notice to the other partys Project Manager or Contract Authority.
4.5 Digimarc shall not, without first obtaining the written consent of the DLA Contract Authority which consent will not be unreasonably withheld, remove or replace:
(a) any employee of Digimarc or its authorized subcontractors assigned to do any part of the Work if the employee or subcontractor is critical to completion of the Work by Digimarc in accordance with this Agreement; or
(b) its Project Manager.
Critical means that the Work cannot timely be completed by Digimarc without such employee.
4.6 Digimarc shall replace within a reasonable time under the circumstances any of its employees or authorized subcontractors engaged in fulfilling its obligations under this Agreement, including its Project Manager, whose removal is required by the DLA Contract Authority, provided that the DLA Contract Authority specifies reasonable cause for such removal in writing.
4.7 Digimarc represents that all personnel assigned to do the Work will be employees of Digimarc. Digimarc shall not engage any subcontractor other than the subcontractors identified by Digimarc in writing to [**] before this Agreement was executed to do any part of the Work without first obtaining the prior written consent of the DLA Project Manager, who may give or withhold such consent in his or her sole discretion. Digimarc undertakes that it shall obtain from each subcontractor prior to permitting that subcontractor to do any part of the Work a written undertaking that all Intellectual Property Rights in any Work created by that subcontractor vest absolutely in Digimarc upon the date of creation. Digimarc hereby warrants and represents that it has obtained such undertakings from all subcontractors engaged in relation to the Work prior to the date of execution of this Agreement.
4.8 Digimarc shall report on progress of the Work and conduct progress reviews in accordance with the provisions of Schedule N.
4.9 In the event that it becomes evident to either partys Project Manager that a failure or delay by either party to perform in accordance with its obligations under this Agreement will
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
result in a material impact on the completion of the Work in accordance with the applicable Statement of Work, then the relevant Project Manager shall immediately bring the issue to the attention of the other partys Project Manager.
5. RESPONSIBILITIES OF [**]
5.1 [**] shall perform all tasks assigned to it in the Statement of Work [**] (herein sometimes referred to as the [**] Tasks).
5.2 Unless otherwise expressly set out in this Agreement, [**] shall respond in writing within ten (10) Business Days to every written request for consent required by this Agreement received from Digimarc.
5.3 If [**] is delayed in complying with any of its obligations under clauses 5.1 or 5.2 for any reason not attributable to Digimarc, and such delay is the cause of a delay in the completion and delivery by Digimarc of any Deliverable, then the time for completion of the Deliverable, and all subsequent Deliverables dependent thereon, will be extended automatically by one day for each day of delay by [**] or such other period as may be agreed in writing between the parties respective Contract Authorities. If Digimarc suffers increased costs by reason of such delay, other than a delay due to a force majeure event, such costs shall be borne by [**] and shall be in addition to the [**] otherwise contemplated by this Agreement. If the delay is due to a force majeure event, such costs shall be borne equally by [**] and Digimarc, and shall be in addition to the [**]. This clause 5.3 sets forth Digimarcs only remedy for a delay by [**] in complying with any such obligation.
6. CHANGES TO THE WORK
6.1 Either party may propose a change to the Work from time to time by submitting a request in writing to the other partys Project Manager.
6.2 On making such a request or within three (3) Business Days after receiving such a request from the DLA Project Manager, Digimarc shall inform the DLA Project Manager of the amount, if any, which Digimarc intends to invoice [**] to investigate whether the change can be made and the effect the change will have on the Statement of Work and the [**] for [**].
6.3 Within ten (10) Business Days after receiving the written authorization of the DLA Project Manager to conduct the investigation or such longer period as may be authorized by the DLA Project Manager, Digimarc shall report to the DLA Project Manager, in writing, on the results of the investigation.
6.4 Within ten (10) Business Days after the DLA Project Manager receives the report, the DLA Contract Authority shall, on behalf of [**], notify Digimarc whether or not [**] authorizes the change.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
6.5 Digimarc shall not implement any change to the Work until the change is authorized in writing by the DLA Contract Authority on behalf of [**].
6.6 Pending receipt of a written authorization from the DLA Contract Authority, on behalf of [**], Digimarc shall proceed with the Work in accordance with the Agreement.
7. APPROVAL OF DELIVERABLES
7.1 If Digimarc fails to produce a Deliverable acceptable to [**] by the date set out in the applicable Statement of Work, or in the case where the Statement of Work requires the parties to agree on whether a Deliverable is acceptable, if the parties fail to agree for any reason by the date specified in the Statement of Work or, if no date is specified, within ten (10) Business Days after a partys Contract Authority asks the other partys Contract Authority for agreement, then the DLA Contract Authority may, in its sole discretion, by written notice to Digimarc, either:
(a) allow additional time for Digimarc to produce a Deliverable acceptable to [**] or for the parties to come to agreement, whereupon the time for completion of all other Deliverables which depend on the acceptance or agreement will be automatically extended by one day for each additional day or such other period as may be agreed in writing between the parties respective Contract Authorities; or
(b) cancel any further Work on the Deliverable and all Deliverables which depend on the acceptance or agreement, whereupon the Statement or Statements of Work which provide for the cancelled Work or Deliverables will be deemed to be amended to exclude them.
7.2 Neither party shall refer for arbitration any failure to agree referred to in clause 7.1.
8. INTELLECTUAL PROPERTY MATTERS
8.1 [**] acknowledges that Digimarc does not have sufficient basis on which to determine whether [**] is the owner of the [**] Technology or the Other [**] Technology.
8.2 [**] shall grant to Digimarc following Digimarcs written acceptance of an offer by [**] to obtain a licence for any [**] Technology a [**] such [**] Technology to comply with its obligations under this Agreement and any license agreement entered into as directed or permitted by the DLA Contract Authority under this Agreement and for no other purpose.
8.3 Digimarc acknowledges that [**] does not have sufficient basis on which to determine whether Digimarc is the owner of the Digimarc Technology or the Project Technology but as between [**] and Digimarc, Digimarc is the owner of the Project Technology, the Improvements thereon and the Technical Information related thereto. Except as otherwise provided herein, Digimarc may freely use and license all such technology.
8.4 Digimarc hereby grants to [**], effective upon the date specified in clause 8.5, the [**] the Digimarc Technology and the Project Technology, and all Improvements thereto, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements, and to sublicense the use of the Digimarc Technology and the Project Technology and such
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Improvements and Technical Information to other Persons, for the purposes of [**] the System and any such component thereof, and making the System and any component available to others solely for [**]. On the effective date of the grant of the license referred to above, [**] copy and use the Escrowed Materials for the purpose of exercising all rights granted under the license and the Escrow Agent shall be deemed authorized to release the Escrowed Materials to [**]. The expressions [**] as used in this clause 8.4, shall be deemed to refer to [**].
8.5 The license described in clause 8.4 shall take effect on the earliest of:
(a) the date on which the DLA Contract Authority requests in writing the license and [**] pays Digimarc the difference, if any, between [**] and the total of the amounts paid and owing to Digimarc pursuant to clause 3.3 above;
(b) [**], subject to payment of all sums properly due to Digimarc under clause 3.2 for Work completed up to [**];
(c) sixty (60) days following the effective date of termination of this Agreement by [**] in accordance with the provisions of clause 15.2 (a), (b), (d) or (e) unless Digimarc demonstrates within such sixty (60) day period that, notwithstanding the occurrence of the events giving rise to the termination, Digimarc is willing and able to comply with its obligations under the Agreement; and
(d) the effective date of termination of this Agreement by [**] in accordance with the provisions of clauses 15.2(c), 15.2 (f), 15.2(g) or 15.3.
8.6 Digimarc hereby grants to [**], effective on the date specified in this clause, the [**] the Digimarc Technology and the Project Technology and all Improvements thereto, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements, and to sublicense the use of the Digimarc Technology, the Project Technology and such Improvements and Technical Information to other Persons, for the sole purpose [**] solely for [**]. This license shall take effect on written request by the DLA Contract Authority at any time following the later of the date on which the license referred to in 8.4 takes effect and the date on which [**] pays Digimarc [**].
8.7 Upon the date on which this Agreement is last signed by them, [**] and Digimarc shall sign the Escrow Agreement and procure that the Escrow Agent signs that Agreement within thirty (30) days. Upon complete signature of the Escrow Agreement, Digimarc shall make available a complete and accurate copy of the Technical Information for the Digimarc Technology and the Project Technology existing on April 19, 1999, for collection and the carrying out of the Verification Process referred to in clause 3.1 by the Escrow Agent at Digimarcs premises.
8.8 From time to time during the Term, on no less than five (5) Business Days prior written notice by the DLA Project Manager, Digimarc shall, at Digimarcs premises, present
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
representatives of the Escrow Agent with all the material, in any form, in Digimarcs possession or control which contains or describes the Technical Information pertaining to the Digimarc Technology and the Project Technology. The representatives may identify any or all of such material and Digimarc shall arrange, at the expense of [**], for a complete, accurate and up-to-date copy of the selected material to be made and sent to the Escrow Agent within five (5) Business Days of the selection being made for deposit under the terms of the Escrow Agreement. If [**] exercises the right granted by this provision 8.8, [**] shall reimburse Digimarcs costs related thereto which costs are in addition to the [**] otherwise contemplated by this Agreement.
8.9 Within twenty (20) Business Days after the end of each calendar quarter during each Phase, Digimarc shall update the Escrowed Material in the possession of the Escrow Agent to reflect all Improvements to the CDS Technology and [**] made by or at the request of Digimarc during that quarter.
8.10 Nothing in this Agreement shall be construed to grant any broader license rights than those expressly granted by the Agreement.
8.11 From and after the date on which [**] gets access to the Escrowed Materials pursuant to the Escrow Agreement, [**] shall inform Digimarc within thirty (30) days after the end of each calendar quarter during the Term of all improvements relating to (i) [**]; (ii) [**]; (iii) [**]; and (iv) any other part of the CDS, [**], or caused or permitted to be made, as a result of access to and use of the Escrowed Materials or the Digimarc Confidential Information. The first such information shall be provided to Digimarc within thirty (30) days after the first calendar quarter following said access, and shall cover improvements made from the date [**] first received, or caused or permitted others to receive, any of the Escrowed Materials or any Digimarc Confidential Information. Following the provision of the information under this clause 8.11, [**] shall provide to Digimarc within a reasonable period of time following request, the Technical Information for those improvements requested by Digimarc in writing.
8.12 [**] hereby grants to Digimarc a royalty-free, non-exclusive, non-transferable, worldwide license to use and license the improvements described in clause 8.11 and in any patents thereon owned or otherwise licensable by [**].
8.13 The license referred to in clause 8.12 shall continue until this Agreement expires or is terminated, or until [**] has no further rights to the Escrowed Materials and Digimarc Confidential Information, whichever occurs last.
8.14 For greater certainty, the obligations set out in clauses 8.11, 8.12 and 8.13 shall not apply to any improvement which [**] can demonstrate would have been made irrespective of access to the Escrowed Materials or Digimarc Confidential Information.
8.15 [**] shall take all reasonable steps to ensure that Persons, other than its directors, officers and employees, to whom it allows access to the Escrowed Materials will be contractually bound in accordance with terms substantially like those set forth in clauses 8.11, 8.12, 8.13 and 8.14, granting rights in favour of Digimarc.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
8.16 Notwithstanding any other provision of this Agreement to the contrary, [**] right to acquire the license described in clause 8.4 by payment of the fee described in clause 8.5(a) shall survive termination of this Agreement by [**] in accordance with the provisions of clause 15.2 (a), (b), (d) or (e) and be exercisable at any time during a period of sixty (60) days following such termination.
9. SECURITY
9.1 Unless otherwise expressly permitted by this Agreement or authorized in writing by the DLA Contract Authority pursuant to this Agreement, Digimarc shall not use, or permit or suffer, to be used:
(a) [**]
(b) the [**] Technology or the Other [**] Technology for any purpose except solely to comply with Digimarcs obligations under this Agreement and any license agreement entered into as directed by the DLA Contract Authority under this Agreement.
Subject to the restrictions set out in this clause 9.1, Digimarc may, at its option, [**]
9.2 Notwithstanding the provisions of clause 9.1, Digimarc may use the [**] Technology, the Other [**] Technology and the [**], and any Improvements, and the Technical Information pertaining to the [**] Technology, the Other [**] Technology and the [**] and such Improvements, to [**] a Security Client for a Security Purpose. Such use may continue so long as:
(a) [**]; and
(b) [**]
9.3 Digimarc may, at any time, make a proposal to the DLA Contract Authority to use the [**] Technology, the Other [**] Technology and the Technical Information pertaining thereto, to develop products and services and to license the use of those products and services to other clients or for other purposes. The DLA Contract Authority may, in his or her sole discretion, authorize the proposed use. Following authorization, such use may continue so long as:
(a) the use does not have a material adverse impact on the effectiveness for [**] provided by Digimarc to any Person during the Term for incorporation into any Device in [**]; and
(b) Digimarc uses its best efforts, including obtaining a legally binding commitment from the proposed user, to ensure that the proposed user does not use the product or service or permit or suffer the product or service to be used, for any purpose other than the permitted purpose.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
9.4 For the purposes of clauses 9.2 and 9.3:
(a) a license to use shall not, unless expressly agreed to by the DLA Contract Authority in his or her sole discretion, include the right to grant a sublicense to any Person except end-user customers of the licensee; and
(b) a material adverse impact will be deemed to arise if, as a result of such use or enjoyment, a [**] referred to therein fails to meet the Specifications for the version of the [**] last accepted by [**] under this Agreement.
9.5 Digimarc shall supply the DLA Contract Authority with all information reasonably available and required to evaluate the effect of each use proposed by Digimarc pursuant to clause 9.3 including, but not limited to, details of the ownership, affiliations, financial stability, security practises, industry reputation, business plans and business operations of the proposed user.
9.6 If Digimarc learns, or has reasonable cause to believe, that any Person to whom Digimarc:
(a) licenses the use of a product or service as permitted by the DLA Contract Authority under clauses 9.2 or 9.3 has used, or permitted or suffered to be used, or proposes to use, or permit or suffer to be used, the product or the results of the services for any purpose which is not permitted as described above, or
(b) has granted a license as requested by the DLA Contract Authority under clause 2.8 or 2.9 in respect of, or has used, or permitted or suffered to be used, or proposes to use or permit or suffer to be used, the [**] or the Technical Information pertaining thereto subject of the license for any purpose other than as permitted by this Agreement,
Digimarc shall immediately notify the DLA Contract Authority of such unauthorised use and Digimarc shall use its best efforts, at its own expense, to prevent any further such use including exercising whatever legal remedies (including, without limitation, an application for injunctive relief) are available to Digimarc. Digimarc shall, immediately on notice by the DLA Contract Authority, assign to [**] any right of action which Digimarc may have in respect of any such further use, or transfer to [**] the control and conduct of legal proceedings and claims in relation to such use. Following such assignment or transfer, Digimarc shall cooperate with [**] to achieve the successful prosecution or, if directed by [**], settlement, of any such action, proceedings or claims.
9.7 Digimarc shall not, except as reasonably necessary to fulfill its obligations under this Agreement or any license agreement entered into as requested by the DLA Contract Authority under clause 2.8 or 2.9, enable any product referred to in clauses 9.2 or 9.3 to produce, display or otherwise make detectable, [**] which is or may be used in [**] by any Licensed [**].
9.8 Digimarc shall at all times comply, and shall ensure that its employees, agents and subcontractors comply, with the Security Requirements.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
10. REPRESENTATIONS AND WARRANTIES OF DIGIMARC
10.1 Digimarc represents, warrants and undertakes to [**] that from and after the Effective Date:
(a) the Work will be of professional quality conforming to generally accepted [**] practices and will be performed at all times in a timely and cost effective manner and, for greater certainty Digimarc shall employ the standard of care in performing the work that would be expected of [**] of the same or similar type as the [**] which comprises the CDS Technology;
(b) Digimarc is duly incorporated and organized and is validly subsisting under the laws of the State of Oregon, U.S.A. or some other state in the United States with full corporate power and authority to enter into this Agreement;
(c) to the best of its knowledge, neither this Agreement nor the Work will contravene, breach, or result in any default under any agreement, permit, by-law, or law or regulation to which Digimarc is subject or by which it is bound including, for greater certainty, any laws or regulations in effect in the United States governing export;
(d) this Agreement when executed and delivered by Digimarc shall constitute a valid and binding agreement with Digimarc enforceable against Digimarc according to its terms;
(e) Digimarc owns all rights in and to, or is properly licensed in respect of, the Digimarc Technology, the Project Technology and the Technical Information pertaining thereto;
(f) Digimarc will at all material times have the right to grant the licenses to the Digimarc Technology, the Project Technology and the Improvements thereon and the Technical Information pertaining to the Digimarc Technology and the Project Technology and all such Improvements as required by this Agreement; and
(g) for greater certainty, neither the Project Technology, the Digimarc Technology or Improvements thereon or the Technical Information pertaining to the Project Technology, the Digimarc Technology or such Improvements infringe any Intellectual Property Right of any Person.
10.2 Digimarc represents, warrants and undertakes to [**] that:
(a) incorporated as part of its [**] practices and procedures are those measures and security procedures commercially and reasonably available on the date for delivery of a component of the CDS [**] in the CDS that could interfere with the use of the CDS or corrupt, interfere with or damage any data;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(b) the CDS shall contain no lock, clock, timer, counter, copy protection feature, replication device or intentional defects (including but not limited to viruses or worms as such terms are commonly used in the computer industry), CPU serial number reference, or other device which might:
(i) lock, disable or erase the CDS or any data which is loaded on the CDS so as to prevent full use of the CDS by authorized Persons; or
(ii) require action or intervention by Digimarc or any other Person to allow properly trained and authorized Persons to use the CDS;
(c) the source code for the CDS, including that deposited with the Escrow Agent, will, without reference to Digimarc or any of its employees or authorized subcontractors, be understandable and usable by expert personnel familiar with the programming languages, and scientific and processing techniques, used therein, and will not involve any programming components that such personnel could not reasonably be expected to understand, and if necessary such source code shall contain sufficient commentary to enable such personnel to understand and use such components; the source code for the CDS will support the year 2000 and neither performance nor functionality will be affected by dates prior to, during and after the year 2000 and, for greater certainty, the CDS will switch to 1 January 2000 on 1 January 2000, and the year 2000 will be recognized as a leap year; and
(d) the Technical Information and all other Escrowed Materials deposited with the Escrow Agent under this Agreement will contain all information in human readable form and on suitable media to enable an expert technical consultant, familiar with the scientific and processing techniques used therein, to understand and use the same without reference to Digimarc or any of its employees and authorised subcontractors.
10.3 Digimarc represents, warrants and undertakes to [**] that:
(a) [**] accepted by [**] will meet the Specifications for that version from the date that it is accepted by [**] until the earlier of the date on which the next version is accepted by [**] and the last day of the Term; and
(b) until the last day of the Term, [**] provided by Digimarc to any Person for incorporation into any Device will be capable of meeting the performance criteria which formed part of the Specifications for the version of the [**] last accepted by [**] under this Agreement at the time such detector was so provided.
10.4 [**] will not be counted in the determination under clause 10.3 as to whether or not an [**] meets the Specifications.
10.5 If any version of the [**] fails to meet the Specifications for that version within one (1) year of the date of acceptance thereof by [**], and such failure could not have been discovered by
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[**] using reasonable diligence during the acceptance procedure for that version, then Digimarc shall, at its own expense, within sixty (60) days after receipt of the Problem Report from the DLA Contract Authority or the DLA Project Manager or such other period as the DLA Project Manager may agree, rectify the failure and at the direction of the DLA Project Manager provide a corrected [**] to which Digimarc had previously provided the [**].
10.6 If a particular version of [**] provided by Digimarc to any Person during the Term for incorporation into any Device, including for greater certainty any version of a [**], fails to meet the relevant Specifications within one (1) year of the date of acceptance thereof by [**], and such failure could not have been discovered by [**] using reasonable diligence during the acceptance procedure for that version, then Digimarc shall, at its own expense, within sixty (60) days after receipt of written notice of a Problem Report from the DLA Contract Authority or the DLA Project Manager or such other period as the DLA Project Manager may agree, rectify the failure and at the direction of the DLA Project Manager provide [**] to all Persons to which Digimarc had previously provided such [**].
11. REPRESENTATIONS AND WARRANTIES OF THE [**]
11.1 [**] represents and warrants to Digimarc that:
(a) [**] has full power and authority to enter into this Agreement;
(b) this Agreement when executed and delivered by [**] shall constitute a valid, binding and enforceable obligation of [**];
(c) [**] will at all material times have the right to grant the licenses required by this Agreement to the [**] Technology and the Technical Information pertaining to the [**] Technology;
(d) from and after the date on which [**] gets access to the Escrowed Materials (the Release Date) as provided by clause 8.4 or 8.6 above until the last day of the Term, every [**] which [**] develops, permits, or causes to be developed using the Escrowed Materials for incorporation into any Device will be capable of [**] with the same or better performance ([**]) than the version of the [**] last accepted by [**] possessed on the Release Date on which [**] gets access to the Escrowed Materials.
11.2 [**] makes no representations, warranties or undertakings that [**] has any right to grant any license in respect of any Other [**] Technology or grant the licenses required to be granted by clause 8.12 in relation to any improvements referred to therein and in each case Digimarc shall be solely responsible for determining that any Other [**] Technology and/or such improvements are suitable for the intended use and for the consequences of any use of the same, whether by Digimarc or others, and [**] hereby disclaims all liability in connection therewith.
11.3 For greater certainty, the provisions of clauses 16.5 and 16.6 shall not apply to any Other [**] Technology.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
12. CONFIDENTIALITY
12.1 Except as otherwise expressly permitted by this Agreement, a Recipient shall not use, reproduce or disclose the Confidential Information of the Discloser for any purpose other than as reasonably necessary to comply with its obligations under this Agreement or to exercise any rights or licenses granted to it under or pursuant to this Agreement.
12.2 The Recipient shall protect the Confidential Information of the Discloser from disclosure by using the same degree of care, which shall be no less than a reasonable degree of care, as the Recipient uses to protect its own confidential information.
12.3 On written request from the Discloser, the Recipient shall return, or certify the destruction of, all originals and copies of the Disclosers Confidential Information in the Recipients possession or control which the Recipient does not need to retain in order to perform any obligations imposed, or exercise any rights acquired, by this Agreement.
12.4 A Recipient may, on a need to know basis, and only for the purposes described in clause 12.1, give the other partys Confidential Information to the Recipients employees, authorized subcontractors or representatives provided that such employee, subcontractor or representative shall have entered into a non-disclosure agreement in respect of such Confidential Information in favour of the Discloser on terms materially similar to the provisions of this clause 12. For greater certainty, [**] representatives shall include the DLA Contract Authority, the DLA Project Manager and all representatives of members of [**].
12.5 The obligations set out in this clause 12 will not apply to any Confidential Information that:
(a) is or becomes publicly available other than through the fault of the Recipient;
(b) was known to the Recipient prior to disclosure as shown by documentation sufficient to establish such knowledge;
(c) was or is lawfully disclosed to the Recipient by a third party who did not breach any obligation of confidence by such disclosure and who made the disclosure without restriction on further disclosure all of which is shown by documentation sufficient to establish same; or
(d) is required by law to be disclosed provided, however, that the Recipient shall first give written notice to the Discloser before the disclosure so that the Discloser may seek an appropriate protective order.
The fact that Confidential Information, or any part thereof, can be linked together by a search of publications and other information, followed by a selection of a series of such items of knowledge from unconnected sources, and fitting together those items of knowledge so as to
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
duplicate or recreate any item of Confidential Information, shall not be deemed to cause the Confidential Information, or any part thereof, to be included within exceptions (a), (b) or (c), above.
12.6 If either party is required by applicable law or regulation, by legal process or by the U.S. Securities and Exchange Commission or listing requirements of any exchange or quotation system on which securities of any party may be listed or quoted, to disclose the terms of this Agreement (such disclosure being referred to herein as Legally Required Disclosure), such party shall provide the other party with prompt notice of such requirement so that the other party may seek an appropriate protective order or remedy. In the event the other party fails to obtain an order or remedy that would permit the requested party not to disclose the required terms, the disclosure shall be permitted, but the disclosing party will use all reasonable efforts to have the disclosure treated confidentially by the recipient.
12.7 The [**] Technology, the Other [**] Technology, and solely for the purposes of clause 12 the [**] insofar as it pertains to [**], and the Technical Information which pertains solely to the [**] Technology and the Other [**] Technology and those aspects of the [**], including any [**] which is or may be used [**] by any Licensed [**], shall be deemed to be the Confidential Information of [**]. Digimarc may disclose such Confidential Information to a person to whom Digimarc has granted a license pursuant to clause 9.2 or 9.3 but only if:
(a) Digimarc can demonstrate to the reasonable satisfaction of [**] that disclosure is necessary to enable Digimarc to grant the license under clause 9.2 or 9.3; and
(b) such person enters into a non-disclosure agreement in respect of such Confidential Information in favour of [**] on terms materially similar to the provisions of this clause 12.
12.8 Nothing in this Agreement shall be construed to require [**] or any representative of [**] including, for greater certainty, the DLA Project Manager or the DLA Contract Authority, to disclose any information which is confidential to a third party including for greater certainty a [**] or a Licensed [**].
12.9 [**] shall not reverse-engineer, disassemble, or decompile any [**] forming part of the CDS, [**] (except to the extent that any such activity is reasonably necessary to permit [**] to exercise its licence rights under clauses 8.4 and 8.6 of this Agreement or [**] right to do so may not be contractually restricted under applicable law), and shall contractually ensure that any other Person to whom [**] provides [**] shall be similarly obliged.
12.10 For greater certainty the obligations imposed by this clause 12 shall continue to apply to the Escrowed Material after it comes into the possession of [**] notwithstanding the circumstances that give rise to such possession.
12.11 General attributes of the CDS may be disclosed in connection with promotion of the CDS to the [**], and to customers or prospects in related markets; information relating to the [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Technology and the [**] Technology may be disclosed to [**] and vendors of [**] subject to a nondisclosure agreement but in all such cases Digimarc shall not disclose any information relating to the [**]. The existence and terms of this Agreement may be disclosed to the parties professional advisors, to members of the[**], and to Digimarcs present shareholders, institutional and corporate investors, and commercial and investment bankers, who have a reasonable need to know such information subject to a non-disclosure agreement.
13. AUDIT AND INSPECTION
13.1 [**], or its duly authorised representatives, may from time to time, without notice, at its own expense, conduct an audit or inspection during normal business hours to verify Digimarcs compliance with its obligations under this Agreement. Digimarc shall facilitate such audit activities by providing access to its premises, as well as any books, records, and other information relating to this Agreement and the Work as may be reasonably requested by [**]. [**] shall promptly advise Digimarc in writing of the results of any audit. If [**] exercises this right more frequently than twice in each calendar year, [**] shall reimburse Digimarcs reasonable costs related thereto which costs are in addition to the [**] otherwise contemplated by this Agreement except in the case where the exercise of such right is reasonably required to follow-up on a non-compliance detected during a previous audit or inspection.
13.2 If, as a result of any such audit, [**] is of the view that Digimarc has engaged in or is about to engage in any act, or has omitted to perform any act, which act or omission is not in compliance with Digimarcs obligations under this Agreement, the DLA Contract Authority may issue to Digimarc a directive requiring Digimarc to refrain from engaging in such act or to perform such act or acts as the DLA Contract Authority deems necessary, acting reasonably, for Digimarc to comply with the Agreement and Digimarc shall promptly comply with such directive at its own expense.
13.3 No act performed by [**], its duly authorised representatives or the DLA Contract Authority pursuant to the provisions of this clause 13 and no omission by any of them to perform an act pursuant to the provisions of this clause 13 shall in any way affect Digimarcs obligation to comply with this Agreement.
14. DISPUTE RESOLUTION
14.1 Any Dispute (as defined in the Arbitration Agreement) shall be finally settled by arbitration in accordance with the Arbitration Agreement.
14.2 Unless otherwise agreed between the parties or unless the subject matter of the dispute resolution proceedings is a partys right to terminate this Agreement, the Work shall continue during the arbitration proceedings and payments due to Digimarc shall not be withheld on account of such proceedings unless that particular Work or payment is the subject matter of the proceedings. Notwithstanding the foregoing, [**] may at its sole discretion instruct Digimarc to continue the performance of that Work, and Digimarc shall act in accordance with those instructions, subject to payment in accordance with clause 3.2.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
15. TERM AND TERMINATION
15.1 This Agreement shall take effect on the Effective Date and shall remain in force throughout the Term unless sooner terminated as provided herein.
15.2 [**] may in its sole discretion terminate this Agreement effective immediately on notice to Digimarc if:
(a) Digimarc makes a general assignment or any other arrangement for the benefit of its creditors;
(b) a proposal or arrangement under applicable bankruptcy or insolvency legislation, or a petition is filed by or against Digimarc under applicable bankruptcy or insolvency legislation and is not discontinued within thirty (30) days;
(c) Digimarc is declared or adjudicated bankrupt or goes into liquidation;
(d) a liquidator, trustee in bankruptcy, custodian, receiver, administrator, administrative - receiver, manager, or any other officer with similar power is appointed over all or any part of the assets and undertaking of Digimarc;
(e) Digimarc commits an act of bankruptcy, institutes proceedings to be adjudged bankrupt or insolvent, consents to the initiation of such appointment or proceedings or admits in writing inability to pay debts generally as they become due;
(f) Digimarc assigns the Agreement without [**]`s consent in breach of clause 19.7; or
(g) Digimarc ceases or threatens to cease business.
15.3 Either party may terminate this Agreement effective immediately on notice to the other party if:
(a) the other party fails, or is unable or unwilling to perform any of its obligations under this Agreement (hereinafter referred to as a breach) and fails to remedy such breach within sixty (60) days after receiving written notice of such breach from the other party; or
(b) an event of force majeure (as defined in clause 17) has continued for a period longer than sixty (60) continuous days or such longer period as the parties may agree and no satisfactory alternative arrangements have been agreed to continue the Work.
15.4 Notwithstanding the foregoing, [**] has no right to terminate this Agreement for breach under clause 15.3 if the breach consists of a failure by Digimarc to perform a particular task the performance of which proves to be technically infeasible provided that the DLA Project Manager
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
has agreed with the Digimarc Project Manager in writing before the task is commenced that the task may be technically infeasible.
15.5 As of the effective date of a termination of this Agreement by Digimarc as permitted by clause 15.3(a) above, the licenses granted by Digimarc pursuant to clause 2.8 or 2.9 above shall continue but be deemed to be restricted [**].
15.6 Termination of this Agreement by [**] for any reason in accordance with the provisions of this clause 15 shall not affect any license granted by Digimarc pursuant to clauses 2.8, 2.9, 8.4, or 8.6 above.
15.7 On termination of this Agreement by Digimarc or [**] for any reason Digimarc shall within fifteen (15) Business Days deliver to the Escrow Agent all Work in progress done up to the effective date of termination, including all Technical Information relating to such Work, and all Technical Information pertaining to the Digimarc Technology or the Project Technology which has not previously been deposited with the Escrow Agent and issue to the DLA Contract Authority a certificate signed by an officer of Digimarc that it has fully complied with this obligation.
16. INTELLECTUAL PROPERTY INDEMNIFICATION
16.1 [**] shall provide Digimarc with prompt written notice of any claim, demand or action against [**] based on an allegation that the CDS, the Digimarc Technology or the Project Technology or any Improvements thereto or any part thereof, infringes any Intellectual Property Right of any Person (referred to below as a Claim). [**] shall use its reasonable efforts to conduct the defence of any Claim in a timely and cost effective manner. Digimarc shall, at Digimarcs expense, comply with all reasonable requests for assistance from [**] in connection with the defence of the Claim.
16.2 Notwithstanding any other provision of this Agreement to the contrary, Digimarc shall indemnify [**] against and save [**] harmless from all loss, costs, liabilities including, for greater certainty an award of damages, and expenses, including, for greater certainty, reasonable legal fees, arising from each Claim. The obligation set out in this clause 16 shall not apply in respect of any settlement made by [**] without the consent of Digimarc.
16.3 If the CDS, the Digimarc Technology or the Project Technology, or any Improvement thereto or part thereof is held to infringe, or if Digimarc believes that it is likely to be held to infringe, any of the Intellectual Property Rights described in clause 16.1, Digimarc shall, in addition to its other obligations set out above, at its own expense either:
(a) procure for [**] the right to continue using the allegedly infringing materials; or
(b) replace or modify the materials to the reasonable satisfaction of [**] so that they are no longer infringing but remain functionally equivalent;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Failing either of which result [**] may, at its option, terminate this Agreement without prejudice to [**] other rights and remedies available in law, at equity or otherwise.
16.4 Digimarc shall provide [**] with prompt written notice of any claim, demand or action against Digimarc based on an allegation that the [**] Technology or any part thereof, infringes any Intellectual Property Right of any person (referred to below as a [**] Technology Claim). Digimarc shall, at [**]s expense, comply with all reasonable requests for assistance from [**] in connection with the settlement or defence of any [**] Technology Claim.
16.5 Notwithstanding any other provision of this Agreement to the contrary, [**] shall indemnify Digimarc against and save Digimarc harmless from all loss, costs, liabilities including, for greater certainty an award of damages, and expenses, including, for greater certainty, reasonable legal fees, arising from each [**] Technology Claim. The obligation set out in this clause 16.5 shall not apply in respect of any settlement made by Digimarc without the consent of [**].
16.6 If the [**] Technology or any part thereof is held to infringe, or if [**] believes that it is likely to be held to infringe, any of the Intellectual Property Rights described in clause 16.4, [**] may, in addition to its other obligations set out above, at its own expense either:
(a) procure for Digimarc the right to continue using the allegedly infringing materials; or
(b) replace or modify the materials to the reasonable satisfaction of Digimarc so that they are no longer infringing but remain functionally equivalent.
17. FORCE MAJEURE
17.1 If the performance by either party of any of its obligations under this Agreement is prevented or delayed by any circumstance of force majeure, which shall mean fire, flood, earthquakes, war, riots, or insurrection, the party shall immediately notify the other party.
17.2 The time period within which the party delayed is obliged to perform its obligations will be delayed during the period such circumstance exists. During the period of delay the party delayed shall use its best efforts to make alternate arrangements satisfactory to the other party to avoid delay or resume performance.
18. NOTICES
18.1 All notices under this Agreement shall be delivered by fax, or recognized international courier service. The notice shall be deemed effective as of the date of delivery to the address of the party specified below as evidenced by a delivery receipt or the addressees registry of incoming correspondence. Unless otherwise expressly set out in this Agreement, all notices to a party will be sent to the partys authorized representative identified below and all notices from a party will be sent by the partys authorized representative identified below.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
18.2 Any notice to DIGIMARC shall be sent to both of, and any notice from Digimarc shall be sent by either:
Mr. Bruce Davis
|
|
Mr. William Y. Conwell
|
18.3 Any notice to [**] shall be sent to both of, and any notice from [**] shall be sent by either:
[**] |
|
[**] |
18.4 A party may change its address for notice by notice to the other party in accordance with the provisions of this clause 18.
19. MISCELLANEOUS PROVISIONS
19.1 Remedies Cumulative - Except as otherwise expressly set out in this Agreement:
(a) each and every right, power and remedy of a party will be considered to be cumulative with and in addition to any other right, power and remedy which such party may have at law or in equity in the event of breach of any of the terms of this Agreement;
(b) the exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party; and
(c) a party terminating this Agreement in accordance with the provisions of this Agreement will have no liability or obligation to the other as a result of or with respect to the termination.
19.2 Severability - If any part of this Agreement is held by an arbitral tribunal appointed pursuant to the Arbitration Agreement or by any other competent authority to be void or unenforceable, the parties agree that such determination will not result in the nullity or unenforceability of the remaining parts of this Agreement, which will continue in force to the fullest extent permitted by law. The parties further agree to replace such void or unenforceable part of this Agreement with a valid and enforceable provision that will achieve, to the extent legally permissible, the economic, business and other purposes of the void or unenforceable part.
19.3 Counterparts . This Agreement may be executed in separate counterparts, and by facsimile, each of which will be deemed an original, and when executed, separately or together,
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
will constitute a single original instrument, effective in the same manner as if the parties had executed one and the same instrument.
19.4 Entire Agreement . This Agreement is intended by the parties to be the final expression of their agreement and constitutes and embodies the entire agreement and understanding between the parties hereto and constitutes a complete and exclusive statement of the terms and conditions thereof, and will supersede any and all prior correspondence, conversations, negotiations, agreements or understandings between the parties relating to the same subject matter.
19.5 Amendments . No change in, modification of or addition to the terms and conditions contained herein will be valid as between the parties unless set forth in a writing that is signed by an authorized representative of each party and which specifically states that it constitutes an amendment to this Agreement.
19.6 Waiver . No waiver of any term, provision, or condition of this Agreement will be effective unless in a written document signed by the waiving party and no such waiver in any one or more instances, will be deemed to be, or be construed as, a further or continuing waiver of that term, provision or condition or any other term, provision or condition of this Agreement.
19.7 Assignment and Successors . This Agreement may not be assigned, novated or otherwise transferred by Digimarc without the prior written consent of [**], which consent shall not be unreasonably withheld. For the purpose of this Agreement, an assignment includes a change in the voting control of Digimarc or the sale or other disposal of substantially all of Digimarcs assets. This Agreement and all of its terms, conditions and covenants are intended to be fully effective and binding, to the extent permitted by law, on the successors and permitted assigns of the parties hereto.
19.8 Substitution . [**] may by written notice to Digimarc at any time substitute any of the following (Substitute) as a party to this Agreement in place of and in substitution for [**], provided that such notice is accompanied by a Deed Of Adherence duly executed by the Substitute in the form attached as Schedule T:
(a) any wholly owned subsidiary of [**];
(b) any [**] existing at the Effective Date or any partnership or joint venture, the entire economic interest in which is owned by one or more of such [**];
(c) any body corporate, the entire economic interest in which is owned by one or more of the [**] described in clause 19.8(b); or
(d) [**].
With effect from the date of such notice the Substitute shall benefit from the same rights and be subject to the same obligations as [**] under this Agreement, and [**] shall no longer benefit from such rights and shall no longer be subject to such obligations.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
19.9 Upon exercising its right of substitution in favour of any wholly owned subsidiary of the [**], the [**] shall provide Digimarc with a comfort letter in the form attached as Schedule U.
19.10 Captions. Captions are provided in this Agreement for convenience only and they form no part, and are not to serve as a basis for interpretation or construction, of this Agreement, nor as evidence of the intention of the parties.
19.11 Disclaimer of Agency. Nothing contained in this Agreement is intended or will be interpreted so as to constitute the parties to this Agreement as partners or joint venturers or as agents of each other. Neither party will have any express or implied right or authority to assume or create any obligations on behalf of or in the name of any other party or to bind any other party in any contract, agreement or undertaking with any third party. No employee of a party shall be deemed or considered to be an employee of the other party or of both parties.
19.12 Publicity. The parties agree that from time-to-time it will be beneficial to both parties to issue press releases and other public announcements concerning benefits arising from the CDS. Each party agrees to submit such releases or announcements for prior approval by the other party which approval may be withheld by the party in its sole discretion. The DLA Contract Authority shall recommend to the [**] that they issue a communiqué produced by the DLA Project Manager at an appropriate time [**].
19.13 Effectiveness. This Agreement shall be effective only after it is signed by both of the parties.
19.14 Ambiguities. Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement.
19.15 Survival. All clauses of this Agreement which expressly or by implication are intended to survive the termination of this Agreement will do so and, for greater certainty and notwithstanding any provision in this Agreement to the contrary, the provisions set out in clauses 2.5, 3.6, 3.7, 3.8, 3.9, 3.10, 8.4, 8.6, 8.11 - 8.16, inclusive, 9.1, 9.2, 9.3, 9.7, 10, 11, 12, 13, 14, 16, 18 and 19 of this Agreement shall survive termination of this Agreement by either party for any reason.
IN WITNESS WHEREOF , this Agreement has been executed and delivered by the parties hereto as of the Effective Date.
[**] |
|
DIGIMARC CORPORATION |
|
|
|
|
|
|
Signature |
|
Signature |
Name: |
|
Name: Bruce Davis |
Title: |
|
Title: President & CEO |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Date |
|
Date: |
|
|
|
|
|
|
Signature |
|
|
Name: |
|
|
Title: |
|
|
Date |
|
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
AMENDMENT TO COUNTERFEIT DETERRENCE SYSTEM
DEVELOPMENT AND LICENSE AGREEMENT
This is an Amendment to the Counterfeit Deterrence System Development and License Agreement (the Amendment) made
Between
DIGIMARC CORPORATION , a corporation incorporated under the laws of Delaware and having its head office at 19801 SW 72 nd Avenue, Suite 250, Lake Oswego, Oregon. U.S.A. 97062 ( Digimarc)
and
[**]
Recitals
Effective 1 January [**], the above identified parties entered into an agreement entitled the Counterfeit Deterrence System Development and License Agreement (hereinafter the Agreement). The Agreement included documents listed in Section 1.4 of the Agreement which were made an integral part of the Agreement.
As required under Section 2.2 of the Agreement, by 21 December [**], Digimarc submitted to [**] a Proposal for the work to be done during Phase [**]. As required under Section 2.4, Digimarc submitted to [**] a revised Proposal for the work to be done during Phase [**].
Effective 8 March [**], Digimarcs Contract Authority, Bruce Davis, duly appointed J. Scott Carr to represent him in agreeing to amendments to the Agreement on behalf of Digimarc.
In consideration of the promises and covenants set out in this Amendment and in the Agreement and other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree as follows:
1. Change the address of Digimarc wherever it appears in the Agreement to the address shown herein.
2. Change the State of Incorporation of Digimarc wherever it appears in the Agreement from the State of Oregon, U.S.A. to the State of Delaware, U.S.A.
3. Delete the notice requirement to Mr. William Y. Conwell wherever it appears in the Agreement.
4. Replace Attachment 3 of Schedule B entitled Device Vendors with the attached page entitled SCHEDULE B, AMENDED ATTACHMENT 3: DEVICE VENDORS.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
5. Replace Schedule C with the attached document entitled AMENDED SCHEDULE C DATED MARCH 14 TH [**] PHASE [**] STATEMENT OF WORK.
6. Replace Schedule I with the attached document entitled AMENDED SCHEDULE I ALLOWABLE COSTS.
7. The parties agree the above-identified replacement documents for a page of Schedule B and all of Schedules C and I are, by this reference, made an integral part of this Amendment and supercede the corresponding documents referenced in Section 1.4 of the Agreement.
8. [**] hereby accepts, under Section 2.5 of the Agreement, the revised Proposal as evidenced in this Amendment and the attachments referenced in this Amendment.
9. Unless modified or superceded by this or other Amendments to the Agreement, all terms of the Agreement remain in full force and effect.
IN WITNESS WHEREOF , this Amendment to the Agreement has been executed and delivered by the parties hereto as of the date the last of the parties affixes their signature hereto.
[**] |
|
DIGIMARC CORPORATION |
|
|
|
|
|
|
Signature |
|
Signature |
Name: |
|
Name: Scott Carr |
Title: |
|
Title: Vice President and General Manager, |
Date |
|
Government and Bank Programs |
|
|
Date |
|
|
|
|
|
|
Signature |
|
|
Name: |
|
|
Title: |
|
|
Date |
|
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
AMENDMENT NUMBER TWO TO THE COUNTERFEIT DETERRENCE SYSTEM
DEVELOPMENT AND LICENSE AGREEMENT
This is the second Amendment to the Counterfeit Deterrence System Development and License Agreement (the Second Amendment) made
Between
DIGIMARC CORPORATION , a corporation incorporated under the laws of Delaware and having its head office at 19801 SW 72 nd Avenue, Suite 100, Tualatin, Oregon. U.S.A. 97062 ( Digimarc)
and
[**]
Recitals
Effective 1 January [**], the above-identified parties entered into an agreement entitled the Counterfeit Deterrence System Development and License Agreement (hereinafter the Agreement). The Agreement included documents listed in Section 1.4 of the Agreement which were made an integral part of the Agreement.
As required under Section 2.2 of the Agreement, by November 22, [**], Digimarc submitted to [**] the Offer for the work to be done during Phase [**].
[**] hereby accepts, under Section 2.5 of the Agreement, the Offer as evidenced in this Second Amendment and the attachments referenced in this Second Amendment.
In consideration of the promises and covenants set out in this Second Amendment and in the Agreement and other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree as follows:
1. Replace Attachment 3 of Schedule B entitled Device Vendors with the attached page entitled SCHEDULE B, AMENDED ATTACHMENT 3: DEVICE VENDORS.
2. Replace Schedule D with the attached document entitled AMENDED SCHEDULE D PHASE [**] STATEMENT OF WORK.
3. Replace Schedule I with the attached document entitled AMENDED SCHEDULE I ALLOWABLE COSTS.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
4. The parties agree the above-identified replacement documents for a page of Schedule B and all of Schedules D and I are, by this reference, made an integral part of the Agreement and supersede the corresponding documents referenced in Section 1.4 of the Agreement.
5. Unless expressly modified by this Second Amendment or other amendments to the Agreement, all terms of the Agreement remain in full force and effect.
6. In the Agreement, replace paragraph 3.4 with the following:
Except as otherwise expressly provided herein, the total amount which [**] will be liable to pay Digimarc for or in connection with the Allowable Costs and Mark-up for the Phase [**] Work, the Phase [**] Work and the Phase [**] Work will not be greater than [**] and assuming that (i) [**] has accepted Digimarcs Offer for all [**] and, (ii) [**] does not terminate this Agreement as permitted herein prior to the date on which Digimarc completes the Phase [**] Work in accordance with the provisions of this Agreement, not less than [**], subject to Digimarc having performed the Work equal to this amount of Allowable Costs and Mark-up.
7. In the Agreement, add paragraphs 19.16.1 and 19.16.2 as follows:
19.16.1 No third party Person shall have any right to enforce any provision of this Agreement under the Contracts (Rights of Third Parties) Act 1999.
19.16.2 Digimarc covenants that it will take all measures which are reasonably necessary to ensure that no third party with which Digimarc contracts or may contract has any right to enforce any provision of this Agreement against the [**] pursuant to the Contracts (Rights of Third Parties) Act 1999 and, in particular, that it will make no statements, representations or warranties to any such third party implying that the latter would have any right to enforce any provision of this Agreement under the Contracts (Rights of Third Parties) Act 1999.
IN WITNESS WHEREOF , this Second Amendment to the Agreement has been executed and delivered by the parties hereto as of the date the last of the parties affixes their signature hereto.
[**] |
|
DIGIMARC CORPORATION |
|
|
|
|
|
|
Signature |
|
Signature |
Name: |
|
Name: Scott Carr |
Title: |
|
Title: Vice President and General Manager, |
Date |
|
Government and Bank Programs |
|
|
Date |
|
|
|
Signature |
|
|
Name: |
|
|
Title: |
|
|
Date |
|
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DEVELOPMENT AND LICENSE AGREEMENT
This is the third Amendment to the Counterfeit Deterrence System Development and License Agreement (the Third Amendment) made by and between
DIGIMARC CORPORATION , a corporation incorporated under the laws of Delaware and having its head office at 19801 SW 72 nd Avenue, Suite 100, Tualatin, Oregon. U.S.A. 97062 (Digimarc)
and
[**]
Recitals
Effective 1 January [**], the above-identified parties entered into an agreement entitled the Counterfeit Deterrence System Development and License Agreement (hereinafter the Agreement). The Agreement included documents listed in clause 1.4 of the Agreement which were made an integral part of the Agreement.
On 14 March [**] and 28 December [**] the parties entered into Amendments to the Agreement (hereinafter First and Second Amendments).
In consideration of the promises and covenants set out in this Third Amendment, in the Agreement, in the First and Second Amendments and other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree that the Agreement as previously amended will be further amended as of 1 January, [**]:
1. DEFINITIONS AND PRINCIPLES OF INTERPRETATION
The following definitions in clause 1.1 shall be replaced as follows:
Arbitration Agreement means the Arbitration Agreement dated 21 June 1999 as amended and attached as Schedule E.
[**] Technology means that technology, if any, from the technology described in Schedule F in respect of which from time to time during Phases [**] of this Agreement and Phases [**] as defined in the [**] Agreement after discussion between the DLA Project Manager and the Digimarc Project Manager, [**] offers, and Digimarc accepts in writing, a [**] on the [**] in clause 8.2 to use, design or implement the CDS and all Intellectual Property Rights in that [**];
Digimarc Contract Authority means Digimarcs President or the Vice President, Government and Bank Programs;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Phase means Phase [**] of this Agreement as the case requires, adjusted if required by any period added pursuant to clause 5.3 or other changes to the Work authorized pursuant to clause 6 below;
Statement of Work means the Statement of Work set out in Schedules B, C, D, V or W as applicable;
Add new Definitions to clause 1.1 as follows:
[**] Agreement means the Agreement between [**] and Digimarc relating to the provision by Digimarc of certain [**] services effective as of 1 January [**], as amended from time to time.
Phase [**] means the period from 1 January 2002 to 31 December 2002;
Phase [**] means the period from 1 January 2003 to 31 December 2003;
Phase [**] Work means the tasks and Deliverables identified in the Phase [**] Statement of Work attached as Schedule V to be performed or produced during Phase [**];
Phase [**] Work means the tasks and Deliverables identified in the Phase [**] Statement of Work attached as Schedule W to be performed or produced during Phase [**] if [**] elects to proceed with Phase [**]; and
Project Manager means either the Digimarc or DLA Project Manager, as the context requires.
1.2 Interpretation :
Clause 1.2.5 shall be replaced with:
1.2.5 unless otherwise specified, the order of precedence for interpreting this Agreement shall be:
a) the Amendments to the Agreement with the Third Amendment supplementing the Second Amendment and the Second Amendment supplementing the First Amendment;
b ) the other terms of this Agreement, excluding Schedules;
c) the Schedules; and
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
d) as between the delivery schedules forming part of a Statement of Work, and other provisions of such Statement of Work, the delivery schedules shall take precedence.
1.2.9 When a definition or a clause in this Agreement is described in the Third Amendment as a replacement, the definition or clause in this Third Amendment replaces the previous definition or clause in the Agreement. When a new definition or a clause is presented in this Third Amendment, the new definition or clause in this Third Amendment is considered added to and incorporated into the Agreement. The changes in this Third Amendment are referenced by the clauses they appear in the Agreement and such changes shall not apply to the interpretation of any part of the Agreement relating to any events, acts or omissions occurring prior to 1 January [**] unless such events, acts or omissions are relevant to any event, act or omission occurring on and after that date. Unless expressly modified, superseded or replaced by this Third Amendment, each term of the Agreement as amended by the First or Second Amendment remains in full force and effect.
1.4 Schedules
In clause 1.4,
Replace Schedules E, I, K-1, K-2, L-1, L-2, N and S as attached; and
Add the following new schedules:
Schedule V described as Phase [**] Statement of Work;
When agreed upon, Schedule W described as Phase [**] Statement of Work; and Schedule X described as [**] Expenditures.
The parties agree the above-identified replacement document Schedules E, I, K-1, K-2, L-1, L-2, N and S supersede the corresponding documents referenced in clause 1.4 of the Agreement and such replacement Schedules together with the new Schedules V, W and X are, by this reference, made an integral part of the Agreement.
2. SCOPE OF THE WORK
Add new clauses to clause 2 as follows:
2.17 [**] has accepted Digimarcs Offer to perform the Phase [**] Work in accordance with the Phase [**] Statement of Work. Digimarc shall perform the Phase [**] Work in accordance with the Phase [**] Statement of Work. [**] has no right to terminate this Agreement during Phase [**], unless [**] terminates this Agreement under clause 15 before Digimarc completes the Phase [**] Work.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.18 Subject to [**] acceptance of the corresponding Offer described in clauses 2.20 and 2.21, Digimarc shall perform the Phase [**] Work in accordance with the Phase [**] Statement of Work. After acceptance by [**] of the Offer described in clauses 2.20 and 2.21, [**] has no right to terminate this Agreement during Phase [**], unless [**] terminates this Agreement under clause 15 before Digimarc completes the Phase [**] Work.
2.19 On or before 15 August [**], Digimarc shall deliver to [**] and the DLA Project Manager a written proposal (the Proposal) for the Work to be done during Phase [**], which Proposal will be in the form of a proposed amendment to the Agreement and will include, but not be limited to:
(a) The Statement of Work for Phase [**] (Schedule W);
(b) an estimate of the Allowable Costs to be incurred by Digimarc in connection with Digimarcs performance of the Work for Phase [**]; and
(c) the nature, timing and estimated quantity of the effort which will be required from [**] to enable Digimarc to perform the Work as proposed during Phase [**].
2.20 The Proposal for Phase [**] when delivered by Digimarc to [**] pursuant to clause 2.19 shall be deemed to constitute an irrevocable offer (the Offer) to amend the Agreement. Digimarc undertakes and represents that the Proposal will be prepared with all due care and diligence and that at the date of [**] acceptance of the Offer, it will not be aware of any matters within its reasonable control which might or will adversely affect its ability to perform the Work for Phase [**].
2.21 The Offer for the Phase [**] Work shall remain open for written acceptance by [**] at its sole discretion until the earlier of 30 November [**] or notice by [**] that it elects not to proceed with Phase [**]. If requested by the DLA Contract Authority by November 1, [**], Digimarc shall prepare and send by November 10, [**] a revised Offer to [**] to take into account any reasonable revisions and clarifications to the original Offer requested by the DLA Contract Authority and [**] will have until November 30, [**], subject to receipt of the revised Offer by November 15, [**], to accept the revised Offer.
2.22 The Term will continue notwithstanding that [**] elects not to accept the Offer for the Phase [**] Work.
2.23 Pending acceptance, or express or implied rejection by [**] of the Offer as provided in clause 2.21, the DLA Contract Authority may, in his or her sole discretion, authorize Digimarc to perform all or part of the Work described in the Offer (or other Work as agreed between the parties respective Contract Authorities). If [**] accepts the Offer for Phase [**], all such authorized Work will be deemed to form part of the Work
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
for Phase [**]. In any event, [**] shall compensate Digimarc for such authorized Work as though it were Phase [**] Work.
2.24 Actions or lack of actions by the [**] under clauses 2.21 or 2.23 do not waive or delay any notice duties of the [**] under clauses 3.13-3.17.
2.25 This Third Amendment is conditional upon execution of an Amendment to [**] between the [**] and the requisite [**]. After execution of this Third Amendment by [**] and Digimarc, the [**] will proceed with reasonable diligence to have the Amendment to the [**] fully executed. When the Amendment to the [**] is fully executed, the [**] will so notify Digimarc that the condition of this clause 2.25 has been removed from this Third Amendment.
3. PRICE AND PAYMENT
Clause 3.7 shall be replaced in relation to Phase [**] and Phase [**] as follows:
3.7 For a period commencing on the Effective Date and ending on the date [**] following the last date on which Digimarc issues an invoice to [**] for Allowable Costs, Digimarc shall maintain proper, up-to-date, accurate and complete books, records and other documentation substantiating the Allowable Costs invoiced under this Agreement including, without limitation, time sheets showing the hours spent on each task which forms part of the Work and receipts for all Expenses (as defined in Schedule I). Digimarc shall produce such books, records and documentation to [**] or its representatives for inspection and copying at all reasonable times on request by the DLA Project Manager.
Add new clauses to clause 3 as follows:
3.11 Subject to the limits set out in this Agreement and unless otherwise expressly set out herein, [**] shall reimburse Digimarc for all the Allowable Costs reasonably and properly incurred by Digimarc during each calendar month to perform the Phase [**] Work and the Phase [**] Work (if any) and any other Work authorized by [**] in writing. Digimarc shall invoice [**] monthly in arrears for such Allowable Costs. Each invoice shall specify the Expenses incurred and the time spent by the staff and sub-contractors of Digimarc in performing the Work and shall give a breakdown of the Allowable Costs in the form attached as Schedule S.
3.12.1 Unless [**] terminates this Agreement under clause 15 before Digimarc completes the Phase [**] Work or terminates [**] before Digimarc completes [**] Phase [**] (as such expression is defined in the [**] Agreement), and subject always to clause 3.12.2, the total amount which [**] will be liable to pay Digimarc for or in connection with the Phase [**] Work and/or for the [**] Phase [**], will not be less than [**]([**]).
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
3.12.2 [**] obligation to pay the [**] is subject to Digimarc having performed all of its obligations under this Agreement and the [**] Agreement relating to the performance of Work and Services (as such expression is defined in the [**] Agreement) which Digimarc is obliged to perform in connection with Phase [**] Work and [**] Phase [**], including any Work or Services which Digimarc is requested to perform pursuant to clause 3.16. If [**] requests, under clause 3.16, that Digimarc cease or reduce the scope of the Work and/or Services remaining to be completed, [**] payment obligation would still be due.
3.13 If [**] elects not to proceed with both Phase [**] and [**] Phase [**] and [**] has provided Digimarc with notice of such election by 30 September [**] will not owe Digimarc any money for Phase [**] or [**] Phase [**] or have any other liability to Digimarc in connection with [**] election not to proceed with Phase [**] or [**] Phase [**]. Such notice will not affect either partys obligations under Phase [**] or [**] Phase [**].
3.14 If [**] elects not to proceed with both Phase [**] and [**] Phase [**] and [**] has provided Digimarc with notice of such election between October 1, [**] and November 30, [**], then, subject to clause 3.16,[**] sole liability to Digimarc relative to Phase [**] and [**] Phase [**] is that [**] shall owe Digimarc an amount equal to [**] months of Work and Services from the effective date of such notice. For example, if [**] provides notice on November 30, [**] of a decision by [**] not to proceed with Phase [**] and [**] Phase [**] shall owe Digimarc through February 28[**]. The amount of such payment shall be calculated in accordance with clause 3.15.
3.15 When such notice is provided as in clause 3.14 for both Phase [**] and [**] Phase [**] or if clause 3.18 applies in respect of both Phase [**] and [**] Phase [**], the amount due Digimarc shall be calculated as follows: (i) for the remainder of [**] in accordance with the remaining financial commitments made for Phase [**] and [**] Phase [**] by [**]; and (ii) for the relevant portion of [**] at the rate of [**] per calendar day. If [**] continues with either Phase [**] or [**] Phase [**], then no payment shall be due under clause 3.14 or clause 3.15 and [**] payment obligation in respect of the Phase which is not terminated shall be the [**] referred to and payable in accordance with clause 3.17.
3.16 During the [**]-month period after notice under clause 3.14, or, if clause 3.18 applies, [**] may request, (but it is not obliged to do so) and Digimarc will, if requested by [**], (a) at [**] sole discretion, cease or reduce the scope of the Work and/or Services remaining to be completed at the date of [**] giving notice and/or, (b) if reasonably possible, provide services relating to Work and/or Services, including work or services relating to the wind down or transfer of the Work and/or Services to [**] and/or any replacement provider as reasonably directed by the DLA Project Manager, commensurate with the payment obligations of the [**] in accordance with clause 3.14. Such requested work or services will be deemed to form part of the Work under this Agreement and/or Services under the [**] Agreement, as applicable. If, when operating under this clause, [**] requests Digimarc to cease or reduce the scope of the Work and/or Services
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
remaining to be completed, [**] payment obligations under clauses 3.12.1, 3.14 or 3.18, as applicable, will still be due. Sums due under such obligations will be invoiced monthly in arrears.
3.17.1 If (i) [**] has accepted the Offer for Phase [**] by Digimarc with notice by November 30, [**], or (ii) [**] does not terminate [**] before 30 November [**], then subject always to clause 3.17.2, the total amount which [**] will be liable to pay Digimarc for or in connection with Phase [**] and/or for [**] Phase [**] will not be less than [**] unless [**] terminates this Agreement under clause 15 before Digimarc completes the Phase [**] Work or terminates [**]
3.17.2 [**] obligation to pay the [**] is subject to Digimarc having performed all of its obligations under this Agreement and [**] relating to the performance of Work and Services which Digimarc is obliged to perform in connection with Phase [**] Work and [**] Phase [**].
3.18 If by November 30, [**] has not accepted an Offer by Digimarc for Phase [**] with notice and has provided notice of termination of the [**] Agreement [**], then, subject to clause 3.16, [**] Sole liability to Digimarc relative to Phase [**] and [**] Phase [**] is that [**] shall owe Digimarc an amount equal to [**] months of Work and Services from November 30, [**] through February 28, [**]. The amount of such payment shall be calculated in accordance with clause 3.15.
3.19. For greater certainty, it is confirmed and agreed that [**], subject to previously agreed upon Statements of Work under this Agreement and [**] Plans (as such expression is defined in the [**] Agreement), and in accordance with the procedures and timescales set out in clause [**] is entitled from time to time a) to determine in what proportion the [**] referred to in clause 3.12.1 is to be allocated between Work and/or Services to be performed as Phase [**] Work and/or [**] Phase [**] Services; and b) to determine in what proportion the [**] referred to in clause 3.17.1 is to be allocated between Work and/or Services to be performed as Phase [**] Work and/or [**] Phase [**] Services (if any).
3.20 Unless authorized in this Agreement, [**] or otherwise agreed in writing by [**], the [**] under this Agreement and the [**] Agreement shall not be greater than an amount equal to the amount listed in Schedule X and the [**] under this Agreement and the [**] Agreement shall not be greater than an amount equal to the amount listed in Schedule X. Such [**] limitations of this clause 3.20 do not apply to costs or charges identified in clauses 3.8, 3.21, 6.5, 8.6 and 8.8 of this Agreement or in clauses 3.6, 6.5, 8.2, 15.7 and 19 of the [**] Agreement. The [**] limitations of this clause may, in some cases, not apply to costs or charges identified in clauses 5.3 and 13.1 of this Agreement or in clauses 5.3 and 13.1 of the [**] Agreement.
3.21 Any equipment or software [**] purchased for over [**] as an Allowable Cost under Schedule I for [**] shall be owned by the [**] or another entity designated by the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DLA Contract Authority and shall be held in trust by Digimarc. Digimarc will ensure that [**] or the designated entity is identified on such [**] and [**] as the owner. Unless such [**] or [**] needs to be used in a manner that it was not designed for and the [**] is made aware of such need, Digimarc will, at its own risk, use such [**] or [**] in a reasonably careful and proper manner and in accordance with all operating instructions. In any event such [**] and [**] shall be used by Digimarc solely for the provision of the Work under this Agreement or Services under the [**] Agreement. Upon termination of this Agreement and at [**] request, Digimarc will promptly deliver such [**] and [**] to the [**] or designated entity, at no charge to Digimarc. Such [**] and [**] shall be returned in the same condition as originally received by Digimarc, reasonable wear and tear excepted. If, however, the [**] or [**] needs to be used in a manner that it was not designed for and the [**] is made aware of such need, then such [**] and [**] will be returned as is. [**] will reimburse Digimarc for any unrecovered costs of such [**] or [**] (i.e. costs not recovered through depreciation charges), subject to receipt of a correct and properly due invoice.
5. RESPONSIBILITIES OF [**]
Clause 5.3 shall be replaced as follows:
5.3 If [**] is delayed in complying with any of its obligations under clauses 5.1 or 5.2 for any reason not attributable to Digimarc, and such delay will cause a delay in the completion and delivery by Digimarc of any Deliverable, then Digimarc shall reasonably promptly advise the DLA Project Manager of the impact of the delay. The time for completion of the Deliverable and all subsequent Deliverables dependent thereon, will then be extended automatically by one day for each day of delay by [**] or such other period as may be agreed in writing between the parties respective Contract Authorities. If Digimarc suffers increased costs by reason of such delay, other than a delay due to a force majeure event, such costs reasonably and necessarily incurred by Digimarc shall be borne by [**]. Digimarc shall make every reasonable effort to reassign staff and otherwise to mitigate the increased costs associated with such a delay. If the delay is due to a force majeure event, such costs shall be borne equally by [**] and Digimarc. If any additional costs to be borne by [**] would lead to the [**] otherwise contemplated by this Agreement being exceeded, Digimarc will reasonably promptly notify the DLA Contract Authority of such and [**] will either approve of costs beyond the [**] and/or request a change to the Work under clause 6. Such a change request under clause 6 will ask Digimarc to stay within the [**] and to describe the effect the costs and delay under this clause 5.3 will have on the applicable [**] Plans or Statements of Work. If after Digimarc describes the effect the costs and delay under this clause 5.3 will have on the applicable [**] Plans or Statements of Work, the DLA Contract Authority requests such a change, Digimarc will implement such change in [**] Plans and Statements of Work so that Digimarc remains within the [**] limitations. This clause 5.3 sets forth Digimarcs only remedy for a delay by [**] in complying with any such obligation.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
6. CHANGES TO THE WORK
Clause 6 shall be replaced as follows:
6.1 [**] or Digimarc may request, a change to the Statements of Work or the [**] Plans (as defined in the [**] Agreement) from time to time by submitting a request in writing to the other partys Project Manager. Such changes directed by [**] may include allocating development personnel other than the Project Manager to provide Services under the [**] Agreement in accordance with clause 4.6 of the [**] Agreement. Any such request will indicate the nature of the new work to be performed, and indicate the desired number and optimum skill set of the personnel to be redirected, in a form sufficient for Digimarc to investigate the effect of the change.
6.2 On making such a change request or within three (3) Business Days after receiving a change request from the DLA Project Manager, Digimarc shall inform the DLA Project Manager of the amount, if any, which Digimarc intends to invoice [**] to investigate the effect the change will have on the applicable [**] Plans or Statements of Work and the [**] for the applicable [**] Plans or Statements of Work.
6.3 Within ten (10) Business Days after receiving the written authorization of the DLA Project Manager to conduct the investigation of a change, or such longer period as may be authorized by the DLA Project Manager, Digimarc shall report to the DLA Project Manager, in writing, on the results of the investigation.
6.4 Within ten (10) Business Days after the DLA Project Manager receives the report, the DLA Contract Authority shall, on behalf of [**], notify Digimarc whether or not [**] authorizes the change. Any authorized change will include an amendment to the Statement of Work and the associated [**] Plans to properly state the new obligations of Digimarc.
6.5 Digimarc shall not implement any change to the Work until the change is authorized in writing by the DLA Contract Authority on behalf of [**]. Digimarc shall implement any change directed and authorized by [**] pursuant to clause 6.4 provided: i) the change is technically feasible and is within the capabilities of Digimarc; ii) the costs associated with such change identified by Digimarc in its investigation report and approved by [**] as part of the approval of the change are borne by [**] (such costs may be over and above the Phase [**] or the Phase [**]); and iii) Digimarc is given commensurate relief in the manner and to the extent as specified in the authorized change from prior commitments under the Statements of Work and/or the [**] Plans.
6.6 Pending receipt of a written authorization from the DLA Contract Authority, on behalf of [**], Digimarc shall proceed with the Work in accordance with this Agreement.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
8. INTELLECTUAL PROPERTY MATTERS
Clause 8.4, 8.6, 8.8 and 8.9 shall be replaced as follows:
8.4 Digimarc hereby grants to [**], effective upon the date specified in clause 8.5, the [**] the Digimarc Technology and the Project Technology, and all Improvements thereto, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements, and to sublicense the use of the Digimarc Technology and the Project Technology and such Improvements and Technical Information to other Persons, for the purposes of [**] the System and any such component thereof, and making the System and any component available to others solely for the [**] On the effective date of the grant of the license referred to above, [**] copy and use the Escrowed Materials for the purpose of exercising all rights granted under the license and the Escrow Agent shall be deemed authorized to release the Escrowed Materials to [**]. The expressions [**] as used in this clause 8.4, shall be deemed to refer to [**] The [**] by clause 8.4 applies to Digimarc Technology and the Project Technology and all Improvements thereto, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements existing on or before December 31, [**]. Digimarc acknowledges that in accordance with clause 8.5, the [**] herein is effective as of 15 November [**].
8.6 Digimarc hereby grants to [**], effective on the date specified in this clause, the [**] the Digimarc Technology and the Project Technology and all Improvements thereto, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements, and to sublicense the use of the Digimarc Technology, the Project Technology and such Improvements and Technical Information to other Persons, for the sole purpose of [**], solely for [**] This license shall take effect on written request by the DLA Contract Authority at any time following the later of the date on which the license referred to in 8.4 takes effect and the date on which [**] pays Digimarc [**]. The license of clause 8.6 applies to Digimarc Technology and the Project Technology and all Improvements thereto, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements existing on or before December 31, [**].
8.8 From time to time during the Term, on no less than five (5) Business Days prior written notice by the DLA Project Manager, Digimarc shall, at Digimarcs premises, present representatives of the Escrow Agent with all the material, in any form, in Digimarcs possession or control which contains or describes the Technical Information pertaining to the Digimarc Technology and the Project Technology. The representatives may identify any or all of such material and Digimarc shall arrange, at the expense of [**], for a complete, accurate and up-to-date copy of the selected material to be made and sent to the Escrow Agent within five (5) Business Days of the selection being made for deposit under the terms of the Escrow Agreement.
8.9 If so requested by the [**], within twenty (20) Business Days after the end of each calendar quarter during each Phase, Digimarc shall update the Escrowed Material in the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
possession of the Escrow Agent to reflect all Improvements to the CDS Technology and [**] Updates made by or at the request of Digimarc during that quarter.
Add new clauses to clause 8 as follows:
8.17 Digimarc hereby confirms and agrees that a) the [**] to [**] by clause 8.4 applies, effective upon the date specified in clause 8.18, to Digimarc Technology and the Project Technology and all Improvements thereto, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements, created between January 1, [**] and the earlier of the completion of the Phase [**] Work and the termination of this Agreement; and b) the expressions [**] as used in clause 8.4, shall be deemed to include [**]
8.18 The [**] described in clause 8.17 shall take effect in respect of each specific item of Digimarc Technology, Project Technology or Improvements thereto, or Technical Information pertaining to the Digimarc Technology, the Project Technology or such Improvements created between 1 January, [**] and the earlier of the completion of the Phase [**] Work and the termination of this Agreement on the earliest of:
a) the date on which both the [**] referred to in clause 8.4 takes effect and [**] pays Digimarc all sums properly due to Digimarc under this Agreement for the development of that specific item;
b) sixty (60) days following the effective date of termination of this Agreement by [**] in accordance with the provisions of clause 15.2 (a), (b), (d) or (e) unless Digimarc demonstrates within such sixty (60) day period that, notwithstanding the occurrence of the events giving rise to the termination, Digimarc is willing and able to comply with its obligations under the Agreement; or
c) the effective date of termination of this Agreement by [**] in accordance with the provisions of clauses 15.2(c), 15.2 (f), 15.2(g) or 15.3.
8.19 Digimarc hereby confirms and agrees that any [**] to [**] pursuant to clause 8.6 applies, without any additional payments over and above that in clauses 8.6 and 8.18, to Digimarc Technology and the Project Technology and all Improvements thereto, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements created between January 1, [**] and the earlier of the completion of the Phase [**] Work and the termination of this Agreement. The [**] confirmed by this clause 8.19 is effective when both the [**] under clauses 8.6 and 8.17 take effect.
8.20 Notwithstanding any other provision of this Agreement to the contrary, [**] right to acquire the [**] described in clause 8.17 by payments as described in clause 8.18(a) shall survive termination of this Agreement by [**] in accordance with the provisions of clause 15.2 (a), (b), (d) or (e) and be exercisable at any time during a period of sixty (60) days following such termination.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
10. REPRESENTATIONS AND WARRANTIES OF DIGIMARC
Sub-clause (g) of clause 10.1 shall be replaced as follows:
(g) for greater certainty, with the exception of the [**], neither the Project Technology, the Digimarc Technology or Improvements thereon or the Technical Information pertaining to the Project Technology, the Digimarc Technology or such Improvements infringe any Intellectual Property Right of any person.
11. REPRESENTATIONS AND WARRANTIES OF THE [**]
Sub-clauses (b) and (d) of clause 11.1 shall be replaced as follows:
(b) this Agreement when executed and delivered by [**] shall constitute a valid, binding and enforceable obligation of [**]. With regard to the obligations under the Third Amendment, this representation will be subject to clause 2.25 of the Third Amendment;
(d) from and after the date on which [**] gets access to the Escrowed Materials (the Release Date) as provided by clauses 8.4, 8.6, 8.17 and 8.19 above until the last day of the Term, every [**]which [**] develops, permits, or causes to be developed using the Escrowed Materials for incorporation into any Device will be capable of [**] with the same or better performance [**] than the version of the [**] last accepted by [**] possessed on the Release Date on which [**] gets access to the Escrowed Materials.
12. CONFIDENTIALITY
Clauses 12.4, 12.7, 12.9 and 12.11 shall be replaced as follows:
12.4 A Recipient may, on a need to know basis, and only for the purposes described in clause 12.1, give the other partys Confidential Information to the Recipients employees, authorized subcontractors or representatives provided that such employee, subcontractor or representative shall have entered into a non-disclosure agreement in respect of such Confidential Information in favour of the Discloser on terms requiring at least [**] years of confidentiality from the date of disclosure of such Confidential Information but that are in all other respects materially similar to the provisions of this clause 12. For greater certainty, [**] representatives shall include the DLA Contract Authority, the DLA Project Manager and all representatives of members of [**].
12.7 The [**] Technology, the Other [**] Technology, and solely for the purposes of clause 12 the [**] insofar as it pertains to [**], and the Technical Information which pertains solely to the [**] Technology and the Other [**] Technology and those aspects of the [**], including any [**] which is or may be used [**] by any Licensed [**], shall
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
be deemed to be the Confidential Information of [**]. Digimarc may disclose such Confidential Information to a person to whom Digimarc has granted a license pursuant to clause 9.2 or 9.3 but only if:
a) Digimarc can demonstrate to the reasonable satisfaction of [**] that disclosure is necessary to enable Digimarc to grant the license under clause 9.2 or 9.3; and
b) such person enters into a non-disclosure agreement in respect of such Confidential Information in favour of [**] on terms requiring at least [**] years of confidentiality from the date of disclosure of such Confidential Information but that are in all other respects materially similar to the provisions of this clause 12.
12.9 [**] shall not reverse-engineer, disassemble, or decompile any Digimarc software forming part of the CDS, [**] (except to the extent that any such activity is reasonably necessary to permit [**] to exercise its licence rights under clauses 8.4, 8.6, 8.17 and 8.19 of this Agreement or [**] right to do so may not be contractually restricted under applicable law), and shall contractually ensure that any other Person to whom [**] provides [**] shall be similarly obliged.
12.11 General attributes of the CDS may be disclosed in connection with promotion of the CDS to the [**], and to customers or prospects in related markets; information relating to the [**] Technology and the [**] may be disclosed to [**] and vendors of [**] subject to a nondisclosure agreement on terms requiring at least [**] years of confidentiality from the date of disclosure of such Confidential Information but that are in all other respects materially similar to the provisions of this clause 12, but in all such cases Digimarc shall not disclose any information relating to the [**]. The existence and terms of this Agreement may be disclosed to the parties professional advisors, to members of the [**], and to Digimarcs present shareholders, institutional and corporate investors, and commercial and investment bankers, who have a reasonable need to know such information subject to a non-disclosure agreement.
13. AUDIT AND INSPECTION
Clause 13.1 shall be replaced as follows:
13.1 [**], or its duly authorised representatives, may from time to time, without notice, at its own expense, conduct an audit or inspection during normal business hours to verify Digimarcs compliance with its obligations under this Agreement. Digimarc shall facilitate such audit activities by providing access to its premises, as well as any books, records, and other information relating to this Agreement and the Work as may be reasonably requested by [**]. [**] shall promptly advise Digimarc in writing of the results of any audit. If [**] exercises this right more frequently than twice in each calendar year, [**] shall reimburse Digimarcs reasonable costs related thereto which costs are in addition to the [**] otherwise contemplated by this Agreement except in the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
case where the exercise of such right is reasonably required to follow-up on a non-compliance detected during a previous audit or inspection.
14. DISPUTE RESOLUTION
Clause 14.2 shall be replaced as follows:
14.2 Unless otherwise agreed between the parties or unless the subject matter of the dispute resolution proceedings is a partys right to terminate this Agreement, the Work shall continue during the arbitration proceedings and payments due to Digimarc shall not be withheld on account of such proceedings unless that particular Work or payment is the subject matter of the proceedings. Notwithstanding the foregoing, [**] may at its sole discretion instruct Digimarc to continue the performance of that Work, and Digimarc shall act in accordance with those instructions, subject to payment in accordance with this Agreement.
15. TERM AND TERMINATION
Clauses 15.6 and 15.7 shall be replaced as follows:
15.6 Termination of this Agreement by [**] for any reason in accordance with the provisions of this clause 15 shall not affect any license granted by Digimarc pursuant to clauses 2.8, 2.9, 8.4, 8.6, 8.17 or 8.19 above.
15.7 On termination of this Agreement by Digimarc or [**] for any reason, Digimarc shall within fifteen (15) Business Days deliver to the Escrow Agent all Work in progress done up to the effective date of termination, including all Technical Information relating to such Work, and all Technical Information pertaining to the Digimarc Technology or the Project Technology which has not previously been deposited with the Escrow Agent and issue to the DLA Contract Authority a certificate signed by an officer of Digimarc that it has fully complied with this obligation. Digimarc shall be entitled to charge [**] for its reasonable costs in providing such assistance calculated in accordance with the Allowable Costs.
