FYI a follow up on articles regarding Ampex and Patent enforcement.
http://www.nwfusion.com/news/2004/1130sonytopa.html
http://www.forbes.com/associatedpress/feeds/ap/2004/11/29/
ap1678714.html
And this from the "Chairman's Letter" in the 2003 annual report
Snip..." The greatest contributor to Ampex's 17.2% increase in
overall
revenues and to the improved operating profits in 2003 was income
from
our
licensing portfolio of digital imaging patents. As I forecasted in
last
year's letter, royalty income improved significantly, rising to
$10.1
million from $4.0 million in the previous year. Some of the increase
resulted from payments by licensees that were actually due to us in
earlier
periods, but ongoing royalties are now running at a rate
significantly
greater than in 2002. Encouragingly, substantially all of our
royalties now
come from digital video recorders and camcorders rather than from
analog
products that are now largely obsolete.
As discussed in previous annual reports, licensing income has tended
to be
volatile and difficult to forecast. In 2003 our royalty income was
solely
generated by digital videotape recorders and camcorders. Starting
two
years
ago we have been moving aggressively to broaden the base of
royalties
to
include additional areas of consumer electronics where we believe
our
patented technology is being used. These markets include DVD
recorders
and
players, digital still cameras and digital television receivers,
each
of
which represents large future market opportunities.
I am pleased to report that, after the year end, we negotiated our
first
license for DVD recorders, which we expect to sign shortly. This new
licensee, a multi-billion dollar manufacturer of consumer electronic
products based in Japan, has informed us that they expect to begin
production later this year of certain new products that will use our
patents. Since these products have not yet been marketed, it is not
possible
to forecast the revenue impact on Ampex this year, but is an
indication that
developments in the DVD market may be moving favorably for us.
At the end of 2002, we had notified 17 manufacturers of digital
still
cameras of their potential infringement of our patents and, as of
today, we
believe we have put substantially all major manufacturers on
notice.We
are
currently in advanced negotiations for our first patent license in
the
digital still camera field with one of the largest manufacturers in
this
market, but we are at present far apart on financial terms. While we
hope to
arrive at a satisfactory agreement it is reasonably likely that, as
I
mentioned in last year's letter, litigation will become necessary.
We
will,
of course, announce developments in this situation as they occur.
There are several negotiations under way with other potential
licensees, not
just digital still cameras but also other products that we believe
to
be
infringing our patents. It is too early to say what impact, if any,
these
negotiations will have in 2004. However, Ampex has been in the
licensing
business for more than 30 years and our patent portfolio is the
result
of
substantial and forward-looking investments in research and
development of
digital imaging technology over many years. An expanded licensing
program
has the potential to produce a dramatic change in Ampex's financial
outlook
and our strategy is to pursue these opportunities aggressively.
As we have said in previous letters, our preference is to avoid the
substantial expenses that patent lawsuits involve. However, if we do
have to
litigate, our recent financial performance has substantially
improved
our
ability to do so. The management team has done an excellent job of
cash
generation and our liquid resources should be more than adequate for
any
litigation costs that can currently be foreseen." Snip....
Clearly Ampex is now in the patent enforcement business. 'Nuff said
on
this
topic.
jim
*
Jim Lindner
*
Media Matters, LLC
*
Email: jim@xxxxxxxxxxxxxxxxx
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Address: 500 West 37th Street, 1st FL
New York, N.Y. 10018
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eFax (646) 349-4475
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Mobile: (917) 945-2662
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