Digital rights management technology (DRM) has broad application for the protection and management of digital information; it is key to the success of electronic media distribution systems now gaining popularity on computers, mobile and consumer electronics platforms. The patent license is the first in a series of marketplace initiatives arising out of MPEG LA's DRM Reference Model (http://www.mpegla.com/pid/drm/) that will enable a wide variety of innovative new products and services based on DRM whose development and deployment might otherwise be inhibited.
"This breakthrough in providing efficient access to key DRM patents would not be possible without the hard work and foresight of these DRM market leaders," said MPEG LA CEO Baryn S. Futa. "Thanks to them, the market may expect the timely availability of a license consisting of their essential patents to enable the rapid development and deployment of DRM products and services for the mobile marketplace. Everyone in the product chain -- content owners, service providers, device manufacturers and especially consumers -- will benefit from this growth opportunity. MPEG LA is proud to play a supporting role in making this important technology widely accessible."
Under the proposed License, royalty rates for patents essential to OMA DRM 1.0 in connection with products that have OMA DRM 1.0 functionality or OMA DRM 1.0 and OMA DRM 2.0 functionality would be (a) US$1.00 per device (payable by the party that offers the device to an end user) and (b) 1% of any transaction in which an end user pays for delivery of a digital asset employing OMA 1.0 (payable by the service provider). OMA DRM 2.0 essential patents may be added as a result of a pending call issued by MPEG LA on 23 September 2004 (http://www.mpegla.com/news/n_04-09-23_drm.pdf).
The proposed License would provide coverage for products from January 1, 2004, but royalties will be payable only on products from January 1, 2005, forward.
MPEG LA plans for an actual license agreement to issue by March 2005.