18. NOTICES
Clause 18.2 shall be replaced as follows:
18.2 Any notice to Digimarc shall be sent to both of, and any notice from Digimarc shall be sent by either:
Mr. Scott Carr |
or |
Mr. William Y. Conwell |
Vice President and General Manager, |
|
|
Government and Bank Programs |
|
Vice President, Intellectual Property |
Digimarc Corporation |
|
Digimarc Corporation |
19801 SW 72nd Avenue |
|
19801 SW 72 nd Avenue |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Suite 100 |
|
Suite 100 |
Tualatin, Oregon 97062 USA |
|
Tualatin, Oregon 97062 USA |
FAX: (503) 885-9880 |
|
FAX: (503) 885-9880 |
19. MISCELLANEOUS PROVISIONS
Clause 19.15 shall be replaced as follows:
19.15 Survival. All clauses of this Agreement which expressly or by implication are intended to survive the termination of this Agreement will do so and, for greater certainty and notwithstanding any provision in this Agreement to the contrary, the provisions set out in clauses 2.5, 3.6-3.10 inclusive, 3.12-3.18 inclusive, 3.20, 3.21, 8.4, 8.5, 8.6, 8.8, 8.11-8.20 inclusive, 9.1, 9.2, 9.3, 9.7, 10, 11, 12, 13, 14, 16, 18 and 19 of this Agreement shall survive termination of this Agreement by either party for any reason.
IN WITNESS WHEREOF , this Third Amendment has been executed and delivered by the parties hereto as of the date of the last signature below.
[**] |
|
|
|
|
|
|
|
|
Signature |
|
Signature |
Name: |
|
Name: |
Title: |
|
Title: |
Date |
|
Date |
|
|
|
DIGIMARC CORPORATION |
|
|
|
|
|
|
|
|
Signature |
|
|
Name: Paul Gifford |
|
|
Title: President |
|
|
Date |
|
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
AMENDMENT
NUMBER FOUR TO THE COUNTERFEIT DETERRENCE SYSTEM
DEVELOPMENT AND LICENSE AGREEMENT
This is the fourth Amendment to the Counterfeit Deterrence System Development and License Agreement (the Fourth Amendment) made by and between
DIGIMARC CORPORATION , a corporation incorporated under the laws of Delaware and having its head office at 9405 SW Gemini Drive, Beaverton, Oregon, U.S.A. 97008 (Digimarc)
and
[**]
Effective 1 January [**], the above-identified parties entered into an agreement entitled the Counterfeit Deterrence System Development and License Agreement (hereinafter, the Agreement).
On 14 March [**], 28 December [**] and 1 January [**], the parties entered into Amendments to the Agreement (hereinafter, First, Second and Third Amendments).
In consideration of the promises and covenants set out in this Fourth Amendment, in the Agreement, in the First, Second and Third Amendments and other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree that the Agreement as previously amended will be further amended with effect from 1 January [**], with the exception of Schedule W, effective from 1 January [**]:
1. DEFINITIONS AND PRINCIPLES OF INTERPRETATION
The following definitions in clause 1.1 shall be deleted and replaced as follows:
[**] Technology means that technology, if any, from the technology described in Schedule F in respect of which from time to time during Phases [**] of this Agreement and Phases [**] as defined in the [**] Agreement after discussion between the CDS Project Director and the Digimarc Project Director, [**] offers, and Digimarc accepts in writing, a [**] on the [**] in clause 8.2 to use, design or implement the CDS and all Intellectual Property Rights in that [**];
Digimarc Contract Authority means Digimarcs President or the President, Digimarc Watermarking Solutions;
Improvement means any change in the CDS Technology or the Technical Information made by or at the direction of Digimarc after [**] which enhances, whether by
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
improvement, enhancement, correction, addition or otherwise, the properties, characteristics or manufacture of the CDS including, for greater certainty, the [**] and the [**], and any change to the CDS, the CDS Technology, the [**] Technology and/or the [**] made by or at the direction of Digimarc or any [**] in connection with the [**] of the CDS by any [**] that Digimarc has rights in, including customization, improvements, enhancements, corrections, and changes to the [**] so that it can interface properly to a [**];
Phase means Phase [**] of this Agreement as the case requires, adjusted if required by any period added pursuant to clause 5.3 or other changes to the Services authorized pursuant to clause 6 below;
Security Purpose means the purpose of [**]; and
Statement of Work means the Statement of Work set out in Schedules B, C, D, V or W as applicable, or the Statements of Work developed for Phases [**] in accordance with the Planning Process set forth in Section 2.
The following terms in clause 1.1 shall be renamed and redefined as follows:
Delete Digimarc Project Manager and replace with Digimarc Project Director means the project director appointed by the Digimarc Contract Authority in accordance with clause 4.2.;
Delete DLA Contract Authority and replace with [**] Contract Authority means the Contract Authority designated by [**] in writing to Digimarc from time to time;
Delete DLA Project Manager and replace with [**] Project Director means the project director appointed by the [**] Contract Authority from time to time on notice to the Digimarc Contract Authority who shall also serve as the person primarily responsible to conduct inspections on behalf of [**];
Delete Project Manager and replace with Project Director means either the [**] or Digimarc Project Director, as the context requires;
Delete [**] and replace with [**] means a committee of representatives from various [**] called [**], previously known as [**]; and
Delete Work and replace with Services means the services required to be performed by Digimarc as authorized by [**] in the Planning Process set out in Section 2. Digimarc shall provide all development, maintenance and [**] services related to the CDS, including (a) acting as [**]; (b) any tasks required to be performed to complete and deliver the [**] (c) any task to be performed by Digimarc for and any item to be delivered by Digimarc to [**] as such tasks and items are identified in the [**] Plan for that [**];
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
and (d) other services reasonably necessary to comply with its obligations under this Agreement.
Add new definitions to clause 1.1 as follows:
[**] means the [**] established by the [**] Contract Authority and that is responsible for the oversight of the overall relationship between [**] and Digimarc and for the key day-to-day contract management;
[**]
Dependancy means any of the following dependencies of Digimarc on [**] and such [**] employees, agents, representatives and subcontractors:
(a) performing a task upon which Digimarcs performance of any part of the Services is dependent;
(b) timely providing to Digimarc the relevant technical information, [**];
(c) timely returning/negotiating [**], documents of understanding as necessary to protect Digimarc or [**] intellectual property;
(d) having attendance of the relevant [**] employees or consultants at key briefings and review meetings;
(e) maintaining/not materially changing planned [**];
(f) not materially altering their [**]; or
(g) such dependencies as are expressly identified in the [**] may be revised;
[**] Agreement means that [**] Agreement effective as of 1 January [**] between [**] and Digimarc;
[**] Personnel means any officer, employee, permitted agent or subcontractor assigned by Digimarc to perform any part of the Services required under a [**]
[**]
[**] Problem Report means a report of a [**] problem addressing as many of the topics specified in Schedule BB as are relevant to a reasonable understanding of the problem;
Key [**] Personnel means those [**] Personnel identified in Schedule AA;
Phase [**] means the period from 1 January 2004 to 31 December 2008;
Phase [**] means the period from 1 January 2009 to 31 December 2011;
Phase [**] means the period from 1 January 2012 to 31 December 2014;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Planning Process means the process set forth in Section 2 of this Agreement by which [**] and Digimarc will develop Program Work Plans, Statements of Work for Phases [**] and [**] Plans;
[**] means the [**]; and
Program Work Plan means a two-year plan developed pursuant to Section 2.26 with an estimated budget for each of the two years, approved tasks for the first year and anticipated tasks for the second year.
Section 1.2 Interpretation
Clause 1.2.5 shall be replaced with:
1.2.5. |
|
unless otherwise specified, the order of precedence for interpreting this Agreement shall be: |
|
|
|
a) |
|
the Amendments to the Agreement with the Fourth Amendment supplementing the Third Amendment and the Third Amendment supplementing the Second Amendment and the Second Amendment supplementing the First Amendment; |
|
|
|
b) |
|
the other terms of this Agreement, excluding Schedules; |
|
|
|
c) |
|
the Schedules excluding the [**] Plans; |
|
|
|
d) |
|
as between the delivery schedules forming part of a Statement of Work, and other provisions of such Statement of Work, the delivery schedules shall take precedence; |
|
|
|
e) |
|
the [**] Plans except that as between the delivery schedules, if any, forming part of a [**] Plan and other provisions of such plan, the delivery schedules shall take precedence. |
Replace clause 1.2.9 as follows:
(a) When a definition or clause in this Agreement is described in the Fourth Amendment as a replacement, the definition or clause in this Fourth Amendment replaces the previous definition or clause in the Agreement. When a new definition or clause is presented in this Fourth Amendment, the new definition or clause is considered added to and incorporated into the Agreement.
(b) The changes in this Fourth Amendment are referenced by the clauses as they appear in the Agreement and such changes shall not apply to the interpretation of any part of the Agreement relating to any events, acts or omissions occurring prior
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
to 1 January [**] unless such events, acts or omissions are relevant to any event, act or omission occurring on and after that date. Unless expressly modified, superseded or replaced by this Fourth Amendment, each term of the Agreement as amended by the First, Second or Third Amendment remains in full force and effect.
1.3 Applicable Law
Clause 1.3 shall be replaced as follows:
1.3 This Agreement and all amendments thereto shall be construed in accordance with the laws of England to the exclusion of its rules of conflicts of laws.
1.4 Schedules
In clause 1.4,
Replace Schedules G, H, I, K-1, K-2, L-1, L-2, N, S and W, as attached; and
Add the following new schedules:
Schedule Y, described as [**] Plan;
Schedule Z, described as [**] Team;
Schedule AA, described as [**] Personnel;
Schedule BB, described as [**] Problem Report; and
Schedule CC, described as Project Indicators.
The parties agree that the above-identified replacement document Schedules G, H, I, K-1, K-2, L-1, L-2, N, S and W supersede the corresponding documents referenced in clause 1.4 of the Agreement and such replacement Schedules together with the new Schedules Y, Z, AA, BB and CC are, by this reference, made an integral part of the Agreement.
2. SCOPE AND DURATION OF THE SERVICES
Clause 2.15 shall be replaced as follows:
2.15 Digimarc shall obtain at its own expense all licenses or permits required to be obtained from the Government of the United States in order for Digimarc to comply with its obligations under this Agreement. [**], [**]
Add new clauses to clause 2 as follows:
2.26 [**] and Digimarc have agreed that Digimarc shall provide the Services for Phases [**] as stated in the Statements of Work and [**] Plans developed in accordance
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
with the Planning Process set forth herein. The [**] and Digimarc shall hold planning meetings in each June and December during the then-current phase to review the scope and status of current and planned projects under the Statement of Work and the current and proposed [**] Plans, relative to the timing schedule and expenditures and budgets and to establish the Statement of Work and revised or new [**] Plans for subsequent periods. Prior to these meetings, the [**] and Digimarc shall exchange such information as is reasonably necessary to enable the parties to conduct an informed evaluation. In addition, the [**] and Digimarc shall meet approximately two months in advance of each planning meeting to discuss [**] and similar issues related to the development, [**] the CDS. At this preparation meeting the parties shall also discuss the project indicators, in accordance with the process set out in Schedule CC. The Statement of Work and revised or new [**] Plans for the next calendar year shall be finalized at the June meeting, except that the Statement of Work and [**] Plans for [**] and the [**] for [**] shall be finalized by May 12, [**]. The [**] and tentative Statement of Work and [**] Plans for the year following the next year shall be set at the December meeting. Services may be added and/or priorities changed, and resources and priorities may be shifted between tasks following a process to be agreed to between the [**] and Digimarc. Digimarc shall not exceed the [**] for a given calendar year without the written approval of the [**]. At each planning meeting, the planned tasks and associated estimated budget shall be set for an additional six months to create an updated Program Work Plan. The [**] and Digimarc shall present the agreed-upon Statement of Work and revised or new [**] Plans to the [**] for approval. The [**] Contract Authority shall notify Digimarc in writing of the [**] approval of the Statement of Work and revised or new [**] Plans.
2.27 The parties shall, unless otherwise agreed, prepare a specific [**] plan for a [**] following the [**] of Schedule Y. Digimarc undertakes and represents that each [**] Plan and every revision thereto prepared by Digimarc shall be prepared with all due care and diligence and that as of the date of the applicable June or December planning meeting, Digimarc shall not be aware of any matters within its reasonable control which might or will adversely affect its ability to perform the Services described in that [**] Plan or revised [**] Plan and other existing approved [**] Plans.
2.28 In the event that the [**] and Digimarc are unable to mutually agree on the pricing of a given task(s) proposed in a Statement of Work or [**] Plan, the matter will be escalated as follows: (1) to the [**] Project Director and the President of Digimarc Watermarking Solutions, (2) to the [**] and the President of Digimarc Corporation, and (3) ultimately to an agreed upon third party expert who is qualified by education and training to pass upon the particular matter to be decided. The dispute resolution process provided for in this clause 2.28 is non-binding. If the parties do not accept the experts decision, either party may initiate the arbitration process in accordance with Clause 14.
2.29 Phase [**] shall commence on 1 January 2009 unless [**] notifies Digimarc in writing on or before 31 December 2007 that it is not exercising its option for Phase [**] or unless Phase [**] is terminated prior to 31 December 2008. Assuming that [**] exercises its option for Phase [**] Phase [**] shall commence on 1 January 2012 unless
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[**] notifies Digimarc in writing on or before 31 December 2010 that it is not exercising its option for Phase [**] or unless Phase [**] is terminated prior to 31 December 2011.
2.30 [**] may terminate for convenience without cause the Services being performed in any of Phases [**] if and only if [**] determines to cease development and [**] the CDS. Termination shall be effective on the last day of the calendar year in which [**] gives written notice of such termination to Digimarc, provided that Digimarc receives that notice on or before June 30 of that year.
2.31 In the event of a termination for convenience without cause, [**] shall pay Digimarc all of its actual and reasonable termination costs, including third party contract termination costs, employee re-deployment or termination costs, undepreciated capital costs of assets purchased exclusively for the project, and accounting, legal and travel costs associated with termination and termination negotiation (Termination Costs). Actual and reasonable termination costs shall be capped [**]. Digimarc shall use commercially reasonable efforts to mitigate all Termination Costs. [**] shall also pay Digimarc an amount equal to [**]. [**] exercises its termination for convenience without cause option during the last year of a phase, the remaining years of that phase will mean the number of years in the follow-on phase.
2.32. Digimarc agrees to make Key [**] Personnel and/or other suitably skilled and experienced personnel available as mutually agreed between [**] and Digimarc to provide assistance as part of any termination transition plan that is agreed to three months prior to the date of termination of Services. Alternatively, at the request of the [**] Project Director, Digimarc agrees for a period of up to six months after termination of Services for any reason except for breach by [**] under clause 15.3 to make Key [**] Personnel and/or other suitably skilled and experienced personnel, at Digimarcs reasonable discretion and acceptable to [**] available to render to [**] or any third party designated by [**], all reasonable assistance. [**] agrees to pay for such assistance provided prior to the termination date at the then-current DLA Labor Rates and for such assistance provided after the termination date at the then-current labor rates charged to Digimarc Watermarking Solutionss most favored customers, excluding the [**] and inter-company transfers, and for Expenses as allowed in accordance with the Allowable Costs.
2.33 The Term will continue notwithstanding that [**] may elect not to exercise its option for Phase [**] or Phase [**] or that it may terminate for convenience without cause the Services being provided by Digimarc under Phases [**]
2.34 This Fourth Amendment is conditional upon execution of an Amendment to the [**] between the [**] and the requisite [**]. After execution of this Fourth Amendment by the [**] and Digimarc, the [**] shall proceed with reasonable diligence to have the Amendment to the [**] fully executed. When the Amendment to the [**] is fully executed, the [**] shall so notify Digimarc that the condition of this clause 2.34 has been removed from this Fourth Amendment.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
3. PRICE AND PAYMENT
Replace clause 3.7 as follows:
3.7 For a period commencing on the Effective Date and ending on the date [**] following the last date on which Digimarc issues an invoice to [**] for Allowable Costs, Digimarc shall maintain proper, up-to-date, accurate and complete books, records and other documentation substantiating the Allowable Costs invoiced under this Agreement including time sheets showing the hours spent on each task which forms part of the Services and receipts for all Expenses (as defined in Schedule I). Digimarc shall produce such books, records and documentation to [**] or its representatives for inspection and copying at Digimarcs premises (with the right to take such copies from Digimarcs premises as long as Digimarc is notified in writing what copies are removed from Digimarcs premises and the copies are handled by [**] or its representative in accordance with [**] confidentiality obligations under clause 12) at all reasonable times on request by [**] Project Director.
Add new clauses to clause 3 as follows:
3.22 Subject to the limits set out in this Agreement and unless otherwise expressly set out herein, [**] shall reimburse Digimarc for all the Allowable Costs reasonably and properly incurred by Digimarc during each calendar month to perform the Phase [**] Services, Phase [**] Services (if any), Phase [**] Services (if any) and other Services authorized by [**] in writing. Digimarc shall invoice [**] monthly in arrears for such Allowable Costs. Each invoice shall specify the Expenses incurred and the time spent by the staff and sub-contractors of Digimarc in performing the Services, including time spent by [**] Personnel, and shall give a breakdown of the Allowable Costs, including a breakdown in respect of each [**] Plan, in the form attached as Schedule S.
3.23 If [**] terminates this Agreement in accordance with Clause 15, Digimarc shall be reimbursed for all Services performed through the date of termination and for any transition services provided after the date of termination in accordance with Clause 2.32. For greater certainty, [**] obligation to pay the [**] for a given year (as determined in accordance with the Planning Process) is subject to Digimarc having performed all of its obligations under this Agreement relating to the performance of Services.
4. PROJECT MANAGEMENT
Replace Section 4 as follows:
4.1 The [**] Project Director shall be responsible for coordinating fulfillment by [**] of its obligations under this Agreement including the provision of all the general information about [**] that Digimarc may reasonably require in order to perform its obligations under this Agreement and directing Digimarc in respect of prioritizing effort
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
and timing of Services in relation to any [**] in accordance with the agreed upon [**] Plans and changes thereto. The [**] Project Director shall have no authority to amend this Agreement, approve payments or approve or accept Deliverables or other Services or proposals on behalf of [**], all of which action shall be within the exclusive authority of [**].
4.2 Digimarc shall designate a responsible individual with adequate authority and competence as the Digimarc Project Director. The Digimarc Project Director shall be responsible for coordinating the performance of the Services by Digimarc including serving as project leader and primary interface with [**] but shall have no authority to agree to an amendment of this Agreement on behalf of Digimarc which action shall be within the exclusive authority of the Digimarc Contract Authority.
4.3 Either partys Project Director or Contract Authority may from time to time appoint one or more persons to represent him or her on prior written notice to the other partys Project Director or Contract Authority.
4.4 Digimarc shall maintain throughout Phases [**] (unless [**] terminates for convenience without cause the Services being performed by Digimarc or elects not to exercise its option for Phases [**]) the [**] Team as defined in Schedule Z comprising the Key [**] Personnel and other persons who have the qualifications, expertise and experience reasonably necessary to perform the tasks and roles of the members of the [**] Team specified in Schedule Z.
4.5 Digimarc acknowledges that it is important to [**] that [**] has the flexibility, at the discretion of [**] to maximize the use of the combined resource pool of personnel allocated by Digimarc to development and [**] Services. Accordingly, as directed by the [**] Project Director in accordance with the procedures set out in clause 6, Digimarc shall: (a) increase the number of [**] Personnel assigned by Digimarc to perform the Services beyond the number of the [**] Team or to subsequently reduce the [**] Personnel back to the level of the [**] Team; and/or (b) assign those [**] Personnel who have the necessary skills to development Services or vice versa.
4.6 The names of the Key [**] Personnel approved by the [**] Contract Authority are set out in Schedule AA. If it becomes necessary for Digimarc to provide substitute or add Key [**] Personnel for any reason, the [**] Contract Authority must approve such Key [**] Personnel in advance, which approval shall not be unreasonably withheld.
4.7 Digimarc shall not, without first obtaining the written consent of the [**] Contract Authority, which consent shall not be unreasonably withheld, remove or replace:
(a) any employee of Digimarc or its authorized subcontractors assigned to do any part of the Services if the employee or subcontractor is critical to completion of the Services by Digimarc in accordance with this Agreement or the applicable [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Plan. Critical means that the applicable Services cannot be completed by Digimarc without such person; or
(b) its Project Director.
4.8 Digimarc shall replace within a reasonable time under the circumstances any of its employees or authorized subcontractors engaged in fulfilling its obligations under this Agreement, including its Project Director, whose removal is required by the [**] Contract Authority, provided that the [**] Contract Authority specifies reasonable cause for such removal in writing. With respect to [**] Personnel, Digimarc shall, at Digimarcs cost, train the replacement personnel about the job specifics so the replacement personnel shall be able to perform the Services in a manner substantially equal to the replaced [**] Personnel at the particular state the Services had reached when the personnel change occurred.
4.9 Digimarc undertakes that all personnel assigned to do the Services shall be employees of Digimarc unless it provides reasonable prior written notice of its intent to use a specific subcontractor. The [**] Project Director shall have the right to approve all subcontractors, which approval shall not be unreasonably withheld. Digimarc undertakes that it shall obtain from each subcontractor prior to permitting that subcontractor to do any part of the Services a written undertaking that all Intellectual Property Rights in any work developed by that subcontractor while providing the Services shall vest absolutely in Digimarc upon the date of creation. Digimarc shall remain responsible for any obligations which are performed by a subcontractor and for the conduct of subcontractors as if they were the acts or omissions of Digimarc.
4.10 Digimarc shall report on progress of the Services and conduct progress reviews in accordance with the provisions of Schedule N.
4.11 In the event that it becomes evident to either partys Project Director that a failure or delay by either party to perform in accordance with its obligations under this Agreement will result in a material impact on the completion of the Services in accordance with the applicable Statement of Work or [**] Plan, then the relevant Project Director shall immediately bring the issue to the attention of the other partys Project Director.
5. RESPONSIBILITIES OF [**]
Clauses 5.1 and 5.3 shall be replaced as follows:
5.1 [**] shall perform all tasks assigned to it in a Statement of Work or an applicable [**] Plan by the dates set out therein (herein referred to as the [**] Tasks), provided that if the [**] Task is required in relation to a [**] Plan, Digimarc has provided the [**] Contract Authority with reasonable notice that there is a Digimarc action that is dependent on that [**] Task.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
5.3 If [**] is delayed in complying with any of its obligations under clauses 5.1 or 5.2 for any reason not attributable to Digimarc, and such delay will cause a delay in the completion and delivery by Digimarc of any Services, then Digimarc shall reasonably promptly advise the [**] Project Director of the impact of the delay. The time for completion of the Services and all subsequent Services dependent thereon, shall then be extended automatically by one day for each day of delay by [**] or such other period as may be agreed in writing between the parties respective Contract Authorities. If Digimarc suffers increased costs by reason of such delay, other than a delay due to a force majeure event (as defined in clause 17.1), such costs reasonably and necessarily incurred by Digimarc shall be borne by [**]. Digimarc shall make every reasonable effort to reassign staff and otherwise to mitigate the increased costs associated with such a delay. If the delay is due to a force majeure event, such costs shall be borne equally by [**] and Digimarc. If there are any additional costs to be borne by [**] otherwise than as agreed under clause 2 of this Agreement, Digimarc shall reasonably promptly notify the [**] Contract Authority of such and [**] shall either approve of such costs and/or request a change to the Services under clause 6. Such a change request will ask Digimarc to describe the effect the costs and delay under this clause 5.3 will have on the applicable [**] Plans or Statements of Work. If after Digimarc describes the effect the costs and delay under this clause 5.3 will have on the applicable [**] Plans or Statements of Work, the [**] Contract Authority requests such a change, Digimarc shall implement such change in [**] Plans and Statements of Work so that Digimarc remains within the previously approved budget. This clause 5.3 sets forth Digimarcs only remedy for a delay by [**] in complying with any such obligation.
6. CHANGES TO THE SERVICES
Clause 6.1 shall be replaced as follows:
6.1 [**] or Digimarc may request a change to the Statements of Work or the [**] Plans from time to time by submitting a request in writing to the other partys Project Director. Such changes directed by [**] may include allocating personnel other than the Project Director to provide development and/or [**] Services in accordance with clause 4.5. Any such request will indicate the nature of the new work to be performed, and indicate the desired number and optimum skill set of the personnel to be redirected, in a form sufficient for Digimarc to investigate the effect of the change.
7. PERFORMANCE OF SERVICES
Add new clauses to clause 7 as follows:
7.3 If any part of the [**] Services have not been performed in accordance with this Agreement and Digimarc receives a [**] Problem Report from the [**] Project Director, Digimarc shall at its own cost and expense, without charge to [**] and in the fastest time reasonably practicable, but no later than sixty (60) days after receipt of a [**] Problem
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Report from the [**] Project Director, ensure, by taking all steps reasonably necessary, that the relevant part of the Services is re-performed or corrected in compliance with this Agreement.
7.4 Digimarc shall not be responsible to the extent any failure by Digimarc to perform the Services in accordance with this Agreement is directly attributable to: a) a delay by [**] to perform any [**] Task (as defined in clause 5.1) applicable to the affected part of the Services; b) a Dependancy applicable to the affected part of the Services not being fulfilled by [**]; or c) a force majeure event (as defined in clause 17.1).
8. INTELLECTUAL PROPERTY MATTERS
The following provision shall be added at the end of clause 8.6:
In the event that this Agreement is terminated by [**] under clauses 15.2 or 15.3, [**] in this Section 8.6 shall take effect on the date on which [**] pays Digimarc [**] and agrees to pay Digimarc an additional [**] by January 31 of the following year. In the event [**] fails to pay [**] by January 31 of the following year, the [**] shall become void ab initio . Interest shall accrue on the outstanding amount from the date the [**] is effective to and including the day the balance is paid in full [**].
Clauses 8.17, 8.18, 8.19 and 8.20 shall be replaced as follows:
8.17 Digimarc hereby confirms and agrees that a) [**] to [**] by clause 8.4 applies, effective upon the date specified in clause 8.18, to Digimarc Technology and the Project Technology and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements, created between January 1, [**] and December 31, [**] and to Digimarc Technology and the Project Technology and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements, created on an on-going basis under any subsequent Statement of Work or [**] Plan approved under clause 2.26; and b) the expressions [**] as used in clause 8.4, shall be deemed to include [**].
8.18 The [**] in clause 8.17 shall take effect in respect of each specific item of Digimarc Technology, Project Technology or Improvements, or Technical Information pertaining to the Digimarc Technology, the Project Technology or such Improvements created as set out in clause 8.17 on the earliest of:
a) the date on which both [**] to in clause 8.4 takes effect and [**] pays Digimarc all sums properly due to Digimarc under this Agreement for the development of that specific item;
b) sixty (60) days following the effective date of termination of this Agreement by [**] in accordance with the provisions of clause 15.2(a), (b), (d) or (e) unless Digimarc demonstrates within such sixty (60) day period that, notwithstanding the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
occurrence of the events giving rise to the termination, Digimarc is willing and able to comply with its obligations under the Agreement; or
c) the effective date of termination of this Agreement by [**] in accordance with the provisions of clauses 15.2(c), 15.2(f), 15.2(g) or 15.3 or of termination for convenience without cause of Services under clause 2.30.
8.19 Digimarc hereby confirms and agrees that any [**] to [**] pursuant to clause 8.6 applies, without any additional payments over and above that in clauses 8.6 and 8.18, to Digimarc Technology and the Project Technology and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements created between January 1, [**] and December 31, [**] and to Digimarc Technology and the Project Technology and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements created on an on-going basis under any subsequent Statement of Work or [**] Plan approved under clause 2.26. The [**] by this clause 8.19 is effective when [**] under clauses 8.6 and 8.17 take effect.
8.20 Notwithstanding any other provision of this Agreement to the contrary, [**] right to [**] in clause 8.17 by payments as described in clause 8.18(a) shall survive termination of this Agreement by [**] in accordance with the provisions of clauses 15.2 (a), (b), (d) or (e) or termination for convenience without cause of Services under clause 2.30 and be exercisable at any time during a period of sixty (60) days following such termination.
Add new clauses to clause 8 as follows:
8.21 Digimarc hereby [**], with effect from 1 January [**] the [**] the Digimarc Technology and the Project Technology, and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements, and [**] the Digimarc Technology and the Project Technology and such Improvements and Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements to other Persons for the purposes of [**], the [**] and any such component thereof, and making the [**] and any component available to others solely for [**]. [**], including [**]. For greater certainty, the uses permitted by this grant are limited to [**] This grant does not permit any other uses, [**] The expressions [**] as used in this clause 8.21 shall be deemed to refer to [**]. The [**] by clause 8.21 applies to Digimarc Technology and the Project Technology and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements existing on or before December 31, [**], and to Digimarc Technology and the Project Technology and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements created on an on-going basis under any subsequent Statement of Work or [**] Plan approved under clause 2.26. This [**] is in addition to those rights granted in Sections 8.4, 8.6, 8.17 and 8.19 of this Agreement.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
8.22 Digimarc grants to [**], effective on the date specified in this clause, the [**] the Digimarc Technology and the Project Technology and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements, and [**] the Digimarc Technology, the Project Technology and such Improvements and Technical Information to other Persons, for the sole purpose of [**] solely for [**]. This grant is subject to the limitations set forth in Clause 8.21. This [**] shall take effect on written request by the [**] Contract Authority at any time following the later of the date on which the [**] to in 8.21 takes effect and the date on which [**] pays Digimarc the amount as set forth below:
(a) if [**] desires to [**] during the period covered by Phase [**], [**] shall pay an amount to be negotiated by [**] and Digimarc, in addition to the amount to be paid under clause 8.6;
(b) if [**] desires to [**] during the period covered by Phases [**] shall only pay to Digimarc [**] as set out in clause 8.6; or
(c) if [**] desires to [**] at any time after the refusal to perform or other material breach of the Agreement by Digimarc, [**] shall [**] at no cost.
The [**] clause 8.22 applies to Digimarc Technology and the Project Technology and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements existing on or before December 31, [**], and to Digimarc Technology and the Project Technology and all Improvements, and the Technical Information pertaining to the Digimarc Technology, the Project Technology and such Improvements created on an on-going basis under any subsequent Statement of Work or [**] Plan approved under clause 2.26.
8.23 [**] hereby grants Digimarc during the term of this Agreement a [**] may have or acquire under clauses 8.4, 8.6, 8.17, 8.19, 8.21 and 8.22 of the Agreement. This [**] to Digimarc is retroactive to any previously [**] rights from Digimarc to [**] may have or may acquire under clauses 8.4, 8.6, 8.17 and 8.19 of the Agreement.
10. REPRESENTATIONS AND WARRANTIES OF DIGIMARC
Add new subclauses to clause 10.1 as follows:
(h) it possesses the necessary skills, knowledge and experience to perform all [**] Services under this Agreement and such [**] Services shall be performed at all times in a timely, cost effective, professional and diligent manner by Digimarc exercising due professional care, skill and competence. For greater certainty Digimarc shall, and shall ensure that the [**] Personnel shall, employ the standard of care in performing the [**] Services that would be expected of a competent and experienced provider of the same or similar type of [**] Services; and
(i) Digimarc shall ensure that the [**] Personnel are appropriately qualified, skilled, trained and experienced to undertake the [**] Services and tasks assigned to them, and that each of the [**] Personnel shall possess the qualifications and experience which Digimarc has represented them to possess.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
11. REPRESENTATIONS AND WARRANTIES OF [**]
Sub-clause (d) of clause 11.1 shall be replaced as follows:
from and after the date on which [**] gets access to the Escrowed Materials (the Release Date) as provided by clauses 8.4, 8.6, 8.17, 8.19, 8.21 and 8.22 above until the last day of the Term, every [**] which [**] develops, permits, or causes to be developed using the Escrowed Materials for incorporation into any Device will be capable of [**]with the same or better performance [**] than the version of the [**] last accepted by [**] possessed on the Release Date on which [**] gets access to the Escrowed Materials.
12. CONFIDENTIALITY
Clause 12.9 shall be replaced as follows:
[**] shall not reverse-engineer, disassemble, or decompile any Digimarc software forming part of the CDS, [**] (except to the extent that any such activity is reasonably necessary to permit [**] to exercise its [**] clauses 8.4, 8.6, 8.17, 8.19, 8.21 and 8.22 of this Agreement or [**] right to do so may not be contractually restricted under applicable law), and shall contractually assure that any other Person to whom [**] provides [**] shall be similarly obliged.
Clause 12.11 shall be replaced as follows:
12.11 General attributes of the CDS may be disclosed in connection with promotion of the CDS to the [**] and [**], and to customers or prospects in related markets; information relating to the [**] Technology and the [**]Technology may be disclosed to [**] and vendors of [**] subject to a nondisclosure agreement on terms requiring at least [**] years of confidentiality from the date of disclosure of such Confidential Information, but that are in all other respects materially similar to the provisions of this clause 12, but in all such cases Digimarc may disclose information relating to the [**] only to Licensed [**] but to no others. The existence and terms of this Agreement may be disclosed to the parties professional advisors, to members of the [**] and to Digimarcs shareholders, institutional and corporate investors, and commercial and investment bankers, who have a reasonable need to know such information subject to a non-disclosure agreement, or as required by applicable law or regulations.
15. TERM AND TERMINATION
Clause 15.6 shall be replaced as follows:
15.6 Termination of this Agreement by [**] for any reason in accordance with the provisions of this clause 15 or termination for convenience without cause of Services under clause 2.30 shall not affect any license granted by Digimarc pursuant to clauses 2.8, 2.9, 8.4, 8.6, 8.17, 8.19, 8.21 or 8.22 above.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
18. |
|
NOTICES |
Clause 18.2 shall be replaced as follows:
With a copy to:
Digimarc Project Director
Digimarc Corporation
9405 SW Gemini Drive
Beaverton, Oregon 97008 USA
FAX: (503) 469-4777
Clause 18.3 shall be replaced as follows:
18.3 Any notice to [**] shall be sent to both of, and any notice from [**] shall be sent by either:
[**]
With a copy to:
[**]
Clause 18.4 shall be replaced as follows:
18.4 A party may change its addressee(s) or address(es) for notice by notice to the other party in accordance with the provisions of this clause 18.
19. MISCELLANEOUS PROVISIONS
Clause 19.12 shall be replaced as follows:
19.12 The parties agree that from time-to-time it will be beneficial to both parties to issue press releases and other public announcements concerning benefits arising from the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[**] of the CDS. Each party agrees to submit such releases or announcements for prior approval by the other party if the name of the other party is mentioned, which approval may be withheld by the other party in its sole discretion. Any Digimarc press releases and public announcements that mention CDS or [**] must be pre-approved by the [**] Project Director.
Clause 19.15 shall be replaced as follows.
19.15 Survival. All clauses of this Agreement which expressly or by implication are intended to survive the termination of this Agreement will do so and, for greater certainty and notwithstanding any provision in this Agreement to the contrary, the provisions set out in clauses 2.5, 3.6-3.10 inclusive, 3.12-3.18 inclusive, 3.20, 3.21, 8.4, 8.5, 8.6, 8.8, 8.11-8.22 inclusive, 9.1, 9.2, 9.3, 9.7, 10, 11, 12, 13, 14, 16, 18, 19 and 20 of this Agreement shall survive termination of this Agreement by either party for any reason.
20. INTELLECTUAL PROPERTY INDEMNIFICATION [**]
Add new clause 20 as follows:
20.1 Digimarc hereby undertakes to assume and be responsible for the provision of intellectual property (IP) infringement indemnification in respect of any infringement or alleged infringement of any third party intellectual property rights of any kind (IP Indemnification) arising in respect of [**] that Digimarc [**] after January 10, [**]. [**] (a) Digimarc has the right to direct the defense of any infringement and indemnity claim; (b) [**] shall take such actions as are reasonably requested by Digimarc in connection with managing, defending, and settling any claim or demand, including mitigation of damages; (c) to facilitate mitigation or avoid infringement, Digimarc can supply, at its own cost, [**] prior approval which shall not be unreasonably withheld; and (d) if [**] as of the date of the notice.
20.2 Unless otherwise agreed between Digimarc and the [**] Project Director, [**] Digimarc and the [**] Project Director shall mutually agree on a [**] such agreement not to be unreasonably withheld.
20.3 [**] Digimarc shall provide indemnification [**] in accordance with its obligations under this Agreement, [**] provided that [**] in accordance with clause [**].
20.4 In addition to any other [**] obligations in this Agreement and in consideration of Digimarcs continuing compliance at all times with its obligations under this clause 20, [**] agrees [**] Digimarc for the IP Indemnification [**] subject to [**] in accordance with clause 20.5. [**].
20.5 Prior to November 15 [**] that the IP Indemnification of clauses 20.1 and 20.2 [**], the [**] Project Director [**] to Digimarc [**] Digimarc under clause 20.4 in the following contract year [**], or, if a review is conducted as per this clause 20.5, [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
20.6 [**] is not included under the provisions of this clause 20. [**]
20.7 This clause 20 is not subject to the termination provisions of clause 15, but will continue until terminated in accordance with this clause 20.7. [**] has the option, at its sole discretion, to terminate the IP Indemnification obligations of Digimarc under this clause 20: (a) at the end of a calendar year and discontinue [**] under this clause 20 as of the end of that same calendar year with written notice by November 15 of that same calendar year; (b) immediately on written notice by [**] if this Agreement is terminated by [**] pursuant to clauses 15.3; or (c) immediately on written notice by [**] if any of the events specified in clauses 15.3 occur after the termination of this Agreement whilst the provisions of this clause 20 are in force. Digimarc has the option to terminate the indemnification obligations of Digimarc under this clause 20 if [**] under clause 20 after receiving [**] by [**] of a termination notice from Digimarc. Upon termination of this clause 20, Digimarc shall [**] from and [**] shall arrange for [**] covered by this clause 20 except that if [**] before such termination, Digimarc shall [**], in accordance with clause 20, [**].
20.8 Digimarc undertakes to review the [**] with [**] Contract Authority [**] the CDS Technology or any part thereof in [**]
20.9 Notwithstanding the above, Digimarc has agreed [**] to allow the [**] to:
a) continue the IP Indemnification obligations of Digimarc under this clause 20 for the first six months of [**].
b) [**] has the option, at its sole discretion, to terminate the IP Indemnification obligations of Digimarc under this clause 20 effective June 30, [**] by providing Digimarc with written notice by April 15, [**]. Upon termination of this clause 20, Digimarc shall [**] and [**] shall arrange for [**] covered by this clause 20 except that if [**], in accordance with clause 20, [**].
c) if [**] does not exercise its option as set out in (b), the IP Indemnification obligations of Digimarc under this clause 20 shall continue for the remainder of [**] and [**] Digimarc [**].
20.10 Notwithstanding the above, Digimarc has agreed for [**] to allow [**] to:
a) continue the IP Indemnification obligations of Digimarc under this clause 20 for the first six months of [**].
b) [**] has the option, at its sole discretion, to terminate the IP Indemnification obligations of Digimarc under this clause 20 effective June 30, [**] by providing Digimarc with written notice by March 31, [**]. Upon termination of this clause
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
20, Digimarc shall [**] and [**] shall arrange for [**] covered by this clause 20 except that if [**], in accordance with clause 20, [**].
c) if [**] does not exercise its option as set out in (b), the IP Indemnification obligations of Digimarc under this clause 20 shall continue for the remainder of [**] and [**] Digimarc [**].
IN WITNESS WHEREOF, this Fourth Amendment has been executed and delivered by the parties hereto as of the date of the last signature below.
[**] |
|
|
|||||
|
|
|
|||||
Signature: |
|
|
Signature: |
|
|
||
|
|
|
|||||
Name: |
|
Name: |
|||||
|
|
|
|||||
Title: |
|
Title: |
|||||
|
|
|
|||||
Date: |
|
Date: |
|||||
|
|
|
|||||
DIGIMARC CORPORATION |
|
|
|||||
|
|
|
|||||
By: |
|
|
|
||||
|
|
|
|||||
Name: |
J. Scott Carr |
|
|||||
|
|
|
|||||
Title: |
President, Digimarc Watermarking Solutions |
|
|||||
|
|
|
|||||
Date: |
|
|
|||||
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE A
DIGITAL COUNTERFEIT DETERRENCE SYSTEM DESCRIPTION
1.0 GENERAL DESCRIPTION OF THE DIGITAL COUNTERFEIT DETERRENCE SYSTEM (CDS)
The CDS is a system designed to hinder or deter the counterfeiting of bank notes by the use of personal computer-based equipment. [**]
[**]
The capitalized terms in this Schedule A have the meanings provided in the Counterfeit Deterrence System Development and License Agreement to the extent same are not elaborated herein.
The term [**] refers to a [**]
2.0 FUNCTIONAL DESCRIPTION OF THE CDS
The CDS is comprised of the following three subsystems:
1. [**]
2. [**]
3. [**]
The functions of the various subsystems and components described below may be changed by the [**] or the [**].
2.1 [**]
2.1.1 [**]
1. [**]
2. [**]
3. [**]
4. [**]
2.1.2 [**]
1. [**].
2. [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED SECTIONS 2.1 THROUGH 7 CONSIST OF TWO PAGES OF TEXT.
3. [**]
4. [**]
5. [**]
2.1.3 [**]
1. [**]
2.2 [**]
1. [**]
2. [**]
3. [**]
4. [**]
(a) [**]
(b) [**]
(c) [**]
5. [**]
6. [**]
7. [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED SECTIONS 2.1 THROUGH 7 CONSIST OF TWO PAGES OF TEXT.
SCHEDULE B
[**]
1. 0 DESCRIPTION OF [**]
Digimarc shall perform the following Work [**]. (The specific responsibilities to be discharged by [**] are also described below.)
1.1 [**] Study
Digimarc shall conduct the [**] Study described below.
1. Digimarc shall examine the feasibility of integrating [**] in the form of the [**]. This study will investigate viable technical approaches and report on the performance, false positive rates, and [**] time that might be expected from the preferred approach.
2. Digimarc shall deliver a final report to the [**] by the date set out in the Delivery Schedule attached as Attachment 2 (the Delivery Schedule) describing the findings of the study and providing recommendations useful in the development of a prototype including the detection rates for [**].
1.2 [**] Study
Digimarc shall conduct a study to attempt to characterise the behaviour of [**] and its measure of strength, as determined by [**] through the [**]. Digimarc shall relate the results of this characterisation to [**] performance. Digimarc shall submit a report on this study to the DLA Project Manager [**]. The results, and other information as available, will be made available by Digimarc to the [**] as guidance in the use of [**].
As part of the [**], Digimarc shall:
1. deliver a study plan to the DLA Project Manager outlining the objects, test and analysis methods for the [**];
2. perform a suite of tests on [**] on [**]. [**] shall assist Digimarc in the performance of a reasonable number of tests involving the [**];
3. conduct parameter measurements (e.g. signal correlation and error rate) on the experimental designs listed in paragraph 4 below and report on and attempt to characterise how the parameters change through the sequence from [**].
4. [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
1.3 Design, Development and Production of the CDS [**]
Digimarc shall design, develop and produce for acceptance by [**] of each of the [**] and each component thereof and the [**] according to the following process:
1. By the date set out in the Delivery Schedule, Digimarc shall develop a detailed specification for each subsystem and component which support the functional description of the subsystem or component described in Schedule A and the additional requirements for the subsystem or component, if any, specified below.
2. Digimarc shall deliver the specifications to the DLA Project Manager by the dates set out in the Delivery Schedule for [**] review, comment and acceptance or rejection.
3. As soon as possible after receiving them under 2, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not [**] approves the specifications and if not, why not. Within fifteen (15) calendar days after receiving notice of rejection, Digimarc shall change the specifications to make them acceptable to [**] and redeliver them to [**] for approval as provided above.
4. Upon notice of approval under 3, Digimarc shall develop the subsystem or component which will meet the approved specifications and deliver the evaluation release of the subsystem or component to [**] for testing and acceptance.
5. Within forty five (45) calendar days after receiving an evaluation version under 4, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not the evaluation release meets the specifications with details of the non-compliance. Any problems shall be detailed using, to the extent appropriate, the [**] form attached as Schedule R.
6. By the date set out in the Delivery Schedule, Digimarc shall develop a final release of the subsystem or component incorporating any changes required to the evaluation release to rectify the non-compliance with the specifications and any other modifications agreed in writing between the parties respective project managers and deliver the final release to [**] for testing and acceptance.
7. Within forty five (45) calendar days after receiving the final release under 6, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not the final release meets the specifications with details of the non-compliance. Within thirty (30) calendar days after receiving notice of rejection, Digimarc shall rectify all non-compliance and redeliver the final release to [**] for approval as provided above.
1.4 Acceptance Procedures
1.4.1 The acceptance procedures for the [**] will include the following:
1. The [**] will be evaluated at the facilities of up to three [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2. Digimarc will train one person on the [**] from each evaluation facility to enable them to evaluate the [**] as part of the acceptance process. Digimarc shall conduct the training at a single facility to be agreed between Digimarc Project Manager and the DLA Project Manager.
1.4.2 The acceptance procedures for the [**] will include the following:
1. Digimarc shall deliver the [**] to the DLA Project Manager in an example [**] that Digimarc will develop to allow the [**] to conduct acceptance tests on performance, robustness, and resistance to [**]. Digimarc shall deliver a detailed description of how the [**] was integrated and the techniques used to defend against [**].
1.5 Implementation of [**]
1.5.1 Digimarc shall implement [**] as follows :
1. [**]
1.6 Training Program
1. Digimarc shall develop a training program acceptable to the DLA Project Manager to train the personnel of [**] as set out in Schedule Q to the Agreement. This training program will be delivered according to the Delivery Schedule for [**].
2. Each [**] shall equip its site for training and installation prior to the start of training, following a pre-site configuration guide to be developed by Digimarc. Failure to establish the required hardware and software environment in advance of installation will lengthen the required installation and training time and costs.
3. Training will be provided in English and will be designed for delivery in five days to students who speak English. Translation, if required, shall be provided by the [**], and may lengthen the training time and costs.
2.0 DESCRIPTION OF, AND REQUIREMENTS FOR, VERSIONS 1.0
2.1 [**]
[**] :
2.1.1 [**]
1. [**].
2. [**].
3. [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED SECTIONS 2.1 THROUGH 7(C) CONSIST OF THREE PAGES OF TEXT.
4. [**].
5. [**].
6. [**].
2.1.2 [**]
1. [**].
2. [**].
2.1.3 [**]
1. [**].
2. [**].
3. [**].
4. [**].
5. [**].
6. [**].
2.2 [**]
2.2.1 [**]:
1. [**].
2. [**]:
(a) [**]
(b) [**].
3. [**].
4. [**].
5. [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED SECTIONS 2.1 THROUGH 7(C) CONSIST OF THREE PAGES OF TEXT.
6. [**].
7. [**]:
(a) [**].
(b) [**] CDS [**].
(c) [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED SECTIONS 2.1 THROUGH 7(C) CONSIST OF THREE PAGES OF TEXT.
Attachment 1
BASELINE, EXTENDED BASELINE, AND OPTIONAL TESTS
1.0 [**]
1.1 [**]
1.1.1 [**]
1.1.2 [**]
1.1.3 [**]
1.1.3.1 [**]
1.1.3.2 [**]
1.1.3.3 [**]
1.2 [**]
1.2.1 [**]
1.2.3 [**]
1.2.4 [**]
1.2.5 [**]
[**]
2.0 [**]
2.1 [**]
2.1.1 [**]
2.1.2 [**]
2.1.3 [**]
2.1.4 [**]
2.1.5 [**]
2.1.6 [**]
2.1.7 [**]
2.1.8 [**]
2.2 [**]
2.2.1 [**]
2.2.2 [**]
2.2.3 [**]
2.2.4 [**]
3.0 [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED SECTIONS 1.0 THROUGH 3.2.3 CONSIST OF 1.5 PAGES OF TEXT.
3.1 [**]
3.2 [**]
3.2.1 [**]
3.2.2 [**]
3.2.3 [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED SECTIONS 1.0 THROUGH 3.2.3 CONSIST OF 1.5 PAGES OF TEXT.
Attachment 2
CDS PHASE 1 DELIVERY SCHEDULE
[**]
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED TABLES ARE TWO PAGES IN LENGTH.
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED TABLES ARE TWO PAGES IN LENGTH.
Attachment 3
DEVICE VENDORS
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE B, AMENDED ATTACHMENT 3
[**]
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
AMENDED SCHEDULE C
PHASE [**] STATEMENT OF WORK
Digimarc shall perform the following Work during Phase [**]. (The specific responsibilities to be discharged by [**] during Phase [**] are also described below.)
1.0 [**]
Digimarc shall [**] for acceptance by [**] and each component thereof according to the following process:
1. By the date set out in the Delivery Schedule, Digimarc shall develop a detailed specification for the [**] that supports the [**] of the [**] described in Schedule A and the additional requirements for the [**], if any, specified below.
2. Digimarc shall deliver the specifications to the DLA Project Manager by the dates set out in the Delivery Schedule for [**] review, comment and acceptance or rejection.
3. As soon as possible after receiving them under 2, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not [**] approves the specifications and if not, why not. Within fifteen (15) calendar days after receiving notice of rejection, Digimarc shall change the specifications to make them acceptable to [**] and redeliver them to [**] for approval as provided above.
4. Upon notice of approval under 3, Digimarc shall [**] which will meet the approved specifications and deliver [**] and acceptance.
5. Within forty five (45) calendar days after receiving an [**] under 4, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not the [**] meets the specifications with details of the non-compliance. Any problems shall be detailed using, to the extent appropriate, the [**] Problem Report form attached as Schedule R.
6. By the date set out in the Delivery Schedule, Digimarc shall [**] incorporating any changes required to the [**] with the specifications and any other modifications agreed in writing between the parties respective project managers and deliver the [**] to [**] for [**].
7. Within thirty (30) calendar days after receiving [**] under 6, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not [**] meets the specifications [**]. Within thirty (30) calendar days after receiving notice of rejection, Digimarc shall rectify all non-compliance and redeliver the [**] for approval as provided above.
1.2 Acceptance Procedures
1.2.1 The acceptance procedures for the [**] will include the following:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
1. Digimarc shall deliver the [**] for [**] to the DLA Project Manager in an example [**] that Digimarc will develop to allow [**] to conduct [**].
2. Digimarc shall deliver the [**] for [**] DLA Project Manager in a [**] that Digimarc will develop based on [**]. The [**] will allow the [**] to conduct [**].
3. Digimarc shall deliver into escrow and review with the [**] a detailed description of how the [**].
1.3 [**]
1.3.1 Digimarc shall [**] as follows :
1. Digimarc shall [**] with [**] attached to Schedule B as Attachment 3 or such other [**] as may be agreed between the parties respective Project Managers. Digimarc shall deliver [**]
2. Digimarc shall [**] with at least [**] from [**] or [**] as may be agreed between the parties respective Project Managers. Development of [**].
2.0 DESCRIPTION OF, AND REQUIREMENTS FOR, [**]
For the purpose of this Schedule, [**] means an agreed upon [**] used to produce [**]. For Phase [**], the [**] was the February [**].
2.1 [**]
Digimarc shall develop for approval by the DLA Project Manager a set of [**] that defines the term [**]. This includes a [**].
2.2 New [**]
The [**] was selected by the [**] as the new [**] design. The [**] will be [**] as described in paragraph 2.5.1.
2.3 [**]
Digimarc shall [**] according to the following requirements:
2.3.1 [**] Requirements
The [**] will meet the following [**] requirements:
1. The [**] shall be capable of being [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2. The [**] shall meet all the requirements in Schedule B paragraph 2.2, plus it shall [**].
3. The [**] shall [**] when more than one [**].
4 The [**] shall [**]. Refinements to the [**] will be recommended as required to accommodate the unique needs of a [**].
2.3.2 [**] Improvements
Digimarc shall [**] improvements that will be incorporated into [**] as follows:
1. Digimarc will focus such improvement work on the new [**].
2. The [**] made at the start of the Phase [**] and described below in section 2.5.1 (4) using the [**] will establish a [**]. The [**] and Digimarc will mutually agree to [**]. Since these [**] will be established after the detailed specification has been delivered to [**], as described in the Delivery Schedule, the [**] will be described in an amendment to the [**] detailed specification.
3. [**] improvements will focus on improving [**] in [**]. [**] and Digimarc will mutually set priorities for the various possible improvements, and such priorities will guide Digimarcs development work.
2.3.3 [**]
Digimarc shall build and [**]:
1. Digimarc shall [**].
2. Digimarc shall build and maintain [**], or [**], for [**] and all [**] to use the [**].
2.4 [**] and [**]
Digimarc shall deliver a [**] and [**]. Digimarc shall work [**] or independently to [**] as mutually agreed with [**]. [**] will be capable of [**] identified by Digimarc and [**]. The capability to [**] selected by [**] will be added if resources and schedule permit as mutually agreed by Digimarc and [**]. Once a decision is made as to whether Digimarc will work [**] or independently, Attachment 1 will be updated with the [**] and [**] schedule.
To complete the development, it may be necessary for Digimarc [**] in order to implement [**]. [**] and Digimarc will mutually agree on a strategy to [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.5 [**] Study
Digimarc shall conduct the [**] Phase of the [**] Study that attempts to [**] the relationship between [**] during [**] and [**] as follows:
2.5.1 [**]
Digimarc shall work [**] as follows:
1. [**] shall provide Digimarc with [**] for the [**].
2. Digimarc shall [**] and provide the [**].
3. [**] shall [**] and provide the [**] to Digimarc.
4. Digimarc shall assess and report [**] in the versions of the [**]. The version of [**] to use as the [**] will be mutually agreed to between [**] and Digimarc. These [**] will establish a [**] to use in [**] improvements.
2.5.2 [**] Characterization
Digimarc shall:
1. conduct a study to characterize the behavior of the [**];
2. include a study of the [**] and [**] of the [**] such that [**] into a [**] may be [**];
3. [**].
4. deliver a study plan to the DLA Project Manager outlining the objectives, test and analysis methods for the [**];
5. deliver a report of the results of the study to the DLA Project Manager by the dates set out in the Delivery Schedule.
2.6 [**]
2.6.1 [**] in [**] Applications
Digimarc shall [**] as described in section 1.3.1 (1) as follows:
1. Digimarc shall provide [**] assist [**] in [**] in [**].
2. Digimarc and [**] shall agree to [**] in [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
3. Digimarc shall [**].
4. [**] may, at its option, evaluate [**] of [**] which [**] has been [**]. The DLA Project Manager shall identify to Digimarc any concerns which [**] may have relating to [**] or [**]. Digimarc shall make a proposal to the DLA Project Manager to address those concerns for approval by the DLA Project Manager.
2.6.2 [**] and [**]
Digimarc shall [**] in [**] as follows:
1. Digimarc and the [**] shall define [**] program that establishes agreed to [**] and [**]. This program will be developed with the assistance [**] and will be described by a [**] plan. This [**] program will be comprised of three elements:
a) To [**]CDS [**].
b) To [**]CDS.
2. Digimarc shall [**] CDS [**].
3. Digimarc shall [**].
4. Digimarc shall [**] CDS [**].
5. [**].
6. [**] shall support in-person meetings with [**] as needed to [**] the CDS.
7. Digimarc shall [**] the CDS [**] CDS [**]. Digimarc shall [**] CDS [**], and Digimarc shall [**]. Digimarc shall report [**] to [**].
2.7 [**] Study
Digimarc shall work [**] to [**] and Digimarc shall provide [**].
2.8 [**]
Digimarc shall [**] the CDS program [**] as follows:
1. Digimarc and [**] shall develop a plan to [**] in the [**] the CDS System, and to [**].
2. Digimarc shall update the [**] documentation and [**] on an as-needed basis [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
3. Digimarc shall [**] the CDS [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Attachment 1
CDS PHASE [**] DELIVERY SCHEDULE
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[**]
Num. |
|
Deliverable |
|
Owner |
|
Sec/Para Ref. |
|
Depends
|
|
Days |
|
CompletionDate |
[**]-1 |
|
[**] |
|
[**] |
|
2.5.1.1 |
|
|
|
|
|
17 Jan [**] |
[**]-2 |
|
[**] |
|
[**] |
|
2.5.1.2 |
|
[**]-1 |
|
21 |
|
8 Feb [**] |
[**]-3 |
|
[**] |
|
[**] |
|
2.5.1.3 |
|
[**]-2 |
|
23 |
|
15 Mar [**] |
[**]-4 |
|
[**] reported and Phase
|
|
[**]
|
|
|
|
[**]-3 |
|
23 |
|
13 Apr [**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] Study |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Num. |
|
Deliverable |
|
Owner |
|
Sec/Para Ref. |
|
Depends
|
|
Days |
|
Completion
|
[**]-1 |
|
[**] study plan delivered |
|
[**] |
|
2.5.2.3 |
|
|
|
|
|
28 Feb [**] |
[**]-2 |
|
[**] Study plan signoff |
|
[**] |
|
1.2 |
|
[**]-1 |
|
11 |
|
9 Mar [**] |
[**]-1 |
|
[**] Analysis [**] delivered |
|
[**] |
|
|
|
[**]-2 |
|
103 |
|
8 Sep [**] |
[**]-2 |
|
Draft report delivered |
|
[**] |
|
2.5.2.5 |
|
[**]-1 |
|
103 |
|
8 Sep [**] |
[**]-3 |
|
[**] evaluation of draft report |
|
[**] |
|
|
|
[**]-2 |
|
20 |
|
6 Oct [**] |
[**]-4 |
|
Final report delivered |
|
[**] |
|
|
|
[**]-3 |
|
41 |
|
4 Dec [**] |
[**]-5 |
|
[**] evaluation of the final report |
|
[**] |
|
|
|
[**]-4 |
|
20 |
|
29 Dec [**] |
[**]-1 |
|
[**] Study draft report delivered |
|
[**] |
|
|
|
[**]-2 |
|
75 |
|
1 Aug [**] |
[**]-2 |
|
[**] evaluation of draft report |
|
[**] |
|
|
|
[**]-1 |
|
28 |
|
29 Aug [**] |
[**]-3 |
|
Final report delivered |
|
[**] |
|
|
|
[**]-2 |
|
41 |
|
25 Oct [**] |
[**]-4 |
|
[**] evaluation of the final report |
|
[**] |
|
|
|
[**]-3 |
|
20 |
|
21 Nov [**] |
[**]-1 |
|
[**] Study draft report delivered |
|
[**] |
|
|
|
[**]-2 |
|
60 |
|
30 May [**] |
[**]-2 |
|
[**] evaluation of draft report |
|
[**] |
|
|
|
[**]-1 |
|
40 |
|
25 Jul [**] |
[**]-3 |
|
Final report delivered |
|
[**] |
|
|
|
[**]-2 |
|
41 |
|
20 Sep [**] |
[**]-4 |
|
[**] evaluation of the final report |
|
[**] |
|
|
|
[**]-3 |
|
20 |
|
17 Oct [**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Verification Test ([**])
Num. |
|
Deliverable |
|
Owner |
|
Sec/Para Ref. |
|
Depends
|
|
Days |
|
CompletionDate |
[**]-1 |
|
Proposed [**] program |
|
[**] |
|
|
|
|
|
|
|
28 Jul [**] |
[**]-2 |
|
[**] feedback on verification test [**] |
|
[**] |
|
|
|
[**]-1 |
|
30 |
|
24 Aug [**] |
[**]-3 |
|
Final verification test [**] signoff |
|
[**] |
|
|
|
[**]-2 |
|
25 |
|
7 Sep [**] |
[**]-4 |
|
[**] acceptance of the [**] test [**] |
|
[**] |
|
|
|
[**]-3 |
|
13 |
|
21 Sep [**] |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] Tests |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Num. |
|
Deliverable |
|
Owner |
|
Sec/Para Ref. |
|
Depends
|
|
Days |
|
CompletionDate |
[**]-1 |
|
Proposed [**] test program |
|
[**] |
|
|
|
|
|
|
|
28 Apr [**] |
[**]-2 |
|
[**] feedback on [**] test program |
|
[**] |
|
|
|
[**]-1 |
|
40 |
|
25 May [**] |
[**]-3 |
|
Final [**] test program signoff |
|
[**] |
|
|
|
[**]-2 |
|
35 |
|
8 Jun [**] |
[**]-4 |
|
[**] acceptance of the [**] test program |
|
[**] |
|
|
|
[**]-3 |
|
13 |
|
22 Jun [**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
AMENDED SCHEDULE D
PHASE [**] STATEMENT OF WORK
1.0 DESCRIPTION OF PHASE [**] WORK
Digimarc shall perform the following Work during Phase [**]. (The specific responsibilities to be discharged by [**] during Phase [**] are also described below.)
1.1 [**] Of The Phase [**] Deliverables
Digimarc shall [**] for acceptance by [**] the Phase [**] Deliverables according to the following process:
1. By the date set out in the Delivery Schedule outlined in Attachment 1, Digimarc shall develop a detailed Specification for each [**] that supports the functional description of the [**] described in Schedule A as relates to Phase [**] and the additional requirements for the [**], if any, specified below.
2. Digimarc shall deliver the Specifications to the DLA Project Manager by the dates set out in the Delivery Schedule for [**] review, comment and acceptance or rejection.
3. Within thirty (30) calendar days after receiving them under 2, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not [**] approves the Specifications and if not, why not. Within fifteen (15) calendar days after receiving notice of rejection, Digimarc shall change the Specifications to make them acceptable to [**] and redeliver them to [**] for approval as provided above.
4. Upon notice of approval under 3, Digimarc shall [**] which will meet the approved Specifications and deliver the [**] and acceptance.
5. Within thirty (30) calendar days after receiving an [**] under 4, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not the evaluation release meets the Specifications with details of any non-compliance. Any problems shall be detailed using, to the extent appropriate, the [**] Report form attached as Schedule R.
6. By the date set out in the Delivery Schedule, Digimarc shall [**] incorporating any changes required to the [**] with the Specifications and any other modifications agreed in writing between the parties respective project managers and deliver the final release to [**] for [**] and acceptance.
7. Within fifteen (15) calendar days after receiving the final release under 6, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not the final release meets the Specifications with details of any non-compliance. Within thirty (30) calendar days
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
after receiving any notice of rejection, Digimarc shall rectify all [**] for approval as provided above.
1.2 Acceptance Procedures
The acceptance procedures for the [**] will be the following:
1. Digimarc shall deliver or make available the [**] for [**] to the DLA Project Manager in a [**] that Digimarc will develop based on [**] from a [**]. The [**] will allow the [**] to conduct [**] as set forth in the Specification.
2. Digimarc shall deliver into escrow and review with the [**] a detailed description of how the [**] for [**] was integrated into the [**] and the techniques used to [**].
The acceptance procedure for the [**] will be the following:
1. Digimarc shall deliver or make available the [**] to the DLA Project Manager in a suitably modified [**] from a [**] for [**] on compliance with the Specification.
2. Digimarc shall deliver into escrow and review with the [**] a detailed description of how the [**] was [**], as well as copies of the [**]. This excludes deposit into escrow of any [**] proprietary data or information for the design and operation of the [**].
Digimarc shall develop the [**] according to the following requirements:
[**] will meet the following requirements:
1. [**] shall be capable of being [**].
2 [**] shall be capable of [**] shall be conditional upon Digimarc [**] Digimarc and the [**] to intellectual property [**] in order to [**].
3. Digimarc shall [**] needed for replacement of the [**] with a suitably designed alternative [**].
4. Detailed requirements for [**] will be specified in a Specification delivered in accordance with the Delivery Schedule outlined in Attachment 1.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Digimarc shall develop an [**] according to the following requirements:
1. Digimarc shall make [**] changes to the [**] necessary for [**].
2. Digimarc shall develop [**] needed to implement an [**]. Digimarc will engage one or more [**] in this effort [**] during the [**] phase.
3. Digimarc shall work with one [**] to implement the [**] of the [**] a selected [**]. The implementation will be used to demonstrate that the [**] functions properly when [**].
4. Digimarc shall deliver or make available the [**] for assessment by the [**].
5. Digimarc shall deliver a detailed technical report on the findings of the Work and recommendations for any future work including requirements to add [**].
The detailed requirements for the [**] will be specified in a Specification delivered in accordance with the Delivery Schedule outlined in Attachment 1.
Digimarc shall implement the [**] as follows:
1. Digimarc shall [**] to [**] with [**] from the list of such [**] attached to Schedule B as Attachment 3 or such other [**] as may be agreed to between the parties respective project managers. Digimarc shall deliver and [**].
2. Digimarc shall [**] to [**] attached to Schedule B as Attachment 3 or such other [**] as may be agreed to between the parties respective project managers. Digimarc shall deliver and [**].
3. Digimarc shall [**] to [**] attached to Schedule B as Attachment 3 or such other [**] as may be agreed to between the parties respective project managers.
Digimarc shall support [**] that [**] as follows:
1. Digimarc shall provide [**] to assist [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2. Digimarc shall administer the certification program approved by [**] for the ongoing review and certification of [**].
3. [**] may, at its option, evaluate the [**] each [**]. The DLA Project Manager shall identify to Digimarc any concerns that [**] may have relating to [**]. Digimarc shall make a proposal to the [**] Project Manager to address those concerns for approval by the [**] Project Manager.
Digimarc shall operate, maintain and improve the [**] as follows:
1. Digimarc shall operate the [**] making it available at [**].
1. Digimarc shall develop, in cooperation with the DLA Project Manager, a program of activities to enhance [**] and [**]. This program will provide detailed strategies and plans. The focus will be on [**] and [**]. The program will support [**] initiatives to motivate [**] of [**].
2. The DLA Contract Authority will authorize use of an additional [**] upon successful completion by May 15, [**] of the [**] specified in the program described in 2.3.4.1.
3. Digimarc shall deliver to the [**] and provide training for [**].
4. Digimarc shall track and summarize for [**] and [**] trends that affect the CDS [**] and development strategy.
5. [**] shall support in-person meetings with [**] as needed to promote support for the [**] of the CDS.
6. Digimarc shall manage [**].
1. Digimarc shall [**] the [**] to [**] and their [**], including administration of [**].
For the avoidance of doubt, with the exception of the conditions in Section 2.1.1.2 of Amended Schedule D, Digimarc represents, warrants and undertakes that the performance of its obligations under Amended Schedule D are covered by Section 10 of the Agreement.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Amended Schedule D
Attachment 1
CDS PHASE [**] DELIVERY SCHEDULE
[**] for [**]
Num. |
|
Deliverable |
|
Owner |
|
Sec/Para Ref. |
|
Depends
|
|
Days |
|
CompletionDate |
[**]-1 |
|
Detailed [**] specification delivered |
|
[**] |
|
1.1.2 |
|
|
|
|
|
15 Jan [**] |
[**]-2 |
|
[**] specification signoff |
|
[**] |
|
1.1.3 |
|
[**]-1 |
|
15 |
|
31 Jan [**] |
[**]-3 |
|
[**] Approved |
|
[**] |
|
2.1 |
|
[**]-2 |
|
28 |
|
1 Mar [**] |
[**]-4 |
|
[**] of the [**] evaluation release |
|
[**] |
|
1.1.4 |
|
[**]-2 |
|
161 |
|
7 Sept [**] |
[**]-5 |
|
[**] acceptance of [**] |
|
[**] |
|
1.1.5 |
|
[**]-4 |
|
30 |
|
19 Oct [**] |
[**]-6 |
|
[**] of the [**] |
|
[**] |
|
1.1.6 |
|
[**]-5 |
|
28 |
|
3 Dec [**] |
[**]-7 |
|
[**] acceptance of [**] |
|
[**] |
|
1.1.7 |
|
[**]-6 |
|
28 |
|
31 Dec [**] |
[**]
Num. |
|
Deliverable |
|
Owner |
|
Sec/Para Ref. |
|
Depends
|
|
Days |
|
CompletionDate |
[**]-1 |
|
[**] Specification |
|
[**] |
|
1.1.2 |
|
|
|
|
|
15 Jan [**] |
[**]-2 |
|
[**] Specification signoff |
|
[**] |
|
1.1.3 |
|
[**]-1 |
|
15 |
|
31Jan [**] |
[**]-3 |
|
[**] |
|
[**] |
|
1.1.6 |
|
[**]-2 |
|
213 |
|
3 Dec [**] |
[**]-4 |
|
Deliver [**] Report |
|
[**] |
|
1.1.6 |
|
[**]-2 |
|
213 |
|
3 Dec [**] |
[**]-5 |
|
[**] acceptance of [**] and report |
|
[**] |
|
1.1.7 |
|
[**]-3,
|
|
28 |
|
31 Dec [**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DLA: SCHEDULE E
ARBITRATION AGREEMENT
An Agreement dated June 21, 1999, hereby amended effective as of January 1, [**], by and among the Parties (as defined below) to submit for final and binding resolution by international arbitration all Disputes (as defined below) arising out of or otherwise connected to a project relating to the development and potential licensing, marketing and servicing of a Counterfeit Deterrence System (as defined in the Development and License Agreement identified below) and the services of Digimarc (as defined below) in relation to the project.
WHEREAS, Digimarc Corporation, a corporation existing under the laws of the State of Delaware, USA, is developing, [**] and referred to in the Development and License Agreement (identified below) as [**]), technology [**] (the Counterfeit Deterrence System or CDS as defined in the Development and License Agreement identified below);
WHEREAS, the [**] has asked the [**], to provide it with limited assistance in connection with the development and potential subsequent licensing of the CDS as set out in a Development and License Agreement (the DLA) effective from January 1, [**] and [**] Agreement effective January 1, [**];
WHEREAS, in performance of the DLA, the [**] and Digimarc will enter into a contract with [**], which will act as escrow agent for certain purposes pursuant to an Escrow Agreement (the Escrow Agreement) which is attached as Schedule M to the DLA;
WHEREAS, in the course of performance of the DLA, Digimarc may be directed to issue licenses to certain [**] in accordance with standard forms of license agreement which are attached at Schedules K-1, K-2, L-1 and L-2 to the DLA all as amended;
WHEREAS, in the course of performance of the DLA, Digimarc may enter into System Support Services Agreements, a form of which is attached at Schedule O to the DLA, with licensees;
WHEREAS, in the course of performance of the DLA, Digimarc may provide consulting and programming services to a [**] on the terms described in Schedule P to the DLA to assist [**] to ensure that a [**] (as defined in the DLA) [**];
WHEREAS, [**], pursuant to an Indemnity Agreement (as amended from time to time) of or of approximately the same date as this Arbitration Agreement (the Indemnity Agreement), agreed to compensate and to indemnify and hold harmless the [**] in respect of any liability in connection with the project;
WHEREAS, given the international nature of the Agreements (as defined below), all the Parties (as defined below) to the Agreements (as defined below) are desirous to avoid recourse to national courts and the potential expense and delay of prosecuting connected Claims (as defined
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
below) in more than one proceeding and also to exclude the risk of having to apply contradictory or inconsistent fact-findings, conclusions, judgments or awards for any Dispute (as defined below) which may arise between or among the Parties (as defined below) and instead wish to resort to international arbitration as the exclusive means of resolving in a final, binding and consistent manner all Disputes (as defined below) arising in connection with the Agreements (as defined below) for the CDS and of establishing through this Arbitration Agreement a mechanism to these ends.
The Parties agree as follows:
1. The meaning of the following terms in this Arbitration Agreement shall be as set out below:
(a) Agreements shall mean all agreements, contracts, schedules or other arrangements in connection with the development or licensing or marketing or servicing of the CDS as listed in Schedule B, as amended from time to time.
(b) Appointing Authority shall mean the [**].
(c) Arbitrating Party or Arbitrating Parties shall mean (i) any and all Parties which have become involved in any arbitration under this Arbitration Agreement as Claimants or Respondents or (ii) which have been otherwise joined to any arbitration under this Arbitration Agreement or (iii) the [**], Digimarc, any [**] or any licensed [**] in the aforementioned circumstances or when it or they has or have exercised their right of Intervention in any arbitration under this Arbitration Agreement.
(d) Claim shall include without limitation any claim or counterclaim or crossclaim made by an Arbitrating Party.
(e) Claimant or Claimants shall mean any Party which, either separately or together with any other Party or Parties, initiates an arbitration under this Arbitration Agreement.
(f) Dispute shall mean any dispute, difference, controversy or claim except only for an Excluded Dispute (as defined below) between or among the parties arising out of or relating to or in connection with this Arbitration Agreement or any of the Agreements listed in Schedule B, including, but not limited to, their signature, validity, interpretation, performance, amendment, breach, termination and post-termination obligations.
(g) Excluded Dispute shall mean only a dispute between the [**] and Digimarc as described in clause 6.4 of the Escrow Agreement as to the occurrence of a Release Event as defined in clause 6.1 of the Escrow Agreement. Any such dispute shall be referred to an expert appointed by the Managing Director of the Escrow Agent (as defined in the Escrow Agreement) and any decision rendered by such an expert pursuant to clause 6.4 of the Escrow Agreement shall be accorded res judicata effect by any arbitral tribunal appointed under this Arbitration Agreement.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(h) Intervention shall mean the right of any of the [**], Digimarc, any [**] or any licensed [**] to intervene into a particular arbitration as an Arbitrating Party even when it is not a Claimant or Respondent and has not been joined into any arbitration by an Arbitrating Party.
(i) Notice of Arbitration shall mean the document given when initiating recourse to arbitration or to join any Party as an Arbitrating Party as well as to initiate recourse in arbitration against any Party which is already an Arbitrating Party.
(j) Party or Parties shall mean any of the signatories to this Arbitration Agreement and those parties listed in Schedule A as amended from time to time.
(k) Respondent or Respondents shall mean any Party which, either separately or together with any other Party, is named as a Respondent in an arbitration by any Claimant or Claimants.
(l) In interpreting this Arbitration Agreement, singular shall be read for plural where appropriate to reflect the multi-party nature of any arbitration.
2. Any Dispute shall be finally settled by arbitration under the [**] as in force at the date of commencement of this Arbitration Agreement except as the [**] Rules are modified in the body and Schedule C of this Arbitration Agreement and to the exclusion of any provisions of the [**] Rules as are inconsistent with the express provisions of this Arbitration Agreement or with the multi-party nature of an arbitration under this Arbitration Agreement.
3. The language used in any arbitration shall be English. All documents submitted into any arbitration shall be in English or submitted with a complete English translation. Oral evidence may be submitted in a language other than English provided that the Arbitrating Party submitting the oral evidence makes provision for its simultaneous interpretation into English. The cost of any translation or interpretation into English shall be borne entirely by the Arbitrating Party on whose behalf the non-English document or oral evidence is submitted and shall not be included among the costs of arbitration apportioned pursuant to Article 40 of the [**]
4. The place of Arbitration shall be [**].
5. Arbitration pursuant to this Arbitration Agreement shall be the sole and exclusive means for resolving any Dispute.
6. No entity shall become a Party unless that entity has become a Party to this Arbitration Agreement by executing a counterpart of this Arbitration Agreement.
7. No Party shall enter into any contract or agreement which alters or amends in any material respect any of the rights or obligations of any Party under any Agreement unless the contract or agreement shall contain the clause set out in Schedule D. Each Party to this
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Arbitration Agreement hereby expressly accepts the addition of new parties to Schedule A and of new contracts or agreements to Schedule B. Any Party which fails to act in conformity with this Article 7 shall be fully liable for any loss, injury or damage whatsoever resulting therefrom to any other Party.
8. (a) Any Claimant or Claimants shall initiate recourse to arbitration by giving to each Respondent a Notice of Arbitration and statement of claim which specify, inter alia , the Agreement or Agreements involved in the Dispute. Any Claimant or Claimants shall also at the same time send a copy of the same Notice of Arbitration and statement of claim to all other Parties and to the [**]. An arbitration shall be deemed to commence upon receipt of the Notice of Arbitration and statement of claim by the [**].
(b) Within thirty (30) days of the date on which each Respondent received the Notice of Arbitration, a Respondent may give a third party Notice of Arbitration in order to join into the arbitration any Party or Parties as an Arbitrating Party or Arbitrating Parties. The Respondent shall also at the same time send a copy of any third party Notice of Arbitration to all other Parties and to the [**].
(c) Any third party joined as an Arbitrating Party may, within thirty (30) days of receipt of any third party Notice of Arbitration, give fourth party Notices of Arbitration in order to join any Party or Parties as an Arbitrating Party or Arbitrating Parties. The third party shall also at the same time send a copy of any fourth party Notice of Arbitration to all other Parties and to the [**].
(d) Parties may be joined as further additional Arbitrating Parties by any Arbitrating Party or Arbitrating Parties until such time as thirty (30) days have elapsed without a new Arbitrating Party being joined into the arbitration.
(e) The [**], Digimarc, any [**], and any licensed [**], whether or not joined as a Respondent or as a further additional Arbitrating Party, shall each have the right to intervene in any arbitration by giving a Notice of Arbitration to each of the Arbitrating Parties within thirty (30) days after receipt of the copy of a Notice of Arbitration from the last Arbitrating Party to be joined or from the last Party to intervene. The [**], Digimarc, any [**], and any licensed [**] shall also at the same time send a copy of the Notice of Arbitration to the [**] and to all other Parties.
