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MP3 Players under fire in US and European courtrooms

by: Paolo d'Amato

ALEXANDRIA, Va. & TURIN, Italy - Oct., 2005 - Audio MPEG, Inc. and Sisvel, S.p.A. announced that Thomson S.A. and a number of its subsidiaries have been sued in the United States and Europe for infringement of several MPEG Audio patents by its MP3 players and digital set-top boxes. This patented technology was developed and is owned by France Telecom, TDF (Telediffusion De France), Philips, and IRT (Institut fur Rundfunktechnik GmbH). The patents are essential to the MPEG audio compression standard used worldwide in MP3 players, TV set top boxes, digital television broadcasting, and an increasing number of consumer electronics products.

The lawsuits were filed by Sisvel S.p.A. and Audio MPEG, Inc., who have the right to license the patents. Litigations for patent infringement against Thomson are now pending and progressing in Alexandria - Virginia, Mannheim - Germany, and Milan - Italy. In this process, thousands of Thomson MP3 products have been detained by the customs authorities in Germany and continue to be detained by customs following a preliminary injunction issued by the Mannheim Court in Germany.

According to the complaints, Thomson markets and sells MP3 players, TV set top boxes, DVD players, and CD players using MPEG audio compression covered by the patents of France Telecom, TDF, Philips, and IRT, without a current license to practice those inventions. Over 250 companies are licensed under these patents and are paying royalties. Until recently, Thomson was also licensed, but failed to renew their license in 2005.

The lawsuits seek royalties for past infringement, punitive damages for willful infringement, attorney�s fees, and injunctions to permanently prohibit Thomson from selling MP3 players, TV set top boxes, DVD players, and CD players using MPEG audio compression.

"By refusing to renew their license under the MPEG Audio patents, Thomson has ignored its duty to respect intellectual property of third parties. This led to the seizure of its products by the Customs Authorities and made lawsuits necessary in both the United States and Europe," said Gen. Richard I. Neal, President of Audio MPEG, Inc. "Thomson's failure to take a license is not only unfair to the owners and the inventors of the patents, whose efforts and research have made this technology possible, but also to the over 250 competitors of Thomson who are meeting their intellectual property obligations as licensees under these patents. Our actions both in the United States and overseas are all about accountability and responsibility."

According to John Paul, a partner in the law firm of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, "The US litigation against Thomson is pending in one of the fastest moving Federal trial courts in the United States, a court known as the "rocket docket." Litigation in the US is focused on getting all of the facts out in the open and that process consumes a tremendous amount of time, energy, and expense. In the rocket docket the consumption of these resources is even more intense because the court requires that the litigation must be completed much faster than in other courts."

Who are Sisvel and Audio MPEG?

Societ� Italiana per lo Sviluppo dell'Elettronica S.p.A (Sisvel) is a patent management company that has become a leader in its field with offices in Turin, Milan, and Hong Kong. It has the rights to license a number of patent portfolios, including the non-US patents in a portfolio relating to MPEG audio compression. Originally established in 1982 as a joint venture by the Italian television producers, it later acquired the entire patent portfolio of Indesit and conducted a number of successful licensing programs in various fields of consumer electronics.

Audio MPEG, Inc. is a patent management company, located in Alexandria, Virginia. It is a wholly owned subsidiary of Sisvel and has the rights to license the US patents in a portfolio relating to MPEG audio compression.

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