(f) The arbitral tribunal, once constituted and after affording the Arbitrating Parties and all other Parties a reasonable period of time in which to comment, shall have the authority to require by an order that any Party or Parties which is not or are not an Arbitrating Party or Arbitrating Parties shall nonetheless be joined into the arbitration as an Arbitrating Party or Arbitrating Parties should the arbitral tribunal determine that: (a) the absence of said Party or Parties from the pending arbitration would prevent the according of complete relief in regard to the Claims of the Arbitrating Parties; or (b) that the Party or Parties has or have a real and significant interest in the Agreement or Agreements out of or in connection with which the Disputes involved in the pending arbitration have arisen and
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
that the absence of said Party or Parties would significantly impede its or their ability to protect that interest. Any such order issued by the arbitral tribunal shall be final and binding upon the Parties.
(g) Any Arbitrating Party may join into a pending arbitration any Dispute which presents issues of law or fact common with those in the Dispute or Disputes already in the pending arbitration by issuing, within 30 days of its receipt of a Notice of Arbitration, a Notice of Arbitration and a statement of claim which specify, inter alia , the Agreement or Agreements involved in the Dispute and sets out the issues of law or fact it alleges are common with those in the Dispute or those Disputes already in the pending arbitration.
(h) The arbitral tribunal shall determine by an order, which shall be final and binding upon the Parties, any issue raised by an Arbitrating Party as to whether or not a Dispute joined into any pending arbitration did, in fact, at the time it was joined into the arbitration, present issues of law or fact common with those presented in other Disputes in the pending arbitration. Any Dispute which is found not to have presented common issues of law or fact shall be dismissed without prejudice from the pending arbitration.
(i) Joinder of any Party or Parties or of any Dispute or Disputes to any arbitration pursuant to this Arbitration Agreement shall be permitted only when made in accordance with the provisions of this Arbitration Agreement, including, without limitation, the strict time limits and no joinder or Intervention other than those provided for shall be permitted.
(j) Any multi-party arbitration arising as a result of there being more than two Arbitrating Parties will be conducted as a single arbitration involving all Arbitrating Parties.
(k) Any Arbitrating Party giving any Notice of Arbitration or sending any copy of a Notice of Arbitration shall send to each recipient according to the provisions set out above a full copy of the document by international courier or other appropriate means of ensuring rapid and certain delivery and, when required to send documents to several recipients, the Arbitrating Party shall send all documents on the same day.
(l) Any advances deemed necessary to cover the costs of any arbitration shall be made in equal shares by all Arbitrating Parties, provided that multiple Claimants or multiple Respondents shall be deemed to constitute one Arbitrating Party for purposes of this subparagraph only, and provided further that should any Arbitrating Party fail to advance its share (a Defaulting Arbitrating Party), it shall be the responsibility of the Arbitrating Party which gave the Notice of Arbitration against the Defaulting Arbitrating Party or Defaulting Arbitrating Parties to advance the share due from the Defaulting Arbitrating Party or Defaulting Arbitrating Parties. Any Claim brought by a Defaulting Arbitrating Party shall be dismissed without prejudice. However, the recipient of any Notice of Arbitration given by a Defaulting Arbitrating Party shall continue to be an Arbitrating Party if it has itself given any Notice of Arbitration, unless it withdraws any such Notice of Arbitration. Should any Defaulting Arbitrating Party commence arbitration in order to reassert any Claim which has been dismissed pursuant to this subparagraph, that Claim
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
shall be deemed to be connected to the pending arbitration from which it was dismissed for the purposes of Article [**] of the [**] Arbitration Act, 1986 and the Defaulting Arbitrating Party shall be required to cover the costs of the arbitration as though its Claim had not been dismissed.
9. If any Dispute arises whilst an arbitration is pending in accordance with the provisions of this Arbitration Agreement, but one or more of the Arbitrating Parties to that Dispute cannot be joined to the pending arbitration in accordance with the provisions of Article 8 of this Arbitration Agreement, the Dispute and the Arbitrating Parties thereto shall nonetheless be joined into the pending arbitration at the request of a Party which is an Arbitrating Party in both the pending arbitration and the Dispute which has arisen so that the Disputes may be resolved in the same arbitration, provided the arbitral tribunal decides that the later Dispute presents issues of law or fact common with those in the pending arbitration and that joinder under these circumstances would not result in undue delay for the pending arbitration.
10. Each Party agrees that neither an arbitral tribunal established pursuant to this Arbitration Agreement nor the Parties shall be authorised to take or seek from any arbitral tribunal or judicial authority any interim measure or any pre-award relief against the [**], any provision of the [**] Rules notwithstanding. Nothing in this Arbitration Agreement shall operate or be regarded as a waiver, renunciation or other modification of the [**], of whatever nature and wherever situated, under international convention or under any applicable law. Except as otherwise provided in this Article 10 with regard to the [**], each Party irrevocably agrees that, to the extent that it or any of its assets has or hereafter may acquire any right of immunity, whether characterized as sovereign immunity or otherwise, from any legal proceedings, whether in [**] or elsewhere, to enforce or collect upon any obligation of that Party in connection with the transaction contemplated under any Agreement, including, without limitation, immunity from jurisdiction of any arbitral tribunal, immunity from service of process, immunity from execution of judgment and immunity of any of its property from attachment prior to the rendering of an arbitral award under this Arbitration Agreement or entry of judgment, it hereby expressly and irrevocably waives all such immunity.
11. (a) Any Dispute, regardless of the number of Arbitrating Parties, shall be submitted to an arbitral tribunal of three (3) arbitrators appointed by the Appointing Authority.
(b) The arbitral tribunal shall be appointed by the Appointing Authority once the time has terminated during which any Party is entitled to give a Notice of Arbitration to join any other Party or the [**], Digimarc, any [**] or any licensed [**] is entitled to intervene.
(c) The presiding arbitrator of the arbitral tribunal shall be a British national and shall have been admitted to practice as a barrister or solicitor in England and shall also have significant expertise in the resolution of disputes in international commercial matters. All arbitrators shall have a full command of the English language.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(d) The arbitrators appointed in accordance with this Arbitration Agreement shall be remunerated in accordance with the provisions of the Rules of the [**] in effect at the time [**].
12. Awards shall be final and binding as from the date the awards are made. The Parties undertake to carry out all awards without delay and waive their right to any form of appeal or recourse to a court of law or other judicial authority, insofar as any such waiver may validly be made. All awards may if necessary be enforced by any court having jurisdiction in the same manner as the judgment of any such court.
13. Each Party explicitly agrees hereby that it shall recognise any arbitral award rendered in an arbitration under this Arbitration Agreement as final and binding upon it unless a competent arbitral tribunal or a competent judicial authority determines that said Party never received notice of the pendency of the arbitration in which the award was rendered.
14. Any arbitral award rendered under this Arbitration Agreement shall be accorded res judicata effect by any arbitral tribunal appointed under this Arbitration Agreement in regard to those Parties which are bound by an award pursuant to Article 13.
15. The obligations of the Parties to the Agreements shall not be altered or suspended by reason of any arbitration being conducted during the life of any Agreement.
16. Any Agreement in regard to which a Dispute has arisen shall be governed by the applicable law as specified in that Agreement.
17. This Arbitration Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of the Parties, subject to all Parties respecting Articles 6 and 7 hereto.
18. This Arbitration Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.
19. Any provision of this Arbitration Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
20. This Arbitration Agreement shall enter into full force and effect on the date first written above and shall continue in full force and effect indefinitely, unless it is terminated by mutual written consent of all of the Parties.
21. This Arbitration Agreement shall be governed by and construed in all respects in accordance with the laws of England, to the exclusion of its rules of conflicts of law.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
The Parties have caused this Arbitration Agreement to be executed in multiple copies, with effect from January 1, 1999.
[Signatures]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Schedule A to Arbitration Agreement
The following, together with their assigns or successors are Parties to the Arbitration Agreement. Each Party has the obligation to advise every other Party of any change in address and each Party expressly agrees that any notice delivered to that Party at the listed address or to any duly notified change of address shall be deemed to be valid notice and that any notice shall be deemed to have been received on the day it is so delivered:
[**],
Digimarc,
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Schedule B to Arbitration Agreement
The following are considered to be Agreements:
1. Development and License Agreement
2. Indemnity Agreement
3. Escrow Agreement
4. [**] License Agreements [**]
5. [**] License Agreements [**]
6. [**] License Agreements [**]
7. [**] License Agreements [**]
8. System Support Services Agreements
9. [**] Agreement
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Schedule C to Arbitration Agreement
In accordance with Article 1.1 of the [**] Rules, in addition to such other modifications of the [**] Rules as are contained in this Arbitration Agreement, the Parties to this Arbitration Agreement and to the Agreements modify the [**] Rules as follows:
(a) Notwithstanding Article 3.1 of the [**] Rules, a Notice of Arbitration may be given by any Arbitrating Party to any Party or Parties so as to join said Party or Parties into any pending arbitration and this Arbitration Agreement shall allow for multi-party arbitration involving third parties, fourth parties and any further additional parties.
(b) Notwithstanding Article 3.2 of the [**] Rules, arbitral proceedings under this Arbitration Agreement shall be deemed to commence on the date on which the Claimants Notice of Arbitration is received by the [**].
(c) Notwithstanding Article 3.3(g), Article 3.4(a) and Article 3.4(b) of the [**] Rules, the Notice of Arbitration shall not contain a proposal as to the number or appointment or the notification of the appointment of arbitrators (and, if made, any such proposal shall be disregarded).
(d) Notwithstanding Article 19.3 of the [**] Rules, any Arbitrating Party must make any counter-claim or claim for the purpose of set-off in its statement of defence and not at a later stage of the arbitral proceedings.
(e) Notwithstanding Article 20 of the [**] Rules, the arbitral tribunal shall, in considering whether it is appropriate to allow a party to amend or supplement a written communication (given the interests of economy, efficiency and the desire to avoid the risk of inconsistent awards), have particular regard to the multi-party nature of any arbitration proceeding, the consequences in terms of delay and the objective of resolving related Claims in a single arbitration involving all relevant Parties.
(f) Notwithstanding Article 23 of the [**] Rules, in considering whether an extension of a time-limit for the communication of written statements is justified, the arbitral tribunal shall have particular regard to the multi-party nature of any arbitration proceeding and the consequences in terms of delay.
(g) Notwithstanding Article 26 of the [**] Rules, no interim measures shall be sought or applied against the [**] in connection with any Dispute by either an arbitral tribunal established pursuant to this Arbitration Agreement or any judicial authority.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Schedule D to Arbitration Agreement
Standard language to be inserted in each Agreement.
[Article No: and heading (e.g., Settlement of Disputes), if applicable]
Any Dispute (as defined in the Arbitration Agreement) shall be finally settled by arbitration in accordance with the Arbitration Agreement as amended from time to time.
[Article No: and heading (e.g., Governing Law), if applicable]
This [Agreement] shall be governed by and construed in all respects in accordance with the laws of [INSERT], to the exclusion of [INSERT]s rules of conflicts of law.
[E Arbitration Agreement]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE F
OTHER [**] TECHNOLOGY
1. Techniques for [**].
2. Copyright in the [**].
3. The above technology is partially described in the following UK patent applications:
UK Patent Application Nos: [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE G
DIGIMARC TECHNOLOGY
The Digimarc Technology includes [**].
This technology is partially described in the following issued U.S. patents:
US 5,850,481
US 5,832,119
US 5,809,160
US 5,768,426
US 5,748,763
US 5,745,604
US 5,721,788
US 5,710,834
US 5,636,292[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE H
PROJECT TECHNOLOGY
The Project Technology shall include:
1. The modification of techniques for using the Digimarc and [**] Technologies in the [**].
2. The effects and behaviours of [**] when used in [**].
3. The effects of various types [**].
4. Improvements to Digimarcs testing and certification processes used in testing and certifying [**].
5. The improvement of [**].
6. The use of [**].
7. Detailed techniques [**]
8. [**]
9. Intellectual Property Rights that: a) [**] under Section 8 of this Agreement; b) were developed by or on behalf of Digimarc under this Agreement; and c) were developed by or on behalf of Digimarc after 1 January [**].
10. Examples of Project Technology include the following:
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. OMITTED SECTION 10 CONSISTS OF TWO PAGES OF TEXT.
SCHEDULE I
ALLOWABLE COSTS
1. For the purposes of this Schedule I:
[**] |
|
|
|
|
[**] |
[**] |
|
|
|
|
|
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
[**] |
[**] |
|
|
** CONFIDENTIAL PORTION CONSISTING OF FOUR PAGES OF TEXT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE J
SECURITY REQUIREMENTS
1. Digimarc shall implement the Security Measures normally followed by a [**] and distributor comparable to Digimarc in number of employees and revenue engaged in the development and distribution of [**] and maintain such Security Measures in effect at all times throughout the Term. The Security Measures will include but not be limited to :
1.1 Electronic security for protection of the network and protection of the CDS software products that are under development.
(a) Network protection which will ensure that unauthorized users will not get access to design information, sensitive test data, proprietary information, released software products or software documentation that is hosted on the network. This protection will include:
(i) erecting barriers to prevent hackers, whether inside or outside the Digimarc facility, from accessing the secure network; and
(ii) the customizing of developmental and operational procedures for the software development team that maximize security while not impeding the teams ability to work efficiently and effectively.
1.2 Physical Security, including the following:
(a) the Digimarc facility at which the Work will be performed will be secure from unauthorized visitors;
(b) the software development laboratory and the computer network employed in the Work shall be secure;
(c) all personnel authorized to have access to sensitive CDS information, data and designs including but not limited to the employees of authorised Subcontractors will be properly screened; and
(d) production and handling of interim and final versions of the Deliverables will be carefully controlled, monitored and audited.
2. Within sixty (60) days after the Agreement is last signed, [**] shall conduct an audit, at its own expense, of the Security Measures.
3. Following the audit, the DLA Project Manager shall submit a Security Plan to Digimarc which will prescribe the actions which Digimarc must take, if any, to improve the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Security Measures to be followed by Digimarc until the end of Phase 3 and the dates by which Digimarc shall take them.
4. Within twenty (20) Business Days after receipt of the Security Plan, Digimarc shall notify the DLA Project Manager of the cost to implement the Plan. Within ten (10) Business Days after receipt of the notice, the DLA Project Manager shall notify Digimarc which aspects of the Security Plan to implement and Digimarc shall implement them in accordance with the Plan.
5. Any cost incurred providing security required by the Security Plan, beyond what is reasonable and customary for a similarly-situated [**] company in the Portland area, will be an Allowable Cost and compensated by [**] accordingly. Digimarc has budgeted [**]. Costs required in excess of this amount may require an adjustment to the [**] and/or Statement of Work .
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULEK-1
[**] LICENSE AGREEMENT - [**]
This [**] LICENSE AGREEMENT (the Agreement) is made
BETWEEN
<<[**] and Address>> ([**])
- AND -
DIGIMARC CORPORATION , a corporation incorporated under the laws of Delaware and having its head office at 9405 SW Gemini Drive, Beaverton, Oregon. U.S.A. 97008 (Digimarc)
[**]
Digimarc has expertise in, and owns extensive intellectual property, including patents, patent applications, copyrights and trade secrets related to digital watermarks, counterfeit deterrence, copyright protection, and device control (the ¨Digimarc IPR);
[**] possesses or will possess intellectual property rights related to the application of such intellectual property to the detection and deterrence of bank note counterfeiting;
Digimarc and [**] have cooperated in the development of means, using such intellectual property, to detect and deter the counterfeiting of bank notes [**] (the Counterfeit Deterrence System or CDS);
[**] desires to obtain a license to certain components of the CDS so it can [**] which include the CDS counterfeit deterring [**].
In consideration of these premises , the covenants set out in this Agreement and other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree as follows:
I. DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions
Agreement means these articles of agreement, including the Attachments, and those documents as specified or referenced in this Agreement as forming part of the Agreement, all as may be amended from time to time;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Arbitration Agreement means the Arbitration Agreement entered into between the parties and others and effective 1 January 1999, as amended from time to time;
Attachment means a document specified as being attached to this Agreement;
[**] the CDS;[**]
Business Day means a day that both Digimarc and [**] are open for business at their respective addresses noted above;
Confidential Information means information disclosed before or during the Term of this Agreement in any form which, if disclosed in tangible form, is or was labeled Confidential, Proprietary or with a similar legend, or if disclosed orally, is or was information that by its nature would be understood to be confidential to the Discloser. For greater certainty, the Confidential Information of Digimarc includes the Digimarc IPR and the [**];
[**]Counterfeit Deterrence System (or CDS or System) [**]
Digimarc IPR means Intellectual Property Rights owned by Digimarc, now or during the Term of this Agreement, to the extent that same specifically relates to or forms part of the CDS;
Digital Watermark refers to [**] (including [**]) that are [**] from [**] by [**] of [**], which [**] of [**] and yet do not significantly [**] from the aesthetics of the [**] or [**] thereby. Examples include, but are not limited to:
1. generally imperceptible changes to [**] or placement in [**];
2. [**] of a substrate, where the [**] substantially uniform to human touch;
3. slight localized changes to [**] or [**] of a printed document;
4. slight changes to [**]; or
5. [**] of substantially [**];
Discloser means a party which has disclosed or otherwise made available its Confidential Information to the other party;
DLA Contract Authority means the individual appointed as such under the [**] License;
[**]
Effective Date means the date on which this Agreement is last signed by the parties;
[**]
Field of Use means the field of [**]
Improvement means an improvement provided to [**] under clause 2.14 of the [**] License;
Intellectual Property Rights or IPR means all intellectual property rights existing now and in the future including, without limitation, trade secrets, copyright, database rights, know-how, topographies, patents and patent applications;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[**]
[**]
[**] License means Schedule L-1 to the [**] License;
[**]
Recipient means a party to which the Confidential Information of the other party has been disclosed or otherwise made available;
Services means the Verification Tests and any other service performed by Digimarc under this Agreement;
Term means the period commencing on the Effective Date and ending on the earlier of 31 December [**] or the date of termination of this Agreement; and
Verification Test means a test or tests developed under the [**] License to determine [**]
1.2 Interpretation - In this Agreement:
1.2.1 unless otherwise specified, all references to money amounts are to the currency of the United States of America;
1.2.2 the use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such person or persons or circumstances as the context otherwise permits;
1.2.3 whenever a provision of this Agreement requires an approval or consent by a party to this Agreement and notice of such approval or consent is not delivered within the applicable time, then the party shall be conclusively deemed to have withheld the consent or approval;
1.2.4 unless otherwise specified, the number of days within or following which any payment is to be made or act is to be done shall be interpreted to be continuous and shall be calculated by excluding the day on which the period commences and including the day which ends the period and by extending the period to the next Business Day if the last day of the period is not a Business Day;
1.2.5 unless otherwise specified, the order of precedence for interpreting this Agreement shall be:
(a) this Agreement, excluding Attachments, and
(b) the Attachments;
1.2.6 for greater certainty, a party or representative to which this Agreement grants the right to make a decision or determination in the sole discretion of the party or representative is not
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
required to act reasonably in making the decision or determination and no such decision or determination may be challenged by the other party under the Arbitration Agreement or otherwise;
1.2.7 the words includes or including will be construed as meaning included without limitation and including without limitation as the case may be; and
1.2.8 a clause or Attachment, unless the context requires otherwise, is a reference to a clause to, an Attachment of, or a paragraph of an Attachment to, this Agreement, as amended from time to time in accordance with this Agreement.
1.3 Applicable Law - This Agreement shall be construed in accordance with the laws of England to the exclusion of its rules of conflicts of laws.
1.4 Attachments - The attachments to this Agreement, listed below, are an integral part of this Agreement:
Attachment |
|
Description |
Attachment 1 |
|
[**] |
Attachment 2 |
|
Problem Report |
Attachment 3 |
|
Payment for Services |
Attachment 4 |
|
[**] |
Attachment 5 |
|
[**] |
2. GRANT OF RIGHTS AND SERVICES
2.1 Subject to the terms of this Agreement, Digimarc hereby grants to [**], a no charge, non-exclusive, non-transferable license under the Digimarc IPR and the [**] IPR, in the Field of Use only, [**]
2.2 [**] acknowledges and agrees that the Digimarc IPR, and any technology developed by Digimarc during the course of its forthcoming and prior work with [**], is the property of Digimarc and that [**] has no right to sublicense it. [**] acknowledges that a [**] may not [**]
2.3 [**] acknowledges and agrees that the [**] IPR is the property of its owner and that [**] has no right to sublicense it.
2.4 Nothing in this Agreement shall be construed to grant, by implication or otherwise, any broader rights than those specifically granted herein.
2.5 Commencing no later than ten (10) Business Days after every written request made during the Term by [**], Digimarc shall make an irrevocable offer, which offer shall remain open for acceptance within sixty (60) days of receipt [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.6 Commencing no later than twenty (20) Business Days after every written request made by [**] during the Term, Digimarc shall conduct Verification Tests of specified [**] on a date or dates agreed between Digimarc and [**] for the charges specified in clause 3.
2.7 Digimarc shall obtain at its own expense all licenses or permits required to be obtained from the Government of the United States in order for Digimarc to comply with its obligations under this Agreement including, without limitation, to deliver the [**], and grant the foregoing license to [**].
3. SERVICE FEES
3.1 [**] shall pay to Digimarc a fee for the Services as detailed below. The fee for Services provided pursuant to any prior agreements between the parties referenced herein shall be as set forth therein. Otherwise, the fee for Services provided:
(a) on or before 31 December [**], is as set out in Attachment 3;
(b) after 31 December [**], will be no greater than the fee then paid to Digimarc for similar services by Digimarcs most favoured customer.
3.2 Shipments of [**], [**] and related documentation shall be by air, Cost, Insurance & Freight (C.I.F.) closest major airport (i.e., Digimarc shall be responsible for transportation and insurance to this port of entry). Except as otherwise expressly provided in this Agreement, [**] shall pay Digimarc all sales, use, goods and services or other similar taxes levied by any government in the United States or the country of the [**] principal place of business which Digimarc is obliged to collect and remit to such government(s) in connection with any amount paid by [**] to Digimarc under this Agreement.
3.3 Digimarc is responsible for, and shall indemnify [**] against, and hold [**] harmless from, the payment of all taxes levied by any government on or in respect of Digimarcs income and any amounts required by law to be paid in respect of social benefits for Digimarcs employees relating to or arising out of the performance of the Services. If required by law, [**] shall deduct all such taxes and amounts from the amounts otherwise payable to Digimarc and remit them to the appropriate authorities.
4. NUMBER NOT USED
5. [**] RESPONSIBILITIES
5.1 [**] shall make every reasonable effort, including obtaining a legally binding commitment from all [**], to ensure that the [**] do not use [**] IPR or the Digimarc IPR, or permit or suffer the [**] IPR or the Digimarc IPR to be used, for any purpose other than [**].
5.2 If [**] learns, or has reasonable cause to believe, that any [**] has used, or permitted or suffered to be used, or proposes to use or permit or suffer to be used, [**] IPR or the Digimarc
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IPR except as expressly authorised herein, [**] shall immediately notify Digimarc and the DLA Contract Authority, and [**] shall use all reasonable efforts, at its own expense, to prevent any further such use including exercising whatever legal remedies (including, without limitation, an application for injunctive relief) are available to [**]. [**] shall, immediately on notice by Digimarc, assign to Digimarc any right of action which [**] may have to prevent any further such use. Following such assignment, [**] shall cooperate with Digimarc to achieve the successful prosecution, or, if elected by Digimarc, settlement, of any such action.
5.3 [**] shall promptly report to Digimarc every instance which comes to its attention of:
(i) a failure of the [**] to meet the specifications established under the [**] Agreement in the form of the Problem Report attached as Attachment 2; or
(ii) unauthorised access to the [**] in the possession of a [**]; or
(iii) failure of any [**] or [**] provided by Digimarc to [**] in response to the attempted [**].
5.4 [**] shall inform Digimarc within thirty (30) days after the end of each calendar quarter during the Term of all improvements relating to (i) Digital Watermarks [**]; (ii) the technology for [**] Digital Watermarks [**], and (iii) the technology for [**] Digital Watermarks [**] (iv) any other part of the CDS, which improvements [**] has made, or caused or permitted to be made, as a result of access to and use of the Digimarc Confidential Information. The first such information shall be provided to Digimarc within thirty (30) days after the first calendar quarter following said access, and shall cover improvements made from the date the [**] first learned of the Digimarc Confidential Information. Following the provision of the information under this clause 5.4, [**] shall provide to Digimarc within a reasonable period of time following request, the Technical Information for those improvements requested by Digimarc in writing.
5.5 [**] hereby grants to Digimarc a royalty-free, non-exclusive, sub-licensable, worldwide license to use the improvements described in clause 5.4 and in any patents thereon owned or otherwise licenseable by [**].
5.6 Such license shall continue until this Agreement expires or is terminated, or until [**] has no further rights to Digimarc IPR, whichever occurs last.
5.7 For greater certainty, the obligations set out in clauses 5.4, 5.5 and 5.6 shall not apply to any such improvement which the [**] can demonstrate would have been made irrespective of access to the Digimarc Confidential Information.
5.8 [**] (or Digimarc if [**] so designates), shall conduct Verification Tests on representative samples of [**]. A report detailing the results of the Tests shall be prepared and promptly provided to [**].
5.9 If [**] designates Digimarc to conduct the tests:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(i) on or before December 31, [**], [**] shall pay Digimarc the fees set out in Attachment 3;
(ii) after December 31, [**], [**] shall pay Digimarc the fees then paid to Digimarc for similar services by Digimarcs most favoured customer.
5.10 In the event that said Tests do not indicate, to [**] satisfaction, that [**] standards detailed in the Verification Tests, [**] will require the [**] to immediately take whatever corrective action(s) [**] considers appropriate.
5.11 [**] shall advise Digimarc in writing in advance of any changes which [**] may, at its sole discretion, make from time to time to the information set forth in Attachments 4 and 5.
6. CONFIDENTIALITY
6.1 Except as otherwise expressly permitted by this Agreement, a Recipient shall not use, reproduce or disclose the Confidential Information of the Discloser for any purpose other than as reasonably necessary to comply with its obligations under this Agreement or to exercise any rights or licenses granted to it under or pursuant to this Agreement.
6.2 The Recipient shall protect the Confidential Information of the Discloser from disclosure by using the same degree of care, which shall be no less than a reasonable degree of care, as the Recipient uses to protect its own confidential information.
6.3 On written request from the Discloser, the Recipient shall return, or certify the destruction of, all originals and copies of the Disclosers Confidential Information in the Recipients possession or control which the Recipient does not need to retain in order to perform any obligations imposed, or exercise any rights acquired, by this Agreement.
6.4 A Recipient may, on a need to know basis, and only for the purposes described in clause 6.1, give the other partys Confidential Information to the Recipients employees or authorized subcontractors provided that such employee or subcontractor shall have entered into a non-disclosure agreement in respect of such Confidential Information in favour of the Discloser on terms materially similar to the provisions of this clause 6.
6.5 The obligations set out in this clause 6 will not apply to any Confidential Information that:
(a) is or becomes publicly available other than through the fault of the Recipient;
(b) was known to the Recipient prior to disclosure as shown by documentation sufficient to establish such knowledge;
(c) was or is lawfully disclosed to the Recipient by a third party who did not breach any obligation of confidence by such disclosure and who made the disclosure without
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
restriction on further disclosure all of which is shown by documentation sufficient to establish same; or
(d) is required by law to be disclosed provided, however, that the Recipient shall first give written notice to the Discloser before the disclosure so that the Discloser may seek an appropriate protective order.
Notwithstanding the foregoing, the fact that Confidential Information, or any part thereof, can be linked together by a search of publications and other information, followed by a selection of a series of such items of knowledge from unconnected sources, and fitting together those items of knowledge so as to duplicate or recreate any item of Confidential Information, shall not be deemed to cause the Confidential Information, or any part thereof, to be included within exceptions (a), (b) or (c), above.
6.6 [**] shall not make any disclosure of Digimarc Confidential Information to [**] which is not licensed by Digimarc, except as expressly and previously authorized in writing by Digimarc. Disclosure to [**] shall only be made if and to the extent reasonably necessary for [**] to fulfill its obligations to [**].
6.7 The obligations of the parties under this clause 6 will survive the Term or sooner termination of this Agreement and will remain in full force and effect regardless of the cause of any termination.
6.8 Nothing in this Agreement shall be construed to require [**] to disclose any information which is confidential to a third party including for greater certainty [**].
7. INTELLECTUAL PROPERTY INDEMNIFICATION
7.1 [**] shall provide Digimarc with prompt written notice of any claim, demand or action against [**] based on an allegation that the Digimarc IPR or any part thereof, infringes any Intellectual Property Right of any person (referred to below as a Claim).
7.2 Subject to the limitations set out in clauses 7.3 to 7.6 inclusive, Digimarc shall, at its own expense:
(a) negotiate the resolution of any such Claim;
(b) pay all costs associated with the Claim; and
(c) defend any action based on the Claim.
7.3 [**] shall, at Digimarcs expense, comply with all reasonable requests by Digimarc for assistance from [**] in connection with the settlement or defence of the Claim.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
7.4 Notwithstanding any other provision of this Agreement to the contrary, but subject to the limitations in this clause 7, Digimarc shall indemnify [**] against and save [**] harmless from all loss, costs, liabilities including an award of damages, and expenses, including legal fees, arising from each Claim first notified to Digimarc prior to 31 December [**]. The obligation set out in this clause 7 shall not apply in respect of any settlement made by [**] without the consent of Digimarc.
7.5 For the purposes of clauses 7.2 through 7.4 inclusive, Claim shall mean any Claim, other than a Claim for patent infringement which Digimarc can demonstrate occurred without Digimarc acting recklessly or negligently.
7.6 The provisions of this Section 7 shall apply to any prior Agreements between the parties referenced herein as if fully set forth therein.
8. REPRESENTATIONS AND WARRANTIES OF DIGIMARC
8.1 Digimarc represents, warrants and undertakes to [**] that from and after the Effective Date:
(a) the Services provided under this Agreement will be of professional quality conforming to generally accepted practices for like services and will be performed at all times in a timely and cost effective manner and, for greater certainty Digimarc shall employ the standard of care in performing the Services that would be expected of an expert [**] of the same or similar type as the [**] which comprises the [**];
(b) Digimarc is duly incorporated and organized and is validly subsisting under the laws of the State of Delaware, U.S.A. or some other state in the United States with full corporate power and authority to enter into this Agreement;
(c) to the best of its knowledge, neither this Agreement nor the Services will contravene, breach, or result in any default under any agreement, permit, by-law, or law or regulation to which Digimarc is subject or by which it is bound including, for greater certainty any laws or regulations in effect in the United States governing export;
(d) this Agreement when executed and delivered by Digimarc shall constitute a valid and binding agreement with Digimarc enforceable against Digimarc according to its terms; and
(e) Digimarc will at all material times have the right to grant the licenses to the Digimarc IPR as required by this Agreement.
8.2 Digimarc represents, warrants and undertakes to [**] that:
(a) incorporated as part of its [**];
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(b) [**] shall contain no lock, clock, timer, counter, copy protection feature, replication device or intentional defects (including but not limited to viruses or worms as such terms are commonly used in the computer industry), CPU serial number reference, or other device which might:
(i) lock, disable or erase the [**] or any data which is loaded on the [**] so as to prevent full use of the [**] by authorized persons; or
(ii) require action or intervention by Digimarc or any other person to allow properly trained and authorized persons to use the [**];
(c) the source code for the [**] will support the year 2000 and neither performance nor functionality will be affected by dates prior to, during and after the year 2000, and for greater certainty, the [**] will switch to 1 January 2000 on 1 January 2000, and the year 2000 will be recognized as a leap year.
9. REPRESENTATIONS AND WARRANTIES OF [**]
9.1 [**] represents and warrants to Digimarc that:
(a) [**] has full power and authority to enter into this Agreement; and
(b) this Agreement when executed and delivered by [**] shall constitute a valid, binding and enforceable obligation of [**].
9.2 [**] makes no representations, warranties or undertakings that [**] has any right to grant the licenses required to be granted by clause 5.5 and Digimarc shall be solely responsible for determining that such improvements are suitable for the intended use and for the consequences of any use of the same whether by Digimarc or others, and [**] hereby disclaims all liability in connection therewith.
10. TERM AND TERMINATION
10.1 This Agreement will take effect on the Effective Date and will remain in force throughout the Term unless sooner terminated as provided herein.
10.2 Either party may terminate this Agreement if the other party breaches any of its obligations under this Agreement and fails to remedy such breach within thirty (30) days after receiving written notice of such breach from the other party.
10.3 Upon termination of this Agreement:
(a) all rights granted to [**] under this Agreement will immediately terminate. No interest in any such rights will thereafter remain with [**],except that [**] that have already been
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
produced will continue to be licensed, but no further production of [**] for [**] shall be permitted; and
(b) each party shall return, or certify the destruction of, to the Discloser, all originals and copies of the Disclosers Confidential Information in the partys possession or control which the party does not need to retain in order to exercise any rights acquired by this Agreement.
10.4 No termination of this Agreement will in any manner release, or be construed as releasing, any party from any liability arising out of or in connection with that partys breach of or failure to perform any covenant, duty or obligation contained herein prior to the date of such termination.
10.5 Upon termination of the [**] License by Digimarc for cause, the rights of the [**] hereunder to use the Digimarc IPR shall be deemed to be restricted to the [**] as of the date of such termination.
11. DISPUTE RESOLUTION
11.1 Any Dispute (as defined in the Arbitration Agreement) shall be finally settled by arbitration in accordance with the Arbitration Agreement.
11.2 Unless otherwise agreed between the parties or unless the subject matter of the dispute resolution proceedings is a partys right to terminate this Agreement, the Services shall continue during the dispute resolution proceedings and payments due to Digimarc shall not be withheld on account of such proceedings unless that particular services or payment is the subject matter of the proceedings. Notwithstanding the foregoing, [**] may in its sole discretion instruct Digimarc to continue to perform services which are the subject matter of the proceedings and Digimarc shall act in accordance with those instructions, subject to payment under clause 3.1.
12. MISCELLANEOUS PROVISIONS
12.1 Remedies Cumulative - Except as otherwise expressly set out in this Agreement:
(a) each and every right, power and remedy of a party will be considered to be cumulative with and in addition to any other right, power and remedy which such party may have at law or in equity in the event of breach of any of the terms of this Agreement;
(b) the exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party; and
(c) a party terminating this Agreement in accordance with the provisions of the Termination clause will have no liability or obligation to the other as a result of or with respect to the termination.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
12.2 Notices. All notices under this Agreement shall be delivered by fax or recognized international courier service. The notice shall be deemed effective as of the date of delivery to the address of the party specified below, as evidenced by a delivery receipt or the addressees registry of incoming correspondence. Unless otherwise expressly set out in this Agreement, all notices to a party will be sent to the partys authorized representative identified below and all notices from a party will be sent by the partys authorized representative identified below.
12.3 Any notice to [**] shall be sent to both of, and any notice from [**] shall be sent by either:
Name 1 |
|
Name 2 |
Address 1 |
|
Address 2 |
12.4 Any notice to Digimarc shall be sent to both of, and any notice from Digimarc shall be sent by either:
Mr. Robert Chamness |
|
Mr. Scott Carr |
Vice President and General Counsel |
|
President, Digimarc Watermarking Solutions |
Digimarc Corporation |
|
Digimarc Corporation |
9405 SW Gemini Drive |
|
9405 SW Gemini Drive |
Beaverton, OR 97008 |
|
Beaverton, OR 97008 |
Fax: (503) 469-4777 |
|
Fax: (503) 469-4777 |
12.5 A copy of every notice sent by either party shall be sent to: [**].
12.6 A party may change its address for notice by notice to the other party in accordance with the foregoing provisions.
12.7 Severability. If any part of this Agreement is held by an arbitral tribunal appointed pursuant to the Arbitration Agreement or other competent authority to be void or unenforceable, the parties agree that such determination will not result in the nullity or unenforceability of the remaining parts of this Agreement, which will continue in force to the fullest extent permitted by law. The parties further agree to replace such void or unenforceable part of this Agreement with a valid and enforceable provision that will achieve, to the extent legally permissible, the economic, business and other purposes of the void or unenforceable part.
12.8 Counterparts. This Agreement may be executed in separate counterparts, and by facsimile, each of which will be deemed an original, and when executed, separately or together, will constitute a single original instrument, effective in the same manner as if the parties had executed one and the same instrument.
12.9 Entire Agreement. With the exception of any prior agreements between the parties referenced herein, this Agreement is intended by the parties to be the final expression of their
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
agreement and constitutes and embodies the entire agreement and understanding between the parties hereto and constitutes a complete and exclusive statement of the terms and conditions thereof, and will supersede any and all prior correspondence, conversations, negotiations, agreements or understandings relating to the same subject matter. In case of a conflict of any prior agreements between the parties referenced herein and this Agreement, the latter shall control.
12.10 Amendments. No change in, modification of or addition to the terms and conditions contained herein will be valid as between the parties unless set forth in a writing that is signed by an authorized representative of each of the parties and which specifically states that it constitutes an amendment to this Agreement.
12.11 Waiver. No waiver of any term, provision, or condition of this Agreement will be effective unless in a written document signed by the waiving party and no such waiver in any one or more instances, will be deemed to be, or be construed as, a further or continuing waiver of that term, provision or condition or any other term, provision or condition of this Agreement.
12.12 Assignment and Successors. This Agreement may not be assigned by [**] without Digimarcs consent, which consent shall not be unreasonably withheld or delayed. This Agreement and all of its terms, conditions and covenants are intended to be fully effective and binding, to the extent permitted by law, on the successors and permitted assigns of the parties hereto.
12.13 Captions. Captions are provided in this Agreement for convenience only and they form no part, and are not to serve as a basis for interpretation or construction, of this Agreement, nor as evidence of the intention of the parties hereto.
12.14 Disclaimer of Agency. Nothing contained in this Agreement is intended or will be construed so as to constitute the parties to this Agreement as partners or joint venturers or as agents of each other. Neither party will have any express or implied right or authority to assume or create any obligations on behalf of or in the name of any other party or to bind any other party in any contract, agreement or undertaking with any third party. No employee of a party shall be deemed or considered to be an employee of the other party or of both parties.
12.15 Publicity. The parties agree that from time-to-time it will be beneficial to both parties to issue press releases and other public announcements concerning benefits arising from the CDS. Each party agrees to submit for approval by the other party any press release that involves the other party, which approval shall not unreasonably be withheld.
12.16 Effectiveness. This Agreement shall not be effective until it is signed by both of the parties.
12.17 Ambiguities. Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
12.18 Survival. All clauses of this Agreement which expressly or by implication are intended to survive the termination of this Agreement will do so and, for greater certainty and notwithstanding any provision in this Agreement to the contrary, the provisions of clauses 3.2, 3.3, 5.1, 5.2, 5.5, 5.6, 6, 7,11, and 12 of this Agreement shall survive termination of this Agreement by either party for any reason.
IN WITNESS WHEREOF , this Agreement has been executed and delivered by the parties hereto as of the Effective Date.
DIGIMARC CORPORATION |
|
<< [**]>> |
||
By: |
|
|
By: |
|
Name: |
|
|
Name: |
|
Title: |
|
|
Title: |
|
Date: |
|
|
Date: |
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 1
[**]
[**] will cause the following [**] to take place:
(a) [**]
[**](b) [**]
[**](c) [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 2
PROBLEM REPORT
Each problem report will contain all information necessary to reproduce or demonstrate the occurrence of the problem. Problem reports will be in English and will be delivered electronically in a format to be provided by Digimarc.
Problem reports will contain:
· Date problem was encountered
· Detailed description of the problem, including the frequency with which the problem occurs
· Name and version number of the program / system component that exhibits the problem
· Step by step instructions to reproduce the problem
· All data files required to reproduce the problem
· [**]Manufacturer and Model
· CPU type and speed
· Amount of memory
· Operating System and Version
· Disk Configuration (number of drives, total space per drive, free space per drive)
· Display Adapter Model, Resolution, Number of colors
· Peripheral configuration (where applicable)[**]TWAIN driver and version number
· [**]
· Severity of problem
· Contact information for person to contact for further information (name, phone number, FAX number, email address)
[**] agrees to work with Digimarc to provide reasonable additional information and perform reasonable additional tests, as requested by Digimarc, to assist Digimarc in resolution of the problem.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 3
PAYMENT FOR SERVICES
Digimarc shall bill [**] for services in one hour increments at the following hourly rates:
Technical/Design Consultant |
|
[**] |
Senior Engineer |
|
[**] |
R&D/Engineering Executive |
|
[**] |
Project Manager |
|
[**] |
Administrator/Scheduler |
|
[**] |
Fees for services will be invoiced on the earlier of 1) the last day of the month or 2) the completion of the Services. Invoices are due thirty (30) days from the date of receipt of a correct invoice. A late charge of 1.5% per month will be charged on any late payments. All fees are due and payable in US funds.
[**] will reimburse Digimarc for all out-of-pocket expenses reasonably and necessarily incurred in providing the Verification Tests and other services. Expenses will be itemized and reported by category. Out-of-pocket expenses will not be marked up by Digimarc. Costs include, but are not limited to, reasonable travel and lodging expenses, telephone and fax charges, postage and overnight deliveries, and charges for rental equipment or materials purchased specifically to be used in providing the Verification Tests and other services. All invoices for out-of-pocket expenses will be issued monthly in arrears and are due thirty (30) days from the date of receipt of a correct invoice. Supporting receipts and vouchers will be available for review at Digimarcs offices. A late charge of 1.5% per month will be charged on any late payments. Payments will additionally include Value Added taxes and other tariffs and fees that may be imposed by any governments other than the United States of America.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 4
IDENTIFICATION OF [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 5
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE K-2
[**] LICENSE AGREEMENT - [**]
This [**] LICENSE AGREEMENT (the Agreement) is made
BETWEEN
<name and address of [**]> ([**])
- AND -
DIGIMARC CORPORATION , a corporation incorporated under the laws of Delaware and having its head office at 9405 SW Gemini Drive, Beaverton, OR 97006 (Digimarc)
RECITALS
Digimarc has expertise in, and owns extensive intellectual property, including patents, patent applications, copyrights and trade secrets related to digital watermarks, counterfeit deterrence, copyright protection, and device control (the Digimarc IPR); and
The [**] possesses or will possess intellectual property rights related to the application of such intellectual property to the detection and deterrence of bank note counterfeiting; and
Digimarc and [**] have cooperated in the development of means, using such intellectual property, to detect and deter the counterfeiting of bank notes [**] (the Counterfeit Deterrence System or CDS); and
[**] desires to obtain a license to certain components of the CDS so it can have [**] which include the CDS counterfeit deterring [**].
In consideration of these premises , the covenants set out in this Agreement and other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree as follows:
I. DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions
Agreement means these articles of agreement, including the Attachments, and those documents as specified or referenced in this Agreement as forming part of the Agreement, all as may be amended from time to time;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Arbitration Agreement means the Arbitration Agreement entered into between the parties and others effective 1 January 1999, as amended from time to time;
Attachment means a document specified as being attached to this Agreement;
[**] the CDS;[**]
Business Day means a day that both Digimarc and [**] are open for business at their respective addresses noted above;
Confidential Information means information disclosed before or during the Term of this Agreement in any form which, if disclosed in tangible form, is or was labelled Confidential, Proprietary or with a similar legend, or if disclosed orally, is or was information that by its nature would be understood to be confidential to the Discloser. For greater certainty, the Confidential Information of Digimarc includes the Digimarc IPR and [**];
[**]Counterfeit Deterrence System (or CDS or System) [**]
Digimarc IPR means Intellectual Property Rights owned by Digimarc, now or during the Term of this Agreement, to the extent that same specifically relates to or forms part of the CDS;
Digital Watermark refers to [**] (including [**]) that are [**] from [**] by [**] of [**], which [**] of [**] and yet do not significantly [**] from the aesthetics of the [**] or [**] thereby. Examples include, but are not limited to:
1. generally imperceptible changes to [**] or placement in [**];
2. [**] of a substrate, where the [**] substantially uniform to human touch;
3. slight localized changes to [**] or [**] of a printed document;
4. slight changes to [**]; or
5. [**] of substantially [**];
Discloser means a party which has disclosed or otherwise made available its Confidential Information to the other party;
DLA Contract Authority means the individual appointed as such under the [**] License;
[**]
[**]
[**]
[**]
Effective Date means the date on which this Agreement is last signed by the parties;
[**]
Field of Use means the field of [**];
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Improvement means an improvement provided to [**] under clause 2.14 of the [**] License;
Intellectual Property Rights or IPR means all intellectual property rights existing now and in the future including, without limitation, trade secrets, copyright, database rights, know-how, topographies, patents and patent applications;
[**]
[**]
[**] License means Schedule L-2 to the [**] License;
[**]
Recipient means a party to which the Confidential Information of the other party has been disclosed or otherwise made available;
Services means the Verification Tests and any other service performed by Digimarc under this Agreement;
Term means the period commencing on the Effective Date and ending on the earlier of 31 December [**] or the date of termination of this Agreement; and
Verification Test means a test or tests developed under the [**] License to determine if a [**].
1.2 Interpretation - In this Agreement:
1.2.1 unless otherwise specified, all references to money amounts are to the currency of the United States of America;
1.2.2 the use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such person or persons or circumstances as the context otherwise permits;
1.2.3 whenever a provision of this Agreement requires an approval or consent by a party to this Agreement and notice of such approval or consent is not delivered within the applicable time, then the party shall be conclusively deemed to have withheld the consent or approval;
1.2.4 unless otherwise specified, the number of days within or following which any payment is to be made or act is to be done shall be interpreted to be continuous and shall be calculated by excluding the day on which the period commences and including the day which ends the period and by extending the period to the next Business Day if the last day of the period is not a Business Day;
1.2.5 unless otherwise specified, the order of precedence for interpreting this Agreement shall be:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(a) this Agreement, excluding Attachments, and
(b) the Attachments;
1.2.6 for greater certainty, a party or representative to which this Agreement grants the right to make a decision or determination in the sole discretion of the party or representative is not required to act reasonably in making the decision or determination and no such decision or determination may be challenged by the other party under the Arbitration Agreement or otherwise;
1.2.7 the words includes or including will be construed as meaning included without limitation and including without limitation as the case may be; and
1.2.8 a clause or Attachment, unless the context requires otherwise, is a reference to a clause to, an Attachment of, or a paragraph of an Attachment to, this Agreement, as amended from time to time in accordance with this Agreement.
1.3 Applicable Law - This Agreement shall be construed in accordance with the laws of England to the exclusion of its rules of conflicts of laws.
1.4 Attachments - The attachments to this Agreement, listed below, are an integral part of this Agreement:
Attachment |
|
Description |
Attachment 1 |
|
[**] |
Attachment 2 |
|
Opinion of Counsel |
Attachment 3 |
|
Problem Report |
Attachment 4 |
|
Payment for Services |
Attachment 5 |
|
[**] |
Attachment 6 |
|
[**] |
2. GRANT OF RIGHTS AND SERVICES
2.1 Subject to the terms of this Agreement, Digimarc hereby grants to [**], a no charge, non-exclusive, non-transferable license under the Digimarc IPR and the [**] IPR, in the Field of Use only, [**].
2.2 [**] acknowledges and agrees that the Digimarc IPR, and any technology developed by Digimarc during the course of its work [**], is the property of Digimarc and that [**] has no right to sublicense it. [**] acknowledges that [**] may not [**].
2.3 [**] acknowledges and agrees that the [**] IPR is the property of its owner and that [**] has no right to sublicense it.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.4 Nothing in this Agreement shall be construed to grant, by implication or otherwise, any broader rights than those specifically granted herein.
2.5 Commencing no later than ten (10) Business Days after every written request made during the Term by [**], Digimarc shall make an irrevocable offer, which offer shall remain open for acceptance within sixty (60) days of receipt [**]
2.6 Commencing no later than twenty (20) Business Days after every written request made by [**] during the Term, Digimarc shall conduct Verification Tests of specified [**] on a date or dates agreed between Digimarc and [**] for the charges specified in clause 3.
2.7 Digimarc shall obtain at its own expense all licenses or permits required to be obtained from the Government of the United States in order for Digimarc to comply with its obligations under this Agreement including, without limitation, to deliver the [**], and grant the foregoing license to [**].
3. SERVICE FEES
3.1 [**] shall pay to Digimarc a fee for the Services as detailed below. The fee for Services provided:
(a) on or before 31 December [**], is as set out in Attachment 4;
(b) after 31 December [**], will be no greater than the fee then paid to Digimarc for similar services by Digimarcs most favoured customer.
3.2 Shipments of [**], [**] and related documentation shall be by air, Cost, Insurance and Freight (C.I.F.) closest major airport (i.e., Digimarc shall be responsible for transportation and insurance to this port of entry). Except as otherwise expressly provided in this Agreement, [**] shall pay Digimarc all sales, use, goods and services or other similar taxes levied by any government in the United States or the country of the [**] principal place of business which Digimarc is obliged to collect and remit to such government(s) in connection with any amount paid by [**] to Digimarc under this Agreement.
3.3 Digimarc is responsible for, and shall indemnify [**] against, and hold [**] harmless from, the payment of all taxes levied by any government on or in respect of Digimarcs income and any amounts required by law to be paid in respect of social benefits for Digimarcs employees relating to or arising out of the performance of the Services. If required by law, [**] shall deduct all such taxes and amounts from the amounts otherwise payable to Digimarc and remit them to the appropriate authorities.
4. OPINION OF COUNSEL
4.1 Before introducing [**] shall obtain and forward to Digimarc a written opinion of counsel substantially in the form attached as Attachment 2 that confirms:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(a) the validity and enforceability of the terms of this Agreement, under the laws of the jurisdiction where [**] resides; and
(b) the legality of each [**] under the laws of the jurisdiction where [**] resides.
4.2 Digimarc shall not unreasonably withhold its consent to any qualifications which [**] counsel may require to be made to such opinion.
5. [**] RESPONSIBILITIES
5.1 [**] shall make every reasonable effort, including obtaining a legally binding commitment from all [**], to ensure that the [**] do not use the [**] IPR or the Digimarc IPR, or permit or suffer the [**] IPR or the Digimarc IPR to be used, for any purpose other than [**].
5.2 If [**] learns, or has reasonable cause to believe, that any [**] has used, or permitted or suffered to be used, or proposes to use or permit or suffer to be used, [**] IPR or the Digimarc IPR except as expressly authorised herein, [**] shall immediately notify Digimarc and the DLA Contract Authority, and [**] shall use all reasonable efforts, at its own expense, to prevent any further such use including exercising whatever legal remedies (including, without limitation, an application for injunctive relief) are available to [**]. [**] shall, immediately on notice by Digimarc, assign to Digimarc any right of action which [**] may have to prevent any further such use. Following such assignment, [**] shall cooperate with Digimarc to achieve the successful prosecution, or, if elected by Digimarc, settlement, of any such action.
5.3 [**] shall promptly report to Digimarc every instance which comes to its attention of:
(i) a failure of the [**] to meet the specification established under the [**] in the form of the Problem Report attached as Attachment 3; or
(ii) unauthorised access to the [**] in the possession of a [**]; or
(iii) failure of any [**] or [**] provided by Digimarc to [**] in response to the attempted [**].
5.4 [**] shall inform Digimarc within thirty (30) days after the end of each calendar quarter during the Term of all improvements relating to (i) Digital Watermarks [**]; (ii) the technology for [**] Digital Watermarks [**], and (iii) the technology for [**] Digital Watermarks [**] and (iv) any other part of the CDS, which improvements [**] has made, or caused or permitted to be made, as a result of access to and use of the Digimarc Confidential Information. The first such information shall be provided to Digimarc within thirty (30) days after the first calendar quarter following said access, and shall cover improvements made from the date [**] first learned of the Digimarc Confidential
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Information. Following the provision of the information under this clause 5.4, [**] shall provide to Digimarc within a reasonable period of time following request, the Technical Information for those improvements requested by Digimarc in writing.
5.5 [**] hereby grants to Digimarc a royalty-free, non-exclusive, sub-licensable, worldwide license to use the improvements described in clause 5.4 and in any patents thereon owned or otherwise licenseable by [**].
5.6 Such license shall continue until this Agreement expires or is terminated, or until [**] has no further rights to Digimarc IPR, whichever occurs last.
5.7 For greater certainty, the obligations set out in clauses 5.4, 5.5 and 5.6 shall not apply to any such improvement which the [**] can demonstrate would have been made irrespective of access to the Digimarc Confidential Information.
5.8 [**] (or Digimarc if [**] so designates), shall conduct Verification Tests on representative samples [**]. A report detailing the results of the Tests shall be prepared and promptly provided to [**].
5.9 If [**] designates Digimarc to conduct the tests:
(i) on or before December 31, [**], [**] shall pay Digimarc the fees set out in Attachment 4;
(ii) after December 31, [**], [**] shall pay Digimarc the fees then paid to Digimarc for similar services by Digimarcs most favoured customer.
5.10 In the event that said Tests do not indicate, to [**] satisfaction, that [**] standards detailed in the Verification Tests, [**] will require the [**] to immediately take whatever corrective action(s) [**] considers appropriate.
5.11 [**] shall advise Digimarc in writing in advance of any changes which [**] may, at its sole discretion, make from time to time to the information set forth in Attachments 5 and 6.
6. CONFIDENTIALITY
6.1 Except as otherwise expressly permitted by this Agreement, a Recipient shall not use, reproduce or disclose the Confidential Information of the Discloser for any purpose other than as reasonably necessary to comply with its obligations under this Agreement or to exercise any rights or licenses granted to it under or pursuant to this Agreement.
6.2 The Recipient shall protect the Confidential Information of the Discloser from disclosure by using the same degree of care, which shall be no less than a reasonable degree of care, as the Recipient uses to protect its own confidential information.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
6.3 On written request from the Discloser, the Recipient shall return, or certify the destruction of, all originals and copies of the Disclosers Confidential Information in the Recipients possession or control which the Recipient does not need to retain in order to perform any obligations imposed, or exercise any rights acquired, by this Agreement.
6.4 A Recipient may, on a need to know basis, and only for the purposes described in clause 6.1, give the other partys Confidential Information to the Recipients employees or authorized subcontractors provided that such employee or subcontractor shall have entered into a non-disclosure agreement in respect of such Confidential Information in favour of the Discloser on terms materially similar to the provisions of this clause 6.
6.5 The obligations set out in this clause 6 will not apply to any Confidential Information that:
(a) is or becomes publicly available other than through the fault of the Recipient;
(b) was known to the Recipient prior to disclosure as shown by documentation sufficient to establish such knowledge;
(c) was or is lawfully disclosed to the Recipient by a third party who did not breach any obligation of confidence by such disclosure and who made the disclosure without restriction on further disclosure all of which is shown by documentation sufficient to establish same; or
(d) is required by law to be disclosed provided, however, that the Recipient shall first give written notice to the Discloser before the disclosure so that the Discloser may seek an appropriate protective order.
Notwithstanding the foregoing, the fact that Confidential Information, or any part thereof, can be linked together by a search of publications and other information, followed by a selection of a series of such items of knowledge from unconnected sources, and fitting together those items of knowledge so as to duplicate or recreate any item of Confidential Information, shall not be deemed to cause the Confidential Information, or any part thereof, to be included within exceptions (a), (b) or (c), above.
6.6 [**] shall not make any disclosure of Digimarc Confidential Information to [**] which is not licensed by Digimarc, except as expressly and previously authorized in writing by Digimarc. Disclosure [**] shall only be made if and to the extent reasonably necessary for [**] to fulfill its obligations to [**].
6.7 The obligations of the parties under this clause 6 will survive the Term or sooner termination of this Agreement and will remain in full force and effect regardless of the cause of any termination.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
6.8 Nothing in this Agreement shall be construed to require [**] to disclose any information which is confidential to a third party including for greater certainty [**].
7. INTELLECTUAL PROPERTY INDEMNIFICATION
7.1 [**] shall provide Digimarc with prompt written notice of any claim, demand or action against [**] based on an allegation that the Digimarc IPR or any part thereof, infringes any Intellectual Property Right of any person (referred to below as a Claim).
7.2 Subject to the limitations set out in clauses 7.3 to 7.7 inclusive, Digimarc shall, at its own expense:
(a) negotiate the resolution of any such Claim;
(b) pay all costs associated with the Claim; and
(c) defend any action based on the Claim.
7.3 [**] shall, at Digimarcs expense, comply with all reasonable requests by Digimarc for assistance from [**] in connection with the settlement or defence of the Claim.
7.4 Notwithstanding any other provision of this Agreement to the contrary, but subject to the limitations in this clause 7, Digimarc shall indemnify [**] and all of the [**] against and save [**] and all [**] harmless from all loss, costs, liabilities including an award of damages, and expenses, including legal fees, arising from each Claim first notified to Digimarc prior to 31 December [**]. The obligation set out in this clause 7 shall not apply in respect of any settlement made by [**] without the consent of Digimarc.
7.5 The liability of Digimarc under clause 7.4 of this Agreement and under the equivalent clause of every other licence or consulting agreement entered into between Digimarc and [**] and [**] pursuant to the provisions of [**] License will not exceed the Indemnity Limit as defined in clause 7.6 below.
7.6 The Indemnity Limit shall be [**], or such higher amount as notified by Digimarc from time to time.
7.7 For the purposes of clauses 7.2 through 7.6 inclusive, Claim shall mean any Claim, other than a Claim for patent infringement which Digimarc can demonstrate occurred without Digimarc acting recklessly or negligently.
7.8 The provisions of this Section 7 shall apply to any prior Agreements between the parties referenced herein as if fully set forth therein.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
8. REPRESENTATIONS AND WARRANTIES OF DIGIMARC
8.1 Digimarc represents, warrants and undertakes to [**] that from and after the Effective Date:
(a) the Services provided under this Agreement will be of professional quality conforming to generally accepted practices for like services and will be performed at all times in a timely and cost effective manner and, for greater certainty Digimarc shall employ the standard of care in performing the Services that would be expected of an expert [**] of [**] of the same or similar type as the [**] which comprises the [**];
(b) Digimarc is duly incorporated and organized and is validly subsisting under the laws of the State of Delaware, U.S.A. or some other state in the United States with full corporate power and authority to enter into this Agreement;
(c) to the best of its knowledge, neither this Agreement nor the Services will contravene, breach, or result in any default under any agreement, permit, by-law, or law or regulation to which Digimarc is subject or by which it is bound including, for greater certainty any laws or regulations in effect in the United States governing export;
(d) this Agreement when executed and delivered by Digimarc shall constitute a valid and binding agreement with Digimarc enforceable against Digimarc according to its terms; and
(e) Digimarc will at all material times have the right to grant the licenses to the Digimarc IPR as required by this Agreement.
8.2 Digimarc represents, warrants and undertakes to [**] that:
(a) incorporated as part of [**];
(b) [**] shall contain no lock, clock, timer, counter, copy protection feature, replication device or intentional defects (including but not limited to viruses or worms as such terms are commonly used in the computer industry), CPU serial number reference, or other device which might:
(i) lock, disable or erase the [**] or any data which is loaded on the [**] so as to prevent full use of the [**] by authorized persons; or
(ii) require action or intervention by Digimarc or any other person to allow properly trained and authorized persons to use the [**];
(c) the source code for the [**] will support the year 2000 and neither performance nor functionality will be affected by dates prior to, during and after the year 2000, and for greater certainty, the [**] will switch to 1 January 2000 on 1 January 2000, and the year 2000 will be recognized as a leap year.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
11. |
|
DISPUTE RESOLUTION |
|
||
11.1 |
|
Any Dispute (as defined in the Arbitration Agreement) shall be finally settled by arbitration in accordance with the Arbitration Agreement. |
|
||
11.2 |
|
Unless otherwise agreed between the parties or unless the subject matter of the dispute resolution proceedings is a partys right to terminate this Agreement, the Services shall continue during the dispute resolution proceedings and payments due to Digimarc shall not be withheld on account of such proceedings unless that particular services or payment is the subject matter of the proceedings. Notwithstanding the foregoing, [**] may in its sole discretion instruct Digimarc to continue to perform services which are the subject matter of the proceedings and Digimarc shall act in accordance with those instructions, subject to payment under clause 3.1. |
|
||
12. |
|
MISCELLANEOUS PROVISIONS |
|
||
12.1 |
|
Remedies Cumulative - Except as otherwise expressly set out in this Agreement: |
|
||
(a) |
|
each and every right, power and remedy of a party will be considered to be cumulative with and in addition to any other right, power and remedy which such party may have at law or in equity in the event of breach of any of the terms of this Agreement; |
|
||
(b) |
|
the exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party; and |
|
||
(c) |
|
a party terminating this Agreement in accordance with the provisions of the Termination clause will have no liability or obligation to the other as a result of or with respect to the termination. |
|
|
|
12.2 |
|
Notices. All notices under this Agreement shall be delivered by fax or recognized international courier service. The notice shall be deemed effective as of the date of delivery to the address of the party specified below, as evidenced by a delivery receipt or the addressees registry of incoming correspondence. Unless otherwise expressly set out in this Agreement, all notices to a party will be sent to the partys authorized representative identified below and all notices from a party will be sent by the partys authorized representative identified below. |
|
||
12.3 |
|
Any notice to [**] shall be sent to both of, and any notice from [**] shall be sent by either: |
|
|
Name1 |
Name2 |
|
|
Address1 |
Address2 |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
12.4 Any notice to Digimarc shall be sent to both of, and any notice from Digimarc shall be sent by either:
Mr. Robert Chamness |
|
Mr. Scott Carr |
Vice President and General Counsel |
|
President Digimarc Watermarking Solutions |
Digimarc Corporation |
|
Digimarc Corporation |
9405 SW Gemini Drive |
|
9405 SW Gemini Drive |
Beaverton, OR 97008 |
|
Beaverton, OR 97008 |
Fax: (503) 469-4777 |
|
Fax: (503) 469-4777 |
12.5 A copy of every notice sent by either party shall be sent to: [**].
12.6 A party may change its address for notice by notice to the other party in accordance with the foregoing provisions.
12.7 Severability. If any part of this Agreement is held by an arbitral tribunal appointed pursuant to the Arbitration Agreement or other competent authority to be void or unenforceable, the parties agree that such determination will not result in the nullity or unenforceability of the remaining parts of this Agreement, which will continue in force to the fullest extent permitted by law. The parties further agree to replace such void or unenforceable part of this Agreement with a valid and enforceable provision that will achieve, to the extent legally permissible, the economic, business and other purposes of the void or unenforceable part.
12.8 Counterparts. This Agreement may be executed in separate counterparts, and by facsimile, each of which will be deemed an original, and when executed, separately or together, will constitute a single original instrument, effective in the same manner as if the parties had executed one and the same instrument.
12.9 Entire Agreement. This Agreement is intended by the parties to be the final expression of their agreement and constitutes and embodies the entire agreement and understanding between the parties hereto and constitutes a complete and exclusive statement of the terms and conditions thereof, and will supersede any and all prior correspondence, conversations, negotiations, agreements or understandings relating to the same subject matter.
12.10 Amendments. No change in, modification of or addition to the terms and conditions contained herein will be valid as between the parties unless set forth in a writing that is signed by an authorized representative of each of the parties and which specifically states that it constitutes an amendment to this Agreement.
12.11 Waiver. No waiver of any term, provision, or condition of this Agreement will be effective unless in a written document signed by the waiving party and no such waiver in any one or more instances, will be deemed to be, or be construed as, a further or
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
continuing waiver of that term, provision or condition or any other term, provision or condition of this Agreement.
12.12 Assignment and Successors. This Agreement may not be assigned by [**] without Digimarcs consent, which consent shall not be unreasonably withheld or delayed. This Agreement and all of its terms, conditions and covenants are intended to be fully effective and binding, to the extent permitted by law, on the successors and permitted assigns of the parties hereto.
12.13 Captions. Captions are provided in this Agreement for convenience only and they form no part, and are not to serve as a basis for interpretation or construction, of this Agreement, nor as evidence of the intention of the parties hereto.
12.14 Disclaimer of Agency. Nothing contained in this Agreement is intended or will be construed so as to constitute the parties to this Agreement as partners or joint venturers or as agents of each other. Neither party will have any express or implied right or authority to assume or create any obligations on behalf of or in the name of any other party or to bind any other party in any contract, agreement or undertaking with any third party. No employee of a party shall be deemed or considered to be an employee of the other party or of both parties.
12.15 Publicity. The parties agree that from time-to-time it will be beneficial to both parties to issue press releases and other public announcements concerning benefits arising from the CDS. Each party agrees to submit for approval by the other party any press release that involves the other party, which approval shall not unreasonably be withheld.
12.16 Effectiveness. This Agreement shall not be effective until it is signed by both of the parties.
12.17 Ambiguities. Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement.
12.18 Survival. All clauses of this Agreement which expressly or by implication are intended to survive the termination of this Agreement will do so and, for greater certainty and notwithstanding any provision in this Agreement to the contrary, the provisions of clauses 3.2, 3.3, 5.1, 5.2, 5.5, 5.6, 6, 7, 11, and 12 of this Agreement shall survive termination of this Agreement by either party for any reason.
IN WITNESS WHEREOF , this Agreement has been executed and delivered by the parties hereto as of the Effective Date.
DIGIMARC CORPORATION |
<[**]> |
||||
|
|
||||
By: |
|
|
By: |
|
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Name: |
|
|
Name: |
|
Title: |
|
|
Title: |
|
Date: |
|
|
Date: |
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 1
[**]
The [**] will cause the following [**] to take place:
(a) |
|
[**] |
|
|
|
(b) |
|
[**] |
|
|
|
(c) |
|
[**] by {date TBD} [**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 2
DRAFT OPINION OF COUNSEL
Digimarc Corporation
9405 SW Gemini Drive
Beaverton, OR 97008
USA
Attention: |
||
|
||
President and CEO |
||
|
||
|
||
Dear: |
||
|
||
In connection with your proposal to grant a license to <[**]> to use the Counterfeit Deterrence System and for no other purpose, we confirm that: |
||
|
||
(a) |
|
each provision of this Agreement is valid and enforceable against <[**]> under the laws of <name of jurisdiction>; and |
|
|
|
(b) |
|
none of the [**] described below, at the time of writing, contravenes any law, regulation, policy, principle, or doctrine in effect in the jurisdiction of the <principal place of business/head office> of <[**]>. |
<[**]> |
|
|
Yours truly, |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 3
PROBLEM REPORT
Each problem report will contain all information necessary to reproduce or demonstrate the occurrence of the problem. Problem reports will be in English and will be delivered electronically in a format to be provided by Digimarc.
Problem reports will contain:
· Date problem was encountered
· Detailed description of the problem, including the frequency with which the problem occurs
· Name and version number of the program / system component that exhibits the problem
· Step by step instructions to reproduce the problem
· All data files required to reproduce the problem
· [**]Manufacturer and Model
· CPU type and speed
· Amount of memory
· Operating System and Version
· Disk Configuration (number of drives, total space per drive, free space per drive)
· Display Adapter Model, Resolution, Number of colors
· Peripheral configuration (where applicable)[**]TWAIN driver and version number
· [**]
· Severity of problem
· Contact information for person to contact for further information (name, phone number, FAX number, email address)
Licensee agrees to work with Digimarc to provide reasonable additional information and perform reasonable additional tests, as requested by Digimarc, to assist Digimarc in resolution of the problem.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 4
PAYMENT FOR SERVICES
Digimarc shall bill [**] for services in one hour increments at the following hourly rates:
Technical/Design Consultant |
|
[**] |
Senior Engineer |
|
[**] |
R&D/Engineering Executive |
|
[**] |
Project Manager |
|
[**] |
Administrator/Scheduler |
|
[**] |
Fees for services will be invoiced on the earlier of 1) the last day of the month or 2) the completion of the Services. Invoices are due thirty (30) days from the date of receipt of a correct invoice. A late charge of 1.5% per month will be charged on any late payments. All fees are due and payable in US funds.
[**] will reimburse Digimarc for all out-of-pocket expenses reasonably and necessarily incurred in providing the Verification Tests and other services. Expenses will be itemized and reported by category. Out-of-pocket expenses will not be marked up by Digimarc. Costs include, but are not limited to, reasonable travel and lodging expenses, telephone and fax charges, postage and overnight deliveries, and charges for rental equipment or materials purchased specifically to be used in providing the Verification Tests and other services. All invoices for out-of-pocket expenses will be issued monthly in arrears and are due thirty (30) days from the date of receipt of a correct invoice. Supporting receipts and vouchers will be available for review at Digimarcs offices. A late charge of 1.5% per month will be charged on any late payments. Payments will additionally include Value Added taxes and other tariffs and fees that may be imposed by any governments other than the United States of America.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 5
IDENTIFICATION OF [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 6
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE L-1
[**] LICENSE AGREEMENT - [**]
This [**] LICENSE AGREEMENT ( the Agreement) is made
BETWEEN
<name and address of Licensee> (Licensee)
- AND -
DIGIMARC CORPORATION , a corporation incorporated under the laws of Delaware and having its head office at 9405 SW Gemini Drive, Beaverton, Oregon. U.S.A. 97006 (Digimarc)
[**]
RECITALS
Digimarc has expertise in, and owns extensive intellectual property, including patents, patent applications, copyrights and trade secrets related to digital watermarks, counterfeit deterrence, copyright protection, and device control;
The [**] possesses or will possess intellectual property rights related to the application of such intellectual property to the detection and deterrence of bank note counterfeiting; and
Digimarc and [**] have cooperated in the development of means, using such intellectual property, to detect and deter the counterfeiting of bank notes[**] and [**] (the Counterfeit Deterrence System or CDS); and
Digimarc is licensing its CDS [**] authorized by a duly licensed [**], and
Licensee, having been authorized by a duly licensed [**], desires access to such technology so that Licensee can include Digimarcs [**];
In consideration of these premises , the covenants set out in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree as follows:
1. DEFINITIONS AND PRINCIPLES OF INTERPRETATION
In this Agreement:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Agreement means these articles of agreement, including the Attachments, and those documents as specified or referenced in this Agreement as forming part of the Agreement, all as may be amended from time to time;
Arbitration Agreement means the Arbitration Agreement entered into between the parties and others effective 1 January 1999, as amended from time to time;
Attachment means a document specified as being attached to this Agreement;
[**] the CDS;
Business Day means a day on which both Digimarc and Licensee are open for business at their respective addresses noted above;
Confidential Information means information disclosed before or during the Term of this Agreement in any form which, if disclosed in tangible form, is or was labeled Confidential, Proprietary or with a similar legend, or if disclosed orally is or was information that by its nature would be understood to be confidential to the Discloser. For greater certainty, the Confidential Information of Digimarc includes the Digimarc IPR and the [**]
[**]Counterfeit Deterrence System ( CDS or System ) [**]
Consulting Services means the Integration Support and all other services that Digimarc provides to Licensee regarding [**], and such other matters as Licensee may request and Digimarc agrees to provide, pursuant to this Agreement;
Digimarc IPR means Intellectual Property Rights owned by Digimarc, now or during the Term of this Agreement, to the extent that same specifically relates to or forms part of the CDS;
Digital Watermark refers to [**] (including [**]) that are [**] from [**] by [**] of [**], which [**] of [**] and yet do not significantly [**] from the aesthetics of the [**] or [**] thereby. Examples include, but are not limited to:
1. generally imperceptible changes to [**] or placement in [**];
2. [**] of a substrate, where the [**] substantially uniform to human touch;
3. slight localized changes to [**] or [**] of a printed document;
4. slight changes to [**]; or
5. [**] of substantially [**];
Discloser means a party that has disclosed or otherwise made available its Confidential Information to the other party;
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Effective Date means the later of the date on which this Agreement is last signed by the parties and the date on which Digimarc receives written notice from the [**] that the Licensee is authorized to [**];
[**]
Field of Use means the field of [**];
Improvement means an improvement provided to [**] under clause 2.14 of the [**] Agreement;
Installation means installation of the Digimarc [**] in accordance with in the design work flow of the Licensee.
Integration Support means the consulting and programming services to be provided by Digimarc to Licensee to assist Licensee to [**];
Intellectual Property Rights or IPR means all intellectual property rights existing now and in the future including, without limitation, trade secrets, copyright, database rights, know-how, topographies, patents and patent applications;
[**] means the [**] named above;
[**]
Recipient means the party to which the Confidential Information of the other party has been disclosed or otherwise made available;
Services means Installation, the Verification Tests, the Training, and the Consulting Services, or any of them;
Term means the period commencing on the Effective Date and ending on the earlier of 31 December [**] or the date of termination of this Agreement;
Training means the training in the use of the [**] described in Attachment 6; and
Verification Test means a test or tests developed under the [**] Agreement to determine [**].
1.2 Interpretation - In this Agreement:
1.2.1 unless otherwise specified, all references to money amounts are to the currency of the United States of America;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
1.2.2 the use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such person or persons or circumstances as the context otherwise permits;
1.2.3 whenever a provision of this Agreement requires an approval or consent by a party to this Agreement and notice of such approval or consent is not delivered within the applicable time, then, the party shall be conclusively deemed to have withheld the consent or approval;
1.2.4 unless otherwise specified, the number of days within or following which any payment is to be made or act is to be done shall be interpreted to be continuous and shall be calculated by excluding the day on which the period commences and including the day which ends the period and by extending the period to the next Business Day if the last day of the period is not a Business Day;
1.2.5 unless otherwise specified, the order of precedence for interpreting this Agreement shall be:
(a) this Agreement, excluding Attachments, and
(b) the Attachments;
1.2.6 for greater certainty, a party or representative to which this Agreement grants the right to make a decision or determination in the sole discretion of the party or representative is not required to act reasonably in making the decision or determination and no such decision or determination may be challenged by the other party under the Arbitration Agreement or otherwise;
1.2.7 the words includes or including will be construed as meaning included without limitation and including without limitation as the case may be; and
1.2.8 a clause or Attachment, unless the context requires otherwise, is a reference to a clause to, an Attachment of, or a paragraph of an Attachment to, this Agreement, as amended from time to time in accordance with this Agreement.
1.3 Applicable Law - This Agreement shall be construed in accordance with the laws of England to the exclusion of its rules of conflicts of laws.
1.4 Attachments - The attachments to this Agreement, listed below, are an integral part of this Agreement:
Attachment |
|
Description |
Attachment 1 |
|
[**] |
Attachment 2 |
|
Problem Report |
Attachment 3 |
|
Payment for Services |
Attachment 4 |
|
[**] |
Attachment 5 |
|
[**] |
Attachment 6 |
|
Training |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2. GRANT OF RIGHTS
2.1 Subject to the terms of this Agreement, Digimarc hereby grants to Licensee a no charge non-exclusive, non - transferable license in the Field of Use to use the [**], the Digimarc IPR and the [**] IPR at the Facilities to:
(a) [**];
(b) [**];
(c) [**]; and
(d) [**] to [**].
2.2 For greater certainty, the foregoing license applies [**].
2.3 Licensee shall not use the [**], the Digimarc IPR or the [**] IPR at, or transfer the Digimarc IPR or [**] IPR to, any place other than the Facilities.
2.4 Licensee acknowledges and agrees that the Digimarc IPR, and any technology developed by Digimarc during the course of its work with Licensee under this Agreement is the property of Digimarc and that, except as otherwise expressly set out in this Agreement, Licensee has no right to sublicense it. Licensee acknowledges that it may [**] unless and until, and only during such period, that [**] is licensed therefore by Digimarc.
2.5 Licensee acknowledges and agrees that the [**] IPR is the property of its owner and that Licensee has no right to sublicense it.
2.6 Nothing in this Agreement shall be construed to grant, by implication or otherwise, any broader rights than those specifically granted herein.
2.7 Digimarc shall obtain at its own expense all licenses or permits required to be obtained from the Government of the United States in order for Digimarc to comply with its obligations under this Agreement including, without limitation, to deliver [**], and grant the associated licenses to Licensee.
2.8 Digimarc shall inform Licensee within thirty (30) days after the end of each calendar quarter during the Term of all Improvements relating to [**] which Improvements Digimarc has made, or caused or permitted to be made, during the course of its work with Licensee under this Agreement. Following the provision of the information under this clause 2.8, Digimarc shall provide to Licensee within a reasonable period of time following request, the Technical Information for those Improvements requested by Licensee in writing.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.9 Digimarc hereby grants to Licensee a royalty-free, non-exclusive, sub-licenseable worldwide license to use the Improvements described in clause 2.8 and in any patents thereon owned or otherwise licenseable by Digimarc. Such license shall continue until this Agreement expires or is terminated or until Licensee has no further rights to Digimarc IPR, whichever occurs last.
2.10 For greater certainty, the obligations set out in clauses 2.8 and 2.9 shall not apply to any such Improvements which Digimarc can demonstrate would have been made irrespective of Digimarcs work with Licensee under this Agreement.
3. SERVICES
3.1 Digimarc shall ship [**] to the Licensee within ten (10) Business Days after the Effective Date or after instructions from the [**] whichever is later. The shipment shall be by air, Cost, Insurance and Freight (C.I.F.) closest major airport (i.e., Digimarc shall be responsible for transportation and insurance to this port of entry).
3.2 Digimarc shall provide Installation of the [**] at Licensees [**] for the fees described in clause 4. The Installation will take no more than ten (10) person days, provided the site is prepared according to a site preparation guide to be provided to Licensee by Digimarc reasonably prior to Installation.
3.3 Digimarc shall provide the Training to Licensee within ten (10) Business Days after completion of installation of the [**] or at such other time as the parties may agree for the fees described in clause 4. The [**] training will be designed to be delivered by one trainer in five days for up to two trainees, provided the trainees [**].
3.4 No later than sixty (60) Business Days after every written request made by Licensee during the Term, Digimarc shall provide Integration Support to Licensee on a date or dates agreed between Digimarc and the Licensee for the fees described in clause 4.
3.5 Commencing no later than twenty (20) Business Days after every written request made by Licensee during the Term, Digimarc shall conduct Verification Tests of [**] on a date or dates agreed between Digimarc and Licensee for the fees described in clause 4.
3.6 Commencing no later than five (5) Business Days after every written request therefore made by Licensee during the Term, Digimarc shall schedule Consulting Services, which Services shall commence not less than thirty (30) Business Days after the written request or at such other time agreed between Digimarc and Licensee.
3.7 Digimarc shall periodically apprise Licensee of Improvements which Digimarc makes to the [**]. Rights to employ such Improvements shall automatically be granted to Licensee pursuant to the terms of clause 2 at no additional charge to Licensee.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
4. FEES
4.1 Licensee shall pay to Digimarc a fee for the Services as detailed below. The fee for Services provided:
(a) on or before 31 December [**], is as set out in Attachment 3;
(b) after 31 December [**], will be no greater than the fee then paid to Digimarc for similar services by Digimarcs most favoured customer.
4.2 Except as otherwise expressly provided in this Agreement, Licensee shall pay Digimarc all sales, use, goods and services or other similar taxes levied by any government in the United States or the country of the Licensees principal place of business which Digimarc is obliged to collect and remit to such government(s) in connection with any amount paid by Licensee to Digimarc under this Agreement.
4.3 Digimarc is responsible for, and shall indemnify Licensee against, and hold Licensee harmless from, the payment of all taxes levied by any government on or in respect of Digimarcs income and any amounts required by law to be paid in respect of social benefits for Digimarcs employees relating to or arising out of the performance of the Services. If required by law, Licensee shall deduct all such taxes and amounts from the amounts otherwise payable to Digimarc and remit them to the appropriate authorities.
5. NUMBER NOT USED
6. LICENSEE RESPONSIBILITIES
6.1 Licensee shall promptly report to Digimarc every instance which comes to its attention of:
(i) [**] to meet the specifications established under the [**] Agreement in the form of the Problem Report attached as Attachment 2;
(ii) unauthorised access to the [**] in the possession of Licensee; or
(iii) [**]
6.2 Licensee shall inform Digimarc within thirty (30) days after the end of each calendar quarter during the Term of all improvements relating to (i) Digital Watermarks [**]; (ii) [**] Digital Watermarks [**], (iii) [**] Digital Watermarks [**] and (iv) any other part of the CDS, which improvements Licensee has made, or caused or permitted to be made, as a result of knowledge of Digimarc Confidential Information. The first such information shall be provided to Digimarc within thirty (30) days after the Effective Date and shall cover improvements made from the date Licensee first learned of the Digimarc Confidential Information. Following the provision of the information under this clause 6.2, Licensee shall provide to Digimarc within a
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
reasonable period of time following request, the Technical Information for those improvements requested by Digimarc in writing.
6.3 Licensee hereby grants to Digimarc a royalty-free, non-exclusive, sub-licenseable worldwide license to use the improvements described in clause 6.2 and in any patents thereon owned or otherwise licenseable by Licensee.
6.4 Such license shall continue until this Agreement expires or is terminated, or until Licensee has no further rights to Digimarc IPR, whichever occurs last.
6.5 For greater certainty, the obligations set out in clauses 6.2, 6.3, and 6.4 shall not apply to any such improvement which the Licensee can demonstrate would have been made irrespective of knowledge of the Digimarc Confidential Information.
6.6 Licensee shall, as directed by [**], cooperate fully with [**] and/or Digimarc in all matters concerning testing of [**] to confirm that they pass the Verification Tests.
7. REPRESENTATIONS AND WARRANTIES OF DIGIMARC.
7.1 General - Digimarc represents, warrants and undertakes to Licensee that from and after the Effective Date:
(a) the Services provided under this Agreement will be of professional quality conforming to generally accepted practices for like services and will be performed at all times in a timely and cost effective manner and, for greater certainty Digimarc shall employ the standard of care in performing the Services that would be expected of an expert [**] of the same or similar type as the [**] which comprises the [**];
(b) Digimarc is duly incorporated and organized and is validly subsisting under the laws of the State of Delaware, U.S.A. or some other state in the United States with full corporate power and authority to enter into this Agreement;
(c) to the best of its knowledge, neither this Agreement nor the Services will contravene, breach, or result in any default under any agreement, permit, by-law, or law or regulation to which Digimarc is subject or by which it is bound including, for greater certainty any laws or regulations in effect in the United States governing export;
(d) this Agreement when executed and delivered by Digimarc shall constitute a valid and binding agreement with Digimarc enforceable against Digimarc according to its terms; and
(e) Digimarc will at all material times have the right to grant the licenses to the Digimarc IPR as required by this Agreement.
7.2 Digimarc represents, warrants and undertakes to Licensee that:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(a) [**] provided to Licensee hereunder will, for a period of one hundred eighty (180) days following the date on which the production of the [**] first commences, meet the specifications for that version of [**] accepted by [**];
(b) until the last day of the Term, [**]; and
(c) incorporated as part of its installation and integration practices and procedures are those measures and security procedures commercially and reasonably available on the date for delivery of a component of [**] to search for, detect and eliminate software viruses in [**] that could interfere with the use of [**] or corrupt, interfere with or damage any data;
(d) the [**] shall contain no lock, clock, timer, counter, copy protection feature, replication device or intentional defects (including but not limited to viruses or worms as such terms are commonly used in the computer industry), CPU serial number reference, or other device which might:
(i) lock, disable or erase [**] or any data which is loaded on [**] so as to prevent full use of [**] by authorized persons; or
(ii) require action or intervention by Digimarc or any other person to allow properly trained and authorized persons to use [**];
(e) the source code for [**] will support the year 2000 and neither performance nor functionality will be affected by dates prior to, during and after the year 2000, and , for greater certainty, the [**] will switch to 1 January 2000 on 1 January 2000, and the year 2000 will be recognized as a leap year.
7.3 If [**] fails to meet the relevant Specifications then Digimarc shall, within thirty (30) days after receipt of written notice of the failure from Licensee, on the form attached as Attachment 2, rectify the failure and provide a [**] to Licensee.
8. REPRESENTATIONS AND WARRANTIES OF LICENSEE
8.1 Licensee represents and warrants to Digimarc that:
(a) Licensee has full power and authority to enter into this Agreement; and
(b) this Agreement when executed and delivered by Licensee shall constitute a valid, binding and enforceable obligation of Licensee.
8.2 Licensee makes no representations, warranties or undertakings that Licensee has any right to grant the licenses required to be granted by clause 6.3 and Digimarc shall be solely responsible for determining that such improvements are suitable for the intended use and for the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
consequences of any use of the same whether by Digimarc or others, and Licensee and hereby disclaims all liability in connection therewith.
9. CONFIDENTIALITY
9.1 Except as otherwise expressly permitted by this Agreement, a Recipient shall not use, reproduce or disclose the Confidential Information of the Discloser for any purpose other than as reasonably necessary to comply with its obligations under this Agreement or to exercise any rights or licenses granted to it under or pursuant to this Agreement.
9.2 The Recipient shall protect the Confidential Information of the Discloser from disclosure by using the same degree of care, which shall be no less than a reasonable degree of care, as the Recipient uses to protect its own confidential information.
9.3 On written request from the Discloser, the Recipient shall return, or certify the destruction of, all originals and copies of the Disclosers Confidential Information in the Recipients possession or control which the Recipient does not need to retain in order to perform any obligations imposed, or exercise any rights acquired, by this Agreement.
9.4 A Recipient may, on a need to know basis, and only for the purposes described in clause 9.1, give the other partys Confidential Information to the Recipients employees or authorized subcontractors provided that such employee or subcontractor shall have entered into a non-disclosure agreement in respect of such Confidential Information in favour of the Discloser on terms materially similar to the provisions of this clause 9.
9.5 The obligations set out in this clause 9 will not apply to any Confidential Information that:
(a) is or becomes publicly available other than through the fault of the Recipient;
(b) was known to the Recipient prior to disclosure as shown by documentation sufficient to establish such knowledge;
(c) was or is lawfully disclosed to the Recipient by a third party who did not breach any obligation of confidence by such disclosure and who made the disclosure without restriction on further disclosure all of which is shown by documentation sufficient to establish same; or
(d) is required by law to be disclosed provided, however, that the Recipient shall first give written notice to the Discloser before the disclosure so that the Discloser may seek an appropriate protective order.
Notwithstanding the foregoing, the fact that Confidential Information, or any part thereof, can be linked together by a search of publications and other information, followed by a selection of a series of such items of knowledge from unconnected sources, and fitting together those items of
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
knowledge so as to duplicate or recreate any item of Confidential Information, shall not be deemed to cause the Confidential Information, or any part thereof, to be included within exceptions (a), (b) or (c), above.
9.6 The obligations of the parties under this clause 9 will survive the Term or sooner termination of this Agreement and will remain in full force and effect regardless of the cause of any termination.
9.7 Nothing in this Agreement shall be construed to require Licensee to disclose any information which is confidential to a third party including for greater certainty a Licensed [**]
10. INTELLECTUAL PROPERTY INDEMNIFICATION
10.1 Licensee shall provide Digimarc with prompt written notice of any claim, demand or action against Licensee based on an allegation that the Digimarc IPR or any part thereof, infringes any Intellectual Property Right of any person (referred to below as a Claim).
10.2 Subject to the limitations set out in clauses 10.3 to 10.7 inclusive, Digimarc shall, at its own expense:
(a) negotiate the resolution of any such Claim;
(b) pay all costs associated with the Claim; and
(c) defend any action based on the Claim.
10.3 Licensee shall, at Digimarcs expense, comply with all reasonable requests by Digimarc for assistance from Licensee in connection with the settlement or defense of the Claim.
10.4 Notwithstanding any other provision of this Agreement to the contrary, but subject to the limitations in this clause 10, Digimarc shall indemnify Licensee against and save Licensee harmless from all loss, costs, liabilities including an award of damages, and expenses, including legal fees, arising from each Claim first notified to Digimarc prior to 31 December [**]. The obligation set out in this clause 10 shall not apply in respect of any settlement made by Licensee without the consent of Digimarc.
10.5 The liability of Digimarc under clause 10.4 of this Agreement and under the equivalent clause of every other licence or consulting agreement entered into between Digimarc and [**] and [**] pursuant to the provisions of the [**] Agreement will not exceed the Indemnity Limit as defined in clause 10.6 below.
10.6 The Indemnity Limit shall be [**], or such higher amount as notified by Digimarc from time to time.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
10.7 For the purposes of clauses 10.2 through 10.6 inclusive, Claim shall mean any Claim, other than a Claim for patent infringement which Digimarc can demonstrate occurred without Digimarc acting recklessly or negligently.
11. TERM AND TERMINATION
11.1 This Agreement will take effect on the Effective Date and will remain in force throughout the Term unless sooner terminated as provided herein.
11.2 Either party may terminate this Agreement if the other party breaches any of its obligations under this Agreement and fails to remedy such breach within thirty (30) days after receiving written notice of such breach from the other party.
11.3 Upon termination of this Agreement:
(a) all rights granted to Licensee under this Agreement will immediately terminate. No interest in any such rights will thereafter remain with Licensee, except that [**], but no further [**] Licensee shall be permitted; and
(b) each party shall return, or certify the destruction of, to the Discloser, all originals and copies of the Disclosers Confidential Information in the partys possession or control which the party does not need to retain in order to exercise any rights acquired by this Agreement.
11.4 No termination of this Agreement will in any manner release, or be construed as releasing, any party from any liability arising out of or in connection with that partys breach of or failure to perform any covenant, duty or obligation contained herein prior to the date of such termination.
11.5 Upon termination of the [**] Agreement by Digimarc for cause, the rights of Licensee hereunder to use the Digimarc IPR shall be deemed to be restricted to the [**] as of the date of such termination.
11.6 Termination of the license between Digimarc and [**] shall automatically act to terminate this Agreement.
12. DISPUTE RESOLUTION
12.1 Any Dispute (as defined in the Arbitration Agreement) shall be finally settled by arbitration in accordance with the Arbitration Agreement.
12.2 Unless otherwise agreed between the parties or unless the subject matter of the dispute resolution proceedings is a partys right to terminate this Agreement, the Services shall continue during the dispute resolution proceedings and payments due to Digimarc shall not be withheld on account of such proceedings unless that particular services or payment is the subject matter of the
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
proceedings. Notwithstanding the foregoing, Licensee may in its sole discretion instruct Digimarc to continue to perform such services which are the subject matter of the proceedings and Digimarc shall act in accordance with those instructions, subject to payment under clause 4.1.
13. MISCELLANEOUS PROVISIONS
13.1 Remedies Cumulative - Except as otherwise expressly set out in this Agreement:
(a) each and every right, power and remedy of a party will be considered to be cumulative with and in addition to any other right, power and remedy which such party may have at law or in equity in the event of breach of any of the terms of this Agreement;
(b) the exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party; and
(c) a party terminating this Agreement in accordance with the provisions of the Termination clause will have no liability or obligation to the other as a result of or with respect to the termination.
13.2 All notices under this Agreement shall be delivered by fax, or recognized international courier service. The notice shall be deemed effective as of the date of delivery to the address of the party specified below as evidenced by a delivery receipt or the addressees registry of incoming correspondence. Unless otherwise expressly set out in this Agreement, all notices to a party will be sent to the partys authorized representative identified below and all notices from a party will be sent by the partys authorized representative identified below.
13.3 Any notice to Licensee shall be sent to both of, and any notice from Licensee shall be sent by either:
Name 1 |
|
Name 2 |
Address 1 |
|
Address 2 |
13.4 Any notice to Digimarc shall be sent to both of, and any notice from Digimarc shall be sent by either:
Mr. Robert Chamness |
|
Mr. Scott Carr |
Vice President and General Counsel |
|
President Watermarking Solutions |
Digimarc Corporation |
|
Digimarc Corporation |
9405 SW Gemini Drive |
|
9405 SW Gemini Drive |
Beaverton, OR 97008 |
|
Beaverton, OR 97008 |
Fax: (503) 469-4777 |
|
Fax: (503) 469-4777 |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
13.5 A copy of every notice sent by either party shall be sent to: [**].
13.6 A party may change its address for notice by notice to the other party in accordance with the foregoing provisions.
13.7 Severability. If any part of this Agreement is held by an arbitral tribunal appointed pursuant to the Arbitration Agreement or other competent authority to be void or unenforceable, the parties agree that such determination will not result in the nullity or unenforceability of the remaining parts of this Agreement, which will continue in force to the fullest extent permitted by law. The parties further agree to replace such void or unenforceable part of this Agreement with a valid and enforceable provision that will achieve, to the extent legally permissible, the economic, business and other purposes of the void or unenforceable part.
13.8 Counterparts. This Agreement may be executed in separate counterparts, and by facsimile, each of which will be deemed an original, and when executed, separately or together, will constitute a single original instrument, effective in the same manner as if the parties had executed one and the same instrument.
13.9 Entire Agreement. This Agreement is intended by the parties to be the final expression of their agreement and constitutes and embodies the entire agreement and understanding between the parties hereto and constitutes a complete and exclusive statement of the terms and conditions thereof, and will supersede any and all prior correspondence, conversations, negotiations, agreements or understandings relating to the same subject matter.
13.10 Amendments. No change in, modification of or addition to the terms and conditions contained herein will be valid as between the parties unless set forth in a writing that is signed by an authorized representative of each of the parties and which specifically states that it constitutes an amendment to this Agreement.
13.11 Waiver. No waiver of any term, provision, or condition of this Agreement, will be effective unless in a written document signed by the waiving party and no such waiver in any one or more instances, will be deemed to be, or be construed as, a further or continuing waiver of that term, provision or condition or any other term, provision or condition of this Agreement.
13.12 Assignment and Successors. This Agreement may not be assigned by Licensee without Digimarcs consent, which consent shall not be unreasonably withheld or delayed. This Agreement and all of its terms, conditions and covenants are intended to be fully effective and binding, to the extent permitted by law, on the successors and permitted assigns of the parties hereto.
13.13 Captions. Captions are provided in this Agreement for convenience only and they form no part, and are not to serve as a basis for interpretation or construction, of this Agreement, nor as evidence of the intention of the parties hereto.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
13.14 Disclaimer of Agency. Nothing contained in this Agreement is intended or will be construed so as to constitute the parties to this Agreement as partners or joint venturers or as agents of each other. Neither party will have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other party or to bind any other party in any contract, agreement or undertaking with any third party. No employee of a party shall be deemed or considered to be an employee of the other party or of both parties.
13.15 Publicity. The parties agree that from time-to-time it will be beneficial to both parties to issue press releases and other public announcements concerning benefits arising from the CDS. Each party agrees to submit for approval by the other party any press release that involves the other party, which approval shall not unreasonably be withheld.
13.16 Effectiveness. This Agreement shall not be effective until it is signed by both of the parties.
13.17 Ambiguities. Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement.
13.18 Survival. All clauses of this Agreement which expressly or by implication are intended to survive the termination of this Agreement will do so and, for greater certainty and notwithstanding any provision in this Agreement to the contrary, the provisions of clause 2.9, 4.2, 4.3, 6.1, 6.3, 6.4, 7.2(b), 9, 10, 12 and 13 of this Agreement shall survive termination of this Agreement by either party for any reason.
IN WITNESS WHEREOF , this Agreement has been executed and delivered by the parties hereto as of the Effective Date.
DIGIMARC CORPORATION |
|
<Licensee> |
||
|
|
|
||
|
|
|
||
By: |
|
|
By: |
|
Name: |
|
|
Name: |
|
Title: |
|
|
Title: |
|
Date: |
|
|
Date: |
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 1
[**]
[**] will cause the following [**] to take place:
(a) [**]
(b) [**]
(c) [**] a date TBD [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 2
PROBLEM REPORT
Each problem report will contain all information necessary to reproduce or demonstrate the occurrence of the problem. Problem reports will be in English and will be delivered electronically in a format to be provided by Digimarc.
Problem reports will contain:
· Date problem was encountered
· Detailed description of the problem, including the frequency with which the problem occurs
· Name and version number of the program / system component that exhibits the problem
· Step by step instructions to reproduce the problem
· All data files required to reproduce the problem
· [**]Manufacturer and Model
· CPU type and speed
· Amount of memory
· Operating System and Version
· Disk Configuration (number of drives, total space per drive, free space per drive)
· Display Adapter Model, Resolution, Number of colors
· Peripheral configuration (where applicable)[**]TWAIN driver and version number
· [**]
· Severity of problem
· Contact information for person to contact for further information (name, phone number, FAX number, email address)
Licensee agrees to work with Digimarc to provide reasonable additional information and perform reasonable additional tests, as requested by Digimarc, to assist Digimarc in resolution of the problem.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 3
PAYMENT FOR SERVICES
Digimarc shall bill Licensee for Services in one hour increments at the following hourly rates:
Technical/Design Consultant |
|
[**] |
Senior Engineer |
|
[**] |
R&D/Engineering Executive |
|
[**] |
Project Manager |
|
[**] |
Administrator/Scheduler |
|
[**] |
Fees for Services will be invoiced on the earlier of 1) the last day of the month or 2) the completion of the Services. Invoices are due thirty (30) days from the date of receipt of a correct invoice. A late charge of 1.5% per month will be charged on any late payments. All fees are due and payable in US funds.
Licensee will reimburse Digimarc for all out-of-pocket expenses reasonably and necessarily incurred in providing the Services. Expenses will be itemized and reported by category. Out-of-pocket expenses will not be marked up by Digimarc. Costs include, but are not limited to, reasonable travel and lodging expenses, telephone and fax charges, postage and overnight deliveries, and charges for rental equipment or materials purchased specifically to be used in providing the Service. All invoices for out-of-pocket expenses will be issued monthly in arrears and are due thirty (30) days from the date of receipt of a correct invoice. Supporting receipts and vouchers will be available for review at Digimarcs offices. A late charge of 1.5% per month will be charged on any late payments. Payments will additionally include Value Added taxes and other tariffs and fees that may be imposed by any government other than the United States of America.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 4
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 5
IDENTIFICATION OF [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 6
TRAINING
1.0 As part of the [**], Digimarc shall develop a program of training acceptable to the [**] Project Director (as defined in the [**] Agreement) in the [**].
2.0 Digimarc shall deliver the Training as follows:
2.1 Digimarc shall provide the Training to up to two (2) people simultaneously. The trainees will be experienced in digital design system operation.
2.2 Digimarc shall conduct the Training at the facilities of Licensee or, at the request of Licensee, at Digimarcs facilities or at some other place agreed between Digimarc and Licensee.
2.3 Digimarc shall give Licensee reasonable notice concerning the equipment which Digimarc will require in order to conduct the Training. Licensee shall provide all such equipment at its own expense. If the parties are unable to agree on the equipment to be provided either party may refer the matter for decision to the DLA Contract Authority (as defined in the [**] Agreement).
2.4 Digimarc shall conduct the Training using the [**].
2.5 Digimarc shall provide a training manual in English to every trainee. Any translation or interpretation which the trainees may require will be provided by Licensee at its own expense.
2.6 Digimarc shall provide each trainee with a certificate of training at the completion of the Training session.
2.7 Digimarc shall conduct the Training in English.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE L-2
[**] AGREEMENT [**]
This [**] LICENSE AGREEMENT ( the Agreement) is made
BETWEEN
<name and address of Licensee> (Licensee)
- AND -
DIGIMARC CORPORATION , a corporation incorporated under the laws of Delaware and having its head office at 9405 SW Gemini Drive, Beaverton, Oregon. U.S.A. 97006 (Digimarc)
[**]
RECITALS
Digimarc has expertise in, and owns extensive intellectual property, including patents, patent applications, copyrights and trade secrets related to digital watermarks, counterfeit deterrence, copyright protection, and device control;
[**] possesses or will possess intellectual property rights related to the application of such intellectual property to the detection and deterrence of bank note counterfeiting; and
Digimarc and [**] have cooperated in the development of means, using such intellectual property, to detect and deter the counterfeiting of bank notes [**] (the Counterfeit Deterrence System or CDS); and
Digimarc is licensing its CDS [**] authorized by a duly licensed [**]; and
Licensee, having been authorized by a duly licensed [**], desires access to such technology so that Licensee can include Digimarcs [**].
In consideration of these premises , the covenants set out in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree as follows:
1. DEFINITIONS AND PRINCIPLES OF INTERPRETATION
In this Agreement:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Agreement means these articles of agreement, including the Attachments, and those documents as specified or referenced in this Agreement as forming part of the Agreement, all as may be amended from time to time;
Arbitration Agreement means the Arbitration Agreement entered into between the parties and others effective 1 January 1999, as amended from time to time;
Attachment means a document specified as being attached to this Agreement;
[**] CDS;
Business Day means a day on which both Digimarc and Licensee are open for business at their respective addresses noted above;
Confidential Information means information disclosed before or during the Term of this Agreement in any form which, if disclosed in tangible form, is or was labeled Confidential, Proprietary or with a similar legend, or if disclosed orally is or was information that by its nature would be understood to be confidential to the Discloser. For greater certainty, the Confidential Information of Digimarc includes the Digimarc IPR and the [**]
[**]Counterfeit Deterrence System ( CDS or System )[**]
Consulting Services means the Integration Support and all other services that Digimarc provides to Licensee regarding [**], and such other matters as Licensee may request and Digimarc agrees to provide, pursuant to this Agreement;
Digimarc IPR means Intellectual Property Rights owned by Digimarc, now or during the Term of this Agreement, to the extent that same specifically relates to or forms part of the CDS;
Digital Watermark refers to [**] (including [**]) that are [**] from [**] by [**] of [**], which [**] of [**] and yet do not significantly [**] from the aesthetics of the [**] or [**] thereby. Examples include, but are not limited to:
1. generally imperceptible changes to [**] or placement in [**];
2. [**] of a substrate, where the [**] substantially uniform to human touch;
3. slight localized changes to [**] or [**] of a printed document;
4. slight changes to [**]; or
5. [**] of substantially [**];
Discloser means a party that has disclosed or otherwise made available its Confidential Information to the other party;
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Effective Date means the later of the date on which this Agreement is last signed by the parties and the date on which Digimarc receives written notice from the [**] that the Licensee is authorized to [**]
[**]
Field of Use means the field of [**];
Improvement means an improvement provided to [**] under clause 2.14 of the [**] Agreement;
Installation means installation of the Digimarc [**] in accordance with in the design work flow of the Licensee.
Integration Support means the consulting and programming services to be provided by Digimarc to Licensee to assist Licensee to [**];
Intellectual Property Rights or IPR means all intellectual property rights existing now and in the future including, without limitation, trade secrets, copyright, database rights, know-how, topographies, patents and patent applications;
[**] means the [**] named above;
[**]
Recipient means the party to which the Confidential Information of the other party has been disclosed or otherwise made available;
Services means the Installation, Verification Tests, the Training, and the Consulting Services, or any of them;
Term means the period commencing on the Effective Date and ending on the earlier of 31 December [**] or the date of termination of this Agreement;
Training means the training in the use of the [**] described in Attachment 7; and
Verification Test means a test or tests developed under the [**] Agreement to determine [**].
1.2 Interpretation - In this Agreement:
1.2.1 unless otherwise specified, all references to money amounts are to the currency of the United States of America;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
1.2.2 the use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such person or persons or circumstances as the context otherwise permits;
1.2.3 whenever a provision of this Agreement requires an approval or consent by a party to this Agreement and notice of such approval or consent is not delivered within the applicable time, then, the party shall be conclusively deemed to have withheld the consent or approval;
1.2.4 unless otherwise specified, the number of days within or following which any payment is to be made or act is to be done shall be interpreted to be continuous and shall be calculated by excluding the day on which the period commences and including the day which ends the period and by extending the period to the next Business Day if the last day of the period is not a Business Day;
1.2.5 unless otherwise specified, the order of precedence for interpreting this Agreement shall be:
(a) this Agreement, excluding Attachments, and
(b) the Attachments;
1.2.6 for greater certainty, a party or representative to which this Agreement grants the right to make a decision or determination in the sole discretion of the party or representative is not required to act reasonably in making the decision or determination and no such decision or determination may be challenged by the other party under the Arbitration Agreement or otherwise;
1.2.7 the words includes or including will be construed as meaning included without limitation and including without limitation as the case may be; and
1.2.8 a clause or Attachment, unless the context requires otherwise, is a reference to a clause to, an Attachment of, or a paragraph of an Attachment to, this Agreement, as amended from time to time in accordance with this Agreement.
1.3 Applicable Law - This Agreement shall be construed in accordance with the laws of England to the exclusion of its rules of conflicts of laws.
1.4 Attachments - The attachments to this Agreement, listed below, are an integral part of this Agreement:
Attachment |
|
Description |
||
Attachment 1 |
|
[**] |
||
Attachment 2 |
|
Opinion of Counsel |
||
Attachment 3 |
|
Problem Report |
||
Attachment 4 |
|
Payment for Services |
||
Attachment 5 |
|
[**] |
|
|
Attachment 6 |
|
[**] |
|
|
Attachment 7 |
|
Training |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2. GRANT OF RIGHTS
2.1 Subject to the terms of this Agreement, Digimarc hereby grants to Licensee a no charge non-exclusive, non-transferable license in the Field of Use to use the [**], the Digimarc IPR and [**] IPR at the Facilities to:
(a) [**]
(b) [**]
(c) [**]; and
(d) [**] to [**].
2.2 For greater certainty, the foregoing license applies [**]
2.3 Licensee shall not use the [**], the Digimarc IPR or the [**] IPR at, or transfer the Digimarc IPR or [**] IPR to, any place other than the Facilities.
2.4 Licensee acknowledges and agrees that the Digimarc IPR, and any technology developed by Digimarc during the course of its work with Licensee under this Agreement is the property of Digimarc and that, except as otherwise expressly set out in this Agreement, Licensee has no right to sublicense it. Licensee acknowledges that it may [**] unless and until, and only during such period, that [**] is licensed therefore by Digimarc.
2.5 Licensee acknowledges and agrees that the [**] IPR is the property of its owner and that Licensee has no right to sublicense it.
2.6 Nothing in this Agreement shall be construed to grant, by implication or otherwise, any broader rights than those specifically granted herein.
2.7 Digimarc shall obtain at its own expense all licenses or permits required to be obtained from the Government of the United States in order for Digimarc to comply with its obligations under this Agreement including, without limitation, to deliver [**], and grant the foregoing licenses to Licensee.
2.8 Digimarc shall inform Licensee within thirty (30) days after the end of each calendar quarter during the Term of all Improvements relating to [**] which Improvements Digimarc has made, or caused or permitted to be made, during the course of its work with Licensee under this Agreement. Following the provision of the information under this
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
clause 2.8, Digimarc shall provide to Licensee within a reasonable period of time following request, the Technical Information for those Improvements requested by Licensee in writing.
2.9 Digimarc hereby grants to Licensee a royalty-free, non-exclusive, sub-licenseable worldwide license to use the Improvements described in clause 2.8 and in any patents thereon owned or otherwise licenseable by Digimarc. Such license shall continue until this Agreement expires or is terminated or until Licensee has no further rights to Digimarc IPR, whichever occurs last.
2.10 For greater certainty, the obligations set out in clauses 2.8 and 2.9 shall not apply to any such Improvements which Digimarc can demonstrate would have been made irrespective of Digimarcs work with Licensee under this Agreement.
3. SERVICES
3.1 Digimarc shall ship [**] to the Licensee within ten (10) Business Days after the Effective Date or after instructions from the [**] whichever is later. The shipment shall be by air, Cost, Insurance and Freight (C.I.F.) closest major airport (i.e., Digimarc shall be responsible for transportation and insurance to this port of entry).
3.2 Digimarc shall provide Installation of the [**] at Licensees [**] for the fees described in clause 4. The Installation will take no more than ten (10) person days, provided the site is prepared according to a site preparation guide to be provided to Licensee by Digimarc reasonably prior to Installation.
3.3 Digimarc shall provide the Training to Licensee within ten (10) Business Days after completion of installation of the [**] or at such other time as the parties may agree for the fees described in clause 4. The [**] training will be designed to be delivered by one trainer in five days for up to two trainees, provided the trainees [**].
3.4 No later than sixty (60) Business Days after every written request made by Licensee during the Term, Digimarc shall provide Integration Support to Licensee on a date or dates agreed between Digimarc and Licensee for the fees described in clause 4.
3.5 Commencing no later than twenty (20) Business Days after every written request made by Licensee during the Term, Digimarc shall conduct Verification Tests of [**] on a date or dates agreed between Digimarc and Licensee for the fees described in clause 4.
3.6 Commencing no later than five (5) Business Days after every written request made by Licensee during the Term, Digimarc shall schedule Consulting Services, which Services shall commence not less than thirty (30) Business Days after the written request or at such other time agreed between Digimarc and Licensee.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
3.7 Digimarc shall periodically apprise Licensee of Improvements which Digimarc makes to the [**]. Rights to employ such Improvements shall automatically be granted to Licensee pursuant to the terms of clause 2 at no additional charge to Licensee.
4. FEES
4.1 Licensee shall pay to Digimarc a fee for the Services as detailed below. The fee for Services provided:
(a) on or before 31 December [**], is as set out in Attachment 4;
(b) after 31 December [**], will be no greater than the fee then paid to Digimarc for similar services by Digimarcs most favoured customer.
4.2 Except as otherwise expressly provided in this Agreement, Licensee shall pay Digimarc all sales, use, goods and services or other similar taxes levied by any government in the United States or the country of the Licensees principal place of business which Digimarc is obliged to collect and remit to such government(s) in connection with any amount paid by Licensee to Digimarc under this Agreement.
4.3 Digimarc is responsible for, and shall indemnify Licensee against, and hold Licensee harmless from, the payment of all taxes levied by any government on or in respect of Digimarcs income and any amounts required by law to be paid in respect of social benefits for Digimarcs employees relating to or arising out of the performance of the Services. If required by law, Licensee shall deduct all such taxes and amounts from the amounts otherwise payable to Digimarc and remit them to the appropriate authorities.
5. OPINION OF COUNSEL
5.1 Before producing [**], Licensee shall obtain and forward to Digimarc a written opinion of counsel substantially in the form attached as Attachment 2 that confirms:
(a) the validity and enforceability of the terms of this Agreement under the laws of the jurisdiction of Licensees principal place of business; and
(b) the legality of each of the [**] under the laws of the jurisdiction of Licensees principal place of business.
5.2 Digimarc shall not unreasonably withhold its consent to any qualifications which Licensees counsel may require to be made to such opinion.
6. LICENSEE RESPONSIBILITIES
6.1 Licensee shall promptly report to Digimarc every instance which comes to its attention of:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(i) [**] to meet the specifications established under the [**] Agreement in the form of the Problem Report attached as Attachment 3;
(ii) unauthorised access to the [**] in the possession of Licensee; or
(iii) [**]
6.2 Licensee shall inform Digimarc within thirty (30) days after the end of each calendar quarter during the Term of all improvements relating to (i) Digital Watermarks [**]; (ii) [**] Digital Watermarks [**] (iii) [**] Digital Watermarks [**] and (iv) any other part of the CDS, which improvements Licensee has made, or caused or permitted to be made, as a result of knowledge of Digimarc Confidential Information. The first such information shall be provided to Digimarc within thirty (30) days after the Effective Date and shall cover improvements made from the date Licensee first learned of the Digimarc Confidential Information. Following the provision of the information under this clause 6.2, Licensee shall provide to Digimarc within a reasonable period of time following request, the Technical Information for those improvements requested by Digimarc in writing.
6.3 Licensee hereby grants to Digimarc a royalty-free, non-exclusive, sub-licenseable worldwide license to use the improvements described in clause 6.2 and in any patents thereon owned or otherwise licenseable by Licensee.
6.4 Such license shall continue until this Agreement expires or is terminated, or until Licensee has no further rights to Digimarc IPR, whichever occurs last.
6.5 For greater certainty, the obligations set out in clauses 6.2, 6.3, and 6.4 shall not apply to any such improvement which the Licensee can demonstrate would have been made irrespective of knowledge of the Digimarc Confidential Information.
6.6 Licensee shall, as directed by [**], cooperate fully with [**] and/or Digimarc in all matters concerning testing of [**] to confirm that they pass the Verification Tests.
7. REPRESENTATIONS AND WARRANTIES OF DIGIMARC.
7.1 General - Digimarc represents, warrants and undertakes to Licensee that from and after the Effective Date:
(a) the Services provided under this Agreement will be of professional quality conforming to generally accepted practices for like services and will be performed at all times in a timely and cost effective manner and, for greater certainty Digimarc shall employ the standard of care in performing the Services that would be expected of an [**] of the same or similar type as the [**] which comprises the [**];
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(b) Digimarc is duly incorporated and organized and is validly subsisting under the laws of the State of Delaware, U.S.A. or some other state in the United States with full corporate power and authority to enter into this Agreement;
(c) to the best of its knowledge, neither this Agreement nor the Services will contravene, breach, or result in any default under any agreement, permit, by-law, or law or regulation to which Digimarc is subject or by which it is bound including, for greater certainty any laws or regulations in effect in the United States governing export;
(d) this Agreement when executed and delivered by Digimarc shall constitute a valid and binding agreement with Digimarc enforceable against Digimarc according to its terms; and
(e) Digimarc will at all material times have the right to grant the licenses to the Digimarc IPR as required by this Agreement.
7.2 Digimarc represents, warrants and undertakes to Licensee that:
(a) [**] provided to Licensee hereunder will, for a period of one hundred eighty (180) days following the date on which the production of the [**] first commences, meet the specifications for that version of [**] accepted by [**];
(b) until the last day of the Term, [**]; and
(c) incorporated as part of its installation and integration practices and procedures are those measures and security procedures commercially and reasonably available on the date for delivery of a component of [**] to search for, detect and eliminate software viruses in [**] that could interfere with the use of [**] or corrupt, interfere with or damage any data;
(d) [**] shall contain no lock, clock, timer, counter, copy protection feature, replication device or intentional defects (including but not limited to viruses or worms as such terms are commonly used in the computer industry), CPU serial number reference, or other device which might:
(i) lock, disable or erase [**] or any data which is loaded on [**] so as to prevent full use of [**] by authorized persons; or
(ii) require action or intervention by Digimarc or any other person to allow properly trained and authorized persons to use [**];
(e) the source code for [**] will support the year 2000 and neither performance nor functionality will be affected by dates prior to, during and after the year 2000, and, for greater certainty, the [**] will switch to 1 January 2000 on 1 January 2000, and the year 2000 will be recognized as a leap year.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
7.3 If [**] fails to meet the relevant Specifications then Digimarc shall, within thirty (30) days after receipt of written notice of the failure from Licensee, on the form attached as Attachment 3, rectify the failure and provide a [**] to Licensee.
8. REPRESENTATIONS AND WARRANTIES OF LICENSEE
8.1 Licensee represents and warrants to Digimarc that:
(a) Licensee has full power and authority to enter into this Agreement; and
(b) this Agreement when executed and delivered by Licensee shall constitute a valid, binding and enforceable obligation of Licensee.
8.2 Licensee makes no representations, warranties or undertakings that Licensee has any right to grant the licenses required to be granted by clause 6.3 and Digimarc shall be solely responsible for determining that such improvements are suitable for the intended use and for the consequences of any use of the same whether by Digimarc or others, and Licensee and hereby disclaims all liability in connection therewith.
9. CONFIDENTIALITY
9.1 Except as otherwise expressly permitted by this Agreement, a Recipient shall not use, reproduce or disclose the Confidential Information of the Discloser for any purpose other than as reasonably necessary to comply with its obligations under this Agreement or to exercise any rights or licenses granted to it under or pursuant to this Agreement.
9.2 The Recipient shall protect the Confidential Information of the Discloser from disclosure by using the same degree of care, which shall be no less than a reasonable degree of care, as the Recipient uses to protect its own confidential information.
9.3 On written request from the Discloser, the Recipient shall return, or certify the destruction of, all originals and copies of the Disclosers Confidential Information in the Recipients possession or control which the Recipient does not need to retain in order to perform any obligations imposed, or exercise any rights acquired, by this Agreement.
9.4 A Recipient may, on a need to know basis, and only for the purposes described in clause 9.1, give the other partys Confidential Information to the Recipients employees or authorized subcontractors provided that such employee or subcontractor shall have entered into a non-disclosure agreement in respect of such Confidential Information in favour of the Discloser on terms materially similar to the provisions of this clause 9.
9.5 The obligations set out in this clause 9 will not apply to any Confidential Information that:
(a) is or becomes publicly available other than through the fault of the Recipient;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(b) was known to the Recipient prior to disclosure as shown by documentation sufficient to establish such knowledge;
(c) was or is lawfully disclosed to the Recipient by a third party who did not breach any obligation of confidence by such disclosure and who made the disclosure without restriction on further disclosure all of which is shown by documentation sufficient to establish same; or
(d) is required by law to be disclosed provided, however, that the Recipient shall first give written notice to the Discloser before the disclosure so that the Discloser may seek an appropriate protective order.
Notwithstanding the foregoing, the fact that Confidential Information, or any part thereof, can be linked together by a search of publications and other information, followed by a selection of a series of such items of knowledge from unconnected sources, and fitting together those items of knowledge so as to duplicate or recreate any item of Confidential Information, shall not be deemed to cause the Confidential Information, or any part thereof, to be included within exceptions (a), (b) or (c), above.
9.6 The obligations of the parties under this clause 9 will survive the Term or sooner termination of this Agreement and will remain in full force and effect regardless of the cause of any termination.
9.7 Nothing in this Agreement shall be construed to require Licensee to disclose any information which is confidential to a third party including for greater certainty a Licensed [**].
10. INTELLECTUAL PROPERTY INDEMNIFICATION
10.1 Licensee shall provide Digimarc with prompt written notice of any claim, demand or action against Licensee based on an allegation that the Digimarc IPR or any part thereof, infringes any Intellectual Property Right of any person (referred to below as a Claim).
10.2 Subject to the limitations set out in clauses 10.3 to 10.7 inclusive, Digimarc shall, at its own expense:
(a) negotiate the resolution of any such Claim;
(b) pay all costs associated with the Claim; and
(c) defend any action based on the Claim.
10.3 Licensee shall, at Digimarcs expense, comply with all reasonable requests by Digimarc for assistance from Licensee in connection with the settlement or defence of the Claim.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
10.4 Notwithstanding any other provision of this Agreement to the contrary, but subject to the limitations in this clause 10, Digimarc shall indemnify Licensee against and save Licensee harmless from all loss, costs, liabilities including an award of damages, and expenses, including legal fees, arising from each Claim first notified to Digimarc prior to 31 December [**]. The obligation set out in this clause 10 shall not apply in respect of any settlement made by Licensee without the consent of Digimarc.
10.5 The liability of Digimarc under clause 10.4 of this Agreement and under the equivalent clause of every other licence or consulting agreement entered into between Digimarc and [**] and [**] pursuant to the provisions of the [**] Agreement will not exceed the Indemnity Limit as defined in clause 10.6 below.
10.6 The Indemnity Limit shall be [**], or such higher amount as notified by Digimarc from time to time.
10.7 For the purposes of clauses 10.2 through 10.6 inclusive, Claim shall mean any Claim, other than a Claim for patent infringement which Digimarc can demonstrate occurred without Digimarc acting recklessly or negligently.
11. TERM AND TERMINATION
11.1 This Agreement will take effect on the Effective Date and will remain in force throughout the Term unless sooner terminated as provided herein.
11.2 Either party may terminate this Agreement if the other party breaches any of its obligations under this Agreement and fails to remedy such breach within thirty (30) days after receiving written notice of such breach from the other party.
11.3 Upon termination of this Agreement:
(a) all rights granted to Licensee under this Agreement will immediately terminate. No interest in any such rights will thereafter remain with Licensee, except that [**], but no further [**] Licensee shall be permitted; and
(b) each party shall return, or certify the destruction of, to the Discloser, all originals and copies of the Disclosers Confidential Information in the partys possession or control which the party does not need to retain in order to exercise any rights acquired by this Agreement.
11.4 No termination of this Agreement will in any manner release, or be construed as releasing, any party from any liability arising out of or in connection with that partys breach of or failure to perform any covenant, duty or obligation contained herein prior to the date of such termination.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
11.5 Upon termination of the [**] Agreement by Digimarc for cause, the rights of Licensee hereunder to use the Digimarc IPR shall be deemed to be restricted to the [**] as of the date of such termination.
11.6 Termination of the license between Digimarc and [**] shall automatically act to terminate this Agreement.
12. DISPUTE RESOLUTION
12.1 Any Dispute (as defined in the Arbitration Agreement) shall be finally settled by arbitration in accordance with the Arbitration Agreement.
12.2 Unless otherwise agreed between the parties or unless the subject matter of the dispute resolution proceedings is a partys right to terminate this Agreement, the Services shall continue during the dispute resolution proceedings and payments due to Digimarc shall not be withheld on account of such proceedings unless that particular services or payment is the subject matter of the proceedings. Notwithstanding the foregoing, Licensee may in its sole discretion instruct Digimarc to continue to perform such services which are the subject matter of the proceedings and Digimarc shall act in accordance with those instructions, subject to payment under clause 4.1.
13. MISCELLANEOUS PROVISIONS
13.1 Remedies Cumulative - Except as otherwise expressly set out in this Agreement:
(a) each and every right, power and remedy of a party will be considered to be cumulative with and in addition to any other right, power and remedy which such party may have at law or in equity in the event of breach of any of the terms of this Agreement;
(b) the exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party; and
(c) a party terminating this Agreement in accordance with the provisions of the Termination clause will have no liability or obligation to the other as a result of or with respect to the termination.
13.2 All notices under this Agreement shall be delivered by fax, or recognized international courier service. The notice shall be deemed effective as of the date of delivery to the address of the party specified below as evidenced by a delivery receipt or the addressees registry of incoming correspondence. Unless otherwise expressly set out in this Agreement, all notices to a party will be sent to the partys authorized representative identified below and all notices from a party will be sent by the partys authorized representative identified below.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
13.3 Any notice to Licensee shall be sent to both of, and any notice from Licensee shall be sent by either:
Name1 |
|
Name2 |
Address1 |
|
Address2 |
13.4 Any notice to Digimarc shall be sent to both of, and any notice from Digimarc shall be sent by either:
Mr. Robert Chamness |
|
Mr. Scott Carr |
Vice President and General Counsel |
|
President |
Digimarc Corporation |
|
Digimarc Watermarking Solutions |
9405 SW Gemini Drive |
|
9405 SW Gemini Drive |
Beaverton, OR 97008 |
|
Beaverton, OR 97008 |
Fax: (503) 469-4777 |
|
Fax: (503) 469-4777 |
13.5 A copy of every notice sent by either party shall be sent to: [**]
13.6 A party may change its address for notice by notice to the other party in accordance with the foregoing provisions.
13.7 Severability. If any part of this Agreement is held by an arbitral tribunal appointed pursuant to the Arbitration Agreement or other competent authority to be void or unenforceable, the parties agree that such determination will not result in the nullity or unenforceability of the remaining parts of this Agreement, which will continue in force to the fullest extent permitted by law. The parties further agree to replace such void or unenforceable part of this Agreement with a valid and enforceable provision that will achieve, to the extent legally permissible, the economic, business and other purposes of the void or unenforceable part.
13.8 Counterparts. This Agreement may be executed in separate counterparts, and by facsimile, each of which will be deemed an original, and when executed, separately or together, will constitute a single original instrument, effective in the same manner as if the parties had executed one and the same instrument.
13.9 Entire Agreement . This Agreement is intended by the parties to be the final expression of their agreement and constitutes and embodies the entire agreement and understanding between the parties hereto and constitutes a complete and exclusive statement of the terms and conditions thereof, and will supersede any and all prior correspondence, conversations, negotiations, agreements or understandings relating to the same subject matter.
13.10 Amendments. No change in, modification of or addition to the terms and conditions contained herein will be valid as between the parties unless set forth in a writing that is
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
signed by an authorized representative of each of the parties and which specifically states that it constitutes an amendment to this Agreement.
13.11 Waiver. No waiver of any term, provision, or condition of this Agreement, will be effective unless in a written document signed by the waiving party and no such waiver in any one or more instances, will be deemed to be, or be construed as, a further or continuing waiver of that term, provision or condition or any other term, provision or condition of this Agreement.
13.12 Assignment and Successors. This Agreement may not be assigned by Licensee without Digimarcs consent, which consent shall not be unreasonably withheld or delayed. This Agreement and all of its terms, conditions and covenants are intended to be fully effective and binding, to the extent permitted by law, on the successors and permitted assigns of the parties hereto.
13.13 Captions. Captions are provided in this Agreement for convenience only and they form no part, and are not to serve as a basis for interpretation or construction, of this Agreement, nor as evidence of the intention of the parties hereto.
13.14 Disclaimer of Agency. Nothing contained in this Agreement is intended or will be construed so as to constitute the parties to this Agreement as partners or joint venturers or as agents of each other. Neither party will have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other party or to bind any other party in any contract, agreement or undertaking with any third party. No employee of a party shall be deemed or considered to be an employee of the other party or of both parties.
13.15 Publicity. The parties agree that from time-to-time it will be beneficial to both parties to issue press releases and other public announcements concerning benefits arising from the CDS. Each party agrees to submit for approval by the other party any press release that involves the other party, which approval shall not unreasonably be withheld.
13.16 Effectiveness. This Agreement shall not be effective until it is signed by both of the parties.
13.17 Ambiguities. Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement.
13.18 Survival. All clauses of this Agreement which expressly or by implication are intended to survive the termination of this Agreement will do so and, for greater certainty and notwithstanding any provision in this Agreement to the contrary, the provisions of clause 2.9, 4.2, 4.3, 6.1, 6.3, 6.4, 7.2(b), 9, 10, 12 and 13 of this Agreement shall survive termination of this Agreement by either party for any reason.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IN WITNESS WHEREOF , this Agreement has been executed and delivered by the parties hereto as of the Effective Date.
DIGIMARC CORPORATION |
<Licensee> |
|||
|
|
|||
|
|
|||
By: |
|
|
By: |
|
Name: |
|
|
Name: |
|
Title: |
|
|
Title: |
|
Date: |
|
|
Date: |
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 1
[**]
The [**] will cause the following [**] to take place:
(a) [**]
(b) [**].
(c) [**] <<a date TBD>> [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 2
DRAFT OPINION OF COUNSEL
Digimarc Corporation
9405 SW Gemini Drive
Beaverton, OR 97062
USA
Attention:
President and CEO
Dear:
In connection with your proposal to grant a license to <name of Licensee> to use the Counterfeit Deterrence System and for no other purpose, we confirm that:
(a) each provision of this Agreement is valid and enforceable against <name of Licensee> under the laws of <name of jurisdiction>; and
(b) none of the [**] described below, at the time of writing, contravenes any law, regulation, policy, principle, or doctrine in effect in the jurisdiction of the <principal place of business/head office> of <name of Licensee>.
[**]
Yours truly,
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 3
PROBLEM REPORT
Each problem report will contain all information necessary to reproduce or demonstrate the occurrence of the problem. Problem reports will be in English and will be delivered electronically in a format to be provided by Digimarc.
Problem reports will contain:
· Date problem was encountered
· Detailed description of the problem, including the frequency with which the problem occurs
· Name and version number of the program / system component that exhibits the problem
· Step by step instructions to reproduce the problem
· All data files required to reproduce the problem
· [**]Manufacturer and Model
· CPU type and speed
· Amount of memory
· Operating System and Version
· Disk Configuration (number of drives, total space per drive, free space per drive)
· Display Adapter Model, Resolution, Number of colors
· Peripheral configuration (where applicable)[**]TWAIN driver and version number
· [**]
· Severity of problem
· Contact information for person to contact for further information (name, phone number, FAX number, email address)
Licensee agrees to work with Digimarc to provide reasonable additional information and perform reasonable additional tests, as requested by Digimarc, to assist Digimarc in resolution of the problem.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 4
PAYMENT FOR SERVICES
Digimarc shall bill Licensee for Services in one hour increments at the following hourly rates:
Technical/Design Consultant |
|
[**] |
Senior Engineer |
|
[**] |
R&D/Engineering Executive |
|
[**] |
Project Manager |
|
[**] |
Administrator/Scheduler |
|
[**] |
Fees for Services will be invoiced on the earlier of 1) the last day of the month or 2) the completion of the Services. Invoices are due thirty (30) days from the date of receipt of a correct invoice. A late charge of 1.5% per month will be charged on any late payments. All fees are due and payable in US funds.
Licensee will reimburse Digimarc for all out-of-pocket expenses reasonably and necessarily incurred in providing the Services. Expenses will be itemized and reported by category. Out-of-pocket expenses will not be marked up by Digimarc. Costs include, but are not limited to, reasonable travel and lodging expenses, telephone and fax charges, postage and overnight deliveries, and charges for rental equipment or materials purchased specifically to be used in providing the Service. All invoices for out-of-pocket expenses will be issued monthly in arrears and are due thirty (30) days from the date of receipt of a correct invoice. Supporting receipts and vouchers will be available for review at Digimarcs offices. A late charge of 1.5% per month will be charged on any late payments. Payments will additionally include Value Added taxes and other tariffs and fees that may be imposed by any government other than the United States of America.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 5
[**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 6
IDENTIFICATION OF [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 7
TRAINING
1.0 |
|
As part of the [**], Digimarc shall develop a program of training acceptable to the [**] Project Director(as defined in the [**] Agreement) in the [**] |
|
|
|
2.0 |
|
Digimarc shall deliver the Training as follows: |
|
|
|
2.1 |
|
Digimarc shall provide the Training to up to two (2) people simultaneously. The trainees will be experienced in digital design system operation. |
|
|
|
2.2 |
|
Digimarc shall conduct the Training at the facilities of Licensee or, at the request of Licensee , at Digimarcs facilities or at some other place agreed between Digimarc and Licensee. |
|
|
|
2.3 |
|
Digimarc shall give Licensee reasonable notice concerning the equipment which Digimarc will require in order to conduct the Training. Licensee shall provide all such equipment at its own expense. If the parties are unable to agree on the equipment to be provided either party may refer the matter for decision to the DLA Contract Authority (as defined in the [**] Agreement). |
|
|
|
2.4 |
|
Digimarc shall conduct the Training using the [**] |
|
|
|
2.5 |
|
Digimarc shall provide a training manual in English to every trainee. Any translation or interpretation which the trainees may require will be provided by Licensee at its own expense. |
|
|
|
2.6 |
|
Digimarc shall provide each trainee with a certificate of training at the completion of the Training session. |
|
|
|
2.7 |
|
Digimarc shall conduct the Training in English. |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE M
ESCROW AGREEMENT
DATED:
Between:
(1) DIGIMARC CORPORATION whose head office is at One Centerpointe Drive, Suite 500, Lake Oswego, Oregon. U.S.A. 97035-8615 (Digimarc);
(2) [**]
(3) [**] wh ose registered office is at [**]
Each of the parties to this Agreement acknowledges that the considerations for their respective undertakings given under it are the undertakings given under it by each of the other parties.
It is agreed that:
1. Definitions
In this Agreement the following terms shall have the following meanings:
1.1 Arbitration Agreement means the Arbitration Agreement entered into between the parties and others effective 1 January 1999.
1.2 Business Day means a day on which each of [**], Digimarc, and [**] is open for business at their respective addresses noted above;
1.3 Intellectual Property Rights means copyright, trade secret, patent, and all other rights of a similar nature;
1.4 Licence Agreement means the Counterfeit Deterrence System Development and License Agreement entered into between Digimarc and [**], effective 1 January 1999.
1.5 Material means the Escrowed Materials as that term is defined in the Licence Agreement; and
1.6 Technology means the CDS Technology as defined in the Licence Agreement.
2. Owners Duties and Warranties
2.1 Digimarc shall:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.1.1 deliver a copy of the Material to [**] within thirty (30) days of the date of this Agreement;
2.1.2 make available to [**] at Digimarcs premises a copy of the Material in accordance with its obligations under Clause 8.8 of the Licence Agreement; and
2.1. 3 deliver to [**] a replacement copy of the Material within twenty (20) Business Days of receipt of a notice served upon it by [**] under the provisions of Clause 4.1.5.
2.2 Digimarc warrants to [**] that Digimarc has sufficient rights in the Intellectual Property Rights in the Material to enter into this Agreement, and that it has authority to enter into this Agreement.
3. [**] Responsibilities
It shall be the responsibility of [**] to notify [**] of any change to the Technology that necessitates a replacement deposit of the Material.
4. [**]s Duties
4.1 [**] shall:
4.1.1 hold the Material in a safe and secure environment;
4.1.2 notify Digimarc and [**] of the receipt of any copy of the Material;
4.1.3 in accordance with the terms of Clause 9 perform the Verification Process from time to time;
4.1.4 at all times retain a copy of the latest verified deposit of the Material;
4.1.5 notify Digimarc and [**] if it becomes aware at any time during the term of this Agreement that the copy of the Material held by it has been lost, damaged or destroyed; and
4.1.6 upon receipt and verification of a new version of the Material, return all prior versions of the Material to Digimarc with ten (10) Business Days.
4.2 [**] shall not be responsible for procuring the delivery of the Material in the event of failure by Digimarc to deliver it.
5. Payment
[**]s fees are payable in accordance with Schedule 1.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
6. Release Events
6.1 For the purposes of this Agreement any of the following events shall be considered to be a Release Event:
(a) the date on which the license referred to in Clause 8.4 of the Licence Agreement takes effect in accordance with Clause 8.5 of that Agreement;
(b) the date on which the license referred to in Clause 8.6 of the Licence Agreement takes effect.
6.2 [**] must notify [**] of the occurrence of a Release Event by delivering to [**] a statutory or notarized declaration (the Declaration) made by an officer of [**] attesting that such event has occurred and that the Licence Agreement was still valid and effective up to the occurrence of such event and exhibiting:
6.2.1 such documentation in support of the Declaration as [**] shall reasonably require; and
6.2.2 a copy of the Licence Agreement.
6.3 Upon receipt of a Declaration from [**] claiming a Release Event under Clause 6.1:
6.3.1 [**] shall send a copy of the Declaration to Digimarc by courier and fax; and
6.3.2 unless within fourteen (14) days after the date of delivery Digimarc delivers to [**] a counter-notice signed by a duly authorized officer of Digimarc stating that no such Release Event has occurred
then [**] will release the Material to an authorized officer of [**] upon receipt of the release fee stated in Schedule 1.
6.4 Where there is any dispute as to the occurrence of any of the events set out in Clause 6.1, such dispute will be referred at the request of either Digimarc or [**] to the Managing Director for the time being of [**] (or the equivalent officer of any new custodian appointed pursuant to Clause 11.2 or 11.3) for the appointment of an expert who shall give a decision on the matter within fourteen (14) days of the date of referral or as soon as practicable thereafter. The experts decision shall be final and binding as between Digimarc and [**] except in the case of manifest error.
6.5 If the experts decision is that a Release Event has occurred, [**] shall immediately release the Material to an authorized officer of [**] upon receipt of the release fee stated in Schedule 1.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
7. Confidentiality
7.1 The Material shall remain the confidential property of Digimarc and in the event that [**] provides a copy of the Material to [**], [**] shall be permitted to use and sublicence the Material only in accordance with the terms set forth in the License Agreement.
7.2 [**] agrees to maintain all information and/or documentation coming into its possession or to its knowledge under this Agreement in strictest confidence and secrecy. [**] further agrees not to make use of such information and/or documentation other than for the purposes of this Agreement and will not disclose or release it other than in accordance with the terms of this Agreement.
7.3 Termination of this Agreement will not relieve [**] or its employees, or [**] or its employees, from the obligations of confidentiality contained in this Clause 7.
8. Intellectual Property Rights
The release of the Material to [**] will not act as an assignment or license of any Intellectual Property Rights that Digimarc possesses in the Material except as specifically provided in the Licence Agreement.
9. Verification
9.1 Subject to the provisions of Clauses 9.2 and 9.3, [**] shall bear no obligation or responsibility to any person, firm, company or entity whatsoever to determine the existence, relevance, completeness, accuracy, effectiveness or any other aspect of the Material.
9.2 Upon the Material being lodged with [**] from time to time under Clause 2.1, [**] shall perform tests in accordance with its standard verification service applying from time to time and shall provide a copy of the test report to [**] and Digimarc. Additionally, at [**] request and expense, [**] shall perform the Verification Process detailed in clause 9.3 below.
9.3 Verification Process. [**] shall inspect, audit and verify any or all of the Material for accuracy, completeness and sufficiency. Such verification process may include, at [**]s option, assembling and/or compiling the source code into executable object code. Digimarc agrees to make reasonably available, at its standard consulting rates as in effect from time to time, technical and support personnel reasonably necessary for [**] to perform verification of the Material, and further agrees to give [**] reasonable access to Digimarcs facilities, including its computer systems, for the purpose of such verification at no additional charge. Digimarc hereby grants [**] permission to release to [**] directory lists and/or tables of contents of computer media, manuals, and other materials comprising the Material. Digimarc and [**] shall be entitled to have a representative present at all times to observe such verification by [**]. Any report prepared by [**] shall be provided to all parties hereto.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
10. [**]s Liability
10.1 [**] shall not be liable for any loss caused to Digimarc or [**] either jointly or severally except for loss of or damage to the Material to the extent that such loss or damage is caused by the negligent acts or omissions of [**], its employees, agents or sub-contractors and in such event [**]s total liability in respect of all claims arising under or by virtue of this Agreement shall not (except in the case of claims for personal injury or death) exceed the sum of five hundred thousand pounds (£500,000).
10.2 [**] shall in no circumstances be liable to Digimarc or [**] for indirect or consequential loss of any nature whatsoever whether for loss of profit, loss of business or otherwise.
10.3 [**] shall be protected in acting upon any written request, waiver, consent, receipt or other document furnished to it pursuant to this Agreement, not only in assuming its due execution and the validity and effectiveness of its provisions but also as to the truth and acceptability of any information contained in it, which [**] in good faith believes to be genuine and what it purports to be.
11. Termination
11.1 [**] may terminate this Agreement after failure by [**] to comply with a 30 day written notice from [**] to pay any outstanding fee.
11.2 [**] may terminate this Agreement by giving sixty (60) days written notice to Digimarc and [**]. In that event Digimarc and [**] shall appoint a mutually acceptable new custodian on terms similar to those contained in this Agreement.
11.3 If a new custodian is not appointed within 30 days of delivery of any notice issued by [**] in accordance with the provisions of Clause 11.2, Digimarc or [**] shall be entitled to request the President for the time being of the British Computer Society to appoint a suitable new custodian upon such terms and conditions as he shall require. Such appointment shall be final and binding on all parties.
11.4 If the rights of all parties to use the Technology under or pursuant to the Licence Agreement have expired or have been lawfully terminated this Agreement will automatically terminate on the same date.
11.5 [**] may terminate this Agreement at any time by giving written notice to Digimarc and [**].
11.6 Digimarc may only terminate this Agreement with the written consent of [**].
11.7 This Agreement shall terminate upon release of the Material to [**] in accordance with Clause 6.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
11.8 Upon termination under the provisions of Clauses 11.4, 11.5 or 11.6 [**] will deliver the Material to Digimarc. If [**] is unable to trace Digimarc, [**] will destroy the Material. Upon termination under the provisions of Clause 11.2 [**] will deliver the Material to the new custodian agreed under Clause 11.2 or appointed under Clause 11.3.
11.9 Upon termination under the provisions of Clause 11.1 the Material will be available for collection by Digimarc from [**] for thirty (30) days from the date of termination. After such thirty (30) day period [**] will destroy the Material.
12. General
12.1 This Agreement shall be governed by and construed in accordance with the laws of England to the exclusion of its rules of conflicts of laws.
12.2 This Agreement represents the whole agreement relating to the escrow arrangements between the parties for the Material and supersedes all prior arrangements, negotiations and undertakings.
12.3 Except as otherwise provided, all notices to be given to the parties under this Agreement shall be served by hand, by internationally-recognized courier service, or by registered post (return receipt requested), addressed to the signatories hereto at the addresses given above or, for companies based in the UK, at the registered office. Facsimile may not be used except as a supplement to one of the foregoing. Notices shall be deemed to have been duly given or made when delivered, as evidenced by delivery receipt or customary courier delivery notification.
12.4 Any Dispute, as the term is defined in the Arbitration Agreement, shall be finally settled by arbitration in accordance with the Arbitration Agreement.
Signed on behalf of
[**]
|
|
|
Signature |
|
|
Name: |
|
|
Title: |
|
(Authorized Signatory) |
Date |
|
|
|
|
|
|
|
|
|
|
|
Signature |
|
|
Name: |
|
|
Title: |
|
(Authorized Signatory) |
Date |
|
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DIGIMARC CORPORATION
Signature |
|
|
|
Name: |
Bruce Davis |
|
|
Title: |
President & CEO |
|
(Authorized Signatory) |
Date: |
|
|
|
|
|
|
|
[**] ESCROW INTERNATIONAL LIMITED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature |
|
|
|
Name: |
|
|
|
Title: |
|
(Authorized Signatory) |
|
Date: |
|
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE 1
[**]s Fees (St£)
DESCRIPTION |
|
FEE |
|
DIGIMARC |
|
[**] |
|
|||
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Initial Fee |
|
£ |
700 |
|
NIL |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
2 |
|
Annual Fee (payable on completion of this Agreement and on each anniversary thereafter) |
|
£ |
385 |
|
NIL |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
3 |
|
Update Fee (per update after the first 4 updates per annum) |
|
£ |
100 |
|
NIL |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
4 |
|
Storage Fee (an additional annual fee may be payable for deposits in excess of one cubic foot) |
|
TBA |
|
NIL |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
Liability Fee (£100 per £500,000 of liability exceeding £500,000, per annum) |
|
Not Applicable |
|
NIL |
|
Not Applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
Release Fee (plus [**]s reasonable expenses) |
|
£ |
500 |
|
NIL |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
7. |
|
Verification Fee (plus [**]s reasonable expenses) |
|
£ |
700 per day |
|
NIL |
|
100 |
% |
|
|
1. |
|
All fees are subject to VAT where applicable* |
|
|
|
|
|
|
|
2. |
|
All fees are reviewed by [**] from time to time |
|
|
|
|
|
* only applicable to countries within the EU.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE N
PROGRESS REPORTS AND PROJECT REVIEWS
1. TASK STATUS
Within fifteen (15) Business Days after the end of every calendar month [**] Digimarc shall deliver reports to the [**] Project Director in accordance with Sections 8 to 10 herein as agreed in the current Program Work Plan.
2. PROBLEM REPORT
Digimarc shall report to the [**] Project Director on problems that impact technical or schedule performance. Each problem will be reported in a problem list that includes the following information:
Problem title
Date reported
Task or Service affected
Task or Service impact
Proposed corrective action
Current status
Date closed
Red Flag reports (see paragraph 7) will be included on the problem list. A problem will remain on the list until closed or otherwise resolved.
3. PROGRESS REVIEWS
Digimarc shall provide materials, information and documentation in support of progress review meetings with the [**] once every three (3) months on average throughout the period during which Phase [**] Services are being performed and will attend progress review meetings as requested by the [**] Project Director. The objective of each meeting is to review the: status of each major task and Service; status of deliverable items; [**] progress for each [**]; each parties proposed plans concerning [**] including intended outcome during the Term of this Agreement and during the period until the next meeting under this Schedule; [**]; a summary of the financial status; contractual and administrative matters; contract changes and amendments, as necessary; technical reports or data; market and user factors and marketing activities; and other topics as necessary and relevant.
Each meeting that Digimarc is requested to attend will last no more than 2 days unless otherwise agreed upon in advance. Attendees will include management, technical and administrative representatives from Digimarc and [**], including the parties respective Project Directors or suitable designees. To ensure meeting effectiveness, [**] will be limited to ten (10)
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
or fewer persons including any outside vendors or consultants deemed necessary by agreement of the parties respective Project Directors to be necessary to ensure an effective meeting.
In between the quarterly meetings described above, the technical representatives of Digimarc and [**] shall hold technical review meetings at least six (6) times per year or as otherwise agreed by the parties to review technical, and resource matters. Each such meeting will last no more than 2 days unless otherwise agreed upon in advance and will be held at a mutually agreeable date and location. At least half of the reviews will be held at Digimarcs facilities.Digimarc will provide a presentation for the [**] on development and [**] progress at least once per year if requested by the [**] Project Director.
4. AGENDA
An agenda will be prepared by Digimarc and sent to the [**] ten (10) days in advance of each progress review and technical review meeting for review and comment or approval.
5. MEETING MATERIALS
Progress review and technical review meeting materials will consist of power point presentations , technical data, marketing white papers, studies, technical specifications analyses and other reports. Meeting materials will be delivered to the [**].
6 REPORT
Within five (5) Business Days after the progress review or technical review meeting, Digimarc shall prepare and deliver to the [**] a report summarizing the essential topics discussed including the action items assigned during the meeting. Meeting materials will be appended to the report.
7. RED FLAG REPORT
Digimarc shall prepare and deliver to the [**] Project Director a Red Flag report when a problem requiring the immediate attention of [**] is required. Red Flag reports may be informative; e.g., a report about a [**] delinquency that will impact a critical version release date. They may also report on problems whose correction requires immediate consideration or action from [**] or another organization external to Digimarc. Red Flag reports on development or [**] problems will contain the following information:
· A summary describing the development or [**] problem and background information that may be necessary to understand the development or [**] problem.
· A description of the impact of the problem on the development project(s) or [**] plan(s).
· The date by which a resolution is required.
· A description of the recommended next action.
· The action requested of the [**] Project Director.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
8. PROJECT REPORTING GENERAL
Monthly activities reports will be provided that include a report for each of the [**] areas: Development, Maintenance, [**] and Program Wide.
a. DEVELOPMENT DETAIL
1. Project Objectives Statement of the objectives for the project
2. Major project risks or unknowns Project Directors view of the major risks and unknowns as of the current month
3. Accomplishments in the current month List of major tasks completed and milestones reached in the current month
4. Changes to plan Changes to the project plan made during the current month
5. Next months tasks and milestones List of the major tasks and the milestones that are expected to be reached in the next month
6. Current project Gantt chart Updated Gantt chart project with all project changes to date
7. Utilized resources List of staff utilized on the project during the current month
8. Monthly labor hours by type of labor Summary of labor hours by job class for the current month
9. Monthly Utilization Actual monthly Allowable Costs, forecast to end of scope of work, and comparison to estimated Allowable Costs projection.
b. MAINTENANCE DETAIL
1. Project Objectives Statement of the objectives for the project
2. Major project risks or unknowns Project Directors view of the major risks and unknowns as of the current month
3. Accomplishments in the current month List of major tasks completed and milestones reached in the current month
4. Changes to plan Changes to the project plan made during the current month
5. Next months tasks and milestones List of the major tasks and the milestones that are expected to be reached in the next month
6. Current project Gantt chart Updated Gantt chart project with all project changes to date
7. Utilized resources List of staff utilized on the project during the current month
8. Monthly labor hours by type of labor Summary of labor hours by job class for the current month
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
9. Monthly Utilization Actual monthly Allowable Costs, forecast to end of scope of work, and comparison to estimated Allowable Costs projection.
c. [**] DETAIL
1. Project Objectives Statement of the objectives for the project
2. Major project risks or unknowns Digimarc Project Directors view of the major risks and unknowns as of the current month
3. Accomplishments in the current month List of major tasks completed in the current month
4. Changes to plan Changes to the project plan made during the current month
5. Next months tasks List of the major tasks that are expected to be accomplished in the next month
6. Utilized resources List of staff utilized on the project during the current month
7. Monthly labor hours by type of labor Summary of labor hours by job class for the current month
8. Monthly Utilization Actual monthly Allowable Costs, forecast to end of scope of work, and comparison to estimated Allowable Costs projection.
d. PROGRAM WIDE DETAIL
1. Project Objectives Statement of the objectives for the project
2. Accomplishments in the current month List of major tasks completed in the current month
3. Changes to plan Changes to the project plan made during the current month
4. Next months tasks List of the major tasks that are expected to be accomplished in the next month
5. Utilized resources List of staff utilized on the project during the current month
6. Monthly labor hours by type of labor Summary of labor hours by job class for the current month
7. Monthly Utilization Actual monthly Allowable Costs, forecast to end of scope of work, and comparison to estimated Allowable Costs projection.
9. PROJECT MANAGEMENT UPDATES
1. Digimarc and the [**] will conduct weekly project management updates to review progress on [**] plans and coordinate [**] work to be undertaken over the next period.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2. Digimarc will be responsible for the issuance of minutes for each project management update and also maintain a register of changes in process and approved.
3. Digimarc will update the [**] activity report once per month.
10. [**] REPORTS
1. Digimarc will provide [**] reports on the status of the [**] and related [**] twice per year in March and September. The [**] will reimburse to Digimarc the cost of providing additional [**] reports as requested by the [**] Project Director.
2. Digimarc will provide reports to the [**] on the specific [**] identified in the [**] Plans once per quarter if requested by the [**] Project Director.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE O
THIS SYSTEM SUPPORT SERVICES AGREEMENT (the Agreement) is made
BETWEEN
<name and address of licensee> (Licensee)
- AND -
DIGIMARC CORPORATION , a corporation incorporated under the laws of Oregon and having its head office at One Centerpointe, Suite 500 Drive, Lake Oswego, Oregon. U.S.A. 97035-8615 (Digimarc)
Licensee entered into one or more license agreements with Digimarc for the license of the [**] a counterfeit deterrence system (the CDS);
Licensee now wishes to engage Digimarc to maintain and support [**];
In consideration of these premises, the covenants set out in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are acknowledged by each of the parties, the parties agree as follows:
1. DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions - Whenever used in this Agreement, the following words and terms shall have the meanings set out below:
Arbitration Agreement means the Arbitration Agreement entered into between the parties and others effective 1 January 1999;
Agreement means these articles of agreement, including the Attachments, and those documents as specified or referenced in this Agreement as forming part of the Agreement, all as may be amended from time to time;
[**] Agreement means Counterfeit Deterrence System Development and License Agreement entered into between [**] and Digimarc effective 1 January 1999;
Business Day means a day on which both Licensee and Digimarc are open for business at their respective addresses noted above;
Confidential Information means information disclosed during the Term of this Agreement in any form which, if disclosed in tangible form, is labelled Confidential,
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Proprietary or with a similar legend, or if disclosed orally is information that by its nature would be understood to be confidential to the Discloser;
Core Hours means 7:00 a.m. to 7:00 p.m. Monday through Friday, United States Pacific time zone, excluding statutory holidays observed by Licensee at its Site;
Discloser means a party which has disclosed or otherwise made available its Confidential Information to the other party;
Effective Date means the date on which this Agreement is last signed, or the Effective Date of the License Agreement, whichever is later;
[**]
Hot-line means a single dedicated telephone line provided by Digimarc to Licensee for the reporting of problems with [**];
License Agreement means, collectively, all license agreements entered into between the parties pursuant to which Licensee acquired a license to use [**];
Person means any individual or other legal entity, including without limitation sole proprietorship, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, or a natural person in the capacity of trustee, executor, administrator or other legal representative;
Recipient means a party to which the Confidential Information of the other party has been disclosed or otherwise made available;
Services means the services described in clauses 2 and 3 below, or any of them;
Severity Level One Software Problem means a Software Problem which causes the [**] to cease operating or which causes the computer system running [**] to crash;
Severity Level Two Software Problem means a Software Problem which causes the [**] to cease operation in accordance with its Specifications or which produces substantially incorrect data;
Severity Level Three Software Problem means a Software Problem which is not a Severity Level Two Problem or a Severity Level One Problem;
Site means the [**] of Licensee at which a Software Problem is encountered;
Software Problem means a circumstance where [**] does not function in accordance with its Specifications, produces substantially incorrect data, or causes a computer running [**] to crash, or other problem with [**] and which can be reproduced by
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Digimarc, at Digimarcs facility, based on information provided to Digimarc by Licensee in a Software Problem Report;
Software Problem Report means a written report in the form attached as Attachment 1;
Specifications has the meaning given to it by the [**] Agreement;
System Documentation means the documentation for [**] provided by Digimarc to Licensee under a License Agreement;
Training Manual means the training manual which relates to the use of [**] provided by Digimarc to Licensee under a License Agreement; and
Work means the tasks that are required to be performed by Digimarc in order to comply with its obligations under this Agreement.
1.2 Interpretation - In this Agreement:
1.2.1 unless otherwise specified, all references to money amounts are to the currency of the United States of America;
1.2.2 the use of words in the singular or plural, or with a particular gender, shall not limit the scope or exclude the application of any provision of this Agreement to such Person or Persons or circumstances as the context otherwise permits;
1.2.3 whenever a provision of this Agreement requires an approval or consent by a party to this Agreement and notice of such approval or consent is not delivered within the applicable time, then the party shall be conclusively deemed to have withheld the consent or approval;
1.2.4 unless otherwise specified, the number of days within or following which any payment is to be made or act is to be done shall be interpreted to be continuous and shall be calculated by excluding the day on which the period commences and including the day which ends the period and by extending the period to the next Business Day if the last day of the period is not a Business Day;
1.2.5 unless otherwise specified, the order of precedence for interpreting this Agreement shall be:
(a) this Agreement, excluding the Attachments,
(b) the Attachments;
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
If this Agreement conflicts in substance with a License Agreement entered into between the parties, the License Agreement shall control;
1.2.6 for greater certainty, a party or representative to which this Agreement grants the right to make a decision or determination in the sole discretion of the party or representative is not required to act reasonably in making the decision or determination and no such decision or determination may be challenged by the other party under the Arbitration Agreement or otherwise;
1.2.7 the words includes or including will be construed without limitation to the generality of the preceding words;
1.2.8 a clause, Schedule or Attachment unless the context requires otherwise, is a reference to a clause, a Schedule or Attachment of, or a paragraph of a Schedule or Attachment of, this Agreement, as amended from time to time in accordance with this Agreement; and
1.2.9 any due date or time period prescribed by this Agreement may be changed by written agreement between the parties respective representatives identified in clauses 5.1 and 5.2.
1.3 Applicable Law - This Agreement shall be construed in accordance with the laws of England to the exclusion of its rules of conflicts of laws.
1.4 Attachments - The attachment to this Agreement, listed below, is an integral part of this Agreement:
Attachment 1 Software Problem Report
2. SCOPE OF THE WORK
2.1 Digimarc shall provide the Services described in this clause 2 as required to ensure that [**] will conform to and operate in accordance with the Specifications.
2.2 Problem Resolution. Digimarc shall resolve every Software Problem in [**] reported by Licensee as follows:
2.2.1 Digimarc shall provide and maintain in effect throughout the Term:
(a) a Hot-line which Licensee representative shall use to report Software Problems, and;
(b) a paging service by which Licensee can communicate with Digimarc when Licensee is unable to communicate with Digimarc using the Hot-line.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Licensee will follow-up each such communication with a Software Problem Report.
2.2.2 Both Digimarc and Licensee shall log each Software Problem reported by Licensee.
2.2.3 Upon receipt by Digimarc of a report from Licensee of a Software Problem, Digimarc shall respond as provided below in accordance with the level of severity of the Software Problem identified by Licensee. Digimarc may respond to the report of a Software Problem by telephone or in writing.
2.2.4 Digimarc shall file a Resolution Report with Licensee for each Software Problem reported by Licensee which will include a description of the cause of the Software Problem and the means by which the Software Problem was resolved.
2.2.5 Digimarc shall use its best efforts to respond to a Software Problem Report of a Severity Level One Software Problem made during Core Hours and resolve the identified Software Problem within two (2) Business Days of receipt of the Software Problem Report. The resolution of the Software Problem may include a work-around to the Software Problem acceptable to Licensee in the form of an amendment to [**] on an interim basis if a permanent resolution is provided within a further twenty (20) Business Days. If:
(a) Digimarc fails to provide a permanent resolution of the Software Problem within twenty (20) Business Days after Digimarc provides the work-around, or
(b) Digimarc fails to provide a work-around to the Software Problem within two (2) Business Days after receipt of a report from Licensee of the Software Problem,
Licensee may, at its option, reduce the monthly charge for the Services by [**] for each Business Day after the first Business Day which elapses until Digimarc provides the required temporary or permanent resolution to that Software Problem.
2.2.6 Digimarc shall use commercially reasonable efforts to respond to a Software Problem Report of a Severity Level Two Software Problem within ten (10) Business Days of receipt and resolve the identified Software Problem within a further ten (10) Business Days of receipt. If Digimarc fails to resolve the Software Problem within the twenty (20) Business Day period, Licensee may, at its option, designate the Software Problem as a Severity Level One Software Problem.
2.2.7 Digimarc will accept reports for Severity Level Three Software Problems and will consider them for resolution in a future release.
2.2.8 The period for resolution of any Software Problem identified under Clause 2.2.5 and 2.2.6 shall commence with the receipt by Digimarc of the information necessary to
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
reproduce the reported Software Problem if the resolution of that Problem requires such reproduction.
2.3 Application Support . Digimarc shall, using the Hotline, answer questions from Licensee related to the use of [**] and resolve problems with [**] which do not require changes to [**].
2.4 Documentation Updating . Digimarc shall update both the hard copy and the electronic versions of the Training Manuals as required to reflect changes in [**] which result from the provision by Digimarc of the Services.
2.5 Digimarc shall provide the Services during the Core Hours. If Licensee notifies Digimarc that the provision of the Services during Core Hours will have a noticeable impact on Licensees normal operations, Digimarc shall provide the Services outside of Core Hours at a time or times and for the charges to be agreed with Licensee.
2.6 Changes to the [**] other than changes to redress a Software Problem shall be made by Digimarc only at the direction of the DLA Contracting Authority, pursuant to the terms of the [**] Agreement.
2.7 All Services required to be provided as a result of :
(a) use by Licensee of [**] other than in accordance with the Training Manual supplied by Digimarc under a License Agreement; or
(b) failure of the computer system on which [**] is installed to operate in accordance with the applicable manufacturers specifications; will be for the account of Licensee.
3. [**] UPDATES
3.1 No Licensee shall be compelled to incorporate [**].
3.2 Digimarc shall continue to provide the Services to Licensee for the two (2) versions of [**] which immediately preceded the then current version of [**] or for all versions of [**] released within twenty-four (24) months of the date of issue of the [**], whichever is the greater, at no additional cost to Licensee.
4. PURCHASE PRICE AND PAYMENT
4.1 The fee for the Services is [**] for each year during the Term. Licensee shall pay the fee in equal monthly installments on or before the first day of the calendar month.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
4.2 Except as otherwise expressly provided in this Agreement, Licensee shall pay Digimarc all sales, use, goods and services or other similar taxes levied by any government in the United States or the country of Licensees principal place of business which Digimarc is obliged to collect and remit to such government(s) in connection with any amount paid by Licensee to Digimarc under this Agreement.
4.3 Digimarc is responsible for, and shall indemnify Licensee against, and hold Licensee harmless from, the payment of all taxes levied by any government on or in respect of Digimarcs income and any amounts required by law to be paid in respect of social benefits for Digimarcs employees relating to or arising out of the services performed under this Agreement by Digimarc. If required by law, Licensee shall deduct all such taxes and amounts from the amounts otherwise payable to Digimarc and remit them to the appropriate authorities.
4.4 Licensee may set off against any amount which Licensee owes Digimarc under or in connection with this Agreement any amount which Digimarc owes Licensee under or in connection with this Agreement, and vice versa.
5. SERVICES COORDINATION
5.1 Digimarc shall designate a responsible individual with adequate authority and competence as a services representative whose responsibilities, in addition to those expressly set out in this Agreement, shall be to serve as primary interface with Licensee.
5.2 Licensee shall designate a responsible individual with adequate authority and competence to serve as primary interface with Digimarc.
5.3 Either partys representative may from time to time appoint one or more Persons to represent him or her on prior written notice to the other partys representative.
5.4 Digimarc shall replace within a reasonable time under the circumstances any of its employees or authorized subcontractors engaged in fulfilling its obligations under this Agreement, including its services representative, whose removal is required by Licensee, provided that Licensee specifies reasonable cause for such removal in writing.
5.5 Digimarc represents that all personnel assigned to do the Work will be employees of Digimarc. Digimarc shall not engage any subcontractor to do any part of the work without first obtaining the prior written consent of Licensee, which consent will not unreasonably be withheld.
6. LICENSEES RESPONSIBILITIES
6.1 Unless otherwise expressly set out in this Agreement, Licensee shall respond in writing within ten (10) Business Days to every written request for consent required by this Agreement received from Digimarc.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
6.2 If Licensee is delayed in complying with any of its obligations under clause 6.1 for any reason not attributable to Digimarc, and such delay is the cause of a delay in the compliance by Digimarc with any of its obligations under this Agreement, then the time for completion and the deadlines dependent thereon will be extended automatically by one day for each day of delay by Licensee or such other period as may be agreed in writing between the parties respective representatives. If Digimarc reasonably incurs any costs as a result of the delay, other than a delay due to a force majeure event, such costs will, at Digimarcs option, be borne by Licensee. If the delay is due to a force majeure event, such costs shall be borne equally by Licensee and Digimarc. This clause 6.2 sets forth Digimarcs only remedy for a delay by Licensee in complying with such obligation.
7. INTELLECTUAL PROPERTY MATTERS
7.1 Licensee acknowledges that Digimarc is the owner of all changes to [**] made by Digimarc under this Agreement and all such changes shall be considered for all purposes of a License Agreement as forming part of [**] licensed thereunder.
8. REPRESENTATIONS AND WARRANTIES OF DIGIMARC
8.1 General - Digimarc represents, warrants and undertakes to Licensee that from and after the Effective Date:
(a) the Services will be of professional quality conforming to generally accepted software product development practices and will be performed at all times in a timely and cost effective manner and, for greater certainty Digimarc shall employ the standard of care in performing the work that would be expected of an [**] of the same or similar type as [**] which comprises the CDS Technology;
(b) Digimarc is duly incorporated and organized and is validly subsisting under the laws of the State of Oregon, U.S.A. or some other state in the United States with full corporate power and authority to enter into this Agreement;
(c) to the best of its knowledge, neither this Agreement nor the Services will contravene, breach, or result in any default under any agreement, permit, by-law, or law or regulation to which Digimarc is subject or by which it is bound including, for greater certainty any laws or regulations in effect in the United States governing export; and
(d) this Agreement when executed and delivered by Digimarc shall constitute a valid and binding agreement with Digimarc enforceable against Digimarc according to its terms.
9. REPRESENTATIONS AND WARRANTIES OF LICENSEE
9.1 Licensee represents and warrants to Digimarc that:
(a) Licensee has full power and authority to enter into this Agreement; and
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(b) this Agreement when executed and delivered by Licensee shall constitute a valid, binding and enforceable obligation of Licensee.
10. CONFIDENTIALITY
10.1 Except as otherwise expressly permitted by this Agreement, a Recipient shall not use, reproduce or disclose the Confidential Information of the Discloser for any purpose other than as reasonably necessary to comply with its obligations under this Agreement or to exercise any rights or licenses granted to it under or pursuant to this Agreement.
10.2 The Recipient shall protect the Confidential Information of the Discloser from disclosure by using the same degree of care, which shall be no less than a reasonable degree of care, as the Recipient uses to protect its own confidential information.
10.3 On written request from the Discloser, the Recipient shall return, or certify the destruction of, all originals and copies of the Disclosers Confidential Information in the Recipients possession or control which the Recipient does not need to retain in order to perform any obligations imposed, or exercise any rights acquired, by this Agreement.
10.4 A Recipient may, on a need to know basis, and only for the purposes described in clause 10.1, give the other partys Confidential Information to the Recipients employees, authorized subcontractors or representatives provided that such employee, subcontractor or representative shall have entered into a non-disclosure agreement in respect of such Confidential Information in favour of the Discloser on terms materially similar to the provisions of this clause 10.
10.5 The obligations set out in this clause 10 will not apply to any Confidential Information that:
(a) is or becomes publicly available other than through the fault of the Recipient;
(b) was known to the Recipient prior to disclosure as shown by documentation sufficient to establish such knowledge;
(c) was or is lawfully disclosed to the Recipient by a third party who did not breach any obligation of confidence by such disclosure and who made the disclosure without restriction on further disclosure all of which is shown by documentation sufficient to establish same; or
(d) is required by law to be disclosed provided, however, that the Recipient shall first give written notice to the Discloser before the disclosure so that the Discloser may seek an appropriate protective order.
The fact that Confidential Information, or any part thereof, can be linked together by a search of publications and other information, followed by a selection of a series of such items of
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
knowledge from unconnected sources, and fitting together those items of knowledge so as to duplicate or recreate any item of Confidential Information, shall not be deemed to cause the Confidential Information, or any part thereof, to be included within exceptions (a), (b) or (c), above.
10.6 Each party hereby consents to any court order sought by the other party to enjoin non-compliance, or to require compliance, by the party with any of the partys obligations under this clause 10.
10.7 Nothing in this Agreement shall be construed to require Licensee or any representative of Licensee to disclose any information which is confidential to a third party including for greater certainty an [**].
11. DISPUTE RESOLUTION
11.1 Any Dispute as the term is defined in the Arbitration Agreement shall be finally settled by Arbitration in accordance with the Arbitration Agreement.
11.2 Unless otherwise agreed between the parties or unless the subject matter of the dispute resolution proceedings is a partys right to terminate this Agreement, the Services shall continue during the dispute resolution proceedings and payments due to Digimarc shall not be withheld on account of such proceedings unless that particular Services or payment is the subject matter of the proceedings. In the latter case, Digimarc may suspend continued provision of the disputed Services until the dispute resolution proceeding is concluded unless Licensee instructs Digimarc to continue the provision of the disputed Services, in which case Digimarc shall act in accordance with such instructions, subject to payment of the fees due for such Services.
12. TERM
12.1 This Agreement shall take effect on the Effective Date and shall remain in force for one (1) year thereafter (the Term) unless sooner terminated as provided herein. [**] , Licensee may in its sole discretion renew the Agreement for one (1) or more successive one (1) year Terms on no less than sixty (60) days notice prior to the last day of a Term.
12.2 Either party may terminate this Agreement if the other party breaches any of its obligations under this Agreement and fails to remedy such breach within thirty (30) days after receiving written notice of such breach from the other party.
12.3 Upon termination of this Agreement each party shall return or certify the destruction of, to the Discloser, all originals and copies of the Disclosers Confidential Information in the partys possession or control which the party does not need to retain in order to exercise any rights acquired by this Agreement.
12.4 No termination of this Agreement will in any manner release, or be construed as releasing, any party from any liability arising out of or in connection with that partys breach of or
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
failure to perform any covenant, duty or obligation contained herein prior to the date of such termination.
13. FORCE MAJEURE
13.1 If the performance by either party of any of its obligations under this Agreement is prevented or delayed by any circumstance of force majeure (which shall mean fire, flood, earthquakes, war, riots, or insurrection) the party shall immediately notify the other party.
13.2 The time period within which the party delayed is obliged to perform its obligations will be delayed during the period such circumstance exists. During the period of delay the party delayed shall use its best efforts to make alternate arrangements satisfactory to the other party to avoid delay or resume performance.
14. NOTICES
14.1 All notices under this Agreement shall be delivered by fax, certified mail, return receipt requested, or recognized international courier service. The notice shall be deemed effective as of the date of delivery to the address of the party specified below as evidenced by a delivery receipt or the addressees registry of incoming correspondence. Unless otherwise expressly set out in this Agreement, all notices to a party will be sent to the partys authorized representative identified below and all notices from a party will be sent by the partys authorized representative identified below.
14.2 Any notice to DIGIMARC shall be sent to both of, and any notice from Digimarc shall be sent by either:
Mr. Bruce Davis
President and CEO
Digimarc Corporation
One Centerpointe Drive
Suite 500
Lake Oswego, Oregon 97035 USA
FAX: (503) 968-0219
Mr. William Y. Conwell
Klarquist, Sparkman,
Campbell,
Leigh & Whinston
121 SW Salmon Street
Suite 1600
Portland, Oregon 97204USA
FAX: (503) 228-9446
14.3 Any notice to Licensee shall be sent to both of, and any notice from Licensee shall be sent by:
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
TBD
TBD
14.4 A party may change its address for notice by notice to the other party in accordance with the provisions of this clause 14.
14.5 A copy of every notice sent by either party shall be sent to: [**]
15. MISCELLANEOUS PROVISIONS
15.1 Remedies Cumulative - Except as otherwise expressly set out in this Agreement:
(a) each and every right, power and remedy of a party will be considered to be cumulative with and in addition to any other right, power and remedy which such party may have at law or in equity in the event of breach of any of the terms of this Agreement;
(b) the exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party; and
(c) a party terminating this Agreement in accordance with the provisions of the Termination clause will have no liability or obligation to the other as a result of or with respect to the termination.
15.2 Severability - If any part of this Agreement is held by an arbitral tribunal appointed pursuant to the Arbitration Agreement or by any other competent authority to be void or unenforceable, the parties agree that such determination will not result in the nullity or unenforceability of the remaining parts of this Agreement, which will continue in force to the fullest extent permitted by law. The parties further agree to replace such void or unenforceable part of this Agreement with a valid and enforceable provision that will achieve, to the extent legally permissible, the economic, business and other purposes of the void or unenforceable part.
15.3 Counterparts . This Agreement may be executed in separate counterparts, and by facsimile, each of which will be deemed an original, and when executed, separately or together, will constitute a single original instrument, effective in the same manner as if the parties had executed one and the same instrument.
15.4 Entire Agreement . This Agreement is intended by the parties to be the final expression of their agreement and constitutes and embodies the entire agreement and understanding between the parties hereto and constitutes a complete and exclusive statement of the terms and conditions thereof, and will supersede any and all prior correspondence, conversations, negotiations, agreements or understandings between the parties relating to the same subject matter.
15.5 Amendments . No change in, modification of or addition to the terms and conditions contained herein will be valid as between the parties unless set forth in a writing that is signed by
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
an authorized representative of each party and which specifically states that it constitutes an amendment to this Agreement.
15.6 Waiver . No waiver of any term, provision, or condition of this Agreement will be effective unless in a written document signed by the waiving party and no such waiver in any one or more instances will be deemed to be, or be construed as, a further or continuing waiver of that term, provision or condition or any other term, provision or condition of this Agreement.
15.7 Assignment and Successors . This Agreement may not be assigned by Licensee without the prior written consent of the Digimarc, which consent may be withheld or given, with or without conditions at Digimarcs sole discretion. This Agreement and all of its terms, conditions, and covenants are intended to be fully effective and binding, to the extent permitted by law, on the successors and permitted assigns of the parties hereto.
15.8 Captions . Captions are provided in this Agreement for convenience only and they form no part, and are not to serve as a basis for interpretation, of this Agreement, nor as evidence of the intention of the parties.
15.9 Disclaimer of Agency . Nothing contained in this Agreement is intended or will be interpreted so as to constitute the parties to this Agreement as partners or joint venturers or as agents of each other. Neither party will have any express or implied right or authority to assume or create any obligations on behalf of or in the name of any other party or to bind any other party in any contract, agreement or undertaking with any third party. No employee of a party shall be deemed or considered to be an employee of the other party or of both parties.
15.10 Effectiveness . This Agreement shall be effective only after it is signed by both of the parties.
15.11 Ambiguities . Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement.
15.12 Survival. All clauses of this Agreement which expressly or by implication are intended to survive the termination of this Agreement will do so and, for greater certainty and notwithstanding any provision in this Agreement to the contrary, the provisions of clauses 4.2, 4.3, 4.4, 10, 11, 14 and 15 of this Agreement shall survive termination of this Agreement by either party for any reason.
IN WITNESS WHEREOF , this Agreement has been executed and delivered by the parties hereto as of the Effective Date.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
TBD |
|
|
|
|
|
Signature |
|
Name: |
|
Title: |
|
Date |
|
|
|
DIGIMARC CORPORATION |
|
|
|
|
|
Signature |
|
Name: |
|
Title: |
|
Date: |
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT 1
SOFTWARE PROBLEM REPORT
Each problem report will contain all information necessary to reproduce or demonstrate the occurrence of the problem. Problem reports will be in English and will be delivered electronically in a format to be provided by Digimarc.
Problem reports will contain:
Date problem was encountered
Detailed description of the problem, including the frequency with which the problem occurs
Name and version number of the program / system component that exhibits the problem
Step by step instructions to reproduce the problem
All data files required to reproduce the problem
[**]
Manufacturer and Model
CPU type and speed
Amount of memory
Operating System and Version
Disk Configuration (number of drives, total space per drive, free space per drive)
Display Adapter Model, Resolution, Number of colors
Peripheral configuration (where applicable)
[**]
TWAIN driver and version number
[**]
Severity of problem
Contact information for person to contact for further information (name, phone number, FAX number, email address)
Licensee agrees to work with Digimarc to provide reasonable additional information and perform reasonable additional tests, as requested by Digimarc, to assist Digimarc in resolution of the problem.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE P
FEES FOR INTEGRATION SUPPORT AND VERIFICATION TESTING
Digimarc shall bill [**] for Services in one hour increments at the following hourly rates:
|
|
|
|
|
Technical/Design Consultant |
|
$ |
[**] |
|
|
|
|
|
|
Senior Engineer |
|
$ |
[**] |
|
|
|
|
|
|
R&D/Engineering Executive |
|
$ |
[**] |
|
|
|
|
|
|
Project Manager |
|
$ |
[**] |
|
|
|
|
|
|
Administrator/Scheduler |
|
$ |
[**] |
|
|
|
|
|
Fees for Services will be invoiced on the earlier of 1) the last day of the month or 2) the completion of the Service. Invoices are due thirty (30) days from the date of receipt of a correct invoice. A late charge of 1.5% per month will be charged on any late payments. All fees are due and payable in US funds.
The [**] will reimburse Digimarc for all out-of-pocket expenses reasonably and necessarily incurred in providing the Services. Expenses will be itemized and reported by category. Out-of-pocket expenses will not be marked up by Digimarc. Costs include, but are not limited to, reasonable travel and lodging expenses, telephone and fax charges, postage and overnight deliveries, and charges for rental equipment or materials purchased specifically to be used in providing the Services. All invoices for out-of-pocket expenses will be issued monthly in arrears and are due thirty (30) days from the date of receipt of a correct invoice. Supporting receipts and vouchers shall be available for review at Digimarcs offices. A late charge of 1.5% per month will be charged on any late payments. All out-of-pocket expenses will be billed and payable in US funds. Payments will additionally include Value Added taxes and other tariffs and fees that may be imposed by any government other than the United States.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE Q
TRAINING
1.0 As part of [**], Digimarc shall develop a program of training acceptable to the DLA Project Manager in [**].
2.0 Digimarc shall deliver the Training as follows:
2.1 Digimarc shall provide the Training to up to two (2) people simultaneously. The trainees will be experienced in digital design system operation.
2.2 Digimarc shall conduct the Training at the facilities of [**] or, at the request of the [**], at Digimarcs facilities or at some other place agreed between Digimarc and the [**].
2.3 Digimarc shall give the [**] reasonable notice concerning the equipment which Digimarc will require in order to conduct the Training. The [**] shall provide all such equipment at its own expense. If the parties are unable to agree on the equipment to be provided either party may refer the matter for decision to the DLA Contract Authority.
2.4 Digimarc shall conduct the Training using the [**].
2.5 Digimarc shall provide a training manual in English to every trainee. Any translation or interpretation which the trainees may require will be provided by [**] at its own expense.
2.6 Digimarc shall provide each trainee with a certificate of training at the completion of the Training session.
2.7 Digimarc shall conduct the training in English.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE R
SOFTWARE PROBLEM REPORT
Each problem report will contain all information necessary to reproduce or demonstrate the occurrence of the problem. Problem reports will be in English and will be delivered electronically in a format to be provided by Digimarc.
Problem reports will contain:
X Date problem was encountered
X Detailed description of the problem, including the frequency with which the problem occurs
X Name and version number of the program / system component that exhibits the problem
X Step by step instructions to reproduce the problem
X All data files required to reproduce the problem
X PC configuration
X Manufacturer and Model
X CPU type and speed
X Amount of memory
X Operating System and Version
X Disk Configuration (number of drives, total space per drive, free space per drive)
X Display Adapter Model, Resolution, Number of colors
X Peripheral configuration (where applicable)
X Scanner Manufacturer and Model
X TWAIN driver and version number
X Scanning resolution
X Severity of problem
X Contact information for person to contact for further information (name, phone number, FAX number, email address)
[**] agrees to work with Digimarc to provide reasonable additional information and perform reasonable additional tests, as requested by Digimarc, to assist Digimarc in resolution of the problem.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DLA: SCHEDULE S
PROFORMA INVOICE
MONTH, YEAR
CDS DEVELOPMENT SERVICES
|
|
|
|
|
|
|
|
Add columns |
|
|
|
Program |
|
|
|
|||||||
|
|
|
|
Project 1 |
|
Project 2 |
|
as necessary |
|
Sub-total |
|
Wide |
|
Total |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Engineering Labor |
|
Hourly Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Executive |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Director |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Engineering Manager |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Engineer - SW Development |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Engineer - R&D |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
QA Engineer |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Sub-total |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Business Team Labor |
|
Hourly Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Executive |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Project Director |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Lawyer |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Account Manager |
|
$ |
999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Product Manager |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
[**] Engineer |
|
$ |
999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Technical Writer |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Sub-total |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Labor |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Name consultant 1 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Name consultant 2 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Add names as necessary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sub-total: Consulting |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Equipment |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Equipment - [**] |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Security costs |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Postage and shipping |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Communications |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Internet |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
[**] Research |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Travel |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Other authorized expenses under Schedule I |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Description 1 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Description 2 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Sub-total |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Due |
|
|
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
Note: A 15% charge is included in the Expenses.
Wiring Instructions:
Payable to Digimarc Corporation, General Account.
Note: A change to the wiring instructions on this invoice is deemed to be a duly authorized change by Digimarc.
DLA: Schedule S |
|
27 February [**] |
|
DLA: SCHEDULE S |
|
|
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
PROFORMA INVOICE
MONTH, YEAR
CDS DEVELOPMENT SERVICES
|
|
|
|
|
|
Add columns |
|
|
|
|
|
|
|
|
|
Project 1 |
|
Project 2 |
|
as necessary |
|
Sub-total |
|
Program Wide |
|
Total |
|
|
|
Hours |
|
Hours |
|
Hours |
|
Hours |
|
Hours |
|
|
|
Engineering Labor |
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Director |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Engineering Manager |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Engineer - SW Development |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Engineer - R&D |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
QA Engineer |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Sub-total |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Team Labor |
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Project Director |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Lawyer |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Account Manager |
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Manager |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
[**] Engineer |
|
|
|
|
|
|
|
|
|
|
|
|
|
Technical Writer |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Sub-total |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Labor |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
|
Name consultant 1 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Name consultant 2 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Add names as necessary |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Sub-total: Consulting |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
DLA: Schedule S |
|
27 February [**] |
DLA: SCHEDULE S
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
PROFORMA INVOICE
MONTH, YEAR
CDS [**] SERVICES
|
|
|
|
Summary of |
|
Summary of |
|
||
|
|
|
|
all [**] |
|
all [**] |
|
||
|
|
|
|
including [**] |
|
including [**] |
|
||
|
|
|
|
Research |
|
Research |
|
||
|
|
|
|
|
|
Hours |
|
||
Engineering Labor |
|
Hourly Rate |
|
|
|
|
|
||
Executive |
|
$ |
999.99 |
|
|
|
|
|
|
Director |
|
$ |
999.99 |
|
|
|
|
|
|
Engineering Manager |
|
$ |
999.99 |
|
|
|
|
|
|
Engineer - SW Development |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
999,999.99 |
|
Engineer - R&D |
|
$ |
999.99 |
|
|
|
|
|
|
QA Engineer |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
999,999.99 |
|
Sub-total |
|
|
|
$ |
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
||
Business Team Labor |
|
Hourly Rate |
|
|
|
|
|
||
Executive |
|
$ |
999.99 |
|
|
|
|
|
|
Project Director |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
999,999.99 |
|
Lawyer |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
999,999.99 |
|
Account Manager |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
999,999.99 |
|
Product Manager |
|
$ |
999.99 |
|
|
|
|
|
|
[**] Engineer |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
999,999.99 |
|
Technical Writer |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
999,999.99 |
|
Sub-total |
|
|
|
$ |
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
||
Total Labor |
|
|
|
$ |
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
||
Expenses |
|
|
|
|
|
|
|
||
Consulting |
|
|
|
|
|
|
|
||
Name consultant 1 |
|
|
|
$ |
999,999.99 |
|
999,999.99 |
|
|
Name consultant 2 |
|
|
|
$ |
999,999.99 |
|
999,999.99 |
|
|
Add names as necessary |
|
|
|
$ |
999,999.99 |
|
999,999.99 |
|
|
Sub-total: Consulting |
|
|
|
$ |
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
||
Equipment |
|
|
|
$ |
999,999.99 |
|
|
|
|
Equipment - [**] |
|
|
|
$ |
999,999.99 |
|
|
|
|
Security costs |
|
|
|
$ |
999,999.99 |
|
|
|
|
Postage and shipping |
|
|
|
$ |
999,999.99 |
|
|
|
|
Communications |
|
|
|
$ |
999,999.99 |
|
|
|
|
Internet |
|
|
|
$ |
999,999.99 |
|
|
|
|
[**] Research |
|
|
|
$ |
999,999.99 |
|
|
|
|
Travel |
|
|
|
$ |
999,999.99 |
|
|
|
|
Other authorized expenses under Schedule I |
|
|
|
|
|
|
|
||
Description 1 |
|
|
|
$ |
999,999.99 |
|
|
|
|
Description 2 |
|
|
|
$ |
999,999.99 |
|
|
|
|
Sub-total |
|
|
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
||
Total |
|
|
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
||
Total Due |
|
|
|
$ |
999,999.99 |
|
|
|
DLA: Schedule S |
|
27 February [**] |
|
|
|
DLA: SCHEDULE S |
|
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
PROFORMA INVOICE
MONTH, YEAR
CDS [**] SERVICES
|
|
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|||||||
|
|
|
|
Research |
|
[**] |
|
[**] |
|
[**] |
|
Activities |
|
Maintenance |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Engineering Labor |
|
Hourly Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Executive |
|
$ |
999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Director |
|
$ |
999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Engineering Manager |
|
$ |
999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Engineer - SW Development |
|
$ |
999.99 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Engineer - R&D |
|
$ |
999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
QA Engineer |
|
$ |
999.99 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Sub-total |
|
|
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Business Team Labor |
|
Hourly Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Executive |
|
$ |
999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Project Director |
|
$ |
999.99 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Lawyer |
|
$ |
999.99 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Account Manager |
|
$ |
999.99 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Product Manager |
|
$ |
999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
[**] Engineer |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Technical Writer |
|
$ |
999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
Sub-total |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Labor |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Name consultant 1 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Name consultant 2 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Add names as necessary |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Sub-total: Consulting |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Equipment |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Equipment - [**] |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Security costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Postage and shipping |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Communications |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Internet |
|
|
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
||||||
[**] Research |
|
|
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
||||||
Travel |
|
|
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
||
Other authorized expenses under Schedule I |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Description 1 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Description 2 |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
Sub-total |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
|
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
$ |
999,999.99 |
|
[**] |
|
|
|
|
|
DLA: Schedule S |
|
27 February [**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
PROFORMA INVOICE
MONTH, YEAR
CDS [**] SERVICES
|
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
[**] |
|
|
|
|
|
Research |
|
[**] |
|
[**] |
|
[**] |
|
Activities |
|
Maintenance |
|
|
|
Hours |
|
Hours |
|
Hours |
|
Hours |
|
Hours |
|
Hours |
|
Engineering Labor |
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
|
|
|
|
|
|
|
|
|
|
|
|
Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering Manager |
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineer - SW Development |
|
|
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Engineer - R&D |
|
|
|
|
|
|
|
|
|
|
|
|
|
QA Engineer |
|
|
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Sub-total |
|
|
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Team Labor |
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
|
|
|
|
|
|
|
|
|
|
|
|
Project Director |
|
|
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Lawyer |
|
|
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Account Manager |
|
|
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Product Manager |
|
|
|
|
|
|
|
|
|
|
|
|
|
[**] Engineer |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Technical Writer |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Sub-total |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Labor |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
|
Name consultant 1 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Name consultant 2 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Add names as necessary |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
Sub-total: Consulting |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
999,999.99 |
|
[**] |
|
|
|
|
|
DLA: Schedule S |
|
27 February [**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE T
AGREED FORM DEED OF ADHERENCE
THIS DEED is made on [ ]
BY [NAME OF SUBSTITUTE] (Substitute) of [INSERT ADDRESS]
WHEREAS
(A) At the request of [**], the Substitute is willing to become a party to the Counterfeit Deterrence System Development and License Agreement of [ ], 1999 (DLA) between the [**] and Digimarc Corporation (Digimarc) in substitution for and to the exclusion of the [**]
(B) The Substitute is permitted so to become a party to the DLA pursuant to clause 19.8 of the DLA.
NOW THIS DEED WITNESSES that with effect from (and including) the date of this Deed, the Substitute agrees with Digimarc to become a party to the DLA in substitution for and to the exclusion of the [**] so that the Substitute, and not the [**], shall have the benefit of, and be subject to the obligations of, the [**] under the DLA, whether arising before, on or after the date of this Deed.
Executed as a deed and delivered on the date written at the start of this Deed by
[Substitute]
acting by
[duly authorized signatory]
[second duly authorised signatory (where necessary)]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE U
COMFORT LETTER
From: [**]
To: Digimarc Corporation
Dear Sirs:
We refer to the Development and License Agreement (DLA) entered into between us on , 1999.
We hereby exercise our right of substitution under clause 19.8(a) of the DLA in favour of [Substitute]; and attach a Deed of Adherence in the form of Schedule T to the DLA duly executed by the Substitute.
We are writing to confirm that [Substitute]:
1. Is lawfully organized and existing;
2. Is fully qualified, legally and otherwise, to assume the rights and obligations of [**] under the DLA, pursuant to the Deed of Adherence; and under the Escrow Agreement; and
3. Has access to and the benefit of all the facilities previously available to [**] for the exercise of its obligations under the DLA and the Escrow Agreement.
|
|
Yours faithfully, |
|
|
|
|
|
|
|
|
[**] |
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DLA SCHEDULE V
PHASE [**] STATEMENT OF WORK
Digimarc shall perform the following Work during Phase [**]. (The specific responsibilities to be discharged by [**] during Phase [**] are also described below.)
Digimarc shall [**] for acceptance by [**] the Phase [**] according to the following process:
1. By the date set out in the Delivery Schedule outlined in Attachment 1, Digimarc shall develop a detailed Specification for [**] described in Schedule A of the [**] as relates to Phase [**] and the additional requirements for [**], if any, specified below.
2. Digimarc shall deliver the Specifications to the DLA Project Manager by the dates set out in the Delivery Schedule for [**] review, comment and acceptance or rejection.
3. Within thirty (30) calendar days after receiving them under 2, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not [**] approves the Specifications and if not, why not. Within fifteen (15) calendar days after receiving notice of rejection, Digimarc shall change the Specifications [**] and redeliver them to [**] for approval as provided above.
4. Upon notice of approval under 3, Digimarc shall [**] will meet the approved Specifications and deliver [**] against specification requirements.
5. Within thirty (30) calendar days after receiving [**] under 4, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not [**] meets the Specifications with details of any non-compliance. Any problems shall be detailed using, to the extent appropriate, the [**] Problem Report form attached as Schedule R.
6. By the date set out in the Delivery Schedule, Digimarc shall develop [**] incorporating any changes required [**] with the Specifications and any other modifications agreed in writing between the parties respective project managers and deliver [**] to [**] and acceptance.
7. Within thirty (30) calendar days after receiving [**] under 6, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not [**] meets the Specifications with details of any non-compliance. Within thirty (30) calendar days after receiving any notice of rejection, Digimarc shall rectify all [**] for approval as provided above.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
1.2 Acceptance Procedures
1.2.1 [**]
The acceptance procedures for the [**] will be the following:
1. Digimarc shall deliver or make available the [**] to the [**] Project Manager in a [**] that Digimarc will develop based on [**]. The [**] will allow the [**] to conduct [**] and [**] as set forth in the Specification.
2. Digimarc shall deliver into escrow and review with the [**] a detailed description of how the [**] was [**] and the techniques used to [**].
1.2.2 [**]
The acceptance procedure for any improvements to the [**] will be the following:
1. Digimarc shall deliver the [**] for [**] to the [**] Project Manager in an example [**] that Digimarc will develop to allow the [**] to [**] and [**].
2. Digimarc shall deliver or make available the [**] for [**] to the [**] Project Manager in an example [**] that Digimarc will develop based on [**]. The example [**] will allow the [**] to [**] and [**].
3. Digimarc shall deliver the [**] Project Manager in an example [**] that Digimarc will develop based on [**] or other [**]. The example [**] will allow the [**].
4. Digimarc shall deliver into escrow and review with the [**] a detailed description of how the [**] was [**] and the techniques used to [**].
1.2.3 [**]
The acceptance procedure for any improvements to the [**] will be the following:
1. Digimarc shall deliver the [**], [**], and the [**] to the [**] Project Manager to allow [**] with the Specifications.
2. Digimarc shall deliver updated [**] and training materials to the [**] Project Manager to allow the [**] to review the materials for acceptance.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Digimarc shall develop the [**] according to the following requirements:
2.1.1 [**]
Digimarc shall develop [**] to [**]. [**] shall meet the following requirements:
[**]1. [**] for [**] shall be capable of being [**].
2. [**] for [**] shall be capable of [**] and shall meet all the requirements of the Specification for [**]. In addition, the [**] shall meet the performance criteria as determined in the Specification for [**] for [**] and in addition shall meet or exceed the actual performance of [**] as specified in the [**] Specification.
3. [**] shall be capable of [**] and shall meet all the requirements of the Specification for [**] for [**]. In addition, [**] shall meet the performance criteria as determined in the Specification for [**] and in addition shall meet or exceed the actual performance of [**] Specification. Delivery of such [**] shall be conditional upon Digimarc [**] Digimarc and the [**] to intellectual property held [**] in order to [**].
4. Digimarc shall publish the [**] needed for replacement of the [**] with a suitably designed alternative [**].
5. Detailed requirements for [**] will be specified in a Specification delivered in accordance with the Delivery Schedule outlined in Attachment 1.
2.1.2 [**]
At the end of [**] will be [**] in [**]:
[**] As such, the [**] must be [**].
1. Digimarc shall develop [**].
2. Detailed requirements for [**] will be specified in a Specification delivered in accordance with the Delivery Schedule outlined in Attachment 1.
2.1.3 [**]
During the course of the year, [**] activities will result in the need to improve the [**], either to [**] needs or to respond to [**], such as [**] or in response to [**]. To ensure delivery of [**] in September [**] and a [**] in December [**], a detailed Specification for the project must be completed by February 28, [**].
2.2.1 [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
The [**] Digimarc shall [**] the [**] to add [**] for the following [**]:
· [**]
· [**]
1. Digimarc shall make technology changes to the [**] necessary to operate [**].
2. Digimarc shall make changes to the [**] as necessary to operate [**].
3. Upon [**] acceptance, Digimarc shall release the updated version of the [**] to [**].
4. The [**] documentation will be [**] to reflect [**].
2.3.1 Digimarc shall maintain and operate the [**] and make it available at [**].
2.4.1 Digimarc shall [**] the [**] to [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE W
PHASE [**] STATEMENT OF WORK
Digimarc shall perform the following Work during Phase [**]. (The specific responsibilities to be discharged by [**] during Phase [**] are also described below.)
Digimarc shall [**] for acceptance by [**] the Phase [**] Deliverables according to the following process:
1. By the date set out in the Delivery Schedule outlined in Attachment 1, Digimarc shall develop a detailed Specification for each [**].
2. Digimarc shall deliver the Specifications to the DLA Project Manager by the dates set out in the Delivery Schedule for [**] review, comment and acceptance or rejection.
3. Within thirty (30) calendar days after receiving [**] under 2, the DLA Project Manager shall notify the Digimarc Project Manager in writing whether or not [**] approves the Specifications and if not, why not. Within fifteen (15) calendar days after receiving notice of rejection, Digimarc shall change the Specifications to [**] and redeliver [**] to [**] for approval as provided above.
4. Upon notice of approval under 3, Digimarc shall [**] that will meet the approved Specifications.
5. By the date set out in the [**] Schedule, Digimarc shall [**] that will meet the approved Specifications.
6. Within thirty (30) calendar days after receiving [**] under 5, the [**] Project Manager shall notify the Digimarc Project Manager in writing whether or not [**] meets the Specifications with details of any non-compliance. Any problems shall be detailed using, to the extent appropriate, the [**] Problem Report form attached as Schedule R.
7. Within thirty (30) calendar days after receiving any notice of rejection, Digimarc shall rectify all non-compliance and redeliver [**] for approval as provided above.
1.2.1 [**]
1. Digimarc will deliver the [**] for [**] in the [**] to allow the [**] to [**].
2. Digimarc will deliver or make available the [**] that Digimarc will [**]. The example [**].
3. Digimarc will deliver the [**] for [**]. The example [**].
1.2.2 [**]
1. Digimarc will provide the findings of the study to investigate the [**].
1.2.3 [**]
1. Digimarc will provide the findings of the study to investigate the [**].
2. DESCRIPTION OF, AND REQUIREMENTS FOR, PHASE [**]
Digimarc will develop the [**] according to the requirements described below.
Digimarc shall [**] to meet the following requirements:
1. [**] shall be capable of [**].
2. [**] shall substantially [**].
3. Detailed requirements for [**]
Digimarc shall investigate [**] that meet the following requirements:
1. [**], which may include [**].
2. Technology that could be [**], which may include a [**].
3. Assessment of the current [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
4. Provide a strategy for how [**].
5. Detailed requirements for [**] outlined in Attachment 1.
6. Provide a technical report of the findings in accordance with the [**] outlined in Attachment 1.
1. Digimarc shall investigate [**]:
2. [**]. The requirements [**].
3. The costs to [**] to make the [**]
4. Detailed requirements for [**] will be written in a Specification delivered in accordance with the Delivery Schedule outlined in Attachment 1.
5. Provide a technical report of the findings in accordance with the Delivery Schedule outlined in Attachment 1.
2.4.1. Digimarc shall maintain and operate the [**] and [**]
2.5.1 Digimarc shall [**] the [**] to [**] and [**], including administration of the [**].
|
|
|
|
|
|
SOW Sec, |
|
Depends |
|
Completion |
|
Num. |
|
Deliverable |
|
Owner |
|
Par. Ref. |
|
On |
|
Date |
|
D-1 |
|
[**] Draft Specification delivered |
|
[**] |
|
|
|
|
|
[**] |
|
D-2 |
|
[**] |
|
[**] |
|
|
|
|
|
[**] |
|
D-3 |
|
[**] specification signoff |
|
[**] |
|
1.1.4 |
|
[**] |
|
[**] |
|
D-4 |
|
First Progress Update PowerPoint Summary |
|
[**] |
|
|
|
[**] |
|
[**] |
|
D-5 |
|
Changes to the [**] |
|
[**] |
|
|
|
[**] |
|
[**] |
|
D-6 |
|
Second Progress Update and Development Status Technical Report |
|
[**] |
|
|
|
[**] |
|
[**] |
|
D-7 |
|
Third Progress Update / [**] |
|
[**] |
|
|
|
[**] |
|
[**] |
|
D-8 |
|
Delivery of [**] |
|
[**] |
|
1.1.5 |
|
[**] |
|
[**] |
|
D-9 |
|
[**] acceptance of [**] |
|
[**] |
|
1.1.6 |
|
[**] |
|
[**] |
|
Num. |
|
Deliverable |
|
Owner |
|
Sec/Par.
|
|
Depends
|
|
Completion
|
|
DSE-1 |
|
Send out Study Plan |
|
[**] |
|
|
|
|
|
[**] |
|
DSE-2 |
|
[**] feedback |
|
[**] |
|
|
|
[**] |
|
[**] |
|
DSE-3 |
|
Signoff of Study Plan |
|
[**] |
|
1.1.4 |
|
[**] |
|
[**] |
|
DSE-4 |
|
First Project Update |
|
[**] |
|
|
|
[**] |
|
[**] |
|
DSE-5 |
|
Second Project Update |
|
[**] |
|
|
|
[**] |
|
[**] |
|
DSE-6 |
|
Deliver Final Report |
|
[**] |
|
1.1.5 |
|
[**] |
|
[**] |
|
DSE-8 |
|
Final Report Acceptance |
|
[**] |
|
1.1.6 |
|
[**] |
|
[**] |
|
Num. |
|
Deliverable |
|
Owner |
|
Sec/Par.
|
|
Depends
|
|
Completion
|
|
CLP-1 |
|
Send out Study Plan |
|
[**] |
|
|
|
|
|
[**] |
|
CLP-2 |
|
[**] feedback |
|
[**] |
|
|
|
[**] |
|
[**] |
|
CLP-3 |
|
Signoff of Study Plan |
|
[**] |
|
1.1.4 |
|
[**] |
|
[**] |
|
CLP-4 |
|
Notification of [**] Participation |
|
[**] |
|
|
|
[**] |
|
[**] |
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Num. |
|
Deliverable |
|
Owner |
|
Sec/Par.
|
|
Depends
|
|
Completion
|
|
CLP-5 |
|
First Project Update |
|
[**] |
|
|
|
[**] |
|
[**] |
|
CLP-6 |
|
Deliver Final Report |
|
[**] |
|
1.1.5 |
|
[**] |
|
[**] |
|
CLP-7 |
|
Final Report Acceptance |
|
[**] |
|
1.1.6 |
|
[**] |
|
[**] |
|
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE X:
[**] EXPENDITURES
Unless authorized in this Agreement, the [**] Agreement or otherwise agreed in writing by [**],
the [**] Expenditure under this Agreement and the [**] Agreement shall not be greater than an amount equal to [**]; and
the [**] Expenditure under this Agreement and the [**] Agreement shall not be greater than an amount equal to [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[**]
[**] PLAN
PROVIDED TO
[**]
[date]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SITUATION ANALYSIS |
2 |
|
|
DEPENDENCIES |
2 |
|
|
WORK TO BE PERFORMED AS OF JANUARY [**] |
3 |
TASK: 1. |
[**] |
3 |
TASK: 2. |
[**] COMPLETION |
4 |
TASK: 3. |
[**] COMPLETION |
5 |
TASK: 4. |
[**] COMMITMENT TO [**] |
5 |
TASK: 5. |
[**] IN PLACE |
6 |
TASK: 6. |
[**] |
7 |
TASK: 7. |
[**] |
8 |
TASK: 8. |
[**] |
8 |
TASK: 9. |
[**] |
9 |
TASK: 10. |
[**] |
10 |
[One paragraph overview of [**] & current status]
[**]:
[Input all relevant [**] details associated with the situation analysis]
·
Technical Context
[Input all relevant technical details associated with the situation analysis]
·
Primary Contacts
[Input all major contact names and titles [**]]
Name title
Name title
Name title
Name title
Current barriers [**]
[Input all [**] or technical [**] barriers]
·
Current roles of [**] and Digimarc with relation to [**]:
[**]
[**] agrees to complete tasks upon which any part of the Services is dependent. The dependencies include all tasks identified in this plan as a [**] Task and approval and acceptance by [**] the CDS.
[Input the major task names & durations]
|
|
Jan |
|
Feb |
|
Mar |
|
Apr |
|
May |
|
Jun |
|
Jul |
|
Aug |
|
Sep |
|
Oct |
|
Nov |
|
Dec |
|
Task Number & Name |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Task Number & Name |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Task Number & Name |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Task Number & Name |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Task Number & Name |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tasks will not necessary follow the order provided below.
Task: 1 [**]
1.1 Completion
· [**]
1.2 Work
· [List tasks to be completed to achieve the objective]
1.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
1.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
1.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
1.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
Task: 2 [**] Completion
2.1 Completion
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
· [**]
· [**]
2.2 Work
· [List tasks to be completed to achieve the objective]
2.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
2.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
2.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
2.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
Task: 3 [**] Completion
3.1 Completion
· [**]
· [**]
· [**]
· Digimarc conveys these results to the appropriate [**] representatives
3.2 Work
· [List tasks to be completed to achieve the objective]
3.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
3.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
3.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
3.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Task: 4 [**] commitment to [**]
[**]
4.1 Completion
· [**]
4.2 Work
· [List tasks to be completed to achieve the objective]
4.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
4.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
4.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
4.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
Task: 5 [**] in Place
5.1 Completion
· [**]
5.2 Work
· [List tasks to be completed to achieve the objective]
5.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
5.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
5.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
5.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Task: 6 [**]
6.1 Completion
· [**]
6.2 Work
· [List tasks to be completed to achieve the objective]
6.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
6.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
6.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
6.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
Task: 7 [**]
7.1 Completion
· [**]
7.2 Work
· [List tasks to be completed to achieve the objective]
7.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
7.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
7.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
7.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
Task: 8 [**]
8.1 Completion
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
· [**]
8.2 Work
· [List tasks to be completed to achieve the objective]
8.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
8.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
8.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
8.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
Task: 9 [**]
9.1 Completion
· [**]
9.2 Work
· [List tasks to be completed to achieve the objective]
9.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
9.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
9.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
9.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
Task: 10 [**]
10.1 Completion
· [**]
10.2 Work
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
· [List tasks to be completed to achieve the objective]
10.3 Assumptions
· [List any assumptions made that could affect the work needed to complete the task]
10.4 [**] Tasks
· [List deliverables needed from [**] to complete the task]
10.5 Dependencies
· [List dependencies that could affect work needed to achieve the objective or Digimarcs ability to achieve the objective]
10.6 Available Budget
[List information about the approved budget for this task or a reference to the approved budget for this task]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE Z
[**] TEAM
Engineer [**] Development: A total of [**] FTE of [**] Engineering time is allocated. In addition to meeting Digimarcs requirements as a professional [**] developer, the [**] engineers assigned to the [**] Team must, as a collective group, have skill and experience in the following:
· [**]
QA Engineer: A total of [**] FTE of Quality Assurance Engineering time is allocated. In addition to meeting Digimarcs requirements as a professional [**] development QA Engineer, the QA Engineers assigned to the [**] Team must, as a collective group, have skill and experience in the following:
· [**]
Account Manager: A total of [**] FTE of Account Management time is allocated. In addition to meeting Digimarcs requirements for an Account Manager, the account managers assigned to the [**] team must have skills in the following:
· [**]
Attorney: A total of [**] FTE of Attorney (Lawyer) time is allocated. Legal staff assigned to the [**] must have experience [**].
[**] Engineer: A total of [**] FTE of [**] Engineering time is allocated. In addition to meeting Digimarcs requirements as a [**] Engineer, the [**] Engineer assigned to the [**] Team must have experience providing [**] research for the [**].
Technical Writer: A total of [**] FTE of Technical Writer time is allocated. In addition to meeting Digimarcs requirements as a professional Technical Writer, the Technical writers assigned to the [**] Team must have experience in the development of technical documentation targeted at [**].
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE AA
KEY [**] PERSONNEL
Following are the names and positions of Key [**] Personnel required as per clause 4.6 of this Agreement:
- Digimarc Project Director - [**]
- Business Team - [**]
- [**] Development - [**]
- R&D Engineering - [**]
- QA Engineering [**]
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE BB
[**] PROBLEM REPORT
Each [**] Problem Report will contain all information necessary to reproduce or demonstrate the occurrence of the problem. [**] Problem Reports will be in English and will be delivered electronically in a format to be provided by Digimarc.
[**] Problem Reports will contain:
Name of [**]
[**] Date problem was encountered
Detailed description of the problem, including the frequency with which the problem occurs
Severity of problem
Impact on [**] schedules and other [**] activities
Cost and budget impact
Recommended solution and estimated cost of implementation
Contact information for person to contact for further information (name, phone number, FAX number, email address)
If the problem involves [**]:
Name [**] that exhibits the problem
Step by step instructions to reproduce the problem
All [**] required to reproduce the problem
[**]
[**]
[**] type and speed
Amount of [**]
[**] [**] [**] [**] [**] [**] [**]
[**] agrees to work with Digimarc to provide reasonable additional information [**], as requested by Digimarc, to assist Digimarc in resolution of the problem.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE CC
CDS PROJECT INDICATORS
The project indicators established shall be used as a communications and planning tool that will allow the [**] and Digimarc to assess the overall health of the project, and to help identify potential problems. The agreed upon project indicators may change, new ones may be added or some deleted. Such changes shall be agreed to by the parties. Both parties shall work co-operatively to interpret the results of the project indicators. The project indicators shall not be used to assess penalties.
The parties shall establish at each Junes planning meeting which project indicators will be measured that year. A report shall be prepared by the end of March the following year and shall be discussed at the strategic planning meeting held approximately two months prior to the June meeting. The parties shall agree on what, if any, corrective measures need to be taken.
Among the project indicators which may be measured are the following:
1. [**] Survey [**] and Digmarc shall develop a joint survey to assess the level of [**] satisfaction with the CDS project and the [**] Services;
2. [**] Survey [**] and Digmarc shall develop a joint survey to assess the level of [**] satisfaction with the CDS project and the [**] provided by Digimarc;
3. Budget performance the parties shall track Allowable Costs and Expenses under the Agreement to the established budgets;
4. Help Desk Calls Digimarc shall monitor and report on the calls from [**] to Digimarcs help desk; and
5. Number of [**] and Number of [**] Digimarc shall report on the number and [**] containing the CDS [**] and the number of [**]
Each party shall share equally any [**] costs associated with developing, implementing and carrying out the project indicators. Services performed in developing and reporting on project indicators that is performed as part of normal operational reporting shall be an Allowable Cost. The parties shall determine in advance if work in addition to normal operational reporting shall be required and whether the costs of such work will be an Allowable Cost.
** CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
, 2008
Dear Digimarc Corporation Stockholder:
I am pleased to inform you that the distribution of all of the shares of common stock of Digimarc Corporation, formerly known as DMRC Corporation and which we refer to as New Digimarc, a wholly owned subsidiary of the former Digimarc Corporation, which we refer to as Old Digimarc, for the benefit of Old Digimarc stockholders was completed on August 1, 2008. New Digimarc holds all of the assets and liabilities used primarily in Old Digimarc's digital watermarking business, as well as all of the cash held by Old Digimarc prior to the distribution.
The distribution was made prior to and in connection with the acquisition of Old Digimarc's secure ID business by L-1 Identity Solutions, Inc., in a transaction that was completed on August 13, 2008. On August 1, 2008, the shares of New Digimarc common stock were transferred to a newly created trust for the benefit of Old Digimarc stockholders as of August 1, 2008 at 5:30 pm Eastern time, the record date and time. The shares of New Digimarc common stock will be held by the trust until the Registration Statement on Form 10, of which the accompanying information statement is a part, has been declared effective by the Securities and Exchange Commission, at which time the shares will be distributed to the Old Digimarc record holders, as beneficiaries of the trust, pro rata in accordance with their ownership of shares of Old Digimarc common stock as of the record date and time.
Each Old Digimarc record holder is entitled to receive one share of New Digimarc common stock for every three and one half shares of Old Digimarc common stock held by the stockholder as of the record date and time. The shares will be issued in book-entry form only, which means that no physical stock certificates will be issued. No fractional shares of New Digimarc common stock will be issued. If you would have otherwise been entitled to a fractional share of New Digimarc common stock in the distribution, you will receive the net cash value of the fractional share instead.
New Digimarc has been approved to list its common stock under the trading symbol "DMRC" on The Nasdaq Global Market. Old Digimarc's common stock ceased trading on the Nasdaq Global Market following completion of the acquisition of Old Digimarc by L-1 Identity Solutions, Inc.
Stockholder approval of the spin-off is not required, and you are not required to take any action to receive your New Digimarc common stock.
The attached information statement, which is being mailed to all Old Digimarc record holders, describes the spin-off and contains important information about, including financial statements of, New Digimarc.
We look forward to our future as a public company and to your support as a holder of New Digimarc common stock.
Sincerely,
Bruce
Davis
Chairman and Chief Executive Officer
The information contained herein is not complete and may be changed. A Registration Statement on Form 10 relating to these securities has been filed with the United States Securities and Exchange Commission under the United States Securities Exchange Act of 1934, as amended. This preliminary information statement is not an offer to sell or a solicitation of an offer to buy any securities.
Preliminary and Subject to Completion, dated October 2, 2008
INFORMATION STATEMENT
Digimarc Corporation
Common Stock
(Par value $0.001 per share)
This information statement is being furnished in connection with the distribution of all of the shares of common stock of Digimarc Corporation, formerly known as DMRC Corporation and which we refer to as New Digimarc. New Digimarc owns and operates the assets and liabilities of the digital watermarking business that was spun off from the former Digimarc Corporation, which we refer to as Old Digimarc, prior to the acquisition of Old Digimarc's secure ID business by L-1 Identity Solutions, Inc., which we refer to as L-1, in a transaction that was completed on August 13, 2008. On August 1, 2008, the shares of New Digimarc common stock were transferred to a newly created trust for the benefit of (i) Old Digimarc stockholders as of the record date and time of August 1, 2008 at 5:30 pm Eastern time and (ii) anyone who purchased shares of Old Digimarc common stock in an open market transaction after the record date and time, in each case, who did not sell the shares in an open market transaction after the record date and time, which we refer to as the Old Digimarc record holders. The shares of New Digimarc common stock will be held by the trust until the Registration Statement on Form 10, of which this information statement is a part, and which we refer to as the Form 10, has been declared effective by the Securities and Exchange Commission, which we refer to as the SEC, at which time the shares will be distributed to the Old Digimarc record holders, as beneficiaries of the trust, pro rata in accordance with their ownership of shares of Old Digimarc common stock as of the record date and time.
The shares will be issued in book-entry form only, which means that no physical stock certificates will be issued. No fractional shares of New Digimarc common stock will be issued. If you would have otherwise been entitled to a fractional share of New Digimarc common stock in the distribution, you will receive the net cash value of the fractional share instead.
YOUR VOTE IS NOT REQUIRED, AND WE ARE NOT ASKING YOU FOR A PROXY.
All of the outstanding shares of New Digimarc common stock are now held in trust for the benefit of Old Digimarc record holders. Accordingly, no public trading market for New Digimarc common stock exists. New Digimarc has been approved to list its common stock under the trading symbol "DMRC" on The Nasdaq Global Market. We anticipate that normal trading of New Digimarc common stock will begin on the first trading day following the New Digimarc stock delivery date.
In reviewing this information statement, you should carefully consider the matters described under the caption "Risk Factors" beginning on page 11.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.
This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities. The date of this information statement is , 2008.
This information statement was first mailed to Old Digimarc stockholders on or about , 2008.
SUMMARY | 3 | |
RISK FACTORS |
|
11 |
THE SPIN-OFF |
|
22 |
DIVIDEND POLICY |
|
30 |
CAPITALIZATION |
|
31 |
SELECTED HISTORICAL FINANCIAL INFORMATION |
|
32 |
PRO FORMA FINANCIAL INFORMATION |
|
34 |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|
37 |
BUSINESS OF DIGIMARC CORPORATION |
|
61 |
MANAGEMENT |
|
66 |
DIRECTOR COMPENSATION |
|
72 |
COMPENSATION DISCUSSION AND ANALYSIS |
|
74 |
EXECUTIVE COMPENSATION |
|
79 |
OUR RELATIONSHIP WITH OLD DIGIMARC AFTER THE SPIN-OFF |
|
88 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
|
95 |
DESCRIPTION OF OUR CAPITAL STOCK |
|
96 |
LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS |
|
99 |
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES |
|
100 |
WHERE YOU CAN FIND MORE INFORMATION |
|
103 |
INDEX TO FINANCIAL STATEMENTS |
|
F-1 |
This information statement contains trademarks, trade names and service marks of companies other than New Digimarc, which are the property of their respective owners.
2
This summary highlights information contained elsewhere in this information statement and provides an overview of our company and the material aspects of our spin-off from Old Digimarc. You should read this entire information statement carefully, especially the risk factors discussed beginning on page 11 and our pro forma financial statements and notes to those statements appearing elsewhere in this information statement. Unless the context otherwise requires, references in this information statement to (i) "Digimarc Corporation," "New Digimarc," "we," "our" and "us" refer to Digimarc Corporation and (ii) "Old Digimarc" refers to the former Digimarc Corporation, which merged with and into a wholly owned subsidiary of L-1 Identity Solutions, Inc. on August 13, 2008, and its consolidated subsidiaries (other than us).
You should not assume that the information contained in this information statement is accurate as of any date other than the date set forth on the cover. Changes to the information contained in this information statement may occur after that date, and we undertake no obligation to update the information, except in the normal course of our public disclosure obligations and practices.
Our Business
Digimarc Corporation enables governments and enterprises around the world to give digital identities to media and objects that computers can sense and recognize and to which they can react. Our technology provides the means to infuse persistent digital information, perceptible only to computers and digital devices, into all forms of media content. The unique digital identifier placed in media generally persists with it regardless of the distribution path and whether it is copied, manipulated or converted to a different format, and does not affect the quality of the content or the enjoyment or other traditional uses of it. Our technology permits computers and digital devices to quickly identify relevant data from vast amounts of media content.
Our technologies, and those of our licensees, span the complete range of media content, enabling our customers and those of our partners to:
At the core of our intellectual property is a signal processing technology innovation known as "digital watermarking" which allows imperceptible digital information to be embedded in all forms of digitally designed, produced or distributed media content and some physical objects, including photographs, movies, music, television, personal identification documents, financial instruments, industrial parts and product packages. The digital information can be detected and read by a wide range of computers, mobile phones, and other digital devices.
3
We provide technology-based solutions directly and through our licensees. Our proprietary technologies have proven to be a powerful element of document security, giving rise to our long-term relationship with a consortium of central banks, which we refer to as the Central Banks, and many leading companies in the information technology industry. We and our licensees have successfully propagated digital watermarking in music, movies, television broadcasts, images and printed materials. Digital watermarks have been used in these applications to improve media rights and asset management, reduce piracy and counterfeiting losses, improve marketing programs, permit more efficient and effective distribution of valuable media content and enhance consumer entertainment and commercial experiences.
To protect our significant efforts in creating these technologies, we have implemented an extensive intellectual property protection program that relies on a combination of patent, copyright, trademark and trade secret laws, and nondisclosure agreements and other contracts. We believe we have one of the world's most extensive patent portfolios in the field of digital watermarking and related media enhancement innovations, with over 370 U.S. and over 85 foreign issued patents and more than 400 U.S. and foreign patent applications on file as of September 8, 2008.
The Separation and the Merger
Prior to and in connection with the merger of Old Digimarc with and into a wholly owned subsidiary of L-1 on August 13, 2008, which we refer to as the Old Digimarc/L-1 merger, on August 1, 2008, Old Digimarc spun off the common stock of New Digimarc, which holds all of the assets and liabilities of Old Digimarc's digital watermarking business, which we refer to as the Digital Watermarking Business. The shares were transferred to a newly-created trust for the benefit of Old Digimarc record holders, on the basis of one share of New Digimarc common stock for every three and one-half shares of Old Digimarc common stock held by the stockholder at the record date and time. Following the spin-off we issued to our executive officers shares of Series A Redeemable Nonvoting Preferred stock in the aggregate amount of $50,000.
Following and in connection with the spin-off, a wholly owned subsidiary of L-1 merged with and into Old Digimarc, which at the time consisted principally of the secure ID business, which we refer to as the Secure ID Business. The Old Digimarc/L-1 merger took place on August 13, 2008, following completion of the offer. The New Digimarc stock delivery date will occur upon effectiveness of the Form 10.
Summary of the Transactions
The following is a brief summary of the terms of the spin-off and the related transactions:
Distributing company | Old Digimarc. Since the spin-off, Old Digimarc does not own any shares of our capital stock. | |
Distributed company |
|
After the New Digimarc stock delivery date, New Digimarc will be an independent, publicly-traded company. |
Securities to be distributed |
|
Shares of New Digimarc common stock. |
Distribution ratio |
|
Each Old Digimarc record holder will receive one share of New Digimarc common stock for every three and one-half shares of Old Digimarc common stock held by the Old Digimarc record holder at the record date and time. |
Method of distribution |
|
For registered Old Digimarc record holders, our transfer agent has credited shares of our common stock to book-entry accounts established to hold shares of our common stock. |
|
|
|
4
|
|
Book-entry refers to a method of recording stock ownership in our records in which no physical certificates are issued. For Old Digimarc record holders who owned Old Digimarc common stock through a broker or other nominee, shares of our common stock will be credited to their accounts by the broker or other nominee. Following the distribution of shares of our common stock, stockholders whose shares are held in book-entry form may request the transfer of their shares of our common stock to a brokerage or other account at any time and may request the delivery of physical stock certificates for their shares, in each case without charge. |
Record date and time |
|
The record date and time was August 1, 2008 at 5:30 pm Eastern time. Following the record date and time, the right to the distribution continued to trade with the shares of Old Digimarc common stock until Old Digimarc ceased trading on the Nasdaq Global Market on August 14, 2008. As a result, holders of shares of Old Digimarc as of the record date and time who did not sell the shares in an open market transaction following the record date and time will receive shares of New Digimarc common stock on the New Digimarc stock delivery date, and holders of shares of Old Digimarc who sold shares in an open market transaction following the record date and time will not receive shares of our common stock on the New Digimarc stock delivery date. Accordingly, stockholders who purchased shares of Old Digimarc common stock in an open market transaction after the record date and time and did not subsequently sell the shares in an open market transaction will receive shares of New Digimarc common stock on the New Digimarc stock delivery date. |
Distribution date and time |
|
The distribution date and time was August 1, 2008 at 5:32 pm Eastern time. |
New Digimarc merger |
|
On August 1, 2008, following the distribution date and time, DMRC LLC merged with and into its wholly owned subsidiary, New Digimarc, and each limited liability company interest of DMRC LLC was converted into one share of common stock of New Digimarc in a transaction which we refer to as the New Digimarc merger. |
New Digimarc stock delivery date |
|
The New Digimarc stock delivery date will be the date upon which the Form 10 is declared effective. On that day, we will issue a press release announcing effectiveness of the Form 10 and the distribution of shares from the trust. |
Distribution agent, transfer agent and registrar |
|
Computershare Trust Company, N.A. |
Stock Exchange Listing |
|
We have been approved for listing of our common stock on The Nasdaq Global Market under the symbol "DMRC." On the first trading day following the New Digimarc stock delivery date, trading of our common stock will begin. We cannot predict the trading prices for our common stock on or after the New Digimarc stock delivery date. |
|
|
|
5
The offer |
|
Old Digimarc entered into a merger agreement with L-1 and Dolomite Acquisition Co., a wholly owned subsidiary of L-1, which we refer to as the Old Digimarc/L-1 merger agreement, pursuant to which Dolomite Acquisition Co. purchased more than 90% of the outstanding shares of common stock of Old Digimarc, together with the associated preferred stock purchase rights, for $12.25 per share, net to the seller in cash, without interest thereon and less any required withholding taxes, and merged Old Digimarc with and into Dolomite Acquisition Co., with Old Digimarc continuing as the surviving company and a wholly owned subsidiary of L-1. The initial offering period and withdrawal rights expired at 12:00 midnight Eastern time on Friday, August 1, 2008. A first and second subsequent offering period expired at 5:00 p.m. Eastern time on Friday, August 8, 2008, and 5:00 p.m. ET on Wednesday, August 13, 2008, respectively. The per share price paid in the offer did not include the value attributable to the spin-off. The occurrence of the spin-off was a condition to the completion of the offer. Following completion of the offer, the Old Digimarc/L-1 merger was completed. |
Old Digimarc/L-1 merger |
|
Old Digimarc entered into an agreement with L-1 and Dolomite Acquisition Co., a wholly owned subsidiary of L-1, pursuant to which Dolomite Acquisition Co. merged with and into Old Digimarc. The occurrence of the spin-off and completion of the offer were conditions to the occurrence of the Old Digimarc/L-1 merger. The Old Digimarc/L-1 merger took place on August 13, 2008, following completion of the offer. |
Tax consequences to stockholders |
|
We believe that for U.S. federal income tax purposes, the spin-off, the offer and the Old Digimarc/L-1 merger will constitute a single integrated transaction with respect to Holders (as defined in "Certain Material U.S. Federal Income Tax Consequences," beginning on page 100 of this information statement) of Old Digimarc stock in which the spin-off will be treated as a taxable redemption of shares of Old Digimarc common stock that qualifies for "exchange" treatment. Accordingly, assuming this characterization will be respected with respect to each U.S. Holder (as defined in "Certain Material U.S. Federal Income Tax Consequences," beginning on page 100 of this information statement) who held his or her shares of Old Digimarc common stock as a capital asset (generally, assets held for investment), such a U.S. Holder generally will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference between (1) the sum of the fair market value of the DMRC LLC interests received in the spin-off, the amount of cash received in the offer, and the amount of cash received in the Old Digimarc/L-1 merger, and (2) the U.S. Holder's adjusted tax basis in his or her shares of Old Digimarc common stock surrendered or deemed surrendered in the |
|
|
|
6
|
|
transactions. The deduction of any recognized loss may be delayed or otherwise adversely affected by certain loss limitation rules. In addition, such a U.S. Holder will not recognize any gain or loss in the New Digimarc merger. With respect to each non-U.S. Holder (as defined in "Certain Material U.S. Federal Income Tax Consequences," beginning on page 100 of this information statement) who held his or her shares of Old Digimarc common stock as a capital asset, such a non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain realized on the receipt of cash, DMRC LLC interests or shares of New Digimarc stock in exchange for shares of Old Digimarc common stock in the spin-off, the offer, the Old Digimarc/L-1 merger and the New Digimarc merger. |
|
|
Tax matters are complicated and the tax consequences of the spin-off, the offer, the Old Digimarc/L-1 merger and the New Digimarc merger to you will depend on your individual circumstances. You should consult your tax advisor to determine the specific tax consequences of the spin-off, the offer, the Old Digimarc/L-1 merger and the New Digimarc merger to you. |
|
|
For additional information, please see "Certain Material U.S. Federal Income Tax Consequences," beginning on page 100 of this information statement. |
Dividend policy |
|
We do not intend to pay dividends on our common stock in the foreseeable future. |
Relationship between New Digimarc and Old Digimarc after the spin-off |
|
Old Digimarc no longer owns any shares of our common stock. Our common stock has been transferred to a trust for the benefit of Old Digimarc record holders and will be distributed to stockholders on the New Digimarc stock delivery date. We, Old Digimarc and DMRC LLC have entered into the following agreements that govern the spin-off from Old Digimarc and our future relationship: a Separation Agreement, a Transition Services Agreement and a License Agreement. Also, each of our executive officers has entered into a non-competition agreement with Old Digimarc and L-1. |
Separation Agreement |
|
The Separation Agreement among Old Digimarc, DMRC LLC, us, and with respect to certain sections, L-1, provides for (1) the transfer of specified assets of Old Digimarc and its subsidiaries to, and the assumption of specified liabilities of Old Digimarc and its subsidiaries by, DMRC LLC and its subsidiaries, and (2) the distribution of the interests of DMRC LLC to Old Digimarc's stockholders. The Separation Agreement sets forth the agreement between Old Digimarc and DMRC LLC relating to employee matters, non-competition, non-solicitation of employees and others, tax matters and purchase price excess or shortfall. Following the New Digimarc merger, New Digimarc succeeded to all of the |
|
|
|
7
|
|
rights, interests and obligations of DMRC LLC under the Separation Agreement by operation of law. The Separation Agreement continues in effect following the spin-off with respect to various indemnification, insurance, confidentiality and cooperation provisions. For a description of the rights and obligations of the parties under the Separation Agreement, see "Our Relationship with Old Digimarc After the Spin-OffSeparation Agreement," beginning on page 88. |
Transition Services Agreement |
|
The Transition Services Agreement between Old Digimarc and us sets forth the terms under which we and Old Digimarc are providing to one another transition services that are substantially consistent with the services provided by the Secure ID Business to the Digital Watermarking Business, or by the Digital Watermarking Business to the Secure ID Business, as applicable, before completion of the spin-off. For a description of the rights and obligations of the parties under the Transition Services Agreement, see "Our Relationship with Old Digimarc After the Spin-OffTransition Services Agreement," beginning on page 93. |
License Agreement |
|
Under the terms of the License Agreement between New Digimarc and L-1 Identity Solutions Operating Company, L-1 Identity Solutions Operating Company granted to New Digimarc and its affiliates a license under certain patents owned by L-1 Identity Solutions Operating Company upon completion of the spin-off for use and exploitation in specified fields related to the Digital Watermarking Business, and New Digimarc granted to L-1 Identity Solutions Operating Company and its affiliates an exclusive license under certain patents owned by New Digimarc upon completion of the spin-off for use and exploitation in certain fields related to the Secure ID Business. For a description of the rights and obligations of the parties under the License Agreement, see "Our Relationship with Old Digimarc After the Spin-OffLicense Agreement," beginning on page 92. |
Management and Operation of New Digimarc after the distribution |
|
New Digimarc is operating the Digital Watermarking Business, managed by the same Beaverton, Oregon based management team employed by Old Digimarc Corporation prior to the distribution, except for Robert Eckel, Old Digimarc's current President, ID Systems, and Reed Stager, Old Digimarc's former Executive Vice President. |
Anti-takeover effects |
|
Some provisions of our certificate of incorporation, our bylaws and Delaware law may have the effect of making more difficult an acquisition of control of us in a transaction not approved by our board of directors. For more information, see "Description of Our Capital Stock," beginning on page 96. |
You should carefully read the "Risk Factors" beginning on page 11 of this information statement.
8
Corporate Information and Structure
We were incorporated in Delaware on June 18, 2008 by Old Digimarc to facilitate the separation of its Secure ID Business and its Digital Watermarking Business through the spin-off and pursuant to the Old Digimarc/L-1 merger agreement. Our principal executive offices are located at 9405 S.W. Gemini Drive, Beaverton, Oregon 97008, and our telephone number is (503) 469-4800. We maintain a website at www.digimarc.com . Our website and the information contained on that site, or connected to that site, are not incorporated into this information statement.
Summary Historical and Pro Forma Financial Information
The following table sets forth our selected historical financial data as of and for each of the periods indicated. We derived the selected historical financial data as of and for each of the five years ended December 31 and for the six-months ended June 30 from our financial statements. The pro forma financial information set forth below portrays how our spin off from Old Digimarc might have affected our historical financial information if it had occurred on June 30, 2008 for balance sheet purposes and on January 1, 2007 for income statement purposes. This information is only a summary and you should read it in conjunction with our historical financial statements included in this information statement and the related notes, the pro forma financial information and the related notes and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in this information statement. As you read this, you should understand that the pro forma financial information is presented for informational purposes only, and is not intended to show what our financial position or results of operations would have been had we been operating as an independent, publicly-traded company during these periods or what our financial position or results of operations might be in the future. Our financial information may not be indicative of our future performance and does not necessarily reflect what our financial condition and results of operations would have been had we operated as an independent, stand-alone entity for the periods presented, particularly since many changes will occur in our operations and capitalization as a result of our spin-off from Old Digimarc.
The pro forma financial information presented reflects our financial results as fully described in the financial statements and the notes to our financial statements beginning on page F-3 of this information statement and gives effect to the following pro forma transactions:
The pro forma financial information presented does not give effect to the following:
It is expected that the initial operating costs of New Digimarc on a stand-alone basis will be higher than those allocated to the New Digimarc operations under the shared services methodology applied in the audited financial statements of New Digimarc. Consequently, the financial position, results of operations and cash flows of New Digimarc reflected in the financial statements of New Digimarc may not be indicative of those that would have been achieved or that might be achieved in the future had
9
New Digimarc been operated as a separate, stand-alone entity for the periods reflected in its financial statements.
The dollar amounts in the tables below are in thousands.
|
For the Years Ended December 31,
|
For the Six Months Ended June 30,
|
||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(1)
|
2003
(unaudited) |
2004
(unaudited) |
2005
(audited) |
2006
(audited) |
2007
(audited) |
2007
(unaudited) |
2008
(unaudited) |
|||||||||||||||
Operating revenues | $ | 9,306 | $ | 11,184 | $ | 11,119 | $ | 11,071 | $ | 13,025 | $ | 6,331 | $ | 10,200 | ||||||||
Gross profit percentage | 58 | % | 68 | % | 69 | % | 66 | % | 69 | % | 70 | % | 70 | % | ||||||||
Operating income (loss) | (2 | ) | (2 | ) | $ | (5,770 | ) | $ | (3,908 | ) | $ | (1,310 | ) | $ | (964 | ) | $ | 1,084 |
|
For the Years Ended December 31,
|
As of June 30,
|
Pro Forma As of June 30,
|
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(1)
|
2003
(unaudited) |
2004
(unaudited) |
2005
(audited) |
2006
(audited) |
2007
(audited) |
2007
(unaudited) |
2008
(unaudited) |
2008
(unaudited) |
||||||||||||||||
Cash, cash equivalents and short term investments | $ | 78,633 | $ | 51,836 | $ | 31,982 | $ | 33,073 | $ | 32,713 | $ | 28,856 | $ | 36,914 | $ | 55,104 | ||||||||
Total assets | (2 | ) | $ | 56,210 | $ | 36,896 | $ | 37,658 | $ | 38,451 | $ | 32,940 | $ | 43,239 | $ | 61,429 | ||||||||
Long-term obligations | $ | 0 | $ | 160 | $ | 295 | $ | 294 | $ | 215 | $ | 298 | $ | 242 | $ | 242 |
Prior to the acquisition of the Secure ID Business from Polaroid by Old Digimarc in late December 2001, New Digimarc operated as a separate entity. Its revenues for 2000 and 2001 were $11.9 million and $13.2 million, respectively, and its operating losses exceeded $20 million in each of those years. In the years after the acquisition and up through the present date, Old Digimarc's business, including New Digimarc, began to benefit from a shared services operating model where its general and administrative costs, among others, could be spread more efficiently across multiple operating activities. In addition, in mid-2005, Old Digimarc began a reorganization of its business to focus on its core strengths while significantly reducing its cost of operations in all areas and growing revenues in both the Secure ID Business and Digital Watermarking Business. The change in the operating results of New Digimarc since its early loss years prior to the acquisition benefited from the shared services operating model in 2002, and later, beginning in 2005, further benefited as operating costs were reduced and revenues began to rise to current levels. As a result, New Digimarc's operating losses were reduced over the years to $1.3 million in 2007. New Digimarc achieved an operating profit of $1.6 million in the first six months of 2008.
10
You should carefully consider each of the following risks and all of the other information set forth in this information statement. The following risks relate principally to our business, our relationship with Old Digimarc and our status as a separate publicly-traded company, as well as risks related to the nature of the spin-off itself. The risks and uncertainties described below are those risks of which we are aware, that we consider to be material to our business. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected. In that case, the trading price of our common stock could decline.
Risks Related to our Common Stock and the Spin-off
A trading market may not develop for shares of our common stock, which could adversely affect the market price of those shares.
There is no trading market for shares of our common stock, and we do not assure you that such a market will develop or be sustained after the New Digimarc stock delivery date. We have been approved to have our shares of common stock listed on the Nasdaq Global Market under the symbol "DMRC"; however, following the spin-off, the shares of our common stock are being held in trust for the benefit of our stockholders until the Form 10 is declared effective by the SEC. Until that time, the shares will not be listed for trading and you will not be able to sell any of your shares of our common stock. Once the shares have been listed and trading commences, we cannot predict the extent to which investor interest will lead to the development of an active and liquid trading market in our common stock on the Nasdaq Global Market or otherwise. If an active trading market does not develop, you may have difficulty selling any of your shares of common stock.
Substantial sales of our common stock following the spin-off may have an adverse impact on the trading price of our common stock.
We expect that under the United States federal securities laws all of the shares of our common stock distributed to our stockholders in the spin-off will be eligible for resale in the public market, except for shares held by our affiliates. Some of our stockholders who receive our shares of common stock may decide that their investment objectives do not include ownership of our shares, and may sell their shares of common stock following the spin-off. In particular, stockholders that are institutional investors may have investment parameters that require their portfolio companies to maintain a minimum market capitalization that we may not achieve as a result of our separation from Old Digimarc. We cannot predict whether stockholders will sell large numbers of our shares of common stock in the public market following the spin-off, or how quickly they may sell these shares. If our stockholders sell large numbers of our shares of common stock over a short period of time, or if investors anticipate large sales of our shares of common stock over a short period of time, the trading price of our shares of common stock could be adversely affected.
We have no recent operating history as a separate company. Our historical and pro forma financial information are not necessarily representative of the results we would have achieved as a separate publicly-traded company, and they may not be a reliable indicator of our future results.
Old Digimarc did not account for us, and we were not operated, as a stand-alone public company for the periods presented in our financial statements included in this information statement. Our financial statements have been "carved out" from Old Digimarc's consolidated financial statements and reflect assumptions and allocations made by Old Digimarc. The financial statements do not fully represent what our financial position, results of operations and cash flow would have been had we operated as a stand-alone public company for the periods presented. Significant changes may occur in our cost structure, tax structure, management, financing and business operations as a result of our
11
operating as a public company separate from Old Digimarc. These changes may result in increased costs associated with reduced economies of scale, marketing expenses, the incurrence of debt and interest expense, stand-alone costs for services formerly provided by Old Digimarc, the need for additional personnel to perform services formerly provided by Old Digimarc, and the legal, accounting, compliance and other costs associated with being a public company with equity securities listed on a national exchange. As a result, the historical and pro forma information included in this information statement are not necessarily indicative of what our financial position, results of operations and cash flow will be following the spin-off. For more information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Pro Forma Financial Information" and our financial statements and related notes included elsewhere in this information statement.
Our common stock price may be volatile, and you could lose all or part of your investment in shares of our common stock.
The price of shares of our common stock may fluctuate as a result of changes in our operating performance or prospects and other factors. Some specific factors that may have a significant effect on the price of shares of our common stock include:
We have the ability to issue additional equity securities, which would lead to dilution of our issued and outstanding common stock.
The issuance of additional equity securities or securities convertible into equity securities would result in dilution of our existing stockholders' equity interests. We are authorized to issue, without stockholder approval, up to 2,500,000 shares of preferred stock, par value $0.001 per share, in one or more series, which may give other stockholders dividend, conversion, voting, and liquidation rights, among other rights, which may be superior to the rights of holders of our common stock. In addition, we are authorized to issue up to 50,000,000 shares of common stock, par value $0.001 per share. We are authorized to issue, without stockholder approval except as required by law or Nasdaq regulations, securities convertible into either common stock or preferred stock.
Following the spin-off, we issued to our executive officers an aggregate of 10,000 shares of Series A Redeemable Nonvoting Preferred stock. In the event of our liquidation, dissolution or other winding up, before any payment or distribution is made to the holders of common stock, holders of the
12
Series A Redeemable Nonvoting Preferred stock will be entitled to receive a value of $5.00 per share of Series A Redeemable Nonvoting Preferred stock held by the stockholder. The Series A Redeemable Nonvoting Preferred has no voting rights, and may be redeemed by us at any time on or after June 18, 2013.
Our corporate governance documents as well as Delaware law may delay or prevent an acquisition of us that stockholders may consider favorable, which could decrease the value of your shares.
Our certificate of incorporation and bylaws and Delaware law contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. These provisions include supermajority voting requirements for stockholders to amend our organizational documents and limitations on actions by our stockholders by written consent. In addition, our board of directors has the right to issue preferred stock without stockholder approval, which could be used to dilute the stock ownership of a potential hostile acquirer. Delaware law also imposes some restrictions on mergers and other business combinations between any holder of 15% or more of our outstanding common stock and us. Although we believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics and thereby provide for an opportunity to receive a higher bid by requiring potential acquirers to negotiate with our board of directors, these provisions apply even if the offer may be considered beneficial by some stockholders. See "Description of Our Capital Stock."
Risks Related to Our Business
We have a history of losses and we may not achieve or sustain profitability, particularly if we were to lose large contracts.
Old Digimarc's Digital Watermarking Business had incurred significant net losses from inception. Old Digimarc's accumulated deficit was $100 million as of December 31, 2007. Although we anticipate that we will achieve profitability for 2009, in order to achieve sustained profitability we will need to generate higher revenue than Old Digimarc's Digital Watermarking Business had in prior years and control expenditures. Achieving sustained profitability will depend upon a variety of factors, including the extent to which we may be required to increase the size of our workforce in order to execute our business strategy and capitalize on new opportunities. In addition, we will evaluate our strategy and market opportunities on an ongoing basis and will adjust our approach to market conditions from time to time. Finally, various adverse developments, including the loss of large contracts or cost overruns on our existing contracts, could have a negative effect on our revenue or our margins. Accordingly, increases in our expenses may not be offset by revenue increases and as a result we may not be able to achieve or sustain profitability.
A small number of customers account for a substantial portion of our revenues and the loss of any large contract may result in loss of revenue.
Historically, we have derived a significant portion of our revenues from a limited number of customers. Two customers, a consortium of Central Banks and The Nielsen Company, which we refer to as Nielsen, represented approximately 77% of our revenue for the six months ended June 30, 2008. Contracts between our large central banking, federal and commercial customers generally have terms of three to five or more years in length and sometimes for the life of the patents under license, which could be up to 20 years. Some contracts we enter into contain termination for convenience provisions. If we were to lose a contract due to termination for convenience or in a competitive situation, our financial results could be adversely affected.
We expect to continue to depend upon a small number of customers for a significant portion of our revenues for the foreseeable future. The loss of, or decline in, orders or backlog from one or more major customers could reduce our revenues and have a material adverse effect on our financial results.
13
The majority of our revenue is subject to commercial contracts and development of new markets that may involve unpredictable delays and other unexpected changes, which might limit our actual revenue in any given quarter or year.
We derive substantial portions of our revenue from commercial contracts tied to development schedules or development of new markets, which could shift for months, quarters or years as the needs of our customers and the markets in which they participate change. Government agencies and commercial customers also face budget pressures that introduce added uncertainty. Any shift in development schedules, the markets in which we or our licensees participate, or customer procurement processes, which are outside our control and may not be predictable, could result in delays in bookings forecasted for any particular period, could affect the predictability of our quarterly and annual results, and might limit our actual revenue in any given quarter or year, resulting in reduced and less predictable revenue and adversely affecting profitability.
The market for our products is highly competitive and alternative technologies or larger companies may undermine, limit or eliminate the market for our products' technologies, which would decrease our revenue and profits.
The markets in which we compete for business are intensely competitive and rapidly evolving. We expect competition to continue from both existing competitors and new market entrants. We face competition from other companies and from alternative technologies. Because the market solutions based on our technologies is still in an early stage of development, we also may face competition from unexpected sources.
Alternative technologies that may directly or indirectly compete with particular applications of our watermarking technologies include:
14
In the competitive environment in which we operate, product generation, development and marketing processes relating to technology are uncertain and complex, requiring accurate prediction of demand as well as successful management of various development risks inherent in technology development. In light of these dependencies, it is possible that failure to successfully accommodate future changes in technologies related to our technologies could have a long-term effect on our growth and results of operations.
New developments are expected to continue, and we do not assure you that discoveries by others, including current and potential competitors, will not render our services and products noncompetitive. Moreover, because of rapid technological changes, we may be required to expend greater amounts of time and money than anticipated to develop new products and services, which in turn may require greater revenue streams from these products and services to cover developmental costs. Many of the companies that compete with us for some of our business, as well as other companies with whom we may compete in the future, are larger and may have greater technical, financial, marketing, and political resources than we do. These resources could enable these companies to initiate severe price cuts or take other measures in an effort to gain market share or otherwise impede our progress. We do not assure you that we will be able to compete successfully against current or future participants in our market or against alternative technologies, or that the competitive pressures we face will not decrease our revenue and profits in the future.
We depend on our management and key employees for our future success. If we are not able to retain, hire or integrate these employees, we may not be able to meet our commitments.
Our success depends to a significant extent on the performance and continued service of our management and our intellectual property team. The loss of the services of any of these employees could limit our growth or undermine customer relationships.
Due to the high level of technical expertise that our industry requires, our ability to successfully develop, market, sell, license and support our products, services, and intellectual property depends to a significant degree upon the continued contributions of our key personnel in engineering, sales, marketing, operations, legal and licensing, many of whom would be difficult to replace. We believe our future success will depend in large part upon our ability to retain our current key employees and our ability to attract, integrate and retain these personnel in the future. It may not be practical for us to match the compensation some of our employees could garner at other employment. In addition, we may encounter difficulties in hiring and retaining employees because of concerns related to our financial performance. These circumstances may have a negative effect on the market price of our common stock, and employees and prospective employees may factor in the uncertainties relating to our stability and the value of any equity-based incentives in their decisions regarding employment opportunities and decide to leave our employ. Moreover, our business is based in large part on patented technology, which is unique and not generally known. New employees require substantial training, involving significant resources and management attention. Competition for experienced personnel in our business can be intense. If we do not succeed in attracting new, qualified personnel or in integrating, retaining and motivating our current personnel, our growth and ability to deliver products and services that our customers require may be hampered. Although our employees generally have executed agreements containing non-competition clauses, we do not assure you that a court would enforce all of the terms of these clauses or the clauses generally. If these clauses were not fully enforced, our employees could be able to freely join our competitors. Although we generally attempt to control access to and distribution of our proprietary information by our employees, we do not assure you that the confidential nature of our proprietary information will be maintained in the course of such
15
future employment. Any of these events could have a material adverse effect on our financial and business prospects.
If leading companies in our industry or standard-setting bodies or institutions downplay, minimize, or reject the use of our technologies, deployment may be slowed and we may be unable to achieve revenue growth, particularly in the media and entertainment sectors.
Many of our business endeavors, such as our licensing of intellectual property in support of audio and video copy-control applications, can be impeded or frustrated by larger, more influential companies or by standard-setting bodies or institutions downplaying, minimizing or rejecting the value or use of our other technologies. A negative position by these companies, bodies or institutions, if taken, may result in obstacles for us that we would be incapable of overcoming and may block or impede the adoption of digital watermarking, particularly in the media and entertainment market. In addition, potential customers in the media and entertainment industry may delay or reject initiatives that relate to deployment of our technologies. Such a development would make the achievement of our business objectives in this market difficult or impossible.
If we are unable to respond to regulatory or industry standards effectively, or if we are unable to develop and integrate new technologies effectively, our growth and the development of our products and services could be delayed or limited.
Our future success will depend in part on our ability to enhance and improve the responsiveness, functionality and features of our products and services, and those of our business partners, in accordance with regulatory or industry standards. Our ability to remain competitive will depend in part on our ability to influence and respond to emerging industry and governmental standards in a timely and cost-effective manner. If we are unable to influence these or other standards or respond to such standards effectively, our growth and the development of certain products and services could be delayed or limited.
Our market is characterized by new and evolving technologies. The success of our business will depend on our ability to develop and integrate new technologies effectively and address the increasingly sophisticated technological needs of our customers in a timely and cost-effective manner. Our ability to remain competitive will depend in part on our ability to:
We do not assure you that we will be successful in responding to these technological and industry challenges in a timely and cost-effective manner. If we are unable to develop or integrate new technologies effectively or respond to these changing needs, our margins could decrease, and our release of new products and services and the deployment of our watermarking technology could be adversely affected.
We may need to retain additional employees or contract labor in the future in order to take advantage of new business opportunities arising from increased demand, which could impede our ability to achieve or sustain profitability.
We have staffed our company with the intent of achieving and sustaining profitability. Our current staffing levels could affect our ability to respond to increased demand for our services. In addition, to meet any increased demand and take advantage of new business opportunities in the future, we may
16
need to increase our workforce through additional employees or contract labor, which would increase our costs. If we experience such an increase in costs, we may not succeed in achieving or sustaining profitability.
Our future growth will depend to some extent on our successful implementation of our technology in solutions provided by third parties, including partners and suppliers.
Our business and strategy rely substantially on deployment of our technologies by third-party software developers and original equipment manufacturers. For example, one of our technologies is commonly deployed in image editing applications to permit users of these products to read data embedded in imagery, and thereby identify ownership and discern the identities of image owners. Another of our technologies is used in our anti-counterfeiting products. If third parties who include our technologies in their products cease to do so, or we fail to obtain other partners who will incorporate, embed, integrate or bundle our technologies, or these partners are unsuccessful in their efforts, our efforts to expand deployment of our technologies would be adversely affected and, consequently, our ability to increase revenues would be adversely affected and we may suffer other adverse effects to our business. In addition, if our technologies do not perform according to market expectations, our future sales would suffer as customers seek other providers.
Our growth of IP licensing revenues depends on successful implementation of solutions by our licensees and third parties and successful development of new markets for our technologies.
Our IP licensing business and strategy rely, in part, on successful deployment of our technologies by our licensees and other third-party software developers and original equipment manufacturers. For example, our technology is being deployed as part of Digital Cinema systems to theatres around the world by companies that integrate technologies and subsystems. If third parties who license our intellectual property for their products cease to do so, or we fail to obtain other partners who will incorporate, embed, integrate or bundle our technologies and intellectual property, or these partners are unsuccessful in their efforts, our ability to increase licensing revenues would be adversely affected. In addition, if our technologies do not perform according to market expectations, our future sales would suffer as customers seek other providers.
The loss of international customers or the failure to find new international customers could adversely affect our profitability and slow our growth.
We believe that revenue from sales of products and services to commercial, governmental and other customers outside the United States could represent a growing percentage of our total revenue in the future. International sales and services are subject to a number of risks that can adversely affect our sales of products and services to customers outside of the United States, including the following:
17
We do not have an extensive operational infrastructure for international business. We generally depend on local or international business partners and subcontractors for performance of substantial portions of our business. These factors may result in greater risk of performance problems or of reduced profitability with respect to our international programs in these markets. In addition, if foreign customers, in particular foreign government authorities, terminate or delay the implementation of our products and services, it may be difficult for us to recover our potential losses.
We are exposed to currency exchange fluctuations and do not engage in foreign currency hedging transactions. We may in the future choose to limit our exposure by the purchase of forward foreign exchange contracts, collared options, currency swap agreements or through similar hedging strategies. No currency hedging strategy, however, can fully protect against exchange-related losses.
The terms and conditions of our contracts could subject us to damages, losses and other expenses if we fail to meet delivery and other performance requirements.
Our service contracts typically include provisions imposing (i) development, delivery and installation schedules and milestones, (ii) customer acceptance and testing requirements and (iii) other performance requirements. To the extent these provisions involve performance over extended periods of time, risks of noncompliance may increase. From time to time we have experienced delays in system implementation, timely acceptance of programs, concerns regarding program performance and other contractual disputes. Any failure to meet contractual milestones or other performance requirements as promised, or to successfully resolve customer disputes, could result in us incurring liability for damages, as well as increased costs, lower margins, or compensatory obligations in addition to other losses, such as harm to our reputation. Any unexpected increases in costs to meet our contractual obligations or any other requirements necessary to address claims and damages with regard to our customer contracts could have a material adverse effect on our business and financial results.
Our products could have unknown defects or errors, which may give rise to claims against us, divert application of our resources from other purposes or increase our project implementation and support costs.
Products and services as complex as those we offer or develop may contain undetected defects or errors. Furthermore, we often provide complex implementation, integration, customization, consulting and other technical services in connection with the implementation and ongoing maintenance of our products. Despite testing, defects or errors in our products and services may occur, which could result in delays in the development and implementation of products and systems, inability to meet customer requirements or expectations in a timely manner, loss of revenue or market share, increased implementation and support costs, failure to achieve market acceptance, diversion of development resources, injury to our reputation, increased insurance costs, increased service and warranty costs and warranty or breach of contract claims. Although we attempt to reduce the risk of losses resulting from warranty or breach of contract claims through warranty disclaimers and liability limitation clauses in our sales agreements when we can, these contractual provisions are sometimes not included and may not be enforceable in every instance. If a court refuses to enforce the liability-limiting provisions of our contracts for any reason, or if liabilities arose that were not contractually limited or adequately covered by insurance, the expense associated with defending these actions or paying the resultant claims could be significant.
The security systems used in our product and service offerings may be circumvented or sabotaged by third parties, which could result in the disclosure of sensitive information or private personal information or cause other business interruptions that could damage our reputation and disrupt our business.
Our business relies on computers and other information technologies, both internal and at customer locations. The protective measures that we use may not prevent security breaches, and failure to prevent security breaches may disrupt our business, damage our reputation, and expose us to
18
litigation and liability. A party who is able to circumvent security measures could misappropriate sensitive or proprietary information or materials or cause interruptions or otherwise damage our products, services and reputation, and the property of our customers. If unintended parties obtain sensitive data and information, or create bugs or viruses or otherwise sabotage the functionality of our systems, we may receive negative publicity, incur liability to our customers or lose the confidence of our customers, any of which may cause the termination or modification of our contracts. Further, our insurance coverage may be insufficient to cover losses and liabilities that may result from these events.
In addition, we may be required to expend significant capital and other resources to protect ourselves against the threat of security breaches or to alleviate problems caused by these breaches. Any protection or remedial measures may not be available at a reasonable price or at all, or may not be entirely effective if commenced.
We are subject to risks encountered by companies developing and relying upon new technologies, products and services for substantial amounts of their growth or revenue.
Our business and prospects must be considered in light of the risks and uncertainties to which companies with new and rapidly evolving technologies, products and services are exposed. These risks include the following:
Some of our key technologies and solutions from our patent or technology licensees are in the development stage. Consequently, products incorporating these technologies and solutions are undergoing technological change and are in the early stage of introduction in the marketplace. Delays in the adoption of these products or adverse competitive developments may result in delays in the development of new revenue sources or the growth in our revenue. In addition, we may be required to incur unanticipated expenditures if product changes or improvements are required. Additionally, new industry standards might redefine the products that we or our licensees are able to sell, especially if these products are only in the prototype stage of development. If product changes or improvements are required, success in marketing these products by us or our licensees and achieving profitability from these products could be delayed or halted. We also may be required to fund any changes or improvements out of operating income, which could adversely affect our profitability.
We may not be able to protect adequately our intellectual property, and we may be subject to infringement claims and other litigation, which could adversely affect our business.
Our success depends in part on licensing our proprietary technologies. To protect our intellectual property portfolio, we rely on a combination of patent, copyright, trademark and trade secret rights, confidentiality procedures and licensing arrangements. Unlicensed copying and use of our intellectual property or infringement of our intellectual property rights result in the loss of revenue to us.
19
We face risks associated with our patent position, including the potential need from time to time to engage in significant legal proceedings to enforce our patents, the possibility that the validity or enforceability of our patents may be denied, and the possibility that third parties will be able to compete against us without infringing our patents. Budgetary concerns may cause us not to file, or continue, litigation against known infringers of our patent rights, or may cause us not to file for, or pursue, patent protection for all of our inventive technologies in jurisdictions where they may have value. Some governmental entities that might infringe our intellectual property rights may enjoy sovereign immunity from such claims. Failure to reliably enforce our patent rights against infringers may make licensing more difficult. If we fail to protect our intellectual property rights and proprietary technologies adequately, if there are changes in applicable laws that are adverse to our interests, or if we become involved in litigation relating to our intellectual property rights and proprietary technologies or relating to the intellectual property rights of others, our business could be seriously harmed because the value ascribed to our intellectual property could diminish and result in a lower stock price or we may incur significant costs in bringing legal proceedings against third parties who are infringing our patents.
Effective protection of intellectual property rights may be unavailable or limited. Patent protection throughout the world is generally established on a country-by-country basis. We have applied for patent protection in the United States and in various other countries. We do not assure you, however, that pending patents will be issued or that issued patents will be valid or enforceable. Failure to obtain these patents or failure to enforce those patents that are obtained may result in a loss of revenue to us. We do not assure you that the protection of our proprietary rights will be adequate or that our competitors will not independently develop similar technologies, duplicate our services or design around any of our patents or other intellectual property rights.
We are the exclusive licensee under some third-party patents, and may need the assistance of these parties if we choose to enforce any of these patent rights. The cooperation of these third parties cannot be assured. Although we rely on some of these technologies for our products or for our licenses to third parties to date, the licensed patents have not been material to our operations.
As more companies engage in business activities relating to digital watermarking, and develop corresponding intellectual property rights, it is increasingly likely that claims may arise which assert that some of our products or services infringe upon other parties' intellectual property rights. These claims could subject us to costly litigation, divert management resources and result in the invalidation of our intellectual property rights. These claims may require us to pay significant damages, cease production of infringing products, terminate our use of infringing technologies or develop non-infringing technologies. In these circumstances, continued use of our technologies may require that we acquire licenses to the intellectual property that is the subject of the alleged infringement, and we might not be able to obtain these licenses on commercially reasonable terms or at all. Our use of protected technologies may result in liability that threatens our continuing operation.
Some of our contracts include provisions regarding our non-infringement of third-party intellectual property rights. As deployment of our technology increases, and more companies enter our markets, the likelihood of a third party lawsuit resulting from these provisions increases. If an infringement arose in a context governed by such a contract, we may have to refund to our customer amounts already paid to us or pay significant damages, or we may be sued by the party allegedly infringed upon. Similarly, as we seek to broaden the number of companies licensed under our patent portfolio, some may seek contractual assurances that we will pursueby litigation if necessarytheir competitors who use our patented technology but are not licensed to do so. Compliance with any such contract provisions may require that we pursue litigation where our costs exceed our likely recovery.
As part of our confidentiality procedures, we generally enter into non-disclosure agreements with our employees, directors, consultants and corporate partners, and attempt to control access to and
20
distribution of our technologies, solutions, documentation and other proprietary information. Despite these procedures, third parties could copy or otherwise obtain and make unauthorized use of our technologies, solutions or other proprietary information or independently develop similar technologies, solutions or information. The steps that we have taken to prevent misappropriation of our solutions, technologies or other proprietary information may not prevent their misappropriation.
We do not assure you that our internal controls and procedures will succeed in achieving their stated goals under all potential future conditions, regardless of how remote.
We have deployed significant resources to design, implement, and maintain effective internal controls and procedures, including disclosure controls and procedures. Although our internal controls and procedures are designed to provide reasonable assurance of achieving their objectives, the design of any system of controls is based in part upon various assumptions about the likelihood of future events, and we do not assure you that our system will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Any failure to maintain adequate controls or to adequately implement required new or improved controls could harm our operating results or cause us to fail to meet our reporting obligations in a timely and accurate manner.
If our revenue models and pricing structures relating to products and services that are under development do not gain market acceptance, the products and services may fail to attract or retain customers and we may not be able to generate new or sustain existing revenue.
Some of our business involves embedding digital watermarks in traditional and digital media, including identification documents, secure documents, audio, video and imagery, and licensing our intellectual property. Our revenue stream is based primarily on a combination of development, consulting, subscription and license fees from copyright protection and counterfeit deterrence applications. We have not fully developed revenue models for some of our future digital watermarking applications and licensing endeavors. Because some of our products and services are not yet well-established in the marketplace, and because some of these products and services will not directly displace existing solutions, we cannot be certain that the pricing structure for these products and services will gain market acceptance or be sustainable over time or that the marketing for these products and services will be effective.
While we currently have no claims, litigation or regulatory actions filed or pending by or against us, future claims, litigation or enforcement actions could arise, and any obligation to pay a judgment or damages could materially harm our business or financial condition.
From time to time, Old Digimarc had been engaged in litigation and incurred significant costs relating to these matters. The inherent uncertainties of litigation, and the ultimate cost and outcome of litigation cannot be predicted. We carry director and officer liability insurance and other insurance policies that provide protection against various liabilities relating to claims against us and our executive officers and directors up to prescribed policy limits. If these policies do not adequately cover expenses and liabilities relating to future lawsuits, our financial condition could be materially harmed. In addition, if this insurance coverage becomes unavailable to us or premiums increase significantly in the future, it could make it more difficult for us to retain and attract officers and directors and could expose us to potentially self-funding certain future liabilities ordinarily mitigated by director and officer liability insurance.
21
Background of the Spin-Off
As part of its ongoing evaluation of Old Digimarc's business and strategic direction, Old Digimarc's board of directors from time to time evaluated Old Digimarc's strategic alternatives. In addition, Old Digimarc, from time to time, received unsolicited inquiries related to an acquisition of all or part of the company. In the second half of 2006, Old Digimarc's board of directors determined that Old Digimarc would benefit from the resources and analysis provided by financial advisors familiar with the company and the businesses in which it is engaged. In November 2006, Old Digimarc engaged USBX Advisory Services, LLC, which we refer to as USBX Advisory Services, and RA Capital Advisors LLC, which we refer to as RA Capital, as Old Digimarc's financial advisors to assess Old Digimarc's Secure ID Business and Digital Watermarking Business, respectively, and to assist in the evaluation of strategic alternatives, including identifying potential complementary businesses for Old Digimarc to acquire and assisting management and the board of directors in reviewing and analyzing potential inquiries from parties interested in acquiring all or a portion of the company.
In the spring and summer of 2007, USBX Advisory Services facilitated discussions and financial and legal due diligence with four parties interested in potential strategic transactions with Old Digimarc, none of which resulted in an offer to acquire Old Digimarc or any of its assets or businesses. In the fall of 2007, certain assets of USBX Advisory Services, including the Old Digimarc engagement and the primary USBX Advisory Services bankers working on the Old Digimarc engagement, were acquired by Imperial Capital, LLC, which we refer to as Imperial Capital.
On October 11, 2007, Robert Basil, Vice President of Strategic Planning and Business Operations of L-1, contacted a representative of USBX Advisory Services to facilitate a conversation between L-1 and Old Digimarc about a possible strategic transaction. During October and November 2007, representatives of L-1 and USBX Advisory Services held several discussions regarding L-1's preliminary interest in the acquisition of Old Digimarc's Secure ID Business.
On December 6, 2007, at a meeting of Old Digimarc's board of directors, a representative of USBX Advisory Services reported to the board of directors on his conversations with representatives of L-1 regarding a potential acquisition of Old Digimarc's Secure ID Business.
On January 22, 2008, Bruce Davis, President and Chief Executive Officer of Old Digimarc, James T. Richardson, Old Digimarc's lead director, and Jay Beaghan, a representative of Imperial Capital after the acquisition of certain assets of USBX Advisory Services, met with Robert V. LaPenta, L-1's President and Chief Executive Officer, at the Portland, Oregon, airport to discuss L-1's interest in a potential transaction involving the acquisition of Old Digimarc's Secure ID Business. The parties discussed the broad parameters of a potential transaction.
On January 25, 2008, Old Digimarc's board of directors held a meeting, during which Messrs. Davis and Richardson reported on their meeting with Mr. LaPenta. The board of directors directed Old Digimarc's management, and its financial and legal advisors, to explore the threshold structuring, legal and regulatory issues involved in a potential transaction with L-1 to determine the preliminary viability of such a transaction.
Between January 29, 2008 and February 27, 2008, various representatives of L-1 and Old Digimarc, including representatives of L-1's financial, accounting and legal advisors, and Old Digimarc's legal advisors, held a series of telephone conferences to discuss legal, accounting and tax matters relating to a potential transaction between L-1 and Old Digimarc pursuant to which L-1 would acquire Old Digimarc's Secure ID Business, and to exchange preliminary due diligence information with respect to each company.
22
On February 28, 2008, at a meeting of Old Digimarc's board of directors, Old Digimarc's management and representatives of Perkins Coie LLP, Old Digimarc's legal counsel, which we refer to as Perkins Coie, reported the results of their initial discussions with L-1 and its representatives. The board of directors discussed a potential transaction between L-1 and Old Digimarc pursuant to which L-1 would acquire Old Digimarc's Secure ID Business, the risks related to such a transaction and alternatives to such a transaction available to Old Digimarc, including the sale of the entire company, remaining as a stand-alone company or acquisitions of other companies or businesses. The board of directors authorized management and Old Digimarc's advisors to continue to explore a potential transaction with L-1 pursuant to which L-1 would purchase Old Digimarc's Secure ID Business, and to pursue other opportunities for a strategic transaction.
On March 4, 2008, various representatives of L-1 and Old Digimarc, including representatives of their respective legal advisors, held a telephone conference to discuss the proposed tax structure of the potential transaction between L-1 and Old Digimarc involving the acquisition by L-1 of Old Digimarc's Secure ID Business.
On March 11, 2008, Mr. Davis and Mr. Beaghan met with Mr. LaPenta in New York City to discuss the terms of a potential transaction between Old Digimarc and L-1 involving the acquisition by L-1 of Old Digimarc's Secure ID Business. After several hours of meetings and discussions of the potential synergies of the companies' businesses and the terms of a potential transaction, Mr. Davis and Mr. LaPenta reached a preliminary understanding on the general economic terms of a proposed acquisition by L-1 of Old Digimarc's Secure ID Business and the related spin-off of Old Digimarc's Digital Watermarking Business.
On March 13, 2008, Old Digimarc's board of directors convened a meeting to discuss L-1's proposal relating to a potential transaction involving the acquisition by L-1 of Old Digimarc's Secure ID Business. Representatives of Imperial Capital, RA Capital and Perkins Coie also attended the meeting. The board of directors reviewed the structure and terms of the proposed transaction and received advice from its financial advisors regarding valuation implications of the proposal and strategic alternatives, including the sale of the entire company, remaining as a stand-alone company or acquisitions of other companies. A representative of Perkins Coie advised the board of directors on its fiduciary obligations with respect to the proposed transaction. Imperial Capital, the board of directors and management reviewed a list of potential acquirers and the board of directors then authorized Imperial Capital to contact a selected group of potential acquirers to ascertain whether any in the group was interested in pursuing a transaction. The group of potential acquirers was determined based on previous communications with those parties, the level of interest expressed and the likely value of a transaction with any of the potential acquirers. Following the meeting, Mr. Davis called Mr. LaPenta to confirm the board of directors' support of continued due diligence and the negotiation of the potential transaction involving the acquisition by L-1 of Old Digimarc's Secure ID Business.
From March 14, 2008 to March 18, 2008, representatives of Imperial Capital conducted a targeted market check and had conversations with approximately 10 qualified potential acquirers, other than L-1, which included both private equity firms and potential strategic buyers, to solicit interest in a potential transaction with Old Digimarc. Each party was informed of certain financial and timing considerations of any expression of interest. None of the parties submitted an offer to Old Digimarc on the bases described.
From March 15, 2008 through March 23, 2008, Old Digimarc's management and Perkins Coie, on the one hand, and L-1's management and Weil Gotshal, LLP, L-1's legal counsel, which we refer to as Weil Gotshal, on the other hand, negotiated the terms of a merger agreement and related schedules and agreements. The parties also continued their respective due diligence reviews during this period.
On March 19, 2008, Old Digimarc's board of directors met to consider the proposed transaction involving L-1's acquisition of Old Digimarc's Secure ID Business. Also present at the meeting were
23
representatives of Imperial Capital, RA Capital and Perkins Coie. Representatives of Old Digimarc's management and Perkins Coie reviewed the proposed terms of the merger agreement, including the remaining issues to be negotiated. The representatives of Imperial Capital and RA Capital presented an exhaustive review regarding the potential impact on stockholder value of a range of alternatives, including the potential transaction with L-1, a sale of the entire company, remaining as a stand-alone company or acquisitions of other companies. Representatives of Perkins Coie advised the board of directors on its fiduciary duties regarding the pursuit of alternative proposals and regulatory considerations regarding the proposed transaction. The board of directors directed management and Perkins Coie to attempt to negotiate the definitive merger agreement, including the related schedules and agreements, on terms that would be satisfactory to the board of directors.
From March 19, 2008 through much of the day on March 22, 2008, Old Digimarc's management and Perkins Coie, on the one hand, and L-1's management and Weil Gotshal, on the other hand, negotiated the terms of the merger agreement and related schedules and agreements.
On March 22, 2008, Old Digimarc's board of directors met to review all the terms of the proposed transaction involving L-1's acquisition of Old Digimarc's secure ID business and a substantially final draft of the merger agreement, and to receive a report from Perkins Coie of the legal aspects of the transaction. A representative of Perkins Coie again reviewed for the board of directors its fiduciary duties applicable to the potential transaction. Representatives of Imperial Capital and RA Capital then presented their financial analyses with respect to the proposed transaction with L-1. Following this presentation, Imperial Capital reviewed with the board of directors Imperial Capital's financial analyses and delivered to the board of directors an oral opinion, which opinion was confirmed by delivery of a written opinion, dated March 22, 2008, to the effect that, as of that date and based on and subject to various assumptions, matters considered and limitations described in its opinion, the consideration in the Old Digimarc/L-1 merger was fair, from a financial point of view, to the holders of Old Digimarc common stock. Old Digimarc's board of directors then unanimously approved the merger, the merger agreement and the transactions contemplated thereby and the spin-off of the Digital Watermarking Business and recommended that the Old Digimarc stockholders approve the merger and the merger agreement.
On March 23, 2008, following the resolution of the final issues in the merger agreement and related schedules and agreements, Old Digimarc, L-1 and a wholly owned subsidiary of L-1 executed the merger agreement, which merger agreement we refer to as the Original Merger Agreement.
On March 24, 2008, prior to the opening of U.S. financial markets, Old Digimarc and L-1 each issued a press release announcing that L-1 had entered into a definitive agreement to acquire Old Digimarc's Secure ID Business. The press releases also announced the related spin-off of Old Digimarc's Digital Watermarking Business and cash on hand.
Following the announcement of the Original Merger Agreement and through the second week of June 2008, Old Digimarc, L-1 and their respective representatives negotiated the terms of a separation agreement, transition services agreement and license agreement, each related to the spin-off of the Digital Watermarking Business, and prepared a prospectus/proxy statement related to the Old Digimarc/L-1 merger and a Form 10 for the registration of the shares of common stock of New Digimarc to be issued in connection with the spin-off.
On June 12, 2008, the Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, relating to the Old Digimarc/L-1 merger.
Subsequently, on June 12, 2008, Old Digimarc received an unsolicited non-binding indication of interest from Safran S.A., which we refer to as Safran, in which Safran proposed to acquire the outstanding common stock of Old Digimarc, following the spin-off of Old Digimarc's Digital
24
Watermarking Business and cash on hand, for $300 million in cash, subject to completion of due diligence and negotiation of customary definitive documentation similar to the Original Merger Agreement with L-1.
Between June 14, 2008 and June 16, 2008, Mr. Davis and Mr. LaPenta engaged in multiple conversations regarding potential modifications to the form and amount of consideration in the Original Merger Agreement and the structure of the transaction between Old Digimarc and L-1.
On June 16, 2008, Old Digimarc's board of directors met to consider the Safran proposal. After consulting with its legal and financial advisors, Old Digimarc's board of directors determined that the Safran proposal could reasonably be expected to lead to a "superior proposal" as defined in the Original Merger Agreement. Accordingly, the board of directors authorized Old Digimarc to furnish information to and enter into discussions with Safran regarding the proposal.
On June 17, 2008, during a telephonic conference, representatives of L-1, Weil Gotshal, Old Digimarc, Perkins Coie and Bank of America discussed L-1's intent to propose an all cash transaction effected pursuant to a tender offer. The participants also discussed the current status of L-1's debt financing.
Later on June 17, 2008, Old Digimarc received a written proposal in which L-1 proposed an all cash tender offer for all of the outstanding shares of Old Digimarc common stock, together with the associated preferred stock purchase rights, followed by a second-step merger, following the spin-off of Old Digimarc's Digital Watermarking Business and cash on hand, for an aggregate purchase price of $325 million. In addition, L-1 would invest $5 million in the Digital Watermarking Business.
In a subsequent telephonic conference on June 17, 2008, representatives of L-1, Weil Gotshal, Old Digimarc and Perkins Coie discussed L-1's revised proposal. Because of the preliminary nature of L-1's revised proposal, Mr. Davis indicated during the meeting that Old Digimarc did not intend at that time to terminate its discussions with Safran. At the end of this discussion, L-1 withdrew its revised proposal.
Later on June 17, 2008, a representative of Perkins Coie formally notified Mr. Molina of Old Digimarc's board of directors' determination that the Safran acquisition proposal could reasonably be expected to lead to a "superior proposal," as defined in the Original Merger Agreement.
On June 20, 2008, Safran's Executive Vice President, Strategy, Olivier Andries, Safran's legal and financial advisors, Mr. Davis, Mr. Chamness, Mr. Beaghan and a representative of Perkins Coie conducted a telephonic meeting during which the parties discussed logistics for facilitating Safran's due diligence review of Old Digimarc.
On June 22, 2008, Old Digimarc published a press release announcing receipt of the Safran proposal. During the week of June 22, 2008, representatives of Imperial Capital conducted separate telephonic meetings with Evercore Partners, Safran's financial advisors, and L-1 to discuss their respective acquisition proposals.
On June 23, 2008, New Digimarc filed its Form 10 to register the shares of its common stock to be distributed in connection with the spin-off of the Digital Watermarking Business. On the same day, Old Digimarc published a press release announcing the filing of the Form 10 by New Digimarc.
On June 24, 2008, Safran entered into a confidentiality agreement with Old Digimarc in compliance with the terms of the Original Merger Agreement to permit Safran to begin a due diligence review of Old Digimarc, and Old Digimarc delivered a copy of the confidentiality agreement to L-1. Following execution of the confidentiality agreement, representatives of Perkins Coie invited representatives of Safran and Kaye Scholer to conduct more detailed due diligence on Old Digimarc and its businesses through access to an online data room containing customary due diligence materials.
25
On June 25, 2008, representatives of Perkins Coie and Weil Gotshal discussed the terms and structure of a potential new proposal from L-1 by telephone conference.
On June 26, 2008, Mr. Davis and Mr. LaPenta discussed the proposed terms of a new revised offer to come from L-1. Separately, Mark S. Molina, L-1's Chief Legal Officer, and Robert P. Chamness, Old Digimarc's Chief Legal Officer, discussed the schedule and process contemplated by L-1 for presenting its potential new proposal to Old Digimarc.
Later on June 26, 2008, as a follow up to the earlier schedule and process call between Mr. Molina and Mr. Chamness, L-1 provided Old Digimarc and Perkins Coie with proposed amendments to the Original Merger Agreement providing for an offer to acquire, in an all cash tender offer, all of the outstanding Shares followed by a second-step merger, following the spin-off of the Digital Watermarking Business and cash on hand.
From June 27, 2008 through June 29, 2008, Old Digimarc, L-1 and their respective counsel and advisors negotiated the terms and conditions of the draft amendment to the Original Merger Agreement.
On June 28, 2008, L-1 provided a new written offer to Old Digimarc providing for an all cash tender offer for all of the outstanding shares of Old Digimarc's common stock, together with the associated preferred stock purchase rights, for an aggregate offer price of $310 million, followed by a second-step merger, following the spin-off of Old Digimarc's Digital Watermarking Business and cash on hand.
On June 29, 2008, Old Digimarc's board of directors met to consider the new L-1 proposal and a substantially final draft of the amended and restated merger agreement. A representative of Perkins Coie discussed material legal aspects of the transaction and reviewed for the board of directors its fiduciary duties applicable to the potential transaction. Representatives of Imperial Capital reviewed with the board of directors Imperial Capital's financial analyses and delivered to the board of directors an oral opinion, which opinion was confirmed by delivery of a written opinion, dated June 29, 2008, to the effect that, as of that date and based on and subject to various assumptions, matters considered and limitations described in its opinion, the consideration to be received by the Old Digimarc stockholders in the tender offer and in the Old Digimarc/L-1 merger was fair, from a financial point of view, to the holders of Old Digimarc common stock. Old Digimarc's board of directors then unanimously (1) approved and declared advisable the amended and restated merger agreement and the transactions contemplated thereby, including the tender offer by L-1 and the Old Digimarc /L-1 merger, (2) determined that the amended and restated merger agreement and the transactions contemplated thereby, including the tender offer by L-1 and the Old Digimarc /L-1 merger, were advisable, fair to and in the best interests of Old Digimarc and its stockholders and (3) recommended that the Old Digimarc stockholders accept the tender offer by L-1 and tender their shares of Old Digimarc common stock pursuant to the tender offer and, if necessary, adopt the amended and restated merger agreement.
On June 29, 2008, following the resolution of the final issues in the amended and restated merger agreement and related schedules and agreements, Old Digimarc, L-1 and a wholly owned subsidiary of L-1 executed the amended and restated merger agreement and Old Digimarc terminated its discussions with Safran.
On June 30, 2008, prior to the opening of U.S. financial markets, Old Digimarc and L-1 each issued a press release announcing that L-1 and Old Digimarc had entered into the amended and restated merger agreement providing for an all-cash transaction, by means of a tender offer followed by a second-step merger, with an aggregate offer price of $310 million.
Subsequently, on June 30, 2008, Perkins Coie on behalf of Old Digimarc provided written notice to Safran of Old Digimarc's decision to terminate discussions with Safran regarding a transaction, and
26
requested the destruction or return of confidential information pursuant to the terms of Safran's non-disclosure agreement with Old Digimarc.
On July 3, 2008, L-1 and a wholly owned subsidiary of L-1 commenced the tender offer for all of the outstanding shares of Old Digimarc common stock, together with the associated preferred stock purchase rights.
Following commencement of the tender offer and through the end of July 2008, Old Digimarc, L-1 and their respective representatives negotiated the terms of the Separation Agreement, Transition Services Agreement and License Agreement.
On July 17, 2008, L-1, a wholly owned subsidiary of L-1 and Old Digimarc executed Amendment No. 1 to the Amended and Restated Agreement and Plan of Merger, dated as of June 29, 2008, pursuant to which the parties agreed to adjust the offer price pursuant to the tender offer to $12.25 per share of Old Digimarc common stock, together with the associated preferred stock purchase rights.
On July 23, 2008, New Digimarc filed Amendment No. 1 to its Form 10 with the SEC.
At 12:00 midnight Eastern time on August 1, 2008, the initial offering period and withdrawal rights for the tender offer expired. L-1's subsidiary accepted for payment all of the shares of Old Digimarc common stock that were validly tendered and not withdrawn, representing approximately 79% of the issued and outstanding shares of Old Digimarc common stock. L-1 also commenced a subsequent offering period to acquire all of the remaining shares of Old Digimarc common stock not tendered into the offer, which subsequent offering period expired at 5:00 pm ET on August 8, 2008, following which L-1's subsidiary had accepted for payment approximately 87.5% of the issued and outstanding shares of Old Digimarc common stock. L-1 commenced a second subsequent offering which expired at 5:00 pm ET on August 13, 2008, following which L-1's subsidiary exercised its right under the Old Digimarc/L-1 merger agreement to purchase from Old Digimarc enough newly issued shares to increase its ownership of the issued and outstanding shares of Old Digimarc common stock to greater than 90%, and then effected the merger of Old Digimarc with and into L-1's subsidiary, with Old Digimarc continuing as the surviving corporation and a wholly owned subsidiary of L-1.
Also on August 1, 2008, prior to the expiration of the offer, the parties entered into the Separation Agreement, the Transition Services Agreement and the License Agreement. Old Digimarc contributed the assets and liabilities of its Digital Watermarking Business and all of its cash on hand to DMRC LLC, which was subsequently merged with and into New Digimarc. The shares of New Digimarc were transferred to a newly created trust for the benefit of holders of shares of Old Digimarc common stock as of the record date and time, on the basis of one share of New Digimarc common stock for every three and one-half shares of Old Digimarc common stock held by the stockholder.
On August 13, 2008, New Digimarc filed Amendment No. 2 to its Form 10 with the SEC.
On September 9, 2008, New Digimarc filed Amendment No. 3 to its Form 10 with the SEC.
Reasons for the Spin-Off
On June 29, 2008, Old Digimarc's board of directors approved the Old Digimarc/L-1 merger and the spin-off under the terms of the Old Digimarc/L-1 merger agreement. Old Digimarc believed that the Old Digimarc/L-1 merger and spin-off would enhance value for stockholders of Old Digimarc and stockholders of New Digimarc, by creating significant opportunities and benefits, including:
27
The Separation of the Digital Watermarking Business from Old Digimarc
Until August 1, 2008, we were a wholly owned subsidiary of DMRC LLC, which immediately prior to the spin-off was a wholly owned subsidiary of Old Digimarc. DMRC LLC was formed in Delaware on June 18, 2008, in anticipation of the spin-off of the Digital Watermarking Business. Prior to the expiration of, and as a condition to, the offer, in a transaction which we refer to as the restructuring, Old Digimarc contributed all of the assets and liabilities related to its Digital Watermarking Business, together with all of Old Digimarc's cash, including cash received upon the exercise of stock options, to DMRC LLC. The restructuring did not result in the loss of any significant Digital Watermarking Business customers or contracts.
Description of the Spin-Off
Following the restructuring, all of the limited liability company interests of DMRC LLC were transferred to a newly created trust for the benefit of Old Digimarc record holders on the basis of one unit of DMRC LLC for every three and one-half shares of Old Digimarc common stock held by the stockholder. Following the spin-off, the New Digimarc merger occurred. As a result, upon effectiveness of the Form 10, each Old Digimarc record holder will receive one share of New Digimarc common stock for every three and one-half shares of Old Digimarc common stock held by the stockholder as of the record date and time.
The trust in which all of the shares of New Digimarc are now held was established under Delaware law for the benefit of Old Digimarc record holders. The trust will hold all of the shares of New Digimarc until the Form 10 is declared effective by the SEC, at which time the shares will be distributed to Old Digimarc record holders, as beneficiaries of the trust, pro rata in accordance with their ownership of shares of Old Digimarc common stock on the record date and time. The New Digimarc shares are the sole asset of the trust, and the sole purpose of the trust is to hold and distribute those shares, as described. The trustees of the trust have been selected from New Digimarc's current independent directors, and have exclusive authority to take actions on behalf of the trust within its stated purposes. Beneficial interests in the trust will not be issued in certificated form or otherwise evidenced by separate instruments of any kind, and will not be permitted to be traded. Following distribution of the New Digimarc shares by the trust to the beneficiaries, the trust will be liquidated.
For all U.S. federal and applicable state and local income tax purposes, we, Old Digimarc and L-1 will treat the transfer of the DMRC LLC interests to the trust as a transfer of the DMRC LLC interests to the Old Digimarc record holders followed by a transfer of the interests by the stockholders to the trust, and the Old Digimarc record holders will be treated as the grantors and owners of the interests held in the trust pursuant to Section 677 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, and the trust will be treated as a liquidating trust within the meaning of Treasury Regulations Section 301.7701-4(d). The trustees will value, or cause to be valued, the DMRC LLC interests and notify the stockholders in writing of the valuation.
Manner of Effecting the Spin-Off
The general terms and conditions of the spin-off are set forth in the separation agreement entered into by and among Old Digimarc, DMRC LLC, us and, with respect to certain sections, L-1 on August 1, 2008. For a description of the terms of the separation agreement, see "Our Relationship with Old Digimarc After the Spin-OffSeparation Agreement."
Old Digimarc record holders are not required to pay for shares of our common stock to be received in connection with the spin-off and the New Digimarc merger. No vote of Old Digimarc
28
stockholders was required or sought in connection with the spin-off or the New Digimarc merger, and Old Digimarc record holders have no appraisal rights in connection with the distribution and the New Digimarc merger. The completion of the spin-off was a condition to the completion of the offer.
On the New Digimarc stock delivery date, Old Digimarc record holders will have their shares of New Digimarc common stock credited to book-entry accounts established for them by Computershare. Computershare will mail an account statement to each registered holder stating the number of shares of New Digimarc common stock credited to the holder's account. Holders of record will receive cash in lieu of any fractional shares of New Digimarc common stock. Computershare will aggregate all fractional shares of New Digimarc common stock and will sell them in open market transactions at then prevailing prices on behalf of holders who would otherwise be entitled to fractional shares of New Digimarc common stock. Computershare will then distribute to those holders their ratable share of the net proceeds of those sales, based on the average gross selling price per share of New Digimarc common stock. After the New Digimarc stock delivery date, any holder may request:
If you became a registered holder of our common stock in connection with the spin-off and the New Digimarc merger and you prefer to receive one or more physical share certificates representing your shares of our common stock, you will receive one or more certificates for all shares of New Digimarc common stock. Computershare will mail you certificates representing your shares of our common stock as soon after the date of request as practicable.
For those Old Digimarc record holders who hold their shares through a broker, bank or other nominee, Computershare will credit the shares of our common stock to the accounts of those nominees who are registered holders, who, in turn, will credit their customers' accounts with our common stock. We and Old Digimarc anticipate that brokers, banks and other nominees will generally credit their customers' accounts with New Digimarc common stock on or shortly after the New Digimarc stock delivery date.
Costs associated with the contemplated transaction are estimated at $8.4 million and relate to investment banking fees, legal, accounting, printing and mailing costs and severance related costs. These costs will be paid out of beginning cash balances retained by New Digimarc after the spin-off and are reflected in the pro forma balance sheet that can be found in "Pro Forma Financial Information," beginning on page 34 of this information statement.
Results of the Spin-Off
Following the New Digimarc stock delivery date, we will be an independent, publicly-traded company owning and operating the Digital Watermarking Business. Following the spin-off and the New Digimarc merger, we had 7,143,442 shares of our common stock and 10,000 shares of Series A Redeemable Nonvoting Preferred stock outstanding.
Stockholder approval of the spin-off was not required, and you are not required to take any action to receive your New Digimarc common stock.
Market for Our Common Stock
There is no trading market for our common stock. We have been approved to list our common stock on The Nasdaq Global Market under the symbol "DMRC." We have not and will not set the initial price of our common stock. The initial price will be established by the public markets when trading commences following the New Digimarc stock delivery date.
29
We cannot predict the price at which our common stock will trade after the New Digimarc stock delivery date. The price at which our common stock trades is likely to fluctuate significantly, particularly until an orderly public market develops. Trading prices for our common stock will be determined in the public markets and may be influenced by many factors. For more information, see "Risk FactorsRisks Related to Our Common Stock and the Spin-Off."
Shares of our common stock distributed to holders in connection with the spin-off will, as of the New Digimarc stock delivery date, be transferable without registration under the Securities Act of 1933, or the Securities Act, except for shares received by persons who may be deemed to be our affiliates. Persons who may be deemed to be our affiliates after the distribution generally include individuals or entities that control, are controlled by or are under common control with us, which may include our executive officers, directors or principal stockholders. Securities held by our affiliates will be subject to resale restrictions under the Securities Act. Our affiliates will be permitted to sell shares of our common stock only pursuant to an effective registration statement or an exemption from the registration requirements of the Securities Act, such as the exemption afforded by Rule 144 under the Securities Act.
Spin-Off Conditions and Termination
The distribution, effective on the distribution date, August 1, 2008, occurred only after, among other things:
The spin-off was a condition to the completion of the Old Digimarc/L-1merger.
We do not expect to pay any dividends on our common stock in the foreseeable future. Payment of future cash dividends will be at the discretion of our board of directors in accordance with applicable law after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, plans for expansion and contractual restrictions with respect to the payment of dividends.
30
The following table shows our capitalization as of June 30, 2008 on both an historical basis and a pro forma basis giving effect to our post-spin-off capital structure as if the spin-off occurred on June 30, 2008. This table should be read in conjunction with our historical financial statements and accompanying notes included in this information statement and the sections entitled "Selected Historical Financial Information," "Pro Forma Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Our Capital Stock."
Our pro forma capitalization is not necessarily indicative of our capitalization had the spin-off been completed on June 30, 2008. The pro forma capitalization below may not reflect the capitalization or financial condition that would have resulted had we been operating as an independent, publicly-traded company at that date, and is not necessarily indicative of our future capitalization or financial condition. For an explanation of the pro forma adjustments made to our historical financial statements for the anticipated spin-off and the transactions related to the proposed spin-off to derive the pro forma capitalization described below, please see "Pro Forma Financial Information."
|
As of June 30, 2008
|
||||||
---|---|---|---|---|---|---|---|
|
Historical
|
Pro Forma(1)
|
|||||
|
(In thousands)
|
||||||
Cash and cash equivalents and short-term investments | $ | 36,914 | $ | 55,104 | |||
|
|
||||||
Total long-term debt | | | |||||
Stockholders' equity: | |||||||
Net parent's investment | 39,086 | | |||||
Preferred stock | | 50 | |||||
Common stock | | 7,143 | |||||
Additional paid-in capital | | 41,813 | |||||
|
|
||||||
Total stockholders' equity | $ | 39,086 | $ | 49,006 | |||
|
|
||||||
Total capitalization | $ | 39,086 | $ | 49,006 | |||
|
|
Upon the completion of the spin-off, Old Digimarc's net investment in New Digimarc was reclassified as New Digimarc stockholders' equity and allocated between common stock and additional paid-in capital based on the number of shares of New Digimarc common stock outstanding at the completion of the spin-off. For purposes of the pro forma financial statements, we have used a distribution ratio of one share of our common stock for every three and one-half shares of outstanding Old Digimarc common stock, excluding shares held in treasury.
31
SELECTED HISTORICAL FINANCIAL INFORMATION
The following table sets forth our selected financial information as of and for each of the years in the five-year period ended December 31, 2007, and as of and for the six-months ended June 30, 2007 and 2008, which has been derived from (a) audited financial statements as of December 31, 2005, 2006 and 2007 and for the years ended December 31, 2005, 2006 and 2007, which are included elsewhere in this information statement, (b) unaudited financial information as of December 31, 2003 and 2004 and for the years ended December 31, 2003 and 2004, which is not included in this information statement and (c) unaudited financial information as of June 30, 2007 and 2008 and for the six-months ended June 30, 2007 and 2008, which is included elsewhere in this information statement. In our opinion, the information derived from our unaudited financial statements is presented on a basis consistent with the information in our audited financial statements. The selected financial information presented may not reflect the results of operations or financial condition that would have resulted had we been operating as an independent, publicly-traded company during the periods presented, and is not necessarily indicative of our future performance as an independent company. See "Risk FactorsRisks Related to our Common Stock and the Spin-Off."
The selected financial information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," the pro forma financial information and accompanying notes, and the historical financial statements and the accompanying notes included elsewhere in this information statement. The dollar amounts in the tables below are in thousands.
Statement of Operations Data(1)
|
For the Years Ended December 31,
|
For the Six Months Ended June 30,
|
||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2003
(unaudited) |
2004
(unaudited) |
2005
(audited) |
2006
(audited) |
2007
(audited) |
2007
(unaudited) |
2008
(unaudited) |
|||||||||||||||
Operating revenues | $ | 9,306 | $ | 11,184 | $ | 11,119 | $ | 11,071 | $ | 13,025 | $ | 6,331 | $ | 10,200 | ||||||||
Gross profit percentage | 58 | % | 68 | % | 69 | % | 66 | % | 69 | % | 70 | % | 70 | % | ||||||||
Operating income (loss) | (2 | ) | (2 | ) | $ | (5,770 | ) | $ | (3,908 | ) | $ | (1,310 | ) | $ | (964 | ) | $ | 1,084 |
Balance Sheet Data(1)
|
For the Years Ended December 31,
|
As of June 30,
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2003
(unaudited) |
2004
(unaudited) |
2005
(audited) |
2006
(audited) |
2007
(audited) |
2007
(unaudited) |
2008
(unaudited) |
||||||||||||||
Cash, cash equivalents and short term investments | $ | 78,633 | $ | 51,836 | $ | 31,982 | $ | 33,073 | $ | 32,713 | $ | 28,856 | $ | 36,914 | |||||||
Total assets | (2 | ) | $ | 56,210 | $ | 36,896 | $ | 37,658 | $ | 38,451 | $ | 32,940 | $ | 43,239 | |||||||
Long-term obligations | $ | 0 | $ | 160 | $ | 295 | $ | 294 | $ | 215 | $ | 298 | $ | 242 | |||||||
32
cash
balances were reduced from $78.6 million at the end of 2003 to $32.7 million at the end of 2007, reflecting the funding of operating losses for the combined Secure ID Business and
Digital Watermarking Business and for funding capital expenditures, the majority being for the Secure ID Business.
Prior to the acquisition of the Secure ID Business from Polaroid by Old Digimarc in late December 2001, New Digimarc operated as a separate entity. Its revenues for 2000 and 2001 were $11.9 million and $13.2 million, respectively, and its operating losses exceeded $20 million in each of those years. In the years after the acquisition and up through the date of the Old Digimarc/L-1 merger, Old Digimarc's business, including New Digimarc, began to benefit from a shared services operating model where its general and administrative costs, among others, could be spread more efficiently across multiple operating activities. In addition, in mid-2005, after incurring significant operating losses in 2004 and projecting further significant losses in the future, Old Digimarc began a reorganization of its business to focus on its core strengths while significantly reducing its cost of operations in all areas, while growing revenues in both the Secure ID Business and Digital Watermarking Business. The change in the operating results of New Digimarc since its early loss years prior to Old Digimarc's acquisition of the Secure ID Business began to benefit from the shared services operating model in 2002, and later, beginning in 2005, as operating costs were reduced and revenues began to rise to current levels. As a result, New Digimarc's operating losses reduced over the years to $1.3 million in 2007, and eventually achieved an operating profit of $1.6 million for the first six months of 2008.
33
PRO FORMA FINANCIAL INFORMATION
The pro forma financial information set forth below portrays how our spin-off from Old Digimarc might have affected our historical financial information if it had occurred on June 30, 2008 for balance sheet purposes. As you read this, you should be aware that the pro forma financial information is presented for informational purposes only, and is not intended to show what our financial position or results of operations would have been had we been operating as an independent, publicly-traded company during these periods or what our financial position or results of operations might be in the future. The pro forma financial information should be read with our historical financial statements included in this information statement and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations."
How we prepared the pro forma financial information
We prepared the pro forma financial information based upon our historical financial statements adjusted to reflect our estimate of the effect of events that are directly attributable to the spin-off, expected to have a continuing effect on our operations, and are factually supportable. The pro forma adjustments were derived from available information and were based on assumptions that we believe are reasonable and that reflect our current intentions.
Events that are reflected in the pro forma financial information
The pro forma financial information reflects:
Events that are not reflected in the pro forma financial information
The pro forma financial information does not reflect pro forma statements of operations for the year ended December 31, 2007 and three- and six-month periods ended June 30, 2008. These statements of operations have not been presented because we believe they would not be meaningful for the following reasons:
34
Unaudited Pro Forma Balance Sheet
As of June 30, 2008
(In thousands, except share data)
|
Historical
|
Adjustments
|
Pro Forma
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
ASSETS | ||||||||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
||
Cash and cash equivalents | $ | 33,065 | $ | 18,190 | $ | 51,255 | (2)(6) | |||||
Short-term investments | 3,849 | 3,849 | ||||||||||
Trade accounts receivable, net | 4,204 | 4,204 | ||||||||||
Other current assets | 399 | 399 | ||||||||||
|
|
|
||||||||||
Total current assets | 41,517 | 18,190 | 59,707 | |||||||||
Property and equipment, net | 1,340 | 1,340 | ||||||||||
Other assets, net | 382 | 382 | ||||||||||
|
|
|
||||||||||
Total assets | $ | 43,239 | $ | 18,190 | $ | 61,429 | ||||||
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
||
Accounts payable and other accrued liabilities | $ | 488 | $ | 5,250 | $ | 5,738 | (1) | |||||
Accrued payroll and related costs | 592 | 3,020 | 3,612 | (5) | ||||||||
Deferred revenue | 2,831 | 2,831 | ||||||||||
|
|
|
||||||||||
Total current liabilities | 3,911 | 8,270 | 12,181 | |||||||||
Long-term liabilities | 242 | 242 | ||||||||||
|
|
|
||||||||||
Total liabilities | 4,153 | 8,270 | 12,423 | |||||||||
Commitments and contingencies | ||||||||||||
Stockholders' equity: | ||||||||||||
Net parent's investment | 39,086 | (39,086 | ) | | ||||||||
Preferred stock | 50 | 50 | (4) | |||||||||
Common stock | 7,143 | 7,143 | (2)(3) | |||||||||
Additional paid-in capital | 41,813 | 41,813 | (2)(3)(4) | |||||||||
|
|
|
||||||||||
Total stockholders' equity | 39,086 | 9,920 | 49,006 | |||||||||
|
|
|
||||||||||
Total liabilities and stockholders' equity | $ | 43,239 | $ | 18,190 | $ | 61,429 | ||||||
|
|
|
The adjustments included in the unaudited pro forma balance sheet reflect the following:
35
36
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements relating to future events or the future financial performance of New Digimarc, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. Please see the discussion regarding forward-looking statements included in this information statement, under the caption "Forward-Looking Statements."
Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not give any assurances that these expectations will prove to be correct. These statements by their nature involve substantial risks and uncertainties that could significantly affect expected results. Actual future results could differ materially from those described in our forward-looking statements, and we do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise. We urge you to carefully review and consider the various disclosures we have made that attempt to advise interested parties of the factors which affect our business, including the disclosures made under the caption "Forward Looking Statements" in this information statement, the audited financial statements and related notes included in this information statement, and other reports and filings made with the SEC by Old Digimarc.
The following discussion should be read in conjunction with our financial statements and the related notes and other financial information appearing elsewhere in this information statement.
All dollar amounts are in thousands, unless otherwise noted.
Acquisition of Old Digimarc and Separation of New Digimarc
On June 29, 2008, Old Digimarc entered into the Old Digimarc/L-1 merger agreement, as amended by Amendment No. 1 dated as of July 17, 2008, with L-1 and Dolomite Acquisition Co., a wholly owned subsidiary of L-1, pursuant to which Dolomite Acquisition Co. purchased more than 90% of the outstanding shares of Old Digimarc common stock, together with the associated preferred stock purchase rights for $12.25 per share. On August 13, 2008, following the completion of the offer, Dolomite merged with and into Old Digimarc with Old Digimarc continuing as the surviving company and a wholly owned subsidiary of L-1.
On August 1, 2008, prior to the initial expiration of the offer, Old Digimarc contributed all of the assets and liabilities related to its Digital Watermarking Business, together with all of Old Digimarc's cash, to DMRC LLC, which subsequently merged with and into New Digimarc, and the shares of New Digimarc common stock were transferred to a newly created trust for the benefit of Old Digimarc record holders. The shares of New Digimarc common stock will be held by the trust until the Form 10 has been declared effective by the SEC, at which time the shares will be distributed to Old Digimarc record holders, as beneficiaries of the trust, pro rata in accordance with their ownership of shares of Old Digimarc common stock as of the record date and time. Each Old Digimarc record holder is entitled to receive one share of New Digimarc common stock for every three and one half shares of Old Digimarc common stock held by the stockholder as of the record date and time.
In connection with the Old Digimarc/L-1 merger, we entered into a separation agreement with Old Digimarc, DMRC LLC and, with respect to certain sections, L-1, which contained many of the key provisions related to the spin-off of the Digital Watermarking Business from Old Digimarc. We entered into a transition services agreement with Old Digimarc to provide one another with transition services and other assistance substantially consistent with the services provided before completion of the spin-off, and a license agreement with L-1 Identity Solutions Operating Company, under which we license to one another certain intellectual property to be used in the other's business following the spin-off. After the completion of the Old Digimarc/L-1 merger, we changed our corporate name to
37
"Digimarc Corporation." The following Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the historical financial condition and results of operations for the Digital Watermarking Business, or New Digimarc, without giving effect to the proposed transactions.
The following discussion may not reflect the results of operations or financial condition that would have resulted had we been operating as an independent, publicly-traded company during the periods presented. Significant changes may occur in our cost structure, tax structure, management, financing and business operations as a result of our operating as a public company separate from Old Digimarc. These changes may result in increased costs associated with reduced economies of scale, marketing expenses, the incurrence of debt and interest expense, stand-alone costs for services formerly provided by Old Digimarc, the need for additional personnel to perform services formerly provided by Old Digimarc, and the legal, accounting, compliance and other costs associated with being a public company with equity securities listed on a national exchange. Operating a newly independent, publicly-traded company will pose significant challenges for us. The most significant challenges we expect to face include: the effect of the change in the scale of our business on our ability to compensate our employees at a level required to attract and retain the technical and management expertise necessary to operate our business; the effect of the change in the scale of our business on our ability to control administrative costs; the ability to maintain investment in our company by our institutional investors and to establish and maintain an active trading market for shares of our common stock; and the ability to maintain analyst coverage of our common stock following the spin-off. For a more complete discussion of the risks facing us as an independent, publicly-traded company, please see "Risk Factors," beginning on page 11.
Overview
Our technologies, and those of our licensees, span the complete range of media content, enabling governments and enterprises to:
Our revenue is generated primarily from patent and technology license fees paid by business partners, and development and service contracts with a variety of government and commercial organizations, including a consortium of Central Banks and a major media and audience measurement company.
38
Basis of Accounting
The financial statements include the assets, liabilities and results of operations of the components of Old Digimarc that constitute the business of New Digimarc that was separated, or "carved-out" in connection with the Old Digimarc/L-1 merger and spin-off. This information primarily consists of the Digital Watermarking Business and certain accounts of Old Digimarc. All intercompany balances have been eliminated in the carve-out.
Management believes that the assumptions underlying the financial statements are reasonable. The financial information in these financial statements does not include all of the expenses that would have been incurred had New Digimarc been a separate, stand-alone public entity. As such, the financial information herein does not reflect the financial position, results of operations and cash flows of New Digimarc in the future or what they would have been, had New Digimarc been a separate, stand-alone public entity during the periods presented. Additionally, these historical financial statements include proportional allocations of various shared-services common costs of Old Digimarc because specific identification of these expenses was not practicable. The common costs include expenses from Old Digimarc related to various operating shared-services cost centers, including: executive, finance and accounting, human resources, legal, marketing, intellectual property, facilities and information technology. We expect that the initial operating costs of New Digimarc on a stand-alone basis will be higher than those allocated to the New Digimarc operations under the shared services methodology applied in the audited financial statements of New Digimarc. Consequently, the financial position, results of operations and cash flows of New Digimarc reflected in the financial statements of New Digimarc may not be indicative of those that would have been achieved or that might be achieved in the future had New Digimarc been operated as a separate, stand-alone entity for the periods reflected in its financial statements.
Commitments and contingencies related to New Digimarc operations have been included in the financial statements and those relating to Old Digimarc have been excluded.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States, which we refer to as U.S. GAAP, requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to bad debts, income taxes, long-term service contracts, license and subscription agreements, investments, and contingencies and litigation. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
Some of our accounting policies require higher degrees of judgment than others in their application. These include revenue recognition on long-term service contracts, revenue recognition on license and subscription arrangements, reserves for uncollectible accounts receivable, contingencies and litigation and stock-based compensation. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:
Balances and expenses assignment and allocations: Balances and expenses were assigned to the different business units based on the following hierarchy:
39
the New Digimarc and Secure ID Business units based on the assumption that HR support costs should be relatively equal per employee across the broader population, and in the Intellectual Property cost center we allocated the costs based on the relative number of patents that are used by each of the two business units.
Management believes that the reasonable allocation and general allocation methods are representative of the efforts expended in shared services in support of the separate business units.
Revenue recognition on long-term service contracts: Revenue from professional service arrangements is generally determined based on time and materials. Revenue for professional services is recognized as the services are performed. Billing for services rendered generally occurs within one month following when the services are provided. Revenue earned which has not been invoiced at the reported balance sheet date is classified as unbilled trade receivables, which are included in the balance of trade accounts receivable, net in the balance sheets.
Revenue recognition on license and subscription arrangements: Royalty revenue is recognized when the royalty amounts owed to New Digimarc have been earned, are determinable, and collection is probable. These revenues include the licensing of digital watermarking products and services for use in authenticating documents, detecting fraudulent documents and deterring unauthorized duplication or alteration of high-value documents, for use in communicating copyright, asset management and business-to-business image commerce solutions, and for use in connecting analog media to a digital environment. Subscriptions are paid in advance and revenue is recognized ratably over the term of the subscription.
Reserves for uncollectible accounts receivable: We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We determine the allowance based on historical write-off experience and current information. We review, and adjust when appropriate, our allowance for doubtful accounts on at least a quarterly basis. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.
Contingencies and litigation: We periodically evaluate all pending or threatened contingencies or commitments, if any, that are reasonably likely to have a material adverse effect on our operations or financial position. We assess the probability of an adverse outcome and determine if it is remote, reasonably possible or probable as defined in accordance with the provisions of SFAS No. 5, Accounting for Contingencies . If information available prior to the issuance of our financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of our financial statements, and the amount of the loss, or the range of probable loss can be reasonably
40
estimated, then the loss is accrued and charged to operations. If no accrual is made for a loss contingency because one or both of the conditions pursuant to SFAS No. 5 are not met, but the probability of an adverse outcome is at least reasonably possible, we will disclose the nature of the contingency and provide an estimate of the possible loss or range of loss, or state that such an estimate cannot be made.
Stock-based compensation: Old Digimarc accounted for stock-based compensation in accordance with SFAS 123(R), which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options, employee stock purchases under a stock purchase plan and restricted stock awards based on estimated fair values. Stock compensation expense was allocated to New Digimarc based on a combination of specific and shared services resource allocations from Old Digimarc.
Income Taxes: For all historic periods reported in this filing:
41
and state income tax benefit was recognized for the book losses that were incurred in periods prior to 2007, and no income tax expense was recognized during the 2007 and 2008 periods, since any expense was offset by the benefit of net operating loss carry-forwards; and
Backlog
Based on projected commitments we have for the periods under contract with our respective customers, we anticipate our current contracts as of June 30, 2008 will generate approximately $60 million in revenue during the terms of the contracts, currently running out over four years. We expect more than $9 million of this amount to be recognized as revenue during the remainder of 2008. This amount includes commitments reasonably expected to be achieved under currently effective contracts. Backlog as of December 31, 2007 and 2006 was approximately $46 million and $13 million respectively. The increase in backlog reflects factors noted below.
Some factors that lead to increased backlog are:
Some factors that lead to decreased backlog are:
The mix of these factors, among others, dictates whether our backlog increases or decreases for any given period. There is no assurance that our backlog will result in actual revenue in any particular period, because the orders and contracts included in our backlog may be subject to modification, cancellation or suspension. We may not realize revenue on some orders included in our backlog, or the timing of recognition may change.
42
Results of Operations
The following table presents our statements of operations data for the periods indicated as a percentage of total revenue.
|
Three
Months Ended June 30, |
Six
Months Ended June 30, |
Year Ended
December 31, |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2008
|
2007
|
2008
|
2007
|
2007
|
2006
|
2005
|
||||||||||
Revenue: | |||||||||||||||||
Service | 58 | % | 62 | % | 54 | % | 57 | % | 60 | % | 62 | % | 63 | % | |||
License and subscription | 42 | 38 | 46 | 43 | 40 | 38 | 37 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
Total revenue | 100 | 100 | 100 | 100 | 100 | 100 | 100 | ||||||||||
Cost of revenue: | |||||||||||||||||
Service | 32 | 31 | 29 | 28 | 29 | 33 | 29 | ||||||||||
License and subscription | 1 | 2 | 1 | 2 | 2 | 1 | 2 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
Total cost of revenue | 33 | 33 | 30 | 30 | 31 | 34 | 31 | ||||||||||
Gross profit | 67 | 67 | 70 | 70 | 69 | 66 | 69 | ||||||||||
Operating expenses: | |||||||||||||||||
Sales and marketing | 13 | 23 | 13 | 21 | 19 | 34 | 42 | ||||||||||
Research, development and engineering | 18 | 29 | 18 | 24 | 22 | 22 | 28 | ||||||||||
General and administrative | 18 | 30 | 19 | 27 | 26 | 31 | 33 | ||||||||||
Intellectual property | 9 | 15 | 9 | 13 | 12 | 14 | 17 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
Total operating expenses | 58 | 97 | 59 | 85 | 79 | 101 | 120 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
Operating income (loss) | 9 | (30 | ) | 11 | (15 | ) | (10 | ) | (35 | ) | (51 | ) | |||||
|
|
|
|
|
|
|
|||||||||||
Other income (expense), net | 4 | 12 | 5 | 11 | 11 | 11 | 8 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
Income (loss) before provision for income taxes | 13 | (18 | ) | 16 | (4 | ) | 1 | (24 | ) | (43 | ) | ||||||
|
|
|
|
|
|
|
|||||||||||
Provision for income taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||
|
|
|
|
|
|
|
|||||||||||
Net income (loss) | 13 | % | (18 | )% | 16 | % | (4 | )% | 1 | % | (24 | )% | (43 | )% | |||
|
|
|
|
|
|
|
The overall financial results of New Digimarc have improved significantly over the past two years as revenues grew, the adoption of products and services based on our technologies became more widespread, and we reduced costs through various improvements in our business processes, which we refer to as cost reduction initiatives. We expect our revenues to exceed $19 million for 2008 and to exceed $20 million for 2009. We also expect to achieve profitability for 2009.
43
Three- and Six-Months Ended June 30, 2008 and 2007
Revenue
|
Three Months
Ended June 30, |
|
|
Six Months
Ended June 30, |
|
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
Dollar
Increase |
Percent
Increase |
|||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Service | $ | 2,987 | $ | 1,751 | $ | 1,236 | 71 | % | $ | 5,535 | $ | 3,628 | $ | 1,907 | 53 | % | |||||||||
License and subscription | 2,128 | 1,095 | 1,033 | 94 | % | 4,665 | 2,703 | 1,962 | 73 | % | |||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||
Total | $ | 5,115 | $ | 2,846 | $ | 2,269 | 80 | % | $ | 10,200 | $ | 6,331 | $ | 3,869 | 61 | % | |||||||||
|
|
|
|
|
|
||||||||||||||||||||
Revenue (as % of total revenue): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Service | 58 | % | 62 | % | 54 | % | 57 | % | |||||||||||||||||
License and subscription | 42 | % | 38 | % | 46 | % | 43 | % | |||||||||||||||||
|
|
|
|
||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||
|
|
|
|
Service. Service revenue consists primarily of software development and consulting services. The majority of service revenue arrangements are structured as time and materials consulting agreements, or fixed price consulting agreements. The majority of our services revenue is derived from contracts with an international consortium of Central Banks, Nielsen, and with other government agencies. The agreements can range from several months to several years in length, and our longer term contracts are subject to work plans that are reviewed and agreed upon at least annually. These contracts generally provide for billing hours worked at predetermined rates and, to a lesser extent, for cost reimbursement for third party costs and services. The increases or decreases in the services are generally subject to both volume and price changes. The volume of work is generally negotiated at least annually and can be modified as the needs of the customers arise. We also have provisions in our longer term contracts that allow for specific hourly rate price increases on an annual basis to account for cost of living variables. Contracts with other government agencies are generally shorter term in nature, are less linear in billings and less predictable than our longer terms contracts since they are subject to government budgets and funding.
The increases in service revenue for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 were primarily attributable to increased consulting revenues, almost all of which related to our new contract with Nielsen.
License and subscription. License revenue originates primarily from licensing our technology and patents where we receive royalties as our income stream. Subscription revenue consists primarily of royalty revenue from the sale of our web-based subscriptions related to various software products, which are more recurring in nature. Revenues from our licensed products have minimal associated direct costs, and thus are highly profitable.
The increases in license and subscription revenue for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 were almost all due to initial license revenues from Nielsen.
44
Revenue by Geography
|
Three Months
Ended June 30, |
|
|
Six Months
Ended June 30, |
|
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
Dollar
Increase |
Percent
Increase |
|||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||||
Revenue by geography: | |||||||||||||||||||||||||
Domestic | $ | 2,656 | $ | 556 | $ | 2,100 | 378 | % | $ | 5,314 | $ | 1,674 | $ | 3,640 | 217 | % | |||||||||
International | 2,459 | 2,290 | 169 | 7 | % | 4,886 | 4,657 | 229 | 5 | % | |||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||
Total | $ | 5,115 | $ | 2,846 | $ | 2,269 | 80 | % | $ | 10,200 | $ | 6,331 | $ | 3,869 | 61 | % | |||||||||
|
|
|
|
|
|
||||||||||||||||||||
Revenue (as % of total revenue): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Domestic | 52 | % | 20 | % | 52 | % | 26 | % | |||||||||||||||||
International | 48 | % | 80 | % | 48 | % | 74 | % | |||||||||||||||||
|
|
|
|
||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||
|
|
|
|
The increases in domestic revenue for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 were due primarily to additional service and license revenues associated with the Nielsen contract.
The slight increases in international revenue for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 were due primarily to increased service revenue from the consortium of Central Banks.
Cost of Revenue
Service. Cost of service revenue primarily includes costs that are allocated from research, development, engineering and sales and marketing that relate directly to producing revenue under our customer contracts. Allocated costs include:
License and subscription. Cost of license and subscription revenue primarily includes:
45
Gross Profit
|
Three Months
Ended June 30, |
|
|
Six Months
Ended June 30, |
|
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
Dollar
Increase |
Percent
Increase |
|||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||||
Gross Profit: | |||||||||||||||||||||||||
Service | $ | 1,344 | $ | 868 | $ | 476 | 55 | % | $ | 2,543 | $ | 1,826 | $ | 717 | 39 | % | |||||||||
License and subscription | 2,067 | 1,042 | 1,025 | 98 | % | 4,545 | 2,619 | 1,926 | 74 | % | |||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||
Total | $ | 3,411 | $ | 1,910 | $ | 1,501 | 79 | % | $ | 7,088 | $ | 4,445 | $ | 2,643 | 59 | % | |||||||||
|
|
|
|
|
|
||||||||||||||||||||
Gross Profit (as % of related revenue components): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Service | 45 | % | 50 | % | 46 | % | 50 | % | |||||||||||||||||
License and subscription | 97 | % | 95 | % | 97 | % | 97 | % | |||||||||||||||||
Total |
|
|
67 |
% |
|
67 |
% |
|
|
|
|
|
|
70 |
% |
|
70 |
% |
|
|
|
|
|
Though the overall gross profit as a percentage of revenue for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 remained relatively consistent, the gross profit percentage of the revenue components reflect the following primary changes:
Operating Expenses
Sales and marketing
|
Three Months
Ended June 30, |
|
|
Six Months
Ended June 30, |
|
|
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
Dollar
Increase |
Percent
Increase |
|||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
Sales and marketing | $ | 683 | $ | 667 | $ | 16 | 2 | % | $ | 1,339 | $ | 1,306 | $ | 33 | 3 | % | |||||||
Sales and marketing (as % of total revenue) | 13 | % | 23 | % | 13 | % | 21 | % |
Sales and marketing expenses consist primarily of:
We allocate certain costs of sales and marketing to cost of service revenue when they relate directly to our service contracts. For direct billable labor hours, we allocate to cost of service revenue
46
Overall, sales and marketing costs remained relatively flat for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007. Higher incentive compensation accruals for incentive bonuses, compared to no bonus accrual for the 2007 period, were offset by lower other operating costs.
Under the current basis of accounting explained above, we anticipate that we will continue to incur sales and marketing costs at existing or higher levels for the remainder of 2008.
Research, development and engineering
|
Three Months
Ended June 30, |
|
|
Six Months
Ended June 30, |
|
|
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar Increase
|
Percent Increase
|
Dollar Increase
|
Percent Increase
|
|||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
Research, development and engineering | $ | 910 | $ | 829 | $ | 81 | 10 | % | $ | 1,832 | $ | 1,558 | $ | 274 | 18 | % | |||||||
Research, development and engineering (as % of total revenue) | 18 | % | 29 | % | 18 | % | 24 | % |
Research, development and engineering expenses arise primarily from three areas that support our business model:
47
Research, development and engineering expenses consist primarily of:
We allocate certain costs of research, development and engineering to cost of service revenue when they relate directly to our service contracts. For direct billable labor hours, we allocate to cost of service revenue:
The increases in research, development and engineering costs for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 resulted primarily from increases in engineering personnel and higher incentive compensation accruals for incentive bonuses, compared to no bonus accrual for the 2007 period.
Under the current basis of accounting explained above, we anticipate that we will continue to incur research, development and engineering costs at existing levels or higher for the remainder of 2008.
General and administrative
|
Three Months
Ended June 30, |
|
|
Six Months
Ended June 30, |
|
|
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
Dollar
Increase |
Percent
Increase |
|||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
General and administrative | $ | 927 | $ | 844 | $ | 83 | 10 | % | $ | 1,907 | $ | 1,701 | $ | 206 | 12 | % | |||||||
General and administrative (as % of total revenue) | 18 | % | 30 | % | 19 | % | 27 | % |
General and administrative expenses consist primarily of:
48
The increases in general and administrative costs for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 resulted primarily from increased compensation related costs, the majority of which related to higher incentive compensation accruals for incentive bonuses, compared to no bonus accrual for the 2007 period.
Under the current basis of accounting explained above, we anticipate that we will continue to incur general and administrative expenses at least at existing levels for the remainder of 2008, while continuing to examine means to reduce general and administrative spending as a percentage of revenue in the longer term.
Intellectual property
|
Three Months
Ended June 30, |
|
|
Six Months
Ended June 30, |
|
|
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
Dollar
Increase |
Percent
Increase |
|||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
Intellectual property | $ | 448 | $ | 413 | $ | 35 | 8 | % | $ | 926 | $ | 844 | $ | 82 | 10 | % | |||||||
Intellectual property (as % of total revenue) | 9 | % | 15 | % | 9 | % | 13 | % |
Intellectual property costs primarily consist of:
The slight increases for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 resulted primarily from increased compensation related costs, the majority of which related to higher incentive compensation accruals for incentive bonuses, compared to no bonus accrual for the 2007 period.
Under the current basis of accounting explained above, we anticipate that we will continue to incur intellectual property costs at least at existing levels for the remainder of 2008.
Stock-based compensation
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2008
|
2007
|
2008
|
2007
|
|||||||||
Cost of revenue | $ | 42 | $ | 24 | $ | 85 | $ | 40 | |||||
Sales and marketing | 93 | 72 | 176 | 144 | |||||||||
Research, development and engineering | 14 | 12 | 30 | 20 | |||||||||
General and administrative | 236 | 181 | 456 | 365 | |||||||||
Intellectual property | 15 | 12 | 30 | 22 | |||||||||
|
|
|
|
||||||||||
Total | $ | 400 | $ | 301 | $ | 777 | $ | 591 | |||||
|
|
|
|
49
Old Digimarc accounted for stock-based compensation in accordance with SFAS No. 123(R), Share-Based Payment (Revised 2004) , which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors, including stock options, employee stock purchases under a stock purchase plan and restricted stock awards based on estimated fair values. Stock compensation expense is allocated to New Digimarc based on a combination of specific and shared services resource allocations from Old Digimarc.
The increases in stock-based compensation expense for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 were primarily due to an additional layer of stock-based awards expensed pursuant to the adoption of SFAS 123(R).
We have incurred additional stock-based compensation expense from Old Digimarc through the allocation process described through August 13, 2008, the date of the Old Digimarc/L-1 merger. We have since incurred our own stock-based compensation expense under SFAS 123(R), which we have adopted. The future effect of the adoption of this statement on our financial position and results of operations will be determined by stock-based awards granted in future periods and the assumptions on which the value of those stock-based awards are based.
Other income, net
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2008
|
2007
|
2008
|
2007
|
||||||||
Other income, net | $ | 221 | $ | 330 | $ | 515 | $ | 705 |
Other income, net consists primarily of interest income from our cash and short term investments.
The decreases in other income for the three- and six-month periods ended June 30, 2008 compared to the corresponding three- and six-month periods ended June 30, 2007 were due primarily to lower interest earned on cash and investment balances, reflecting lower interest rates available on our investments.
Provision for Income Taxes. The provision for income taxes reflects foreign withholding tax expense in various foreign jurisdictions. For all historic periods reported in the financial statements, Old Digimarc maintained valuation allowances against its net deferred tax assets, including net operating loss carryforwards, because it was more likely than not that the deferred taxes would not be realized. The provision for income taxes includes foreign taxes withheld by our customers and paid to foreign jurisdictions on our behalf. Our "carve-out" financial statements indicate cumulative losses through the first six months of 2008. Furthermore, the amounts of cumulative expenses in the financial statements that were not allowed for federal and state income tax purposes were not sufficient to require us to record income tax expense. Consequently, no federal and state income tax benefit was recognized for the book losses that were incurred in periods prior to 2007, and no income tax expense was recognized during the 2007 and 2008 periods, since any expense was offset by the benefit of net operating loss carry-forwards. New Digimarc, as a separate legal entity, will not benefit from any of the carryforward tax attributes of Old Digimarc, including net operating loss carryforwards.
50
Years Ended December 31, 2007 and 2006
Revenue
|
Year Ended December 31,
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
||||||||||||
|
2007
|
2006
|
||||||||||||
Revenue: | ||||||||||||||
Service | $ | 7,806 | $ | 6,812 | $ | 994 | 15 | % | ||||||
License and subscription | 5,219 | 4,259 | 960 | 23 | % | |||||||||
|
|
|
||||||||||||
Total | $ | 13,025 | $ | 11,071 | $ | 1,954 | 18 | % | ||||||
|
|
|
||||||||||||
Revenue (as % of total revenue): |
|
|
|
|
|
|
|
|
|
|
|
|
||
Service | 60 | % | 62 | % | ||||||||||
License and subscription | 40 | % | 38 | % | ||||||||||
|
|
|||||||||||||
Total | 100 | % | 100 | % | ||||||||||
|
|
The increase in service revenue for the year was primarily due to increases in consulting revenue. Our Central Banks consortium accounted for more than two-thirds of the increase, followed by Nielsen and, to a lesser extent, contracts with various other government agencies. Increased revenues from the Central Banks resulted primarily from volume increases in the work plans with some minor increases attributable to change in billing rate mix and pass through of third party costs and expenses. We entered into our contract with Nielsen in late 2007.
The increase in license and subscription revenue for the year was primarily attributable to higher license revenues from customers whose revenues fluctuate from period to period and a combination of growing levels of fixed and variable royalties from a larger customer base.
Revenue by Geography
|
Year Ended December 31,
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
||||||||||||
|
2007
|
2006
|
||||||||||||
Revenue by geography: | ||||||||||||||
Domestic | $ | 3,696 | $ | 2,414 | $ | 1,282 | 53 | % | ||||||
International | 9,329 | 8,657 | 672 | 8 | % | |||||||||
|
|
|
||||||||||||
Total | $ | 13,025 | $ | 11,071 | $ | 1,954 | 18 | % | ||||||
|
|
|
||||||||||||
Revenue (as % of total revenue): |
|
|
|
|
|
|
|
|
|
|
|
|
||
Domestic | 28 | % | 22 | % | ||||||||||
International | 72 | % | 78 | % | ||||||||||
|
|
|||||||||||||
Total | 100 | % | 100 | % | ||||||||||
|
|
The increase in domestic revenue for the year was due primarily to increases in service and license revenues from Nielsen.
The increase in international revenue for the year was due primarily to growing license revenues from various international customers.
51
Gross Profit
|
Year Ended December 31,
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
||||||||||||
|
2007
|
2006
|
||||||||||||
Gross profit: | ||||||||||||||
Service | $ | 3,991 | $ | 3,179 | $ | 812 | 26 | % | ||||||
License and subscription | 5,002 | 4,123 | 879 | 21 | % | |||||||||
|
|
|
||||||||||||
Total | $ | 8,993 | $ | 7,302 | $ | 1,691 | 23 | % | ||||||
|
|
|
||||||||||||
Gross profit (as % of related revenue component): |
|
|
|
|
|
|
|
|
|
|
|
|
||
Service | 51 | % | 47 | % | ||||||||||
License and subscription | 96 | % | 97 | % | ||||||||||
Total | 69 | % | 66 | % |
The overall improvement of gross profit and gross profit as a percentage of revenue for the year primarily reflects:
Operating Expenses
Sales and marketing
|
Year Ended December 31,
|
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Decrease |
Percent
Decrease |
||||||||||
|
2007
|
2006
|
||||||||||
Sales and marketing | $ | 2,453 | $ | 3,740 | $ | 1,287 | 34 | % | ||||
Sales and marketing (as % of total revenue) | 19 | % | 34 | % |
The decrease in sales and marketing expense for the year primarily reflects:
Research, development and engineering
|
Year Ended December 31,
|
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
||||||||||
|
2007
|
2006
|
||||||||||
Research, development and engineering | $ | 2,912 | $ | 2,448 | $ | 464 | 19 | % | ||||
Research, development and engineering (as % of total revenue) | 22 | % | 22 | % |
52
The increase in research, development and engineering expense for the year reflects:
General and administrative
|
Year Ended December 31,
|
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Decrease |
Percent
Decrease |
||||||||||
|
2007
|
2006
|
||||||||||
General and administrative | $ | 3,345 | $ | 3,433 | $ | 88 | 3 | % | ||||
General and administrative (as % of total revenue) | 26 | % | 31 | % |
The slight decrease in general and administrative expense for the year reflects a decrease in our incentive bonus program, reflecting no bonus accrual for the 2007 period.
Intellectual property
|
Year Ended December 31,
|
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
||||||||||
|
2007
|
2006
|
||||||||||
Intellectual Property | $ | 1,593 | $ | 1,589 | $ | 4 | 0 | % | ||||
Intellectual Property (as % of total revenue) | 12 | % | 14 | % |
Intellectual property expense remained relatively consistent from year to year.
Stock-based compensation
|
Year Ended December 31,
|
|
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase (Decrease) |
Percent
Increase (Decrease) |
|||||||||||
|
2007
|
2006
|
|||||||||||
Cost of service | $ | 102 | $ | 42 | $ | 60 | 143 | % | |||||
Sales and marketing | 287 | 172 | 115 | 67 | % | ||||||||
Research, development and engineering | 47 | 51 | (4 | ) | (8 | )% | |||||||
General and administrative | 728 | 495 | 233 | 47 | % | ||||||||
Intellectual property | 45 | 30 | 15 | 50 | % | ||||||||
|
|
|
|||||||||||
Total | $ | 1,209 | $ | 790 | $ | 419 | 53 | % | |||||
|
|
|
The increase in stock-based compensation expense for the year was primarily due to an additional layer of stock-based awards expensed pursuant to the adoption of SFAS 123(R).
Other income, net
|
Year Ended December 31,
|
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
||||||||||
|
2007
|
2006
|
||||||||||
Other income, net | $ | 1,387 | $ | 1,242 | $ | 145 | 12 | % |
The increase in other income for the year reflects higher average interest rates on our cash and investment balances.
53
Years Ended December 31, 2006 and 2005
Revenue
|
Year Ended December 31,
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase (Decrease) |
Percent
Increase (Decrease) |
||||||||||||
|
2006
|
2005
|
||||||||||||
Revenue: | ||||||||||||||
Service | $ | 6,812 | $ | 7,051 | $ | (239 | ) | (3 | )% | |||||
License and subscription | 4,259 | 4,068 | 191 | 5 | % | |||||||||
|
|
|
||||||||||||
Total | $ | 11,071 | $ | 11,119 | $ | (48 | ) | 0 | % | |||||
|
|
|
||||||||||||
Revenue (as % of total revenue): |
|
|
|
|
|
|
|
|
|
|
|
|
||
Service | 62 | % | 63 | % | ||||||||||
License and subscription | 38 | % | 37 | % | ||||||||||
|
|
|||||||||||||
Total | 100 | % | 100 | % | ||||||||||
|
|
The decrease in service revenue for the year was primarily due to decreased services provided to government agencies other than Central Banks, where projects generally are short term and less predictable in nature.
The increase in license and subscription revenue for the year was primarily due to a combination of growing levels of fixed and variable royalties from a larger customer base.
Revenue by Geography
|
Year Ended December 31,
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase (Decrease) |
Percent
Increase (Decrease) |
||||||||||||
|
2006
|
2005
|
||||||||||||
Revenue by geography: | ||||||||||||||
Domestic | $ | 2,414 | $ | 2,882 | $ | (468 | ) | (16 | )% | |||||
International | 8,657 | 8,237 | 420 | 5 | % | |||||||||
|
|
|
||||||||||||
Total | $ | 11,071 | $ | 11,119 | $ | (48 | ) | 0 | % | |||||
|
|
|
||||||||||||
Revenue (as % of total revenue): |
|
|
|
|
|
|
|
|
|
|
|
|
||
Domestic | 22 | % | 26 | % | ||||||||||
International | 78 | % | 74 | % | ||||||||||
|
|
|||||||||||||
Total | 100 | % | 100 | % | ||||||||||
|
|
The decrease in domestic revenue for the year was due primarily to decreased services provided to government agencies other than Central Banks as discussed above.
The increase in international revenue for the year was due primarily to increased service revenues from our Central Banks contract and increased license revenues from various customers as discussed above.
54
Gross Profit
|
Year Ended December 31,
|
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase (Decrease) |
Percent
Increase (Decrease) |
||||||||||||
|
2006
|
2005
|
||||||||||||
Gross profit: | ||||||||||||||
Service | $ | 3,179 | $ | 3,752 | $ | (573 | ) | (15 | )% | |||||
License and subscription | 4,123 | 3,886 | 237 | 6 | % | |||||||||
|
|
|
||||||||||||
Total | $ | 7,302 | $ | 7,638 | $ | (336 | ) | (4 | )% | |||||
|
|
|
||||||||||||
Gross profit (as % of related revenue component): | ||||||||||||||
Service | 47 | % | 53 | % | ||||||||||
License and subscription | 97 | % | 96 | % | ||||||||||
Total | 66 | % | 69 | % |
The reduction in overall gross profit, as a percentage of revenue, for the year reflects:
Operating Expenses
Sales and marketing
|
Year Ended
December 31, |
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Decrease |
Percent
Decrease |
||||||||||
|
2006
|
2005
|
||||||||||
Sales and marketing | $ | 3,740 | $ | 4,692 | $ | 952 | 20 | % | ||||
Sales and marketing (as % of total revenue) | 34 | % | 42 | % |
The decrease in sales and marketing expense for the year resulted primarily from:
Research, development and engineering
|
Year Ended
December 31, |
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Decrease |
Percent
Decrease |
||||||||||
|
2006
|
2005
|
||||||||||
Research, development and engineering | $ | 2,448 | $ | 3,208 | $ | 760 | 24 | % | ||||
Research, development and engineering (as % of total revenue) | 22 | % | 28 | % |
The decrease in research, development and engineering expense for the year resulted primarily from:
55
General and administrative
|
Year Ended
December 31, |
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Decrease |
Percent
Decrease |
||||||||||
|
2006
|
2005
|
||||||||||
General and administrative | $ | 3,433 | $ | 3,645 | $ | 212 | 6 | % | ||||
General and administrative (as % of total revenue) | 31 | % | 33 | % |
The decrease in general and administrative expense for the year resulted primarily from:
Intellectual property
|
Year Ended
December 31, |
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Decrease |
Percent
Decrease |
||||||||||
|
2006
|
2005
|
||||||||||
Intellectual Property | $ | 1,589 | $ | 1,863 | $ | 274 | 15 | % | ||||
Intellectual Property (as % of total revenue) | 14 | % | 17 | % |
The decrease in intellectual property expenses resulted primarily from realignment of our resources and reduction of third party agent and government fees associated with our cost reduction initiatives.
Stock-based compensation
|
Year Ended
December 31, |
|
|
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
|||||||||||
|
2006
|
2005
|
|||||||||||
Cost of service | $ | 42 | | $ | 42 | 0 | % | ||||||
Sales and marketing | 172 | 56 | 116 | 207 | % | ||||||||
Research, development and engineering | 51 | | 51 | 0 | % | ||||||||
General and administrative | 495 | 147 | 348 | 237 | % | ||||||||
Intellectual property | 30 | | 30 | 0 | % | ||||||||
|
|
|
|||||||||||
Total | $ | 790 | $ | 203 | $ | 587 | 289 | % | |||||
|
|
|
The increase in stock-based compensation expense for year was primarily due to the adoption by Old Digimarc of SFAS 123(R) effective in 2006 that required expensing of all stock based awards, including stock options and restricted stock. For 2005, Old Digimarc's restricted stock grants recorded stock compensation expense in accordance with SFAS 123.
56
Other income, net
|
Year Ended
December 31, |
|
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dollar
Increase |
Percent
Increase |
||||||||||
|
2006
|
2005
|
||||||||||
Other income, net | $ | 1,242 | $ | 928 | $ | 314 | 34 | % |
The increase in other income, net for the year was primarily due to higher interest rates earned on our cash and investment balances.
Liquidity and Capital Resources
As of June 30, 2008, we had cash and cash equivalents and short-term investments of $36.9 million, representing an increase of approximately $4.2 million from $32.7 million at December 31, 2007. Working capital at June 30, 2008 was $37.6 million, compared to working capital of $33.5 million at December 31, 2007. Cash flow generated by Old Digimarc, which flows to New Digimarc, and improved operating results contributed to our improved cash and working capital positions.
Operating Cash Flow. The components of operating cash flows were:
|
Six Months
Ended June 30, |
Year Ended December 31,
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(unaudited)
|
|
|
|
|||||||||||||
|
2008
|
2007
|
2007
|
2006
|
2005
|
||||||||||||
Net income (loss) | $ | 1,588 | $ | (268 | ) | $ | 55 | $ | (2,687 | ) | $ | (4,842 | ) | ||||
Non-cash items | 1,223 | 891 | 1,821 | 1,393 | 769 | ||||||||||||
Changes in operating assets and liabilities | 67 | (22 | ) | (851 | ) | (473 | ) | 239 | |||||||||
|
|
|
|
|
|||||||||||||
Net cash provided by (used in) operating activities | $ | 2,878 | $ | 601 | $ | 1,025 | $ | (1,767 | ) | $ | (3,834 | ) | |||||
|
|
|
|
|
Net income (loss). The improving operating results in each of the comparable periods reflect:
Non-cash charges. The increase in non-cash charges in each of the comparable periods is primarily the result of:
Operating assets and liabilities. The major changes in the operating assets and liabilities for the comparable periods primarily reflect timing differences for:
57
Cash provided by (used in) investing activities. The major changes in our investing activities are the result of:
Cash provided by (used in) financing activities. The major changes in our financing activities are the result of cash transactions associated with Old Digimarc in accordance with the basis of accounting used in these financial statements. Specifically:
Commitments and Contingencies.
Our significant commitments consist of obligations under non-cancelable operating leases for our facilities rent and various equipment leases, which totaled $3.2 million as of December 31, 2007, and are payable in monthly installments through July 2011. Our significant commitments and payment obligations under non-cancelable operating leases at December 31, 2007 are as follows:
|
Payment Due by Period
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Total
|
Less than
1 year |
2-3 years
|
4-5 years
|
More than
5 years |
||||||||||
Total contractual obligations | $ | 3,174 | $ | 837 | $ | 1,738 | $ | 599 | $ | | |||||
|
|
|
|
|
Future Cash Expectations.
We believe that our current cash, cash equivalents, and short-term investment balances will satisfy our projected working capital and capital expenditure requirements for at least the next 12 months. In addition, we expect to generate positive cash flow from operations in 2008 that we can use to fund our operating and capital needs. Thereafter, we anticipate continuing to use cash, cash equivalents and short-term investment balances to satisfy our projected working capital and capital expenditure requirements.
We may utilize cash resources to fund acquisitions or investments in complementary businesses, technologies or product lines. In order to take advantage of opportunities, we may find it necessary to obtain additional equity financing, debt financing, or credit facilities. We do not believe at this time,
58
however, that our long-term working capital and capital expenditures would require us to take steps to remedy any such potential deficiencies. If it were necessary to obtain additional financings or credit facilities, we may not be able to do so, or if these funds are available, they may not be available on satisfactory terms.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have an effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material.
Recent Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in U.S. GAAP, and expands disclosures about fair value. This statement does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. SFAS No. 157 is effective the first fiscal year beginning after November 15, 2007. We have applied the provisions of this standard regarding the framework of measuring fair value and noted no material effect on the current financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, which permits entities to choose to measure certain financial assets and liabilities at fair value. SFAS No. 159 is effective the first fiscal year beginning after November 15, 2007. We have elected not to measure certain financial assets and liabilities at fair value as permitted by SFAS No. 159.
In April 2008, FASB issued Staff Position No. FAS 142-3 Determination of the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets . The intent of this Staff Position is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141 (revised 2007), Business Combinations , and other U.S. generally accepted accounting principles. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. We have concluded that this standard does not currently apply to us.
In May 2008, the FASB issued SFAS NO. 162, The Hierarchy of Generally Accepted Accounting Principles , which identifies the sources of accounting principles and the framework for selecting principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This statement shall be effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board's amendments to AU section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. We are evaluating the impact of SFAS 162, but we do not expect the adoption of this pronouncement will have a material effect on our financial statements.
Forward-Looking Statements
Because this information statement contains forward-looking statements, any of the risk factors set forth in this information statement or elsewhere in this information statement or incorporated herein by reference could cause our actual results to differ materially from those results projected or
59
suggested in such forward-looking statements. Such forward-looking statements include but are not limited to statements relating to:
Such forward-looking statements also include other statements containing words such as "anticipate," "estimate," "expect," "management believes," "we believe," "we intend," "should" and similar words or phrases, which are intended to identify forward-looking statements. Actual results may vary materially due to, among other things, our failure to become profitable, the failure of the potential markets for our digital watermarking technology to develop as anticipated, the adoption of alternative technologies within these markets, as well as changes in economic, business, competitive, technology and/or regulatory factors and trends, and the other factors described in this information statement or in our other documents filed with the SEC. All forward-looking statements are necessarily only estimates of future results and there can be no assurance that actual results will not differ materially from expectations, and, therefore, investors are cautioned not to place undue reliance on such statements. Investors should understand that it is not possible to predict or identify all risk factors and that the risks discussed in this information statement should not be considered a complete statement of all potential risks and uncertainties. We do not have any intention or obligation to update forward looking statements to reflect future events or developments, except as required by law.
60
BUSINESS OF DIGIMARC CORPORATION
Overview
Digimarc Corporation enables governments and enterprises around the world to give digital identities to media and objects that computers can sense and recognize and to which they can react. Our technology provides the means to infuse persistent digital information, perceptible only to computers and digital devices, into all forms of media content. The unique digital identifier placed in media generally persists with it regardless of the distribution path and whether it is copied, manipulated or converted to a different format, and does not affect the quality of the content or the enjoyment or traditional usefulness of it. Our technology permits computers and digital devices to quickly identify relevant data from vast amounts of media content.
Our technologies, and those of our licensees, span the complete range of media content, enabling our customers and theirs to:
Our revenue is generated primarily from patent and technology license fees paid by business partners, and development and service contracts with a variety of government and commercial organizations, including a consortium of Central Banks and a major media and audience measurement company.
Financial information about geographic areas is included in Note 4 of our financial statements.
History
We were formed in Delaware on June 18, 2008 by Old Digimarc to hold and operate the Digital Watermarking Business and to facilitate the separation of its Secure ID Business through the spin-off and the Old Digimarc/L-1 merger. Old Digimarc was founded to commercialize a signal processing innovation known as "digital watermarking." Digital watermarking is a technology that allows our customers to infuse digital data into any media content that is digitally processed at some point during its lifecycle. The technology can be applied to printed materials, video, audio, and images. The inclusion of these digital data enables a wide range of improvements in security and media management, and new business models for distribution and consumption of media content. Over the years our technology and intellectual property portfolios have grown to encompass many related technologies.
Banknote counterfeit deterrence was the first commercially successful use of our technologies. Old Digimarc, in cooperation with an international consortium of Central Banks, developed a system to
61
deter the use of digital technologies in the unauthorized reproduction of banknotes. More recently, innovations based on our digital watermarking technology and experience have been leveraged to create new products to deter counterfeiting and tampering of driver licenses and other government-issued secure credentials. In parallel, our business partners, under patent or technology licenses from us, are delivering digital watermarking solutions to track and monitor the distribution of music, images, television and movies to consumers. In November of 2007, we announced a relationship with Nielsen to license our patents in support of their audience measurement across more than 95% of the television shows broadcast in the United States and to provide development services for Nielsen's new Digital Media Manager content identification and management system.
Customers and Business Partners
Our revenue is generated through commercial and government applications of our technologies, including a long-term contract with a consortium of Central Banks. Our contract with the Central Bank consortium is in its tenth year. The contract is in the final year of a 5-year extension and provides for two additional 3-year extensions. The Central Bank consortium has agreed to the first 3-year extension. Our development and services agreement with Nielsen is perpetual, but may be terminated by Nielsen after two years if a specified level of revenues is not realized, or after five years, at its option. We also engage in development or service initiatives for government or commercial clients from time to time. Other revenue is generated primarily from patent and technology license fees paid by business partners providing media identification and management solutions to movie studios and music labels, television broadcasters, creative professionals and other customers around the world. Patent and technology licensing is expected to continue to contribute most of the revenues from non-government customers for the foreseeable future.
As part of our work with government customers, we must comply with and are affected by laws and regulations relating to the award, administration and performance of government contracts. Government contract laws and regulations affect how we do business with our customers and, in some instances, impose added costs on our business.
In some instances, these laws and regulations impose terms or rights that are more favorable to the government than those typically available to commercial parties in negotiated transactions. For example, the government agency may terminate any of our contracts and, in general, subcontracts, at its convenience, as well as for default based on performance. Upon termination for convenience of a fixed-price type contract, we normally are entitled to receive the purchase price for delivered items, reimbursement for allowable costs for work-in-process and an allowance for profit on the contract or adjustment for loss if completion of performance would have resulted in a loss. Upon termination for convenience of a cost reimbursement contract, we normally are entitled to reimbursement of allowable costs plus a portion of the fee.
In addition, our government contracts typically span one or more base years and multiple option years. The government agency generally has the right to not exercise option periods and may not exercise an option period if the agency is not satisfied with our performance on the contract.
Products and Services
We provide some media identification and management solutions to commercial entities and government customers. Our license solutions primarily target the media and entertainment industry. We have two multi-year development agreements, one with an international consortium of Central Banks, and the other with Nielsen.
Commercial customers use secure media solutions from our business partners and us to identify, track, manage and protect content as it is distributed and consumedeither digitally or physicallyand to enable new consumer applications to access networks and information from personal computers and
62
mobile devices. Movie studios, record labels, broadcasters, creative professionals and other customers rely on our technologies as a cost-effective means to:
Licensees of our technology or intellectual property include AquaMobile, Cinea, Inc., a subsidiary of Dolby Laboratories, Inc., GCS Research LLC, MediaGrid, Microsoft Corporation, Mobile Data Systems, Inc., The Nielsen Company, Royal Philips Electronics, Signum Technologies Limited, Thomson Multimedia, S.A., USA Video, Verance Corporation, Verimatrix, Inc. and VCP (an affiliate of VEIL Interactive Technologies).
Technology and Intellectual Property
We develop and patent intellectual property to differentiate products and technologies, mitigate infringement risk, and develop opportunities for licensing. Licensing of our technologies is supported by a broad patent portfolio covering a wide range of methods, applications, system architectures and business processes.
Most of our patents relate to various methods for embedding and detecting digital information in video, audio, images, and printed materials, whether the content is rendered in analog or digital formats. The digital information is generally embedded by making subtle modifications to the fundamental elements of the content itself, generally at a signal processing level. The changes necessary to embed this information are so subtle that they are generally not noticeable by people during normal use. Because the embedded digital information is carried by the content itself, it is file-format independent. The embedded digital information generally survives most normal compression, edits, rotation, scaling, re-sampling, file-format transformations, copying, scanning and printing.
To protect our intellectual property rights, we have implemented an extensive intellectual property protection program that relies on a combination of patent, copyright, trademark and trade secret laws, and nondisclosure agreements and other contracts. We believe we have one of the world's most extensive patent portfolios in the field of digital watermarking, with over 370 U.S. and over 85 foreign issued patents and more than 400 U.S. and foreign patent applications on file as of September 8, 2008 in the areas of digital watermarking and related technologies. Separately, we own registered trademarks in both the U.S. and other countries and have applied for other trademarks. We continue to develop and broaden our portfolio of patented technologies, including digital watermarking and related applications and systems.
Although we devote significant resources to developing and protecting our technologies, and periodically evaluate potential competitors of our technologies for infringement of our intellectual property rights, these infringements may nonetheless go undetected or may arise in the future.
Markets
Our technologies are used in various media identification and management products and solutions supporting a variety of media objects, from movies, music, TV programming and images, to banknotes, secure credentials and physical products or packaging. Each media object enabled by our technology
63
can be recognized by networks and digital devices, resulting in a wide range of applications for our technologies, including in the fields of:
We believe the market potential for our technologies is in the early stages of development and that existing solutions represent only a small portion of the potential market for our products, services, and technologies.
Competition
There is no single competitor or small number of competitors dominant in our industry. Our competitors vary depending on the application of our products and services. Our business partners and we generally compete with non-digital watermarking technologies for the security or marketing budgets of the producers and distributors of media objects, documents, products and advertising. These alternatives include, among other things, encryption based security systems and technologies and solutions based on fingerprinting and pattern recognition. Our competitive position within the digital watermarking industry is strong because of our large, high quality, sophisticated patent position in the proprietary technology of digital watermarking and our substantial and growing amount of intellectual property in related media security and management innovations that span basic technologies, applications, system designs, and business processes. Our intellectual property portfolio allows us to use proprietary technologies that are well regarded by our customers and partners and not available to our competitors. We compete with others in our industry based on the basket of features we can offer and a traditional cost benefit analysis of our technologies against alternative technologies and solutions. We anticipate that our competitive position within certain markets may be affected by factors such as reluctance to adopt new technologies and, positively or negatively, by changes in government regulations.
Backlog
Based on projected commitments we have for the periods under contract with our respective customers, we anticipate our current contracts as of June 30, 2008 will generate approximately $60 million in revenue during the terms of the contracts, currently running out over four years. We expect more than $9 million of this amount to be recognized as revenue during the remainder of 2008. This amount includes commitments reasonably expected to be achieved under currently effective contracts. Backlog as of December 31, 2007 and 2006 was approximately $46 million and $13 million, respectively.
Employees
There are two major drivers of revenue in our business(1) licensing revenues resulting from the monetization of our intellectual property portfolio and (2) services revenue resulting from the projects for the Central Banks and business, commerce, and media and entertainment customers. This services revenue is dependent upon the billable hours worked by highly qualified technical and management resources assigned to these projects. At December 31, 2007, we had 95 full-time employees, including 16 in sales, marketing, technical support and customer support; 37 in research, development and engineering; and 42 in finance, administration, information technology and legal. We also had 4
64
contract workers, primarily utilized to support billing services. This employee headcount is based on the same allocation methodology that was applied to carving out New Digimarc's financial statements. Our future success will depend, in part, on our ability to continue to attract, retain and motivate highly qualified technical and management personnel, for whom competition is intense. We offered employment to all of the members of our project service teams, and all of them accepted employment with New Digimarc as of August 1, 2008. These offers of employment involved the continuation of the 2008 salary and incentive compensation program through the end of the 2008, and our current benefits plans through their renewal during the second quarter of 2009. We believe that we will be able to provide competitive compensation and equity programs and maintain similarly competitive benefit plans at the time of renewal. For these reasons, we do not anticipate material turnover at this time or in the reasonably foreseeable future, especially among our technical personnel.
Our employees are not covered by any collective bargaining agreement, and we have never experienced a work stoppage. We believe that our relations with our employees are good.
Properties and Facilities
Our principal administrative, marketing, research, and intellectual property development facility is located in Beaverton, Oregon. Information about our office lease is set forth below.
|
Square
Feet |
Expires
|
||
---|---|---|---|---|
Beaverton, Oregon | 46,000 | August 2011 |
Legal Proceedings
From time to time in our normal course of business we are a party to various legal claims, actions and complaints. Currently, we do not have any pending litigation that we consider material.
65
Executive Officers and Directors
We were incorporated on June 18, 2008. All of our officers were appointed to their current positions on that date. All of our current directors were elected to our board of directors on July 29, 2008. Set forth below are the names and ages and current positions of our directors and executive officers.
|
Age
|
Position
|
||
---|---|---|---|---|
Bruce Davis | 56 | Chief Executive Officer and Chairman of the Board of Directors | ||
William J. Miller | 62 | Director | ||
James T. Richardson | 60 | Director | ||
Peter W. Smith | 74 | Director | ||
Bernard Whitney | 51 | Director | ||
Robert Chamness | 55 | Executive Vice President, Chief Legal Officer and Secretary | ||
Michael McConnell | 58 | Chief Financial Officer and Treasurer |
Bruce Davis. Mr. Davis was elected Chairman of the Board of Directors on June 18, 2008, and was named our Chief Executive Officer on June 18, 2008, having served as Old Digimarc's Chief Executive Officer since 2001, and a director since December 1997, as Old Digimarc's chairman of the Board of Directors since May 2002, and as its President from December 1997 through May 2001. Mr. Davis received a B.S. in accounting and psychology and an M.A. in criminal justice from the State University of New York at Albany, and a J.D. from Columbia University.
William J. Miller. Prior to the spin-off Mr. Miller served on the Board of Directors of Old Digimarc since 2005. Mr. Miller is a retired corporate executive with thirty-six years of experience in the high technology and legal sectors, and has, since 1999, served as an independent director and consultant. He serves as a member of the Board of Directors for each of the following companies: Nvidia Corp (Nasdaq: NVDA), a provider of graphics processing units, media and communications processors, wireless media processors, and related software for personal computers, handheld devices, and consumer electronics platforms; Waters Corporation (NYSE: WAT), a manufacturer of analytical instruments; Overland Storage, Inc. (Nasdaq: OVRL), a supplier of data storage products; and Glu Mobile Inc. (Nasdaq: GLUU), a global publisher of mobile games. Mr. Miller received a B.A. in speech communication from the University of Minnesota and a J.D. from the University of Minnesota.
James T. Richardson. Mr. Richardson has been appointed by the Board of Directors to serve as Lead Director. Prior to the spin-off Mr. Richardson served on the Board of Directors of Old Digimarc since 2003. Mr. Richardson is a director of and consultant to companies in the high-technology sector. Mr. Richardson serves as chairman of the Board of Directors of FEI Company (Nasdaq: FEIC) and as a director and audit committee chair of Tripwire, Inc., a Portland, Oregon-based network security company. Mr. Richardson received a B.A. in finance and accounting from Lewis and Clark College, an M.B.A. from the University of Portland, and a J.D. from Lewis and Clark Law School, and is a licensed C.P.A. and attorney in Oregon.
Peter W. Smith. Prior to the spin-off Mr. Smith served on the Board of Directors of Old Digimarc since 2000. Mr. Smith is a retired corporate executive and has served as a consultant to various other companies since 2000. Most recently, Mr. Smith served as president of News Technology for News America from January 1998 until his retirement in February 2000, where he coordinated technology throughout News Corporation and served as a technology advisor to its Board of Directors. Mr. Smith received a B.E. and B.Sc. from the University of Sydney, with first class honors.
66
Bernard Whitney. Prior to the spin-off Mr. Whitney served on the Board of Directors of Old Digimarc since 2005. Mr. Whitney is a retired corporate executive with twenty-seven years of experience in the high technology and finance sectors, and has since 2002 served as an independent director and consultant. He currently serves as a director for a number of private and non-profit entities. Mr. Whitney received a B.S. in business administration, majoring in finance, from California State University Chico, and a masters in business administration from San Jose State University.
Robert Chamness Mr. Chamness was named our Executive Vice President, Chief Legal Officer and Secretary on June 18, 2008, having served Old Digimarc since January 2002 in various roles including Vice President and General Counsel, Secretary, Vice President of Human Resources, Chief Legal Officer, and Executive Vice President. He also served as Old Digimarc's Compliance Officer and Privacy Officer. Mr. Chamness holds an A.B. cum laude from Wabash College and a J.D. summa cum laude from the Indiana University School of Law.
Michael McConnell Mr. McConnell was named our Chief Financial Officer and Treasurer on June 18, 2008, having served since June 2004 as Chief Financial Officer and Treasurer of Old Digimarc. Before joining Old Digimarc, Mr. McConnell was senior vice president, chief financial officer and treasurer at WatchGuard Technologies (1999 to 2004). Mr. McConnell is a CPA and holds a B.A. from California Polytechnic State University, San Luis Obispo.
Determination of Independence
The Board of Directors has determined that each of Messrs. Smith, Richardson, Miller, and Whitney, collectively representing a majority of the members of our Board of Directors, is "independent" as that term is defined by Nasdaq Marketplace Rule 4200. There were no related person transactions involving any of the independent directors of New Digimarc.
Lead Director
The Lead Director presides over all executive sessions of the non-management directors; serves as the principal liaison to the non-management directors; and consults with the Chairman of the Board of Directors regarding information to be sent to the Board of Directors, meeting agendas and establishing meeting schedules. Mr. Richardson was elected Lead Director on July 30, 2008.
Committees of the Board of Directors
The Board of Directors has three standing committees: an Audit Committee, a Compensation Committee and a Governance and Nominating Committee. The members of these committees are set forth in the following table:
Non-Employee Directors
|
Audit
|
Governance and Nominating
|
Compensation
|
|||
---|---|---|---|---|---|---|
William J. Miller | X | Chair | ||||
James T. Richardson | X | X | X | |||
Peter W. Smith | Chair | X | ||||
Bernard Whitney | Chair | X |
Audit Committee
We have a standing Audit Committee of the Board of Directors, consisting of Messrs. Whitney (chairman), Richardson, and Miller, that is responsible for overseeing the quality and integrity of our accounting, auditing, and financial reporting practices, the audits of our financial statements, and other duties assigned by the Board of Directors. The Audit Committee's role includes a particular focus on the qualitative aspects of financial reporting to stockholders, our processes to manage business and
67
financial risk, and compliance with significant applicable legal, ethical, and regulatory requirements. The Audit Committee will be directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm, including the resolution of any disagreements between management and the independent registered public accounting firm regarding financial reporting, engaged to prepare or issue an audit report on our financial statements or to perform other audit, review or attestation services for us. The Audit Committee is expected to also serves as our Qualified Legal Compliance Committee.
The Board of Directors has adopted a charter for the Audit Committee to authorize powers consistent with the provisions of the Sarbanes-Oxley Act of 2002 and other requirements. A copy of this charter is posted on the New Digimarc website, www.digimarc.com , on the Corporate Governance page. The Board of Directors has determined that each of the three members of the Audit Committee:
The Board of Directors further determined that each of Messrs. Whitney, Richardson and Miller qualifies as an "Audit Committee financial expert" in compliance with Item 407(d)(5) of Regulation S-K.
Governance and Nominating Committee
We have a standing Governance and Nominating Committee which will initially consist of Messrs. Smith (chairman), Whitney and Richardson. The Board of Directors has delegated to the Governance and Nominating Committee the responsibility for overseeing the quality and integrity of our corporate governance practices and for assessing the size, membership, skills and characteristics necessary and appropriate for members of the Board of Directors and its committees. The Board of Directors has adopted a written charter for the Governance and Nominating Committee, a copy of which is posted on our website, www.digimarc.com , on the Corporate Governance page. The Board of Directors has determined that all members of the Governance and Nominating Committee are "independent" as that term is defined in Nasdaq Marketplace Rule 4200.
The Governance and Nominating Committee's responsibilities include the review, monitoring, and general oversight of our policies and procedures involving corporate governance and compliance with significant legal, ethical, and regulatory requirements. This oversight responsibility includes monitoring compliance with the Sarbanes-Oxley Act of 2002. The Governance and Nominating Committee will also oversee the structure and evaluation of the Board of Directors and its committees, and the development, monitoring, and enforcement of the corporate governance principles applicable to us.
The Governance and Nominating Committee is responsible for recruiting individuals to become members of the Board of Directors and evaluating their qualifications under the guidelines described under "Director Nomination Policy" below. The Governance and Nominating Committee is also responsible for the composition of the Board committees. The Board of Directors may assign the Governance and Nominating Committee additional duties and functions from time to time consistent with its charter, our bylaws and governing law. Succession planning is one such responsibility that has been assigned to the committee.
Director Nomination Policy. The Governance and Nominating Committee has adopted a formal written policy addressing the nominating process. A copy of this policy is posted on our website, www.digimarc.com , attached as an exhibit to the Governance and Nominating Committee charter located on the Corporate Governance page of the site. Pursuant to its written policy addressing the nominating process, the Governance and Nominating Committee will welcome and encourage recommendations of director candidates from our stockholders, and will consider any director
68
candidates recommended by our stockholders, provided that the information regarding director candidates who are recommended is submitted to the Governance and Nominating Committee in compliance with the terms of its policy. Stockholders may submit director candidate nominations in accordance with the terms of our bylaws and applicable securities laws.
In evaluating a potential candidate's qualification for nomination to the Board, the Governance and Nominating Committee will consider the potential candidate's experience, areas of expertise, and other factors relative to the overall composition of the Board of Directors. The Governance and Nominating Committee will also review from time to time the skills and characteristics necessary and appropriate for directors in the context of the current composition of the Board of Directors. Directors are expected to devote sufficient time to carry out their duties and responsibilities effectively, ensure that other existing and planned future commitments do not materially interfere with his/her service as a director, and attend at least 75% of all Board of Directors and applicable committee meetings.
The Governance and Nominating Committee's process for identifying and evaluating nominees for director, including nominees recommended by stockholders, will involve compiling names of potentially eligible candidates, vetting those candidates against the factors described above, conducting background and reference checks, conducting interviews with candidates, meeting to consider and approve final candidates and, as appropriate, preparing and presenting to the Board of Directors an analysis with regard to a candidate. There will be no differences in the manner in which the Governance and Nominating Committee evaluates nominees for director based on whether the nominee is recommended by a stockholder or by the Governance and Nominating Committee. The committee will have the authority to, from time to time, pay professional search firms to assist in the identification and evaluation of potential nominees.
Stockholder Communications with the Board of Directors
The Board of Directors encourages communication from stockholders. All communications must be in written form, addressed to the Board of Directors or to one or more individual members of the Board of Directors, and sent care of the Secretary of New Digimarc at the address of our principal executive offices or via fax to (503) 469-4771. The Secretary of New Digimarc will promptly provide all communications to the applicable member(s) of the Board of Directors or the entire Board of Directors, as specified by the stockholder.
Director Resignation Upon Change of Employment
The Board of Directors has approved a policy that will provide any director who experiences a substantial change in principal employment responsibility that may adversely affect his or her ability to carry out his or her responsibilities as a director effectively to tender his or her resignation from the Board, unless the change was anticipated by the Governance and Nominating Committee at the time of the director's nomination or election to the Board. In accordance with the terms of the policy, upon receipt of a resignation offered under these circumstances, the Governance and Nominating Committee will review the director's change in employment responsibilities to evaluate whether the director's continued service is appropriate.
Compensation Committee
We have a standing Compensation Committee which consists of Messrs. Miller (chairman), Smith and Richardson and has the authority and responsibility to:
69
The Compensation Committee's role includes a particular focus on the compensation of our executive officers and non-employee directors and the administration of our stock incentive plans and significant employee benefit programs.
The Compensation Committee has adopted a written charter, a copy of which is available on our website, www.digimarc.com , on the Corporate Governance page. The Board of Directors has determined that each of the three members of the Compensation Committee is:
The Compensation Committee is permitted, under its charter, to delegate responsibilities to subcommittees of the Committee as necessary and appropriate.
The Compensation Committee, together with our Chief Executive Officer, will review assessments of executive compensation practices at least annually against comparative data and our compensation philosophy. Our Chief Executive Officer will make recommendations to the Compensation Committee with the intent of keeping our executive officer compensation practices aligned with our compensation philosophy, and the Compensation Committee will be required to approve any recommended changes before they can be made.
The Compensation Committee has the authority to retain and terminate any compensation and benefits consultant and the authority to approve the related fees and other retention terms of the consultant.
Code of Business Conduct and Ethics
Our Code of Business Conduct is posted on the Corporate Governance page of our website, www.digimarc.com . The Code of Business Conduct applies to all employees of New Digimarc and its subsidiaries, as well as to directors, temporary contractors, and other independent contractors or consultants when engaged by or otherwise representing us or our interests, and sets forth internal policies and guidelines designed to support and encourage ethical conduct and compliance with the laws, rules and regulations that govern our business operations.
Compensation Committee Interlocks and Insider Participation
No executive officer of New Digimarc served as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any committee performing equivalent functions, the entire Board of Directors) of another entity, or as a director of another entity, where one of the other entity's executive officers served on the Compensation Committee of New Digimarc or as a director of New Digimarc.
Related Person Transactions
Our Governance and Nominating Committee, in executing the responsibilities delegated to it, reviews, considers, and approves, rejects or qualifies all related person transactions between New
70
Digimarc and our officers, directors, principal stockholders and affiliates. The Governance and Nominating Committee consists of disinterested, non-employee directors.
Before our separation from Old Digimarc, we entered into a separation agreement, which contains many of the key provisions related to our separation from Old Digimarc and the distribution of shares of our common stock to Old Digimarc record holders, and a transition services agreement with Old Digimarc to effect the separation and provide a framework for our relationships with Old Digimarc after the separation. These agreements govern the relationship between us and Old Digimarc subsequent to the completion of the distribution and provide for the allocation between us and Old Digimarc of Old Digimarc's assets and liabilities (including employee benefits and tax-related assets and liabilities) related to its Digital Watermarking Business, attributable to periods prior to our separation from Old Digimarc. The terms of the separation agreement and transition services agreement are set forth elsewhere in this information statement under the heading "Our Relationship with Old Digimarc after the Spin-Off."
71
The following table provides information on compensation that our non-employee directors received from Old Digimarc for the year ended December 31, 2007. Directors who were also Old Digimarc employees received no additional compensation for their services as directors. During 2007, Mr. Davis was the only director who was an employee of Old Digimarc. Mr. Davis's compensation is discussed in this information statement under the heading "Executive Compensation."
The size and scope of New Digimarc's operations, based on its configuration and business after its separation from Old Digimarc, are significantly smaller than those of Old Digimarc. Consequently, there are fewer outside directors (four instead of eight) and compensation will be decreased to be commensurate with that paid at comparable companies, defined as companies of similar size within the high tech and software services industries that share similar financial characteristics to New Digimarc. Only the directors of New Digimarc are listed below, but their compensation for the balance of 2008 and beyond will be reduced materially from that set forth herein.
2007 Director Compensation Table
Name
|
Fees Earned or
Paid in Cash ($) |
Stock Awards
($)(1) |
Option Awards
($)(2) |
Total
($) |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Peter W. Smith | $ | 37,500 | $ | 25,496 | $ | 26,986 | $ | 89,982 | ||||
James T. Richardson | $ | 70,000 | $ | 25,496 | $ | 26,986 | $ | 122,482 | ||||
Bernard Whitney | $ | 50,000 | $ | 25,496 | $ | 39,628 | $ | 115,124 | ||||
William J. Miller | $ | 40,000 | $ | 25,496 | $ | 39,628 | $ | 105,124 |
72
All directors were also reimbursed for reasonable and necessary travel, communications, and other out-of-pocket business expenses incurred in connection with their attendance at meetings, while on corporate business or for continuing education related to their board service.
Cash Compensation. In 2007, each non-employee director of Old Digimarc received an annual cash retainer of $30,000. The Lead Director received an additional annual cash retainer of $30,000. Members of the Old Digimarc audit committee received an annual cash retainer of $10,000, with the chair of the audit committee receiving an annual cash retainer of $20,000. Members of the Old Digimarc compensation committee received an annual cash retainer of $5,000, with the chair of the Old Digimarc compensation committee receiving an annual cash retainer of $10,000. Members of other standing committees of the Old Digimarc board of directors received an additional annual cash retainer of $3,750 for each committee on which the member served, with the chair receiving an annual cash retainer of $7,500. In addition, each Old Digimarc committee member received a fee of $1,000 for each in-person committee meeting and would have received a fee of $500 for each teleconference committee meeting in excess of eight meetings of the particular committee held in 2007. No fees for excess meetings were paid during 2007.
Equity Compensation. Old Digimarc's 1999 Non-Employee Director Option Program establishes an automatic option grant program for the grant of awards to its non-employee directors. Under this program, each non-employee director who first was elected to Old Digimarc's board of directors on or after March 29, 2002 is automatically granted an option to acquire 20,000 shares of common stock at an exercise price per share equal to the fair market value of the common stock at the date of grant. These options vest and become exercisable in 36 equal installments on each monthly anniversary of the grant date, so the stock options become fully exercisable three years after the grant date. No new directors were elected to Old Digimarc's board of directors in 2007. On the date of each annual stockholders meeting, each non-employee director who has been a member of Old Digimarc's board of directors for at least six months prior to the date of the stockholders meeting automatically receives an option to acquire 6,000 shares of Old Digimarc common stock at an exercise price per share equal to the fair market value of the common stock at the date of grant, and an automatic grant of 3,000 shares of Old Digimarc restricted stock. The options vest and become exercisable in twelve equal installments on each monthly anniversary of the grant date, so the stock options become fully exercisable one year after the grant date. The restricted stock awards are subject to a forfeiture restriction that lapses as to 100% of the shares subject to the award one year after the grant date. Messrs. Smith, Richardson, Miller and Whitney all received grants of options and restricted stock from Old Digimarc in 2007.
In addition, Old Digimarc's 1999 Non-Employee Director Option Program provides that, immediately following each annual meeting of its stockholders, each non-employee director who serves as a member of a standing committee of the board and who has been a member of the board of directors for at least six months prior to the date of the stockholders meeting receives an option to acquire 3,000 shares of common stock at an exercise price per share equal to the fair market value of the common stock at the date of grant. These options vest and become exercisable in twelve equal installments on each monthly anniversary of the grant date, so the stock option is fully exercisable one year after the grant date.
The Old Digimarc board of directors has discretion to elect not to make the annual option and restricted stock grants to continuing board members and standing committee members. Since 2004, the Old Digimarc board of directors has elected not to make the annual 3,000 share option grant to directors for service on one or more standing committees. The shares for committee service are a vestige of the former program under which Old Digimarc directors received only equity compensation, rather than a combination of cash and equity compensation. The Old Digimarc board of directors determined that the value of the options and restricted stock grants provided sufficient equity compensation for their service as directors of Old Digimarc.
73
Compensation Proposal for New Digimarc Directors
We expect to continue to pay both cash and equity compensation to our non-employee directors in amounts commensurate with amounts paid at comparable companies.
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes the compensation policy we expect to apply to our named executive officers with respect to fiscal 2008.
General Compensation Policy
Our executive compensation programs are designed to attract, retain, motivate and appropriately reward our executive officers, as well as to align the interests of executive officers with those of our stockholders. The objectives of our compensation programs are to:
Setting Executive Compensation
Executive compensation is structured to foster achievement of the objectives of our compensation philosophy and is generally commensurate with compensation structures and levels at companies of similar size within the high tech and software services industries that share similar financial and operating characteristics.
In general, compensation to Named Executive Officers is based upon the scope of their responsibilities, experience, skills, talents, demonstrated prior performance, and potential contributions to our success. In making these determinations, the Compensation Committee has considered compensation practices at comparable companies, among other data points, to judge the reasonableness of its decisions. In 2008, the Committee retained Equilar, Inc. to provide comparable company data. The Committee also has used the services of both Mercer and Radford Surveys and Consulting, nationally recognized independent consulting firms, to assist it in determining appropriate compensation. Mercer and Radford performed analyses and made recommendations with respect to compensation for each Named Executive Officer, including the appropriate number of stock options and other equity awards to be considered.
In establishing the compensation to be provided to our Named Executive Officers, the Compensation Committee considered the factors referred to above, including market data and advice provided by Mercer. As a general guideline, for our Named Executive Officers, we set base cash compensation between the 50 th and 75 th percentiles, total cash compensation (base plus annual cash incentive ("bonus") compensation) for our Named Executive Officers at or between the 50 th and 75 th percentiles (with top quartile opportunity for superior performance) and total equity compensation between the 50 th and 75 th percentiles of similar companies. We believe that these levels will enable us
74
to attract, retain and motivate executives of high quality, while at the same time keep our overall compensation levels in line with those of comparable companies.
2008 Compensation Components
The primary elements of each Named Executive Officer's compensation package for the year ended December 31, 2008 will be:
The reasons for choosing each of these components are set forth in the discussion below. Because base compensation, annual cash bonuses, and equity awards are such basic elements of compensation within our industry, as well as the high tech and software industries in general, and are generally expected by employees, we believe that these components must be included in our compensation mix in order for us to compete effectively for talented executives. In determining the mix of these components, we applied our compensation philosophy and principles and considered the advice of Mercer concerning compensation levels for executives at comparable companies. Our objective was to establish a mix that would facilitate the following objectives:
We use stock options as an element of executive compensation for several reasons. First, stock options facilitate retention of our executives. Stock options will provide a return to the executive only if he or she remains in our employ. Second, stock options align executive compensation with the interests of our stockholders and thereby focus executives on increasing value for the stockholders. Third, stock options are performance based; providing a return to executives only to the extent that the market price of our common stock appreciates over the option term. Fourth, stock options create incentive for increases in stockholder value over a longer term. In determining the number of options to be granted to executives, we take into account the individual's position, scope of responsibility, ability to affect profits and stockholder value, the individual's past and recent performance, and the estimated value of stock options at the time of grant. Assuming individual performance at a level satisfactory to the Compensation Committee, the size of stock option grants to our executives is generally set between the 50 th and 75 th percentiles for comparable companies, with top quartile opportunity for superior performance.
We use time-based restricted stock to help encourage retention and to minimize the burn rate relating to equity awards. Restricted stock provides some of the same benefits as stock options, such as facilitating (i) alignment of the value of an executive's compensation with our performance, the market value of our common stock and the interests of our stockholders and (ii) retention of the executive as an employee. Both stock options and restricted stock provide a return to the executive only to the extent he or she remains in our employ during the vesting period. In the case of restricted stock, the employee receives actual shares, rather than a right to purchase shares at a fixed price. Once the restricted shares vest, they will generally have some value to the employee, even if the share price has not increased since the grant date. On the other hand, stock options will have no value unless the share price increases following the date of grant. As a result, to the extent the stock price has not increased since the date of grant, restricted stock may provide a greater retention benefit than that of stock
75
options. Accordingly, we believe that a mix of stock options and restricted stock provides a more certain baseline retention benefit.
In allocating compensation among the elements identified above, we believe that a substantial portion of the total compensation of our Named Executive Officers, the level of management having the greatest ability to influence our performance, should be performance-based. Accordingly, a substantial portion of the compensation of each Named Executive Officer consisted of incentive cash bonus, stock options, and restricted stock.
In allocating long term incentive compensation among stock options, time-based restricted stock and performance-based restricted stock, our general guideline is to provide approximately 2 / 3 of the annual long-term incentive value for each Named Executive Officer in the form of stock options, based on the Black-Scholes valuation model. The remaining annual long-term incentive value will be provided in the form of time-based restricted stock. The Committee has determined that stock options align the interests of the executives with the stockholders and therefore a substantial portion of the value of the equity grants was allocated to the executives in the form of stock options, while time-based restricted stock assists in the retention of executives while maintaining alignment with growth in stockholder value.
Salary. The salary for each Named Executive Officer is set on the basis of the position and the salary levels in effect for comparable positions with other comparable companies in the industry. Salaries are generally targeted between the 50 th and 75 th percentiles, with the opportunity for high-performers and successful incumbents occupying critical positions to have salaries that reflect their seasoning, experience, performance and contributions. During the annual review, the Committee determined that the targeted annual compensation was competitive with the pay targets established by the Compensation Committee.
The 2008 base salaries for our Named Executive Officers are as follows: Bruce Davis, $410,000; Robert Chamness, $250,000; and Michael McConnell, $260,000. These salaries will continue through calendar year 2008, after which they will be set by the Compensation Committee with respect to future years.
Annual Cash Incentive Compensation. The Compensation Committee has established an incentive compensation program for Named Executive Officers. Under this program, our executive officers receive annual cash bonuses based upon the achievement of specified performance objectives. These executives are responsible for establishing strategic direction and are to be responsible for major functional or operating units and have an impact on bottom-line results. Accordingly, evaluation of performance of objectives is generally based on measure of Company performance as well as individual performance. Compensation objectives are explicitly linked to goals and objectives set forth in our Annual Operating Plan, as approved by the Board of Directors.
The target bonus amounts and the specific company and individual objectives applicable to the cash bonuses paid to our Named Executive Officers will be set annually, with a stub-year plan for the rest of 2008. With respect to each Named Executive Officer, as a general guideline, 20 - 40% of the annual incentive bonus will be based on the achievement of individual performance goals and 60 - 80% will be based on key measures of financial performance.
The 2008 target bonus amount for Mr. Davis was set at 80% of his base salary (or $328,000). The target bonus amounts for our other Named Executive Officers were set at 55% of their base salaries (or $137,500 and $143,000 for each of Mr. Chamness and Mr. McConnell, respectively). The committee determined that these percentages were competitive within the marketplace and consistent with its overall compensation philosophy. A larger portion of Mr. Davis' cash compensation is performance based because we believe that Mr. Davis, as our Chief Executive Officer, has a greater impact on our results than our other executive officers.
76
The individual performance goals varied with each executive and were set in January 2008 as part of the strategic performance management process. Based in part on the successful completion of the sale of the Secure ID Business and spin-off of the Digital Watermarking Business, the Old Digimarc board of directors determined that 100% of the target annual 2008 bonuses of Messrs. Davis, Chamness and McConnell had been earned as of July 30, 2008, and directed New Digimarc to accrue those bonuses and pay them in December of 2008. For the balance of 2008, Messrs. Davis, Chamness and McConnell are eligible to earn additional incentive compensation. The targets for this period are $135,000, $60,000 and $60,000, respectively. The objectives set for earning these incentive payments consist of successfully separating and launching the new company, regaining listing of the company's shares on Nasdaq, establishing strategy, formulating operating plans, and aligning the organization with the plan and strategy.
Equity Compensation. The Compensation Committee intends to award stock options and restricted stock to each of our executive officers upon their initial hiring and from time to time thereafter. These forms of equity compensation are designed to align the interests of our executive officers with those of our stockholders and to provide each executive officer with a significant incentive to manage us from the perspective of an owner with an equity stake in the business.
The size of the grants made to each executive officer is set at a level that the Compensation Committee deems appropriate to create a meaningful opportunity for stock ownership based upon the individual's current position with us and individual and company performance. In making these awards, the Committee will look at competitive long term incentive values, and grant equity compensation to our executives based on an evaluation of each executive's performance, and generally within, but not limited to, a value to the executives between the 50 th and 75 th percentiles of our peer group for their position. The Compensation Committee also takes into account the individual's potential for future responsibility and promotion, the individual's performance in recent periods, and our anticipated stock option burn rate. The relative weight given to each of these factors will vary from individual to individual in the Compensation Committee's discretion. The Committee will allocate the amount and value of such awards among one or more of stock options, time-based restricted stock and stock appreciation rights.
With the exception of significant promotions and initial hires, including the awards at the time of the spin off, we will make these awards at the first meeting of the Compensation Committee each calendar year following approval of the annual operating plan by the board. This process enables us to align compensation with the annual operating plan and to properly budget for associated costs.
Benefits and Perquisites. Benefits are established based upon an assessment of competitive market factors and a determination of what is needed to attract and retain talent. The primary benefits received by our Named Executive Officers are the same as for all other employees and include participation in our health, dental and vision plans, the employee stock purchase plan and our disability and life insurance plans. Our general policy is not to provide perquisites or other personal benefits to our Named Executive Officers, other than those benefits provided for all other employees.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Code generally disallows a tax deduction to public companies for compensation exceeding $1 million paid to certain executive officers. The limitation applies only to compensation that is not considered to be performance-based. We believe that the non-performance-based compensation paid to each of our executive officers in 2008 will not exceed the $1 million limit and, therefore, no deductions will be disallowed under Section 162(m).
The Compensation Committee is aware of the limitations imposed by Section 162(m), and its exemptions, and will address the issue of deductibility when and if circumstances warrant. We review proposed compensation plans in light of applicable tax deductions, and generally seek to maximize the
77
deductibility for tax purposes of all elements of compensation. However, we may approve compensation that does not qualify for deductibility if and when we deem it to be in our best interests.
Practices Regarding Equity Grants
As a general matter, except for new hire grants and initial grants to be made to our executive officers following the spin-off, we will grant awards of stock options and restricted stock (time based and performance based) to our Named Executive Officers at a Compensation Committee meeting held in early January. Pursuant to our written policy and standard operating procedures with respect to the stock grants, the grant date of these awards is the date of approval of the grants. Our executives have no role in selecting the grant date. The exercise price of stock options is always the closing price of the underlying common stock on the grant date. All stock option, restricted stock and performance vesting share awards to executives are promptly reported on Form 4 filings.
Employment Agreements
We anticipate entering into new employment agreements with Messrs. Davis, Chamness and McConnell.
78
The following tables contain information concerning the compensation paid to only the Named Executive Officers of Old Digimarc who are continuing with New Digimarc for services rendered to Old Digimarc during the years ended December 31, 2006 and December 31, 2007. All of the information included in these tables reflects compensation earned by the individuals for services performed for Old Digimarc. All references in the following tables to stock options, restricted stock, restricted stock units, and other stock awards relate to awards granted by Old Digimarc in regard to Old Digimarc common stock.
The amounts and forms of compensation reported below do not necessarily reflect the compensation the Named Executive Officers will receive following the spin-off, which could be higher or lower, because historical compensation was determined by Old Digimarc and future compensation levels will be determined by our compensation committee.
2007 Summary Compensation Table
Name and Principal Position
|
Year
|
Salary
($) |
Bonus
($)(1) |
Stock
Awards ($)(2) |
Option
Awards ($)(3) |
Non-Equity
Incentive Plan Compensation ($) |
All Other
Compensation ($)(4) |
Total
($) |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Bruce Davis,
Chief Executive Officer and Chairman of the Board of Directors |
2007
2006 |
$
$ |
410,000
410,000 |
$
$ |
32,489 |
$
$ |
500,834
276,286 |
$
$ |
255,302
150,430 |
$ |
225,000 |
$
|
6,750
6,600 |
$
|
1,172,886
1,100,805 |
||||||||
Michael McConnell, Chief Financial Officer and Treasurer |
|
2007 2006 |
|
$ $ |
260,000 260,000 |
|
$ $ |
13,713 |
|
$ $ |
194,120 113,319 |
|
$ $ |
127,188 73,685 |
|
$ |
75,000 |
|
$ |
6,750 5,767 |
|
$ |
588,058 541,484 |
Robert Chamness, Chief Legal Officer and Secretary |
|
2007 2006 |
|
$ $ |
250,000 250,000 |
|
$ $ |
13,186 |
|
$ $ |
163,290 104,921 |
|
$ $ |
77,734 40,696 |
|
$ |
77,500 |
|
$ |
6,750 938 |
|
$ |
497,774 487,241 |
79
2007 Grants of Plan-Based Awards Table
The following table sets forth certain information with respect to stock options and other plan-based awards granted by Old Digimarc with respect to Old Digimarc common stock during the year ended December 31, 2007 to each of the Named Executive Officers. Prior to the record date for the distribution, outstanding Old Digimarc equity incentive awards were adjusted as described in "Executive CompensationTreatment of Outstanding Equity Awards in Connection with the Spin-Off."
|
|
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards |
Estimated Future Payouts
Under Equity Incentive Plan Awards |
|
|
|
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name
|
Grant Date
|
Threshold
($) |
Target
($) |
Maximum
($) |
Threshold
(#) |
Target
(#) |
Maximum
(#) |
All Other Stock Awards: Number of Shares of Stock or Units
(#) |
All Other Option Awards: Number of Securities Underlying Options
(#) |
Exercise or Base Price of Option Awards
($/Sh) |
Grant Date Fair Value of Stock and Option Awards
($) |
||||||||||||||
Bruce Davis |
1/2/07 1/2/07 1/2/07 |
0 | $ | 328,000 | |
0 |
30,000 |
30,000 |
30,000 |
100,000 |
$ |
8.79 |
$ $ $ |
424,210 263,700 192,264 |
|||||||||||
Michael McConnell |
|
1/2/07 1/2/07 1/2/07 |
|
0 |
|
$ |
143,500 |
|
|
|
0 |
|
10,000 |
|
10,000 |
|
10,000 |
|
40,000 |
|
$ |
8.79 |
|
$ $ $ |
169,684 87,900 64,088 |
Robert Chamness |
|
1/2/07 1/2/07 1/2/07 |
|
0 |
|
$ |
137,500 |
|
|
|
0 |
|
7,500 |
|
7,500 |
|
7,500 |
|
30,000 |
|
$ |
8.79 |
|
$ $ $ |
127,263 65,925 48,066 |
Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table
Estimated Future Payouts Under Non-Equity Incentive Plan Awards. The "target" amounts represent the 2007 annual bonus target established by Old Digimarc for each Named Executive Officer.
Estimated Future Payouts Under Equity Incentive Plan Awards. These amounts represent the number of shares covered by performance based restricted stock awards granted by Old Digimarc on January 2, 2007. The grant date fair value of this award was determined by Old Digimarc using a Monte Carlo valuation model that resulted in a substantial discount to the fair market value of Old Digimarc's common stock on the date of grant, based on the probability weighting of the specified performance goal.
All Other Stock Awards. These amounts represent the number of shares covered by time-based restricted stock awards granted by Old Digimarc on January 2, 2007. The grant date fair value of this award was based on $8.79 per share (which was the closing price of Old Digimarc common stock on December 29, 2006), the most recent closing price of Old Digimarc's common stock.
All Other Option Awards. These amounts represent the number of shares covered by stock options granted by Old Digimarc on January 2, 2007. These options have an exercise price of $8.79 per share (which was the closing price of Old Digimarc common stock on December 29, 2006, the most recent closing price of Old Digimarc's common stock). The grant date fair value was determined by Old Digimarc using the Black-Scholes valuation model.
Employment Agreement with Mr. Davis
Old Digimarc has entered into an employment agreement with Bruce Davis, pursuant to which Old Digimarc agreed to pay Mr. Davis an initial base salary of not less than $300,000 per year and an annual performance bonus of up to 50% of his base salary per year. Consistent with its charter, the Old
80
Digimarc compensation committee annually reviews and determines the compensation of the Chief Executive Officer and other executive officers. The Old Digimarc compensation committee is not restricted from setting base and bonus amounts at a higher level than as provided in Mr. Davis's employment agreement. Since the date of the employment agreement, Old Digimarc's compensation arrangement with Mr. Davis has evolved and, over time, the Old Digimarc compensation committee has determined to increase the amount of base compensation and the percentage amount of Mr. Davis's target bonus. The Old Digimarc compensation committee determined in 2005 to set the base and annual performance bonus for Mr. Davis in amounts higher than those set forth in his employment agreement, as noted above in the 2007 Summary Compensation Table.
Mr. Davis also receives vacation and other benefits as are generally provided to other Old Digimarc executives. Old Digimarc will grant additional stock options to Mr. Davis consistent with general market practices for similarly situated executives. The employment agreement provides that as long as Mr. Davis serves as Old Digimarc's Chief Executive Officer, it is our intention that he will be nominated to serve as a director and as chairman of Old Digimarc's Board of Directors. The employment agreement provides for an initial term from July 16, 2001 to December 31, 2002, automatically renewing for successive two-year periods unless terminated by written notice received at least one year prior to any scheduled termination.
Other than the agreement with Mr. Davis referenced above, there are no employment contracts between Named Executive Officers and Old Digimarc. However, as described more fully under "Potential Post-Employment Payments" below, on January 2, 2007, the Old Digimarc compensation committee approved a more limited Change of Control Retention Agreement between Old Digimarc and each of Messrs. McConnell and Chamness. All obligations under the Change of Control Retention Agreements were assumed by New Digimarc following the spin-off and New Digimarc merger.
Annual Cash Incentive Compensation
Old Digimarc did not pay annual cash incentive bonuses for 2007 performance. The amounts paid in 2006 represent discretionary cash bonuses approved by the Board of Directors of Old Digimarc on November 2, 2006 as an award for achieving profitability in the third quarter of 2006.
Under Old Digimarc's incentive compensation program for executive officers, non-equity incentive plan awards are not capped at the target level. The Old Digimarc plan allows for bonuses to be paid up to 130% of the target if Old Digimarc's performance exceeds the Old Digimarc plan.
Equity Compensation
The awards included in the 2007 Summary Compensation table include awards that are also described in the 2007 Grants of Plan-Based Awards table and in the 2007 Outstanding Equity Awards at Fiscal Year-End table.
Stock Options. All options granted to the Named Executive Officers in 2007 are intended to be incentive stock options, but only to the extent that the aggregate fair market value of the common stock with respect to which the stock options are exercisable for the first time during any calendar year under all Old Digimarc's equity incentive plans for each executive does not exceed $100,000. Any excess over $100,000 is treated as a non-qualified stock option. Each grant allows the executive officer to acquire shares of Old Digimarc's common stock at a fixed price per share, which is the market price on the grant date over a specified period of time up to 10 years. Such options become exercisable in monthly installments over a four-year period, contingent upon the executive officer's continued employment with Old Digimarc.
Time Based Restricted Stock. Each grant of Old Digimarc time-based restricted stock granted to the Named Executive Officers in 2007 allows the executive officer to acquire shares of Old Digimarc
81
common stock at no cost immediately at the time of the grant, subject to divestiture over a specified period of time (in this instance, four years). At the end of each of the first four years following the grant date, the restrictions will lapse on 25 percent of the restricted shares subject to each of these grants, at which time such shares are no longer subject to forfeiture.
Performance Based Restricted Stock. The form of agreement used in connection with the grant of Old Digimarc performance based restricted stock to its executive officers in 2007 provides that the shares will fully vest, subject to the terms of the agreement, if the Total Stockholder Return (as defined below) for certain specified periods is equal to or greater than specified percentile targets as compared to the weighted peer group used by Old Digimarc's compensation committee for the purposes of determining executive compensation for 2007. If, for the period from the date of grant to December 31, 2009, Old Digimarc's Total Stockholder Return is equal to or greater than the 60 th percentile performance of the weighted peer group, then the shares will vest in full as of December 31, 2009. However, if, for the period from the date of grant to December 31, 2008, Old Digimarc's Total Stockholder Return is equal to or greater than the 75 th percentile performance of the weighted peer group, then the shares will vest in full as of December 31, 2008. Assuming that all conditions are satisfied, the shares will vest and no longer be subject to forfeiture as of the date on which the performance condition is satisfied. Subject to certain exceptions, all rights to shares of performance based restricted stock are contingent on the executive remaining continuously employed by Old Digimarc, or any parent or subsidiary of Old Digimarc, from the grant date through the vesting date. The shares will be automatically forfeited on the third anniversary of the date of grant if the performance condition has not been fully satisfied by such time.
Old Digimarc calculates Total Stockholder Return by dividing (i) the change in the share price from December 31, 2006 to the end of the relevant measurement period, plus dividends paid during such period (including stock splits, cash dividends, stock dividends and share repurchases) by (ii) the share price at the date of grant. For purposes of the above calculation, the share price is the closing price on the relevant measurement date. Because the stock markets were closed on January 1, 2007 (the beginning of the measurement periods), Old Digimarc used the closing price on Friday, December 29, 2006, which was the last preceding trading date for which a closing price was reported. Accordingly, the share price of Old Digimarc common stock on January 1, 2007 is deemed to be $8.79, the closing price of Old Digimarc common stock on December 29, 2006.
For purposes of determining whether Old Digimarc has met the performance conditions, the Total Stockholder Return of each of the peer companies in Group I is weighted by a factor of three and the Total Stockholder Return of each of the peer companies in Group II is given no additional weighting. Old Digimarc's compensation committee determines the precise formula to be used to calculate Old Digimarc's percentile ranking calculation. Old Digimarc's compensation committee also makes additional adjustments to the calculation of Total Stockholder Return and percentile ranking as it deems appropriate to reflect changes in Old Digimarc's outstanding shares or any of the companies that comprise the peer group, or other similar non-market factors that may affect share price. The Old Digimarc compensation committee chose the Total Stockholder Return of Old Digimarc relative to its peer group as the performance measure in order to closely align a portion of compensation with direct benefit to stockholders. Since Old Digimarc based a portion of short term incentive compensation (annual incentive cash bonus) on target levels of return on equity, Old Digimarc felt it appropriate to use share price as the performance measure for performance based restricted stock. Old Digimarc utilized an "all or nothing" approach in structuring the performance measure in order to provide the maximum incentive to reach the specified goal. Old Digimarc may consider revising the "all or nothing" approach in future years to more closely reflect other comparable programs in the peer group.
This approach differed from that used in connection with the grant of performance based restricted stock to Old Digimarc's executive officers in 2006, which provided that the shares would fully vest, subject to the terms of the agreement, if the closing price of Old Digimarc's common stock is at least $15 for more than 30 consecutive calendar days during the period that begins on the grant date and ends on the third anniversary of the grant date.
82
2007 Outstanding Equity Awards at Fiscal Year-End Table
The following table provides summary information, as to the Named Executive Officers, concerning Old Digimarc equity awards outstanding as of December 31, 2007. Prior to the record date for the distribution, outstanding Old Digimarc equity incentive awards were adjusted as described in "Executive CompensationTreatment of Outstanding Equity Awards in Connection with the Spin-Off."
|
Option Awards(1)
|
Stock Awards
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
|
|
|
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5) |
||||||||||||
|
|
|
|
|
|
|
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) |
|||||||||||||
|
|
Number of
Securities Underlying Unexercised Options (#) |
Number of
Securities Underlying Unexercised Options (#) |
|
|
|
Market
Value of Shares or Units of Stock That Have Not Vested ($)(3) |
||||||||||||||
|
|
|
|
Number of
Shares or Units of Stock That Have Not Vested (#)(2) |
|||||||||||||||||
|
|
Option
Exercise Price ($) |
|
||||||||||||||||||
Name
|
Grant
Date |
Option
Expiration Date |
|||||||||||||||||||
Exercisable
|
Unexercisable
|
||||||||||||||||||||
Bruce Davis |
01/31/00 07/17/00 12/21/00 12/18/01 06/25/02 12/12/02 01/02/04 01/05/05 01/03/06 01/02/07 |
100,000 200,000 250,000 150,000 50,000 200,000 110,000 25,000 89,569 22,917 |
90,431
77,083 |
$ $ $ $ $ $ $ $ $ $ |
53.9375 26.25 14.125 18.16 8.67 15.24 13.00 9.07 5.91 8.79 |
01/31/10 07/17/10 12/21/10 12/18/11 06/25/12 12/12/12 01/02/14 01/05/15 01/03/16 01/02/17 |
85,250 | $ | 751,905 | 65,000 | $ | 573,300 | |||||||||
Michael McConnell |
06/01/04 01/05/05 01/03/06 01/02/07 |
200,000 10,000 32,344 9,167 |
32,656
30,833 |
$ $ $ $ |
11.53 9.07 5.91 8.79 |
06/01/14 01/05/15 01/03/16 01/02/17 |
33,000 | $ | 291,060 | 25,000 | $ | 220,500 | |||||||||
Robert Chamness |
01/02/02 12/12/02 01/02/04 01/05/05 01/03/06 01/02/07 |
100,000 28,000 30,000 10,000 24,880 6,875 |
25,120
23,125 |
$ $ $ $ $ $ |
19.93 15.24 13.00 9.07 5.91 8.79 |
01/02/12 12/12/12 01/02/14 01/05/15 01/03/16 01/02/17 |
26,750 | $ | 235,935 | 17,500 | $ | 154,350 |
83
than the 75 th percentile performance of the weighted peer group, then the shares will vest in full as of December 31, 2008. The shares will be automatically forfeited on the third anniversary of the date of grant if the performance condition has not been fully satisfied by such time.
The awards in the Outstanding Awards at Fiscal Year-End table include awards that are also described in the 2007 Summary Compensation Table and in the 2007 Grants of Plan-Based Awards Table.
2007 Option Exercises and Stock Vested Table
The following table provides summary information, as to the Named Executive Officers, concerning Old Digimarc stock options exercised and Old Digimarc stock awards vested during 2007.
|
Stock Awards
|
||||
---|---|---|---|---|---|
Name
|
Number of Shares
Acquired on Vesting (#) |
Value Realized
on Vesting ($)(1) |
|||
Bruce Davis | 37,750 | $ | 329,455 | ||
Michael McConnell | 15,500 | $ | 135,210 | ||
Robert Chamness | 14,250 | $ | 124,685 |
2007 Potential Payments Upon Termination or Change-in-Control
Davis Employment Agreement. The employment agreement entered into between Old Digimarc and Mr. Davis provides that if Old Digimarc terminates Mr. Davis's employment without cause, or if Mr. Davis terminates his employment due to an adverse change in conditions of his employment, Mr. Davis's stock options will immediately and fully vest and Old Digimarc will be obligated to continue to pay Mr. Davis the benefits described below for two years from the date of termination. "Cause" is defined as "an action or inaction adverse to Old Digimarc, including dishonesty, grossly negligent misconduct, willful misconduct, disloyalty, an act of bad faith, neglect of duty or material breach of the employment agreement." "Adverse change" includes any of the following changes, if done without Mr. Davis's prior written consent: reduction in title or responsibilities, or mandatory relocation more than 35 miles from current place of employment. For a period of two years following the date of termination, Mr. Davis would continue to receive base compensation at the level in effect on the date of termination and annual bonus compensation at the level earned in the most recent fiscal year. These amounts would be paid according to Old Digimarc's standard payroll schedules from the date of termination, as if Mr. Davis had not been terminated. For a period of two years following the date of termination, Old Digimarc would also provide for Mr. Davis and his dependents, continued health, disability and other fringe benefits as are generally provided to other executives of Old Digimarc. In consideration for the provisions in the employment agreement providing for the post-termination payments described above, Mr. Davis has agreed to certain non-competition and non-solicitation obligations in favor of Old Digimarc.
Stock Option Policy. The Board of Directors of Old Digimarc adopted a policy, applicable to all of its current and future officers, pursuant to which all shares subject to stock options that have not vested will immediately vest if the following two conditions are met:
84
Restricted Stock Agreement. Old Digimarc's compensation committee approved a form of the restricted stock agreement for restricted stock awards (both time based and performance based) granted to officers of Old Digimarc pursuant to its 1999 Stock Incentive Plan, which provides, among other things, that the shares will vest in full upon the termination of the officer's employment without cause or the officer's resignation for good reason following a change in control of Old Digimarc. Notwithstanding the foregoing, the Old Digimarc compensation committee has discretionary authority to determine the terms and conditions of any award granted under Old Digimarc's 1999 Stock Incentive Plan.
Change of Control Retention Agreement. On January 2, 2007, Old Digimarc's compensation committee approved a form of Change of Control Retention Agreement to be entered into by and between Old Digimarc and each of Messrs. McConnell and Chamness. The Change of Control Retention Agreement is effective until December 31, 2009 and provides for certain severance benefits in the event of termination of the executive without cause by Old Digimarc, or termination by the executive for good reason, within 12 months following a change of control of Old Digimarc or the sale of certain divisions of Old Digimarc during the term of the Change of Control Retention Agreement. "Cause" is defined as willful misconduct that is significantly injurious to Old Digimarc; fraud, dishonesty, embezzlement, misrepresentation or theft of Old Digimarc; conviction of (or plea of no contest to) a felony or crime involving moral turpitude; breach of any agreement with Old Digimarc; unauthorized disclosure of Old Digimarc's proprietary or confidential information or breach of any confidentiality/invention/proprietary information agreement(s) with Old Digimarc; violation of Old Digimarc's code of ethics (if applicable), code of business conduct and ethics or any other employment rule, code or policy; continued failure or refusal to follow our lawful instructions after five days has passed following delivery of a written notice identifying the failure or refusal; a court order or a consent decree barring the executive from serving as an officer or director of a public company; or continued failure to meet and sustain an acceptable level of performance of Executive's duties and obligations to Old Digimarc for thirty days following notice of failure to perform.
"Good reason" is defined as a substantial reduction in duties or responsibilities (with certain exceptions); a material reduction in base salary, benefits or total cash compensation, other than as part of an overall reduction for all employees at the same level; a mandatory transfer to another geographic location more than 35 miles from the prior location of employment, other than normal business travel obligations; the failure of a successor to Old Digimarc to assume the obligations under the agreement; or Old Digimarc's failure to comply with its obligations under the agreement.
The severance benefits payable by Old Digimarc upon such a termination include 12 months' salary, a prorated bonus payment and up to 18 months' premiums necessary to continue the executive's health insurance coverage under Old Digimarc's health insurance plan and are conditioned upon the executive signing a release of claims. All obligations under the Change of Control Retention Agreements were assumed by New Digimarc following the spin-off and New Digimarc merger.
The following table summarizes potential payments to each of the Named Executive Officers upon termination of employment with Old Digimarc or a change in control of Old Digimarc. The amounts set forth in the table are based on the assumption that the triggering event occurred on the last business day of Old Digimarc's last completed fiscal year and that Old Digimarc's stock price was the closing market price per share on that date. In the case of stock options, the value of the acceleration was determined based on the difference between (i) the exercise price of the shares for which vesting was accelerated and (ii) the $8.82 closing price on December 31, 2007. In the case of restricted stock,
85
the value of the acceleration was determined by multiplying (i) the number of shares for which vesting was accelerated by (ii) the $8.82 per share closing price on December 31, 2007.
Name
|
Benefit
|
Before Change in
Control Termination w/o Cause or for Good Reason |
After Change in
Control Termination w/o Cause or for Good Reason |
|||||
---|---|---|---|---|---|---|---|---|
Bruce Davis |
Stock Option Vesting Acceleration
Restricted Stock Vesting Acceleration Salary Continuation Bonus Continuation Benefits Continuation Total Value |
$
$ $ $ $ $ |
265,467
1,325,205 820,000 0 33,498 2,444,170 |
$
$ $ $ $ $ |
265,467
1,325,205 820,000 0 33,498 2,444,170 |
|||
Michael McConnell |
Stock Option Vesting Acceleration
Restricted Stock Vesting Acceleration Salary Continuation Bonus Continuation Benefits Continuation Total Value |
$
$ $ $ $ $ |
0
0 0 0 0 0 |
$
$ $ $ $ $ |
95,954
511,560 260,000 0 17,490 885,004 |
|||
Robert Chamness |
Stock Option Vesting Acceleration
Restricted Stock Vesting Acceleration Salary Continuation Bonus Continuation Benefits Continuation Total Value |
$
$ $ $ $ $ |
0
0 0 0 0 0 |
$
$ $ $ $ $ |
73,793
390,285 250,000 0 25,123 739,201 |
The salary continuation amounts shown in the table above are based on the Named Executive Officer's base salary, paid by Old Digimarc, in 2007. Bonus amounts shown in the table represent the cash bonus earned by the Named Executive officer in 2007 under Old Digimarc's annual incentive bonus cash compensation program.
Treatment of Outstanding Equity Awards in Connection with the Spin-Off
Treatment of Old Digimarc Stock Options
All outstanding options to purchase shares of Old Digimarc common stock became fully vested and exercisable prior to the record date and time. Holders of Old Digimarc stock options were given the opportunity to exercise their stock options on or prior to the record date and time. The holders of Old Digimarc common stock issued upon exercise were entitled to receive shares of New Digimarc common stock in connection with the spin-off and subsequent New Digimarc merger and, to the extent the stockholders remained stockholders until the acceptance time or Old Digimarc/L-1 merger, they were also entitled to receive the offer price or the merger consideration, in an amount equal to the offer price per share, as the case may be. All Old Digimarc stock options that were not exercised or cancelled prior to the effective time of the New Digimarc merger were cancelled and null and void as of the effective time of the New Digimarc merger.
In connection with the termination of Old Digimarc's 1995 Stock Incentive Plan, Restated 1999 Stock Plan, 2000 Non-Officer Employee Stock Incentive Plan and 1999 Non-Employee Director Option Program, following the Old Digimarc/L-1 merger, no holder of Old Digimarc stock options, or any participant or beneficiary of the plans, will have any right to acquire or receive any equity securities of the surviving corporation, any subsidiary of the surviving corporation or any consideration other than as discussed above.
86
Treatment of Digimarc Restricted Stock
All outstanding shares of Old Digimarc restricted stock are fully vested and were entitled to a distribution of shares of New Digimarc common stock in connection with the spin-off. The holders of Old Digimarc restricted stock were entitled to receive the offer price or merger consideration, in an amount equal to the offer price per share, as the case may be.
Treatment of Rights under the Digimarc Employee Stock Purchase Plan
Old Digimarc notified participants in the Digimarc Employee Stock Purchase Plan, which we refer to as the ESPP, that the current offer period will terminate on July 25, 2008. Upon the termination of the ESPP, all accumulated payroll deductions allocated to a participant's account under the ESPP during the current offer period will be returned to the participant as provided by the terms of the ESPP and no shares of Digimarc common stock will be purchased under the plan for the current offering period.
87
OUR RELATIONSHIP WITH OLD DIGIMARC AFTER THE SPIN-OFF
Overview
We have entered into a separation agreement with Old Digimarc, DMRC LLC, and with respect to certain sections, L-1, which contains many of the key provisions related to the spin-off of the Digital Watermarking Business from Old Digimarc. The transition services agreement referenced in the separation agreement governs certain aspects relating to the spin-off and various interim and ongoing relationships between Old Digimarc and us following the spin-off and the Old Digimarc/L-1 merger. Because we were, until completion of the spin-off, a wholly owned subsidiary of Old Digimarc, these agreements were not negotiated at arms' length and may not reflect terms that would be negotiated between independent parties. However, because Old Digimarc, which is a party to each of the agreements, will be a subsidiary of L-1 following the Old Digimarc/L-1 merger, L-1 is a party to the separation agreement with respect to certain sections, and a subsidiary of L-1 is a party to the License Agreement. L-1 participated in the negotiation of these agreements. The following reflects the material provisions of the agreements entered into in connection with the spin-off.
Separation Agreement
We entered into a separation agreement with Old Digimarc, DMRC LLC, and with respect to certain sections, L-1, which we refer to as the separation agreement, to provide for, upon the terms and subject to the conditions set forth in the separation agreement, (1) the transfer of specified assets of Digimarc and its subsidiaries to, and the assumption of specified liabilities of Digimarc and its subsidiaries by, DMRC LLC and its subsidiaries, which we refer to as the restructuring, and (2) the distribution of the interests of DMRC LLC to Digimarc's stockholders, which we refer to as the distribution. We refer to the restructuring together with the distribution as the spin-off. Following the New Digimarc merger, New Digimarc succeeded to all of the rights, interests, and obligations of DMRC LLC under the separation agreement by operation of law.
The Restructuring
The restructuring occurred on August 1, 2008. Pursuant to the terms of the separation agreement, DMRC LLC assumed ownership of the following assets of Old Digimarc, which we refer to as the DMRC assets:
Old Digimarc will retain ownership and possession of all other assets.
88
Also in connection with the restructuring, DMRC LLC assumed the following liabilities, which we refer to as DMRC liabilities:
Old Digimarc will remain responsible for all other liabilities.
The Distribution
Pursuant to the separation agreement, in connection with the distribution, each Old Digimarc record holders became entitled to receive one unit of DMRC LLC for every three and one-half shares of Old Digimarc common stock held on the record date and time for the distribution. Each unit of
89
DMRC LLC was then converted into one share of New Digimarc common stock in connection with the New Digimarc merger. All of the shares of New Digimarc common stock are being held in trust for the benefit of Old Digimarc record holders entitled to the distribution, pending the effectiveness of the Form 10. Following the effectiveness of the Form 10, shares in New Digimarc will be distributed to Old Digimarc record holders on the basis of one share of New Digimarc for every three and one-half shares of Old Digimarc common stock held by the stockholder at that time. During the period that the trust retains possession of the New Digimarc shares, and prior to their distribution, the beneficial interests in such shares will not be certificated or tradable.
Additional Covenants
The separation agreement contains a number of additional agreements among Old Digimarc, DMRC LLC and New Digimarc, including:
90
property or ad valorem tax obligations and similar recurring taxes on the DMRC assets (including certain delayed transfer assets) for taxable periods beginning before, and ending after, the distribution date, will be prorated between Old Digimarc and DMRC LLC as of the distribution date. Old Digimarc will include in its income tax returns for all taxable periods that include the distribution date, all tax items attributable to DMRC LLC, its assets, and the digital watermarking business through the distribution date. Each of Old Digimarc and DMRC LLC will cooperate with respect to all tax filings and proceedings. Each of Old Digimarc and DMRC LLC will treat and report the spin-off and the Old Digimarc/L-1 merger in a consistent manner. Each of Old Digimarc and DMRC LLC will be entitled to any refunds in respect of taxes for which it is responsible under the separation agreement.
Mutual Releases; Indemnification
Old Digimarc and DMRC LLC agreed mutually to release each other from any and all liabilities owing to them or their subsidiaries, whether or not known as of the distribution date, including in connection with the transactions contemplated by the Old Digimarc/L-1 merger agreement and all other activities to implement the restructuring and the distribution, subject to certain exceptions.
Old Digimarc and DMRC LLC agreed to indemnify, defend (or, where applicable, pay the defense costs for) and hold harmless each other's indemnitees from, against and in respect of losses, claims, liabilities, damages, costs and expenses relating to:
Old Digimarc agreed also to indemnify DMRC LLC with respect to certain tax matters.
Rights Under Insurance Policies
Under the separation agreement, Old Digimarc's insurance policies are deemed assets of, and were retained by, Old Digimarc. Old Digimarc and DMRC LLC have agreed that DMRC LLC has rights to claims under Old Digimarc's insurance policies for losses arising out of insured incidents to the extent the incidents were related to the Digital Watermarking Business and occurred prior to the distribution date. DMRC LLC is responsible for its pro rata share, based on the aggregate amount of proceeds received, of any costs and expenses related to asserting and resolving those claims. From and after the distribution date, DMRC LLC became responsible for maintaining its own insurance programs.
91
Conditions to the Spin-Off
Pursuant to the separation agreement, the obligations of Old Digimarc to effect the spin-off were subject to the fulfillment (or waiver by Old Digimarc) at or prior to the distribution date of the following conditions:
Further Assurances and Additional Covenants
At or prior to the effective time of the Old Digimarc/L-1 merger (1) DMRC LLC will take such action necessary to change its corporate name to "Digimarc Corporation," (2) Old Digimarc will take such action necessary to change its corporate name, and (3) Old Digimarc will take such action necessary to remove the term "Digimarc" from the names of each of its subsidiaries.
Any material showing any affiliation or connection of each of Old Digimarc or DMRC LLC or any of its respective subsidiaries or affiliates with the other party or any of its respective subsidiaries or affiliates will not be used by such party or its subsidiaries or affiliates after the distribution date, except as required by applicable law or regulations of securities exchanges for filings, reports and other documents required to be filed. Neither Old Digimarc or DMRC LLC, as applicable, nor its subsidiaries, will represent to third parties that any of them is affiliated or connected with the other party or any of its subsidiaries or affiliates. However, in the case of Old Digimarc and its subsidiaries and affiliates, such restriction is subject to the license agreement.
License Agreement
L-1 Identity Solutions Operating Company, which we refer to as L-1 Operating Company, and New Digimarc entered into a license agreement, which we refer to as the license agreement, pursuant to which L-1 Operating Company licenses certain intellectual property owned by it upon the completion of the spin-off to New Digimarc and its affiliates, and New Digimarc licenses certain
92
intellectual property and software to be owned by it upon the completion of the spin-off to L-1 Operating Company and its affiliates, as generally described below.
Pursuant to the license agreement, L-1 Operating Company granted to New Digimarc and its affiliates a non-exclusive worldwide, fully paid-up, royalty-free, perpetual, irrevocable license under certain patents for use and exploitation in the field of digital watermarking, media fingerprinting (pattern recognition but not including any biometric identifiers), digital rights management and other media management approaches. New Digimarc granted to L-1 Operating Company and its affiliates an exclusive worldwide, fully paid-up, royalty-free, perpetual, irrevocable license under certain patents for use and exploitation in the field of domestic or international driver licenses, passports, national, federal, state or local government identity cards and any other national, federal, state or local government issued credentials, which we refer to as the secure ID field. Such license is exclusive (subject to certain pre-existing licenses) for five years and non-exclusive thereafter. New Digimarc also granted to L-1 Operating Company and its affiliates an exclusive license to use, modify and exploit certain software and derivative works thereof in the secure ID field and, for a transition period, a license to use certain trademarks in the secure ID field. New Digimarc will provide certain training and technical assistance to L-1 Operating Company with respect to the software licensed to L-1 Operating Company to enable L-1 Operating Company to use and market the licensed software.
Transition Services Agreement
Old Digimarc and New Digimarc entered into a transition services agreement, which we refer to as the transition services agreement, to provide one another with transition services and other assistance substantially consistent with the services provided before completion of the spin-off.
To enable Old Digimarc to continue its operation of the Secure ID Business and facilitate the effective transition of the Digital Watermarking Business to New Digimarc, under the transition services agreement, Old Digimarc will provide the following services or support to New Digimarc: information technology services and legal services. Similarly, New Digimarc will provide the following services or support to Old Digimarc: accounting and tax services, information technology services, legal services, human resources services and facilities.
The fees for the transition services generally are intended to cover each party's reasonable costs incurred in connection with providing the transition services. Hourly rates for personnel performing transition services were determined based on a fully loaded cost, taking into account base pay, a bonus based on obtaining target earnings, payroll taxes, benefit costs, a pro rata portion of overhead charges paid by New Digimarc and the current year stock compensation charge for the individual, divided by the total hours available for the employee for the year, taking into account the need for administrative time. The fees to be paid for the transition services will be paid within 30 days after receipt of an invoice from the other party for transition services performed in the immediately preceding calendar month.
The duration of services to be provided by each of New Digimarc and Old Digimarc range from 34 days for information technology services to six months for legal services. Additional transition services may be added upon mutual agreement of the parties, and any transition service may be terminated without affecting the provision of any other transition services. The parties will review the transition services on a monthly basis to determine whether each transition service will continue during the following month. Either party may choose to terminate a transition service upon providing 30 days' prior written notice to the other party. Unless sooner terminated in accordance with the terms of the transition services agreement, the transition services agreement will terminate upon completion of all transition services to be provided by the parties under the agreement.
Under the terms of the transition services agreement, except in the case of fraud, neither party will be liable to the other for incidental, punitive or consequential damages with respect to the transition
93
services provided under the transition services agreement. However, each party will be liable and will indemnify the other party for liabilities resulting from the gross negligence, bad faith or willful misconduct of the party, its employees, contractors, agents or representatives in the provision of any transition service.
Non-Competition Agreements
In connection with the spin-off, each executive officer of New Digimarc entered into a non-competition agreement with Old Digimarc and L-1, which we refer to as the non-competition agreement, pursuant to which each executive officer has agreed not to compete with the Secure ID Business for a period of one year following the distribution date. In addition, pursuant to the non-competition agreement, each executive officer has agreed not to solicit customers of the Secure ID Business or employees of the Secure ID Business for a period of one year following the distribution date.
94
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
All of the shares of our common stock are being held in trust for the benefit of the Old Digimarc record holders. The following table sets forth the beneficial ownership of our common and Series A Redeemable Nonvoting Preferred stock as of October 1, 2008 by (1) each of our stockholders who we believe will be a beneficial owner of more than 5% of our outstanding common stock (2) each of our directors, (3) each Named Executive Officer and (4) all of our executive officers and directors as a group. The beneficial ownership is calculated based on 7,141,036 shares of our common stock outstanding as of October 1, 2008. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting and/or investment power with respect to securities. Except as otherwise noted in the footnotes below, each person identified below has sole voting and investment power with respect to such securities. Unless otherwise stated, the business address of each person listed is c/o Digimarc Corporation, 9405 SW Gemini Drive, Beaverton, Oregon 97008.
Name and Address of Beneficial Owner
|
Title of Class
|
Number of Shares
Beneficially Owned |
Percentage of Class
Beneficially Owned |
||||
---|---|---|---|---|---|---|---|
Koninklijke Philips Electronics N.V.(1) Eindhoven The Netherlands |
|
Common Stock |
|
552,536 |
|
7.74 |
% |
Named Executive Officers: |
|
|
|
|
|
|
|
Bruce Davis(2) |
Common Stock
Series A Preferred |
85,991
5,000 |
1.20
50 |
%
% |
|||
Michael McConnell |
|
Common Stock Series A Preferred |
|
45,632 2,500 |
|
* 25 |
% |
Robert Chamness |
|
Common Stock Series A Preferred |
|
30,333 2,500 |
|
* 25 |
% |
Directors: |
|
|
|
|
|
|
|
Peter W. Smith | Common Stock | 7,228 | * | ||||
James T. Richardson |
|
Common Stock |
|
24,685 |
|
* |
|
Bernard Whitney |
|
Common Stock |
|
7,685 |
|
* |
|
William Miller |
|
Common Stock |
|
13,257 |
|
* |
|
All executive officers and directors as a group (7 persons) |
|
Common Stock |
|
214,811 |
|
3.01 |
% |
95
DESCRIPTION OF OUR CAPITAL STOCK
Below is a summary description of our capital stock. This description is not complete. You should read the full text of our certificate of incorporation and bylaws, which are included as exhibits to the registration statement of which this information statement is a part, as well as the applicable provisions of Delaware law.
General
Our authorized capital stock consists of 50,000,000 shares of common stock, par value $0.001 per share, and 2,500,000 shares of preferred stock, par value $0.001 per share. Following the spin-off and the New Digimarc merger, we had 7,143,442 shares of our common stock and 10,000 shares of Series A Redeemable Nonvoting Preferred stock outstanding.
Common Stock
The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of our stockholders, including the election of directors. Subject to preferences that may be granted to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends as may be declared by our board of directors out of funds legally available for such purpose, as well as any distributions to our stockholders. In the event of our liquidation, dissolution or winding up, holders of common stock are entitled to share ratably in all of our assets remaining after payment of liabilities and the liquidation preference of any then outstanding preferred stock. Holders of common stock have no preemptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable.
Preferred Stock
We are authorized to issue 2,500,000 shares of preferred stock. Our board of directors has the authority to issue the undesignated preferred stock in one or more series and to determine the powers, preferences and rights and the qualifications, limitations or restrictions granted to or imposed upon any wholly unissued series of undesignated preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by the stockholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change of control of our company without further action by stockholders and may adversely affect the voting and other rights of the holders of common stock.
Ten thousand shares of the authorized preferred stock have been designated as Series A Redeemable Nonvoting Preferred stock. In the event of the liquidation, dissolution or other winding up of New Digimarc, before any payment or distribution is made to the holders of common stock, holders of the Series A Redeemable Nonvoting Preferred stock will be entitled to receive a value of $5.00 per share of Series A Redeemable Nonvoting Preferred stock held by the stockholder. The Series A Redeemable Nonvoting Preferred stock has no voting rights, except as required by law, and may be redeemed by the board of directors at any time on or after June 18, 2013. Following the spin-off and completion of the New Digimarc merger, we issued to the executive officers of New Digimarc an aggregate of 10,000 shares of Series A Redeemable Nonvoting Preferred stock.
Anti-Takeover Provisions
Our rights plan, which is summarized below, and certain provisions in our certificate of incorporation and bylaws, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. The provisions summarized below are designed to encourage persons seeking to acquire control of us to first negotiate with our Board of Directors. We believe that
96
the benefits of the potential ability to negotiate with the proponent of an unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging those proposals because negotiation with such proponent could result in an improvement of their terms.
Stockholder Rights Plan
On July 31, 2008, our Board of Directors adopted a rights agreement. Pursuant to the rights agreement, one one-hundredth ( 1 / 100 ) of a preferred stock purchase right will be issued for each outstanding share of our common stock. Each right issued will be subject to the terms of the rights agreement. Our Board of Directors believes that the rights agreement will protect our stockholders from coercive or otherwise unfair takeover tactics. In general terms, our rights agreement works by imposing a significant penalty upon any person or group that acquires 15% or more of our outstanding common stock, without the approval of our Board of Directors.
Delaware Takeover Statute
We are subject to the provisions of Section 203 of the Delaware General Corporation Law, as amended from time to time. Section 203 provides, with certain exceptions, that a publicly-held corporation is prohibited from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:
A "business combination" includes the following:
97
Subject to certain exceptions, an "interested stockholder" is a person who, together with affiliates and associates, owns, or within three years did own, 15% or more of the corporation's voting stock. The Delaware takeover statute may render the removal of directors and management more difficult.
Certificate of Incorporation and Bylaws
Our certificate of incorporation and bylaws contain provisions that could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control of New Digimarc. In particular, our certificate of incorporation and bylaws, as applicable, among other things:
These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by them, and to discourage certain types of transactions that may involve an actual or threatened change in control of New Digimarc. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be used in proxy fights. However, these provisions could have the effect of discouraging others from making tender offers for our shares that could result from actual or rumored takeover attempts. These provisions also may have the effect of preventing changes in our management.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.
Nasdaq Listing
New Digimarc has been approved to list its shares of common stock on The Nasdaq Global Market under the symbol "DMRC."
98
LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
New Digimarc is incorporated in Delaware. Section 145 of the Delaware General Corporation Law permits a corporation to indemnify its directors and officers against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with any action, suit or proceeding brought by third parties, if such directors or officers acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. In a derivative action, i.e. , one by or in the right of the corporation, indemnification may be made only for expenses actually and reasonably incurred by directors and officers in connection with the defense or settlement of an action or suit, and only with respect to a matter as to which they shall have acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if such person shall have been adjudged liable for negligence or misconduct in the performance of his or her respective duties to the corporation, although the court in which the action or suit was brought may determine upon application that the defendant officers or directors are fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.
Section 102(b)(7) of the Delaware General Corporation Law provides that a corporation may eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provisions shall not eliminate or limit the liability of a director (1) for any breach of the director's duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under section 174 of the Delaware General Corporation Law or (4) for any transaction from which the director derived an improper personal benefit. No such provision shall eliminate or limit the liability of a director for any act or omission occurring before the date when such provision becomes effective. The limitations described above do not affect the ability of New Digimarc or its stockholders to seek non-monetary based remedies, such as an injunction or rescission, against a director for breach of his or her fiduciary duty nor would such limitations limit liability under the federal securities laws.
New Digimarc's bylaws require indemnification of directors and officers to the full extent permitted by the Delaware General Corporation Law. We have entered into an agreement with each of our directors and executive officers that requires us to indemnify these persons against any expense, liability or loss, including attorneys' fees, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments or other imposed charges, and any federal state, local or foreign taxes imposed as a result of the actual or deemed receipt of any payment under the agreement, paid or incurred in connection with investigating, defending, being a witness in, or participating in, or preparing for any of the foregoing in, any proceeding relating to any event or occurrence by reason of the fact that the person is or was a director or officer of New Digimarc, or is or was serving at our request in various capacities. The indemnification agreements also set forth procedures that apply in the event of a claim for indemnification. We also intend to renew a policy of directors' and officers' liability insurance obtained by Digimac that insures our directors and officers against the cost of defense, settlement or payment of a judgment in specified circumstances.
99
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes certain material U.S. federal income tax consequences of the spin-off, the Old Digimarc/L-1 merger and the New Digimarc merger that may be relevant to Old Digimarc stockholders that held shares of Old Digimarc common stock as a capital asset (generally, assets held for investment) for U.S. federal income tax purposes, which we refer to as Holders. This discussion is based on the Code, applicable Treasury Regulations promulgated thereunder, and administrative and judicial interpretations thereof, each as in effect as of the date hereof, all of which may change, possibly with retroactive effect. There can be no assurance that the U.S. Internal Revenue Service, which we refer to as the IRS, will not challenge the U.S. federal income tax consequences described below and we have not obtained, nor do we intend to obtain, a ruling from the IRS or an opinion from counsel with respect to such U.S. federal income tax consequences.
The discussion does not address all of the U.S. federal income tax considerations that may be relevant to particular Holders in light of their particular circumstances, or to Holders that are subject to special treatment under U.S. federal income tax laws, including banks, insurance companies, mutual funds or other financial institutions, broker-dealers, traders, expatriates, certain former citizens or long-term residents of the United States, tax-exempt organizations, persons who are subject to the U.S. alternative minimum tax, persons who held their shares of common stock as part of an integrated investment (including as part of a "straddle" or as part of a "hedging," "conversion" or other risk reduction transaction), controlled foreign corporations, passive foreign investment companies, corporations subject to anti-inversion rules, persons that are partnerships, S corporations or other pass-through entities, persons that have a functional currency other than the U.S. dollar or persons who acquired their shares of Old Digimarc common stock through stock option or stock purchase plan programs or in other compensatory arrangements.
In addition, this discussion does not address the U.S. federal income tax considerations applicable to holders of options or warrants, if any, to purchase Old Digimarc common stock or to Holders who exercise dissenters' rights. Furthermore, except as provided below, this discussion does not address any U.S. federal estate and gift tax consequences or any state, local or foreign tax consequences applicable to Holders.
For purposes of this discussion, a "U.S. Holder" means a Holder that is:
A "Non-U.S. Holder" is a Holder (other than an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes) that is not a U.S. Holder.
If a partnership (or other entity classified as a partnership for U.S. federal tax purposes) is a beneficial owner of shares of Old Digimarc common stock, the tax treatment of a partner in that partnership generally will depend on the status of the partner and the activities of the partnership. Holders that are partnerships and partners in these partnerships are urged to consult their tax advisors regarding the U.S. federal income tax consequences of the spin-off, the Old Digimarc/L-1 merger and the New Digimarc merger to them.
100
Tax Consequences of the Spin-Off, the Offer, the Old Digimarc/L-1 merger and the New Digimarc merger
We believe that for U.S. federal income tax purposes the spin-off, the offer and the Old Digimarc/L-1 merger will constitute a single integrated transaction with respect to the Holders in which the spin-off will be treated as a taxable redemption of shares of Old Digimarc common stock in connection with the complete termination of the Holders' interests in Old Digimarc. Old Digimarc and L-1 will treat and report the spin-off, the offer and the Old Digimarc/L-1 merger in a manner consistent with such characterization. We believe that the trust transfer will be treated as a transfer of the DMRC LLC interests to Old Digimarc's stockholders followed by a transfer of such interests by such stockholders to the trust, and such Old Digimarc stockholders will be treated as the grantors and owners of such interests held in the trust pursuant to Sections 671 and 677 of the Code and the trust will be treated as a liquidating trust within the meaning of Treasury Regulations Section 301.7701-4(d).
Although we believe the foregoing treatment, in each case, correctly characterizes the transactions for U.S. federal income tax purposes, and the following discussion assumes this characterization will be respected, the IRS could conceivably assert a different characterization, and were the IRS to prevail, a Holder could experience U.S. federal income tax consequences that are different from those described below. Holders are urged to consult their own tax advisors with respect to the tax consequences of the spin-off, the offer, the Old Digimarc/L-1 merger and the New Digimarc merger to them.
U.S. Holders
U.S. Holders generally will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference between (1) the sum of the fair market value of the DMRC LLC interests received in the spin-off, the amount of cash received in the offer and the amount of cash received in the Old Digimarc/L-1 merger, and (2) such U.S. Holder's adjusted tax basis in his or her shares of Old Digimarc common stock surrendered or deemed surrendered in the transactions. The deduction of any recognized loss may be delayed or otherwise adversely affected by certain loss limitation rules.
DMRC LLC or U.S. Holders will not recognize any gain or loss in the New Digimarc merger. A U.S. Holder will, immediately following the New Digimarc merger, have an aggregate adjusted basis in his or her shares of New Digimarc common stock received in the New Digimarc merger equal to the fair market value of the DMRC LLC interests received in the spin-off, and his or her holding period in such shares will begin on the day following the spin-off and the New Digimarc merger. U.S. Holders should consult their tax advisors with respect to the tax consequences of the New Digimarc merger.
U.S. federal income tax law does not specifically identify how you should determine the fair market value of the DMRC LLC interests. The trustees will value, or cause to be valued, the DMRC LLC interests and notify Digimarc stockholders in writing of such valuation. U.S. Holders are urged to consult their tax advisors regarding the manner in which the fair market value of the New Digimarc shares, and gain or loss should be calculated in connection with the spin-off, the offer, the Old Digimarc/L-1 merger and the New Digimarc merger.
Non-U.S. Holders
A Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain realized on the receipt of the DMRC LLC interests and cash in the spin-off, the offer or the Old Digimarc/L-1 merger, or the New Digimarc common stock received in the New Digimarc merger, unless:
101
Gain described in the first bullet point above generally will be subject to U.S. federal income tax at a flat 30% (or lower applicable treaty) rate, but may be offset by U.S. source capital losses. Unless a tax treaty provides otherwise, gain described in the second bullet point above will be subject to U.S. federal income tax on a net income basis in the same manner as if the Non-U.S. Holder were a resident of the United States. Non-U.S. Holders that are foreign corporations also may be subject to a 30% branch profits tax (or lower applicable treaty rate). Non-U.S. Holders are urged to consult any applicable tax treaties that may provide for different rules.
Prior to the New Digimarc merger and immediately following the spin-off, DMRC LLC will not be treated as a corporation for U.S. federal income tax purposes. Non-U.S. Holders are urged to consult their tax advisors concerning the consequences to them (including potential tax filing obligations) of owning DMRC LLC interests during the period when it may not be treated as a corporation for U.S. federal income tax purposes.
Information Reporting and Backup Withholding
Under U.S. federal income tax laws, the depositary generally will be required to report to a U.S. Holder and to the IRS any reportable payments made to such U.S. Holder in the spin-off, the offer, the Old Digimarc/L-1 merger and the New Digimarc merger. Additionally, a U.S. Holder may be subject to a backup withholding tax, unless the U.S. Holder provides the depositary with the holder's correct taxpayer identification number, which in the case of an individual is his or her social security number, or, in the alternative, establishes a basis for exemption from backup withholding. If the correct taxpayer identification number or an adequate basis for exemption is not provided, a U.S. Holder will be subject to backup withholding (currently at a rate of 28%) on any reportable payment. To prevent backup withholding, each U.S. Holder must complete the IRS Form W-9 or a substitute Form W-9 which will be provided by Computershare Inc., the depositary for the offer, with the letter of transmittal.
Payments made to Non-U.S. Holders in the spin-off, the offer, the Old Digimarc/L-1 merger and the New Digimarc merger may be subject to information reporting and backup withholding. Non-U.S. Holders generally may avoid backup withholding by furnishing a properly executed IRS Form W-8BEN (or other applicable IRS Form W-8) certifying the Holder's non-U.S. status or by otherwise establishing an exemption.
Backup withholding is not an additional tax. Rather, Holders may use amounts withheld as a credit against their U.S. federal income tax liability or may claim a refund of any excess amounts withheld by timely and duly filing a claim for refund with the IRS.
102
The trustees will furnish Holders with the information required by Holders to file their tax returns with respect to their beneficial ownership of the shares of New Digimarc stock held in the trust.
THE FOREGOING DISCUSSION IS FOR GENERAL INFORMATION ONLY AND IS NOT INTENDED TO BE LEGAL OR TAX ADVICE TO ANY PARTICULAR HOLDER. TAX MATTERS REGARDING THE SPIN-OFF, THE OFFER, THE OLD DIGIMARC/L-1 MERGER AND THE NEW DIGIMARC MERGER ARE COMPLICATED, AND THE TAX CONSEQUENCES OF THE SPIN-OFF, THE OFFER, THE OLD DIGIMARC/L-1 MERGER AND THE NEW DIGIMARC MERGER TO ANY PARTICULAR HOLDER WILL DEPEND ON THAT STOCKHOLDER'S INDIVIDUAL SITUATION. HOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISOR TO DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE SPIN-OFF, THE OFFER, THE OLD DIGIMARC/L-1 MERGER AND THE NEW DIGIMARC MERGER, INCLUDING TAX RETURN REPORTING REQUIREMENTS, THE APPLICABILITY OF U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS, AND THE EFFECT OF ANY PROPOSED CHANGE IN THE TAX LAWS TO THEM.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form 10 with the SEC with respect to the shares of our common stock being distributed as contemplated by this information statement. This information statement is a part of, and does not contain all of the information set forth in, the registration statement and the exhibits and schedules to the registration statement. For further information with respect to our company and our common stock, please refer to the registration statement, including its exhibits and schedules. Statements made in this information statement relating to any contract or other document are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contract or document. You may review a copy of the registration statement, including its exhibits and schedules, at the SEC's public reference room, located at 100 F Street, N.E., Washington, D.C. 20549, as well as on the Internet web site maintained by the SEC at www.sec.gov . Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Information contained on any web site referenced in this information statement is not incorporated by reference into this information statement or the registration statement of which this information statement is a part.
After the spin-off, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with the Exchange Act, we will file periodic reports, proxy statements and other information with the SEC.
Our SEC filings will be available to the public at no charge from the SEC's website, as described above, and, following the New Digimarc merger, on our Web site under the "Investors" tab at www.digimarc.com . Information on our website is not incorporated into this information statement or other securities filings and is not a part of these filings. You may also request a copy of our future SEC filings at no cost, by writing or telephoning us at:
Digimarc Corporation
Attn: Robert P. Chamness
9405 SW Gemini Drive
Beaverton, OR 97008
Phone: (503) 469-4800
Fax: (503) 469-4771
You should rely only on the information contained in this information statement or to which we have referred you. We have not authorized any person to provide you with different information or to make any representation not contained in this information statement.
103
|
Page
|
|
---|---|---|
Report of Independent Registered Public Accounting Firm |
|
F-2 |
Balance Sheets |
|
F-3 |
Statements of Operations |
|
F-4 |
Statements of Changes in Parent's Investment |
|
F-5 |
Statements of Cash Flows |
|
F-6 |
Notes to Financial Statements |
|
F-7 |
F-1
Report of Independent Registered Public Accounting Firm
Board
of Directors and Stockholders
Old Digimarc Corporation
We have audited the accompanying balance sheets of New Digimarc Corporation (a carved-out business unit of Old Digimarc Corporation) as of December 31, 2007 and 2006 and the related statements of operations, changes in parent's investment, and cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of New Digimarc Corporation as of December 31, 2007 and 2006, and the results of their operations and cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.
As more fully described in Note 1 to the financial statements, certain expenses of New Digimarc Corporation represent allocations from Old Digimarc Corporation. The accompanying financial statements include such allocations and may not necessarily be representative of the financial position or results of operations had New Digimarc Corporation operated as an unaffiliated company during the periods presented.
/S/ GRANT THORNTON LLP
Portland,
Oregon
June 20, 2008, (except for Note 1, as to
which the date is August 12, 2008)
F-2
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
BALANCE SHEETS
(In thousands)
|
June 30,
2008 |
December 31,
2007 |
December 31,
2006 |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
|
(unaudited)
|
|
|
||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 33,065 | $ | 29,145 | $ | 33,073 | |||||
Short-term investments | 3,849 | 3,568 | | ||||||||
Trade accounts receivable, net | 4,204 | 3,752 | 2,441 | ||||||||
Other current assets | 399 | 387 | 309 | ||||||||
|
|
|
|||||||||
Total current assets | 41,517 | 36,852 | 35,823 | ||||||||
Property and equipment, net | 1,340 | 1,227 | 1,472 | ||||||||
Other assets, net | 382 | 372 | 363 | ||||||||
|
|
|
|||||||||
Total assets | $ | 43,239 | $ | 38,451 | $ | 37,658 | |||||
|
|
|
|||||||||
LIABILITIES AND NET PARENT'S INVESTMENT |
|
|
|
|
|
|
|
|
|
||
Current liabilities: | |||||||||||
Accounts payable and other accrued liabilities | $ | 488 | $ | 464 | $ | 382 | |||||
Accrued payroll and related costs | 592 | 199 | 773 | ||||||||
Deferred revenue | 2,831 | 2,734 | 1,616 | ||||||||
|
|
|
|||||||||
Total current liabilities | 3,911 | 3,397 | 2,771 | ||||||||
Long-term liabilities | 242 | 215 | 294 | ||||||||
|
|
|
|||||||||
Total liabilities | 4,153 | 3,612 | 3,065 | ||||||||
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
|
|
|
||
Parent's investment: |
|
|
|
|
|
|
|
|
|
||
Net Parent's investment | 39,086 | 34,839 | 34,593 | ||||||||
|
|
|
|||||||||
Total liabilities and net Parent's investment | $ | 43,239 | $ | 38,451 | $ | 37,658 | |||||
|
|
|
See accompanying notes to financial statements
F-3
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
STATEMENTS OF OPERATIONS
(In thousands)
|
Three Months Ended
June 30, |
Six Months
Ended June 30, |
Year Ended December 31,
|
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2008
|
2007
|
2008
|
2007
|
2007
|
2006
|
2005
|
|||||||||||||||||
|
(unaudited)
|
|
|
|
||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Service | $ | 2,987 | $ | 1,751 | $ | 5,535 | $ | 3,638 | $ | 7,806 | $ | 6,812 | $ | 7,051 | ||||||||||
License and subscription | 2,128 | 1,095 | 4,665 | 2,703 | 5,219 | 4,259 | 4,068 | |||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Total revenue | 5,115 | 2,846 | 10,200 | 6,331 | 13,025 | 11,071 | 11,119 | |||||||||||||||||
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Service | 1,643 | 883 | 2,992 | 1,802 | 3,815 | 3,633 | 3,299 | |||||||||||||||||
License and subscription | 61 | 53 | 120 | 84 | 217 | 136 | 182 | |||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Total cost of revenue | 1,704 | 936 | 3,112 | 1,886 | 4,032 | 3,769 | 3,481 | |||||||||||||||||
Gross profit | 3,411 | 1,910 | 7,088 | 4,445 | 8,993 | 7,302 | 7,638 | |||||||||||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Sales and marketing | 683 | 667 | 1,339 | 1,306 | 2,453 | 3,740 | 4,692 | |||||||||||||||||
Research, development and engineering | 910 | 829 | 1,832 | 1,558 | 2,912 | 2,448 | 3,208 | |||||||||||||||||
General and administrative | 927 | 844 | 1,907 | 1,701 | 3,345 | 3,433 | 3,645 | |||||||||||||||||
Intellectual property | 448 | 413 | 926 | 844 | 1,593 | 1,589 | 1,863 | |||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Total operating expenses | 2,968 | 2,753 | 6,004 | 5,409 | 10,303 | 11,210 | 13,408 | |||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Operating income (loss) |
|
|
443 |
|
|
(843 |
) |
|
1,084 |
|
|
(964 |
) |
|
(1,310 |
) |
|
(3,908 |
) |
|
(5,770 |
) |
||
Other income (expense), net | 221 | 330 | 515 | 705 | 1,387 | 1,242 | 928 | |||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Income (loss) before provision for income taxes | 664 | (513 | ) | 1,599 | (259 | ) | 77 | (2,666 | ) | (4,842 | ) | |||||||||||||
Provision for income taxes | | (5 | ) | (11 | ) | (9 | ) | 22 | 21 | | ||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Net income (loss) | $ | 664 | $ | (518 | ) | $ | 1,588 | $ | (268 | ) | $ | 55 | $ | (2,687 | ) | $ | (4,842 | ) | ||||||
|
|
|
|
|
|
|
||||||||||||||||||
Unaudited Pro Forma Information (Note 1) | ||||||||||||||||||||||||
Net income (loss) per sharebasic and diluted | $ | 0.09 | $ | (0.07 | ) | $ | 0.22 | $ | (0.04 | ) | $ | 0.01 | $ | (0.38 | ) | $ | (0.68 | ) | ||||||
|
|
|
|
|
|
|
||||||||||||||||||
Weighted average shares outstandingbasic and diluted | 7,143 | 7,143 | 7,143 | 7,143 | 7,143 | 7,143 | 7,143 | |||||||||||||||||
|
|
|
|
|
|
|
See accompanying notes to financial statements
F-4
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
STATEMENTS OF CHANGES IN PARENT'S INVESTMENT
(In thousands)
BALANCE AT DECEMBER 31, 2004 | $ | 53,249 | ||
Cash from Parent stock activity | 333 | |||
Stock compensation allocated from Parent | 203 | |||
Net activity with Parent | (15,847 | ) | ||
Net loss | (4,842 | ) | ||
|
||||
BALANCE AT DECEMBER 31, 2005 | 33,096 | |||
Cash from Parent stock activity | 242 | |||
Stock compensation allocated from Parent | 790 | |||
Net activity with Parent | 3,152 | |||
Net loss | (2,687 | ) | ||
|
||||
BALANCE AT DECEMBER 31, 2006 | 34,593 | |||
Cash from Parent stock activity | 2,187 | |||
Stock compensation allocated from Parent | 1,209 | |||
Net activity with Parent | (3,205 | ) | ||
Net income | 55 | |||
|
||||
BALANCE AT DECEMBER 31, 2007 | 34,839 | |||
Cash from Parent stock activity | 2,335 | (1) | ||
Stock compensation allocated from Parent | 777 | (1) | ||
Net activity with Parent | (453 | )(1) | ||
Net income | 1,588 | (1) | ||
|
||||
BALANCE AT JUNE 30, 2008 | $ | 39,086 | (1) | |
|
See accompanying notes to financial statements.
F-5
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
STATEMENTS OF CASH FLOWS
(In thousands)
|
Six Months Ended
June 30, |
Year Ended December 31,
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2008
|
2007
|
2007
|
2006
|
2005
|
|||||||||||||||
|
(Unaudited)
|
|
|
|
||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | 1,588 | $ | (268 | ) | $ | 55 | $ | (2,687 | ) | $ | (4,842 | ) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Depreciation and amortization of property and equipment | 446 | 300 | 612 | 616 | 659 | |||||||||||||||
Stock-based compensation expense | 777 | 591 | 1,209 | 790 | 203 | |||||||||||||||
Increase (decrease) in allowance for doubtful accounts | | | | (13 | ) | (93 | ) | |||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||
Trade and unbilled accounts receivable, net | (452 | ) | (463 | ) | (1,311 | ) | 199 | (403 | ) | |||||||||||
Other current assets | (12 | ) | (73 | ) | (78 | ) | 63 | (215 | ) | |||||||||||
Other assets, net | (10 | ) | (8 | ) | (9 | ) | | 18 | ||||||||||||
Accounts payable and other accrued liabilities | 16 | (45 | ) | 23 | (147 | ) | 83 | |||||||||||||
Accrued payroll and related costs | 393 | (524 | ) | (574 | ) | (206 | ) | 236 | ||||||||||||
Deferred revenue | 132 | 165 | 1,098 | (382 | ) | 520 | ||||||||||||||
|
|
|
|
|
||||||||||||||||
Net cash provided by (used in) operating activities | 2,878 | 601 | 1,025 | (1,767 | ) | (3,384 | ) | |||||||||||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Purchase of property and equipment | (559 | ) | (181 | ) | (367 | ) | (536 | ) | (506 | ) | ||||||||||
Sale or maturity of short-term investments | 103,395 | 76,807 | 150,775 | 136,946 | 180,568 | |||||||||||||||
Purchase of short-term investments | (103,676 | ) | (78,522 | ) | (154,343 | ) | (136,207 | ) | (156,239 | ) | ||||||||||
|
|
|
|
|
||||||||||||||||
Net cash provided by (used in) investing activities | (840 | ) | (1,896 | ) | (3,935 | ) | 203 | 23,823 | ||||||||||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash from Parent stock activity | 2,335 | 871 | 2,187 | 242 | 333 | |||||||||||||||
Net activity with Parent | (453 | ) | (5,508 | ) | (3,205 | ) | 3,152 | (15,847 | ) | |||||||||||
|
|
|
|
|
||||||||||||||||
Net cash provided by (used in) financing activities | 1,882 | (4,637 | ) | (1,018 | ) | 3,394 | (15,514 | ) | ||||||||||||
|
|
|
|
|
||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 3,920 | (5,932 | ) | (3,928 | ) | 1,830 | 4,475 | |||||||||||||
Cash and cash equivalents at beginning of period | 29,145 | 33,073 | 33,073 | 31,243 | 26,768 | |||||||||||||||
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents at end of period | $ | 33,065 | $ | 27,141 | $ | 29,145 | $ | 33,073 | $ | 31,243 | ||||||||||
|
|
|
|
|
See accompanying notes to financial statements.
F-6
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS
(in thousands)
1. Description of Business and Summary of Significant Accounting Policies
Description of Business
Acquisition of Old Digimarc and Separation of New Digimarc
On June 29, 2008, Old Digimarc entered into an amended and restated merger agreement, as amended by Amendment No. 1 dated as of July 17, 2008, which we refer to as the Old Digimarc/L-1 merger agreement, with L-1 and Dolomite, a wholly owned subsidiary of L-1, pursuant to which Dolomite purchased more than 90% of the outstanding shares of Old Digimarc common stock, together with the associated preferred stock purchase rights for $12.25 per share. On August 13, 2008, following the completion of the offer, Dolomite merged with and into Old Digimarc with Old Digimarc continuing as the surviving company and a wholly owned subsidiary of L-1.
On August 1, 2008, prior to the initial expiration of the offer, Old Digimarc contributed all of the assets and liabilities related to its Digital Watermarking Business, together with all of Old Digimarc's cash, to DMRC LLC, which subsequently merged with and into New Digimarc, and the shares of New Digimarc common stock were transferred to a newly created trust for the benefit of Old Digimarc record holders. The shares of New Digimarc common stock will be held by the trust until the Registration Statement on Form 10 has been declared effective by the SEC, at which time the shares will be distributed to Old Digimarc record holders, as beneficiaries of the trust, pro rata in accordance with their ownership of shares of Old Digimarc common stock on the record date and time. Each Old Digimarc record holder is entitled to receive one share of New Digimarc common stock for every three and one half shares of Old Digimarc common stock held by the stockholder as of the record date and time.
Old Digimarc, L-1, DMRC LLC and New Digimarc entered into various agreements in order to accomplish the spin-off transaction. After completion of the Old Digimarc/L-1 merger, New Digimarc will change its name to Old Digimarc Corporation.
New Digimarc is a supplier of advanced technologies for use in media identification and management. our solutions enable governments and businesses around the world to deter counterfeiting and piracy, combat identity theft and fraud, improve the management of media content, and support new digital media distribution models that provide consumers with more choice and access to media content.
Unaudited Interim Results
The accompanying balance sheet as of June30, 2008, the statements of operations for the three- and six-month periods ended June 30, 2007 and 2008, and the statement of changes in parent's investment for the six-months ended June 30, 2008 and the statements of cash flows for the six-month periods ended June 30, 2007 and 2008 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our financial position at June 30, 2008 and its results of operations and cash flows for the three- and six-months ended June 30, 2007 and 2008. The financial data and other information disclosed in these notes to the financial statements related to the three- and six-month periods are unaudited. The results for the three- and six-month periods ended June 30, 2008 are not necessarily
F-7
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
1. Description of Business and Summary of Significant Accounting Policies (Continued)
indicative of the results to be expected for the year ending December 31, 2008 or for any other interim period or for any other future period.
Basis of Accounting
The financial statements include the assets, liabilities and results of operations of the components of Old Digimarc that constitute the business of New Digimarc to be separated, or "carved-out". New Digimarc's business primarily consists of Old Digimarc's Digital Watermarking Business and certain accounts of Old Digimarc. All intercompany balances have been eliminated in the carve-out.
Management believes that the assumptions underlying the financial statements are reasonable. The financial information in these financial statements does not include all of the expenses that would have been incurred had New Digimarc been a separate, stand-alone public entity. As such, the financial information herein does not reflect the financial position, results of operations and cash flows of New Digimarc in the future or what they would have been, had New Digimarc been a separate, stand-alone public entity during the periods presented. Additionally, these historical financial statements include proportional allocations of various shared-services common costs of Old Digimarc because specific identification of these expenses was not practicable. The common costs include expenses from Old Digimarc related to various operating shared-services cost centers, including: executive, finance and accounting, human resources, legal, marketing, intellectual property, facilities and information technology. It is expected that the initial operating costs of New Digimarc on a stand-alone basis will be higher than those allocated to the New Digimarc operations under the shared services methodology applied in the audited financial statements of New Digimarc. Consequently, the financial position, results of operations and cash flows of New Digimarc reflected in the financial statements of New Digimarc may not be indicative of those that would have been achieved or that might be achieved in the future had New Digimarc been operated as a separate, stand-alone entity for the periods reflected in its financial statements.
The cost allocation methods applied to certain shared-services common cost centers include the following:
F-8
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
1. Description of Business and Summary of Significant Accounting Policies (Continued)
approach consisted of a blended rate based on what we have determined to be the primary drivers for shared-services:
Other key assumptions differing from the historical accounting of the Parent:
F-9
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
1. Description of Business and Summary of Significant Accounting Policies (Continued)
cash from these activities is retained by New Digimarc and stock based compensation expense associated with stock activity is allocated to New Digimarc in accordance with the basis of accounting methodology outlined above.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the U.S. requires New Digimarc to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Some of our accounting policies require higher degrees of judgment than others in their application. These include revenue recognition on long-term service contracts, revenue recognition on license and subscription arrangements, reserves for uncollectible accounts receivable, contingencies and litigation and stock-based compensation. New Digimarc bases its estimates on historical experience as a business unit of Old Digimarc and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Cash Equivalents
We consider all highly liquid investments with original maturities of 90 days or less at the date of acquisition to be cash equivalents. Cash equivalents include money market funds, certificates of deposit, commercial paper, and investments in government bonds. Cash equivalents are carried at cost or amortized cost, which approximates market.
F-10
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
1. Description of Business and Summary of Significant Accounting Policies (Continued)
Investments
New Digimarc considers all investments with original maturities over 90 days that mature in less than one year to be short-term investments. Short-term investments include federal agency notes, company notes, and commercial paper. Our marketable securities are generally classified as held-to-maturity as of the balance sheet date and are reported at amortized cost, which approximates market. The book value of these investments approximates fair market value and, accordingly, no amounts have been recorded to other comprehensive income.
A decline in the market value of any security below cost that is deemed to be other-than-temporary results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other-than-temporary, we consider whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. There have been no other-than-temporary impairments identified or recorded by New Digimarc.
Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using a method that approximates the effective-interest method. Dividend and interest income are recognized when earned.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, short-term investments, trade accounts receivable, accounts payable and accrued payroll approximate fair value due to the short-term nature of these instruments. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument when available. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Concentrations of Business and Credit Risk
A significant portion of our business depends on a limited number of large contracts. The loss of any large contract may result in loss of revenue and margin on a prospective basis.
Financial instruments that potentially subject New Digimarc to concentrations of credit risk consist primarily of cash and cash equivalents, investments, and trade and unbilled accounts receivable. New Digimarc places its cash and cash equivalents with major banks and financial institutions and at times deposits may exceed insured limits. Other than cash used for operating needs, which may include short-term investments with our principal banks, our investment policy limits its credit exposure to any one financial institution or type of financial instrument by limiting the maximum of 5% or $1,000, whichever is greater, to be invested in any one issuer except for the U.S. Government and U. S. federal agencies, which have no limits, at the time of purchase. As a result, the credit risk associated with cash and investments is believed to be minimal.
F-11
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
1. Description of Business and Summary of Significant Accounting Policies (Continued)
Software Development Costs
Under SFAS No. 86, Accounting for the Cost of Computer Software to Be Sold, Leased, or Otherwise Marketed, software development costs are to be capitalized beginning when a product's technological feasibility has been established and ending when a product is made available for general release to customers. To date, the establishment of technological feasibility of our products has occurred shortly before general release and, therefore, software development costs qualifying for capitalization have been immaterial. Accordingly, New Digimarc has not capitalized any software development costs and has charged all such costs to research and development expense.
Internal use software development costs are accounted for in accordance with AICPA SOP No. 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use . Costs incurred in the preliminary project stage are expensed as incurred and costs incurred in the application development stage, which meet the capitalization criteria, are capitalized and amortized on a straight-line basis over the estimated useful life of the asset, generally three to five years. Costs incurred in the post-implementation stage are expensed as incurred.
Research and Development
Research and development costs are expensed as incurred as defined in SFAS No. 2, Accounting for Research and Development Costs . New Digimarc accounts for amounts received under its funded research and development arrangements in accordance with the provisions of SFAS No. 68, Research and Development Arrangements . Under the terms of the arrangements, New Digimarc is not obligated to repay any of the amounts provided by the funding parties. As a result, New Digimarc recognizes revenue as the services are performed.
Revenue Recognition
our revenue is comprised of subscription revenue which includes hardware and software sales, royalties and revenues from the licensing of digital watermarking products and related authentication services. Our revenue recognition policy follows SEC Staff Accounting Bulletin ("SAB") No. 104 Revenue Recognition, SOP No. 97-2, Software Revenue Recognition, as amended by SOP No. 98-9, Modification of SOP No. 97-2, Software Recognition, With Respect to Certain Transactions, SOP 81-1 Accounting for the Performance of Construction Type and Certain Production-Type Contracts, and Emerging Issues Task Force ("EITF") Issue No. 00-21, Revenue Arrangements with Multiple Deliverables.
Other income (expense), net
Our other income (expense), net consists primarily of interest income earned our on cash and short term investments. Some minor amounts are included in this category that relate to interest expense for capital lease allocations from Old Digimarc and for other non-operating items.
F-12
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
2. Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value. This statement does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. SFAS No. 157 is effective the first fiscal year beginning after November 15, 2007. New Digimarc has applied the provisions of this standard regarding the framework of measuring fair value and noted no material effect on the current financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for the Financial Assets and Financial Liabilities, which permits entities to choose to measure certain financial assets and liabilities at fair value. SFAS No. 159 is effective the first fiscal year beginning after November 15, 2007. New Digimarc has elected not to measure certain financial assets and liabilities at fair value as permitted by SFAS No. 159.
In April 2008, FASB issued Staff Position No. FAS 142-3 Determination of the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets . The intent of this Staff Position is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141 (revised 2007), Business Combinations , and other U.S. generally accepted accounting principles. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The Company has concluded that this standard does not currently apply.
In May 2008, the FASB issued SFAS NO. 162, The Hierarchy of Generally Accepted Accounting Principles , which identifies the sources of accounting principles and the framework for selecting principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This statement shall be effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board's amendments to AU section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company is currently evaluating the impact of SFAS 162, but does not expect the adoption of this pronouncement will have a material effect on the Company's financial statements.
3. Revenue Recognition
Some customer arrangements encompass multiple deliverables, such as software, maintenance fees, and software development fees. The Company accounts for these arrangements in accordance with EITF Issue No. 00-21. If the deliverables meet the criteria in EITF Issue No. 00-21, the deliverables are divided into separate units of accounting and revenue is allocated to the deliverables based on their relative fair values. The criteria specified in EITF Issue No. 00-21 are as follows: (i) the delivered item has value to the customer on a stand-alone basis, (ii) there is objective and reliable evidence of the fair value of the undelivered item, and (iii) if the arrangement includes a general right of return relative to
F-13
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
3. Revenue Recognition (Continued)
the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. For our purposes, fair value is generally defined as the price at which a customer could purchase each of the elements independently from other vendors or as the price that the Company has sold the element separately to another customer. Management applies judgment to ensure appropriate application of EITF Issue No. 00-21, including value allocation among multiple deliverables, determination of whether undelivered elements are essential to the functionality of delivered elements and timing of revenue recognition, among others. Revenue is recognized in accordance with SAB 104 when the following four criteria are met (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the fee is fixed or determinable, and (iv) collection is probable.
AICPA SOP No. 98-9 requires that revenue be recognized using the "residual method" in circumstances when vendor specific objective evidence ("VSOE") exists only for undelivered elements. Under the residual method, revenue is recognized as follows: (1) the total fair value of undelivered elements, as indicated by vendor specific objective evidence, is deferred and subsequently recognized in accordance with the relevant sections of AICPA SOP No. 97-2, and (2) the difference between the total arrangement fee and the amount deferred for the undelivered elements is recognized as revenue related to the delivered elements.
Applicable revenue recognition criteria are considered separately for each separate unit of accounting as follows:
F-14
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
3. Revenue Recognition (Continued)
paid in advance and revenue is recognized ratably on a straight-line basis over the term of the service period.
4. Segment Information
Geographic Information
The Company derives its revenue from a single reporting segment: media management solutions. Revenue is generated in this segment through licensing of intellectual property, subscriptions to various products and services, and the delivery of services pursuant to contracts with various customers. The Company markets its products in the United States and in non-U.S. countries through its sales personnel.
Information regarding geographic areas for the three- and six-month periods ended June 30 and the years ended December 31 follow:
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|
|
|
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Years Ended December 31,
|
|||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2007
|
2006
|
2005
|
||||||||||||||||
|
(unaudited)
|
|
|
|
||||||||||||||||||
Domestic | $ | 2,656 | $ | 556 | $ | 5,314 | $ | 1,674 | $ | 3,696 | $ | 2,414 | $ | 2,882 | ||||||||
International | 2,459 | 2,290 | 4,886 | 4,657 | 9,329 | 8,657 | 8,237 | |||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||
Total | $ | 5,115 | $ | 2,846 | $ | 10,200 | $ | 6,331 | $ | 13,025 | $ | 11,071 | $ | 11,119 | ||||||||
|
|
|
|
|
|
|
Major Customers
Customers who accounted for more than 10% of the Company's revenues for the three- and six-month periods ended June 30, 2008 and 2007 respectively and for each of the three years ended December 31, 2007 are summarized as follows:
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
Years Ended December 31,
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenue:
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
2007
|
2006
|
2005
|
|||||||||
|
(unaudited)
|
|
|
|
|||||||||||
Customer A | 42 | % | 68 | % | 39 | % | 62 | % | 60 | % | 65 | % | 64 | % | |
Customer B | 41 | % | * | 38 | % | * | * | * | * | ||||||
Customer C | * | * | * | 13 | % | 10 | % | * | * |
F-15
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
5. Stock-Based Compensation
Stock-based compensation includes expense charges for all stock-based awards to employees and directors. Such awards include option grants, restricted stock awards, and shares expected to be purchased under an employee stock purchase plan. Stock compensation expense is allocated to New Digimarc based on a combination of specific and shared services resource allocations from Old Digimarc. All cash flow related to stock compensation generated by Old Digimarc is retained by New Digimarc.
Stock-based compensation recognized in Old Digimarc's financial statements is based on the value of the portion of the stock-based award that vested during the period, adjusted for expected forfeitures for stock-based awards granted prior to, but not fully vested as of, December 31, 2005 and stock-based awards granted subsequent to December 31, 2005. The compensation cost for awards granted prior to January 1, 2006 is based on the grant date fair value estimated in accordance with the pro forma provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation , while awards granted on or after January 1, 2006 follow the provisions of SFAS 123(R) to determine the grant date fair value and compensation cost. Compensation cost for all stock-based awards is recognized using the straight-line method.
Determining Fair Value Under SFAS 123(R)
Stock Options
Valuation and Amortization Method. Old Digimarc estimates the fair value of stock-based awards granted using the Black-Scholes option pricing model. Old Digimarc amortizes the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods. The fair value of each option grant is estimated on the date of grant.
Expected Life. The expected life of awards granted represents the period of time that they are expected to be outstanding. Old Digimarc determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and pre-vesting and post-vesting forfeitures. Stock options granted generally vest over four years and have contractual terms of ten years.
Expected Volatility. Old Digimarc estimates the volatility of its common stock at the date of grant based on the historical volatility of its common stock using the Black-Scholes option pricing model based on historical stock prices over the most recent period commensurate with the estimated expected life of the award. This historical period excludes portions of time when unusual transactions occurred, such as a significant acquisition.
Risk-Free Interest Rate. Old Digimarc bases the risk-free interest rate used in the Black-Scholes option pricing model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term approximately equal to the expected life of the award.
Expected Dividend Yield. Neither the Company nor Old Digimarc has ever paid any cash dividends on its common stock and the Company does not anticipate paying any cash dividends in the foreseeable future. Consequently, Old Digimarc uses an expected dividend yield of zero in the Black-Scholes option pricing model.
F-16
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
5. Stock-Based Compensation (Continued)
Expected Forfeitures. Old Digimarc uses relevant historical data to estimate pre-vesting option forfeitures. The Company records stock-based compensation only for those awards that are expected to vest.
A summary of Old Digimarc's weighted average assumptions and results for options granted during the periods presented is as follows:
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
Years Ended December 31,
|
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2008
|
2007
|
2008
|
2007
|
2007
|
2006
|
2005
|
|||||||||||||||
|
(unaudited)
|
|
|
|
||||||||||||||||||
Expected life (in years) | 5.7 | 5.8 | 5.7 | 5.8 | 5.8 | 6.0 | 4.0 | |||||||||||||||
Expected volatility | 44 | % | 44 | % | 44 | % | 44 | % | 44 | % | 53 | % | 50 | % | ||||||||
Risk-free interest rate | 2.5 | % | 4.7 | % | 2.5 | % | 4.7 | % | 4.7 | % | 4.7 | % | 4.5 | % | ||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||
Expected forfeiture rate | 15 | % | 16 | % | 15 | % | 16 | % | 16 | % | 14 | % | 20 | % | ||||||||
Fair value | $ | 4.97 | $ | 4.76 | $ | 3.88 | $ | 4.36 | $ | 4.38 | $ | 3.62 | $ | 2.85 |
Employee Stock Purchase Plans
Old Digimarc also recognizes stock-based compensation in connection with its 1999 Employee Stock Purchase Plan. The plan, as amended on November 2, 2006, allows employees to purchase shares of Old Digimarc common stock through payroll deductions of up to 15% of their base compensation during each three-month plan period, up to a maximum deduction of $5.3 for each plan period, not to exceed $21 per year. The three-month plan periods begin December 1, March 1, June 1 and September 1. The price an employee pays for the shares is 85% of the lower of (i) the fair market value of Old Digimarc common stock at the beginning of the plan period or (ii) the fair market value at the end of the plan period.
The current offer period under the plan was terminated as of July 25, 2008 in connection with the anticipated close of the tender offer from L-1 and all payroll deductions have been refunded.
Restricted Stock and Market or Performance Based Vesting Shares
The Compensation Committee of Old Digimarc's Board of Directors awarded restricted stock shares under Old Digimarc's 1999 Stock Incentive Plan, as amended, to certain officers, employees and directors. The shares subject to the restricted stock awards vest over a certain period, usually one to four years, following the date of the grant.
The fair value of restricted stock awards granted is based on the fair market value of Old Digimarc's common stock on the date of the grant (measurement date), and is recognized over the vesting period of the related restricted stock using the straight-line method.
In addition to restricted stock shares that vest over time, Old Digimarc's Compensation Committee awarded restricted stock that vests upon satisfaction of either market based or employee performance based conditions under the 1999 Stock Incentive Plan, as amended.
F-17
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
5. Stock-Based Compensation (Continued)
The fair value of restricted stock awards that vest upon the satisfaction of market based conditions is calculated using a Monte Carlo valuation model that results in a discount factor applied to the fair market value of Old Digimarc's common stock on the date of the grant (measurement date). Compensation cost is recognized over the derived service period, which is shorter than the performance period, using the straight-line method. If the market condition is met prior to completion of the derived service period, all remaining expense is immediately recognized in the period the awards vest. Expense for market based awards is recognized if the employee completes the derived service period, regardless of whether the market condition is met. If the market condition is not met, the shares will be forfeited.
The fair value of restricted stock awards that vest upon the satisfaction of employee performance conditions is based on the fair market value of Old Digimarc's common stock on the date of grant (measurement date). Management has determined it is probable that all performance conditions can be achieved; therefore, compensation cost is recognized on a straight line basis over the explicit service period. If the performance condition is satisfied early, all remaining compensation cost will be recognized in the period the condition is satisfied. If the performance vesting condition is not met by the end of the explicit service condition, all previously recognized compensation cost will be reversed and the shares will be forfeited.
Specific terms of the restricted stock awards (including market or performance based vesting share awards) are governed by restricted stock agreements between Old Digimarc and the award recipients.
Stock-based Compensation Allocated from Old Digimarc
The following table summarizes stock-based compensation allocated from Old Digimarc for the three-and six-month periods ended June 30, 2008 and 2007 and the years ended December 31, 2007, 2006, and 2005.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
Year Ended December 31,
|
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2008
|
2007
|
2008
|
2007
|
2007
|
2006
|
2005
|
||||||||||||||
|
(unaudited)
|
|
|
|
|||||||||||||||||
Cost of service | $ | 42 | $ | 24 | $ | 85 | $ | 40 | $ | 102 | $ | 42 | $ | | |||||||
Sales and marketing | 93 | 72 | 176 | 144 | 287 | 172 | 56 | ||||||||||||||
Research, development and engineering | 14 | 12 | 30 | 20 | 47 | 51 | | ||||||||||||||
General and administrative | 236 | 181 | 456 | 365 | 728 | 495 | 147 | ||||||||||||||
Intellectual property | 15 | 12 | 30 | 22 | 45 | 30 | | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
Total stock-based compensation | $ | 400 | $ | 301 | $ | 777 | $ | 591 | $ | 1,209 | $ | 790 | $ | 203 | |||||||
|
|
|
|
|
|
|
F-18
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
6. Trade Accounts Receivable
Trade Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Revenue earned which has not been invoiced as of the balance sheet date, and generally billed the following month, is classified as unbilled trade receivables in the balance sheets.
|
|
Year Ended December, 31
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
|
Six Months
Ended June 30, 2008 |
||||||||||
|
2007
|
2006
|
|||||||||
|
(unaudited)
|
|
|
||||||||
Billed trade receivables | $ | 3,267 | $ | 3,236 | $ | 2001 | |||||
Unbilled trade receivables | 980 | 559 | 483 | ||||||||
|
|
|
|||||||||
Subtotal | 4,247 | 3,795 | 2,484 | ||||||||
Allowance for doubtful accounts | (43 | ) | (43 | ) | (43 | ) | |||||
|
|
|
|||||||||
Trade accounts receivable, net | $ | 4,204 | $ | 3,752 | $ | 2,441 | |||||
|
|
|
|||||||||
Unpaid Deferred revenues included in accounts receivable | $ | 1,806 | $ | 2,271 | $ | 961 | |||||
|
|
|
Allowance for doubtful accounts
The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. The Company determines the allowance based on historical write-off experience and current information. The Company reviews its allowance for doubtful accounts monthly. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
Unpaid deferred revenues
The unpaid deferred revenues that are included in accounts receivable are billed in accordance with the provisions of the contracts with the Company's customers.
F-19
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
6. Trade Accounts Receivable (Continued)
Major Customers
Customers who accounted for more than 10% of net accounts receivable, at June 30, 2008, December 31, 2007 and December 31, 2006, respectively were:
|
|
Year Ended December, 31
|
|||||
---|---|---|---|---|---|---|---|
|
Six Months
Ended June 30, 2008 |
||||||
|
2007
|
2006
|
|||||
|
(unaudited)
|
|
|
||||
Customer A | 30 | % | 24 | % | 42 | % | |
Customer B | 48 | % | 36 | % | * | ||
Customer C | * | * | 24 | % |
7. Property and Equipment
Property and Equipment
Property and equipment are stated at cost. Repairs and maintenance are charged to expense when incurred. Depreciation on property and equipment is calculated by the straight-line method over the estimated useful lives of the assets, generally two to seven years.
|
|
Year Ended December 31,
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|
|
Six Months
Ended June 30, 2008 |
|||||||||
|
2007
|
2006
|
||||||||
|
(unaudited)
|
|
|
|||||||
Office furniture fixture | $ | 1,092 | $ | 1,086 | $ | 1,086 | ||||
Equipment | 3,947 | 3,411 | 3,059 | |||||||
Leasehold improvements | 696 | 679 | 664 | |||||||
|
|
|
||||||||
5,735 | 5,176 | 4,809 | ||||||||
Less accumulated depreciation and amortization | (4,395 | ) | (3,949 | ) | (3,337 | ) | ||||
|
|
|
||||||||
$ | 1,340 | $ | 1,227 | $ | 1,472 | |||||
|
|
|
F-20
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
7. Property and Equipment (Continued)
Leases
Future minimum lease payments under non-cancelable operating leases related to rent and office equipment are as follows:
Year ending December 31:
|
Operating
Leases |
||
---|---|---|---|
2008 | $ | 837 | |
2009 | 856 | ||
2010 | 882 | ||
2011 | 599 | ||
Thereafter | | ||
|
|||
Total minimum lease payments | $ | 3,174 | |
|
Rent expense on the operating leases for the three- and six-months ended June 30, 2008 and 2007 and for the years ended December 31, 2007, 2006 and 2005 totaled $191, $383, $189, $378, $756, $756 and $756, respectively.
8. Income Taxes
Provision for Income Taxes. The provision for income taxes reflects withholding tax expense in various foreign jurisdictions. For all historic periods reported in the financial statements, Old Digimarc maintained valuation allowances against its net deferred tax assets, including net operating loss carryforwards, because it was more likely than not that the deferred taxes would not be realized. The provision for income taxes included foreign taxes withheld by our customers and paid to foreign jurisdictions on our behalf. The New Digimarc "carve-out" financial statements indicate cumulative losses through the first six months of 2008. Furthermore, the amounts of cumulative expenses in the financial statements that were not allowed for federal and state income tax purposes were not sufficient enough to result in positive taxable income which would have required the company to record income tax expense. As a result of the above, no Federal and state income tax benefit was recognized for the book losses that were incurred in those periods prior to 2007 and no income tax expense was recognized during the 2007 and 2008 periods as any expense was offset by the benefit of net operating loss carry-forwards. New Digimarc as a separate legal entity will not benefit from any of the carrryforward tax attributes of Old Digimarc, including net operating loss carryforwards.
9. Commitments and Contingencies
Certain of the Company's product license and services agreements include an indemnification provision for claims from third parties relating to the Company's intellectual property. Such indemnification provisions are accounted for in accordance with SFAS No. 5, Accounting for Contingencies . To date, there have been no claims made under such indemnification provisions.
The Company is subject from time to time to other legal proceedings and claims arising in the ordinary course of business. Although the ultimate outcome of these matters cannot be determined, management believes that, as of June 30, 2008, the final disposition of these proceedings will not have
F-21
NEW DIGIMARC CORPORATION
(a carved-out business of Old Digimarc Corporation)
NOTES TO FINANCIAL STATEMENTS (Continued)
(in thousands)
9. Commitments and Contingencies (Continued)
a material adverse effect on the financial position, results of operations, or liquidity of the Company. No accrual has been recorded because the amounts are not probable or reasonably estimatable in accordance with SFAS No. 5, Accounting for Contingencies .
10. Quarterly Financial Information (unaudited)
Quarter ended:
|
March 31
|
June 30
|
September 30
|
December 31
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2008 | |||||||||||||
Service revenue | $ | 2,548 | $ | 2,987 | |||||||||
License and subscription revenue | 2,537 | 2,128 | |||||||||||
|
|
||||||||||||
Total revenue | 5,085 | 5,115 | |||||||||||
Total cost of revenue | 1,408 | 1,704 | |||||||||||
Gross profit | 3,677 | 3,411 | |||||||||||
Gross profit percent, service revenue | 47 | % | 45 | % | |||||||||
Gross profit percent, license and subscription revenue | 98 | % | 97 | % | |||||||||
Gross profit percent, total | 72 | % | 67 | % | |||||||||
Sales and marketing | 656 | 683 | |||||||||||
Research, development and engineering | 922 | 910 | |||||||||||
General and administrative | 980 | 927 | |||||||||||
Intellectual property | 478 | 448 | |||||||||||
Operating income (loss) | 641 | 443 | |||||||||||
Net income (loss) | 924 | 664 | |||||||||||
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue | $ | 1,877 | $ | 1,751 | $ | 2,063 | $ | 2,115 | |||||
License and subscription revenue | 1,608 | 1,095 | 1,244 | 1,272 | |||||||||
|
|
|
|
||||||||||
Total revenue | 3,485 | 2,846 | 3,307 | 3,387 | |||||||||
Total cost of revenue | 950 | 936 | 993 | 1,153 | |||||||||
Gross profit | 2,535 | 1,910 | 2,314 | 2,234 | |||||||||
Gross profit percent, service revenue | 51 | % | 50 | % | 55 | % | 47 | % | |||||
Gross profit percent, license and subscription revenue | 98 | % | 95 | % | 95 | % | 95 | % | |||||
Gross profit percent | 73 | % | 67 | % | 70 | % | 66 | % | |||||
Sales and marketing | 639 | 667 | 634 | 513 | |||||||||
Research, development and engineering | 729 | 829 | 656 | 698 | |||||||||
General and administrative | 857 | 844 | 797 | 847 | |||||||||
Intellectual property | 431 | 413 | 373 | 376 | |||||||||
Operating income (loss) | (121 | ) | (843 | ) | (146 | ) | (200 | ) | |||||
Net income (loss) | 250 | (518 | ) | 175 | 148 |
F-22