DRAFT. Administration. 1. Call to Order. Wade Hanniball from Universal called the meeting to order and welcomed the. members. -1-
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1 DCI DIGITAL CINEMA INITIATIVES MEETING OF THE MEMBER REPRESENTATIVES Date: Thursday, May 13, 2010 Venue: Paramount Pictures Roddenberry Bldg., Room Melrose Avenue Hollywood, CA Time: 1:30 p.m. 3:00 p.m. (PDT) Attendees: Representatives from: Disney: Fox: Paramount: Sony Pictures: Universal: Warner Bros: Counsel: Jason Brenek, Paul Holliman, Bob Lambert (by telephone), Nicolas Zylberstein Julian Levin, Neal Rothman Mark Christensen, Bob Kisor, Garrett Smith, Jim Smith Scott Sher, Spencer Stevens Wade Hanniball, Noah Bergman Wendy Aylsworth David Garcia, Esq. MINUTES A meeting of the Member Representatives Committee ("MRC") of Digital Cinema Initiatives, a Delaware limited liability company ("DCI" or the "Company"), was held at Paramount Pictures located at 5555 Melrose Avenue, Roddenberry Bldg., Room 3000, Hollywood, California on Thursday, May 13, 2010 at 1:30 p.m. (PDT). Administration 1. Call to Order members. Wade Hanniball from Universal called the meeting to order and welcomed the -1-
2 2. Approval of Minutes The minutes of the Joint Technical Committee and MRC meeting held March 11, 2010 were approved as previously distributed. 3. Upcoming Meeting Dates After discussion, the next meetings of the MRC were scheduled for July 15, 2010, and September 30, 2010, at Paramount Studios, following the Technical Committee meetings on each date. The Technical Committee meeting would begin at 11:00 a.m., and conclude at 1:00 p.m., and the MRC would begin at 1:30 p.m. and end at 3:00 pm. Lunch would be provided at 1:00 p.m. 4. Technical Committee Update Mr. Hanniball turned the floor over to Bob Kisor from Paramount for an update of significant actions and discussions occurring in the meeting of the Technical Committee earlier that day. Mr. Kisor then reported to the Committee on the following actions and issues summarized below, which are also described at length in the minutes for the Technical Committee for the meeting on this date: The Technical Committee concluded that CineCert should not be given permission under the License Agreement to share test materials with manufacturers not submitting digital cinema equipment for testing. All currently contemplated errata have been completed, and either approved or rejected by the Technical Committee. The MRC had determined in December of last year to foregoing the issuance of additional errata, in order to provide stability to the compliance testing process. The impact on the Compliance Test Plan will need to be considered once DCI decides again to issue errata. The Committee considered a request from D-Box, a manufacturer of moveable theatre seats, for a change in the Specifications to prevent interference with the digital signals that control their equipment, supposedly resulting from complying with audio watermarking provisions in the Specifications. Mr. Kisor has been instructed to inform D-Box that the Specifications also provide for audio watermarking to be turned off. No further action is contemplated, but the Committee will continue to study the matter. There was protracted consideration of alternatives presented by Tony Wechselberger to deal with changes contemplated by NIST, an agency of the federal government, to the security standards in FIPS incorporated by reference into the Specifications. The alternatives include continuing to require NIST certification of FIPS 140-2, while changing the Specifications to make clear that any revised version of FIPS would not be required, or alternatively, no longer requiring a certificate from NIST, but still requiring testing by NIST-approved laboratories for compliance with FIPS in its -2-
3 existing form. Mr. Kisor noted for the Committee that DCI had received unofficial indications from CineCert that at least one piece of digital cinema equipment, and possibly two, had now successfully completed all of the CTP except for obtaining a certificate from NIST, without identifying which two pieces of equipment or manufacturers were involved. Counsel has been instructed to create an amendment to the CineCert license to permit CineCert to identify any equipment which had passed the entire CTP but lacked only a NIST certificate so that such equipment could be listed on the DCI website with an appropriate caveat. Mr. Kisor's description of the NIST/FIPS issues prompted further significant discussion by the Committee. It was the consensus of the Committee that Mr. Kisor should task DCI's security consultant, Mr. Wechselberger, to draft a statement about what DCI is considering doing to the Specifications given the impending revisions to FIPS This document will be a set of talking points that can be available to individual studio members to prompt further discussion of an appropriate approach within the industry. 5. StEM Status & Usage Mr. Hanniball then directed the Committee's attention to the status of the StEM test materials, a topic already discussed at a number of prior meetings. He noted that he had finally obtained access to the underlying records reflecting agreements with persons involved in making the StEM materials, and confirmed that DCI possessed unqualified intellectual property rights in the StEM material itself. Some of the agreements required that the StEM be used on a not-for profit basis and that it not be broadcast. Armed with that knowledge, he advised the Committee that the StEM should not be placed in the public domain, but should be made available on a cost-recovery basis with an appropriate non-profit third party for distribution. Mr. Hanniball offered his own view that SMPTE would be the best such organization for StEM distribution in the future. Considerable discussion followed. It was the unanimous view of the Committee that Mr. Hanniball should be charged with recovering the StEM material from the post houses currently licensed to provide the StEM, abrogating the licenses with those post houses as necessary, and then providing the most up to date StEM materials to SMPTE to allow SMPTE to provide appropriate access to the StEM for persons and entities in the digital cinema community. Mr. Hanniball then directed the Committee's attention to a request he had previously received to utilize the StEM material as part of a video test disk. After discussion, it was the unanimous view of the Committee that the use of the StEM in a test disk for video products not relating directly to digital cinema exhibition was not a use of the StEM that DCI should permit, as per its existing StEM User Agreement. Mr. Hanniball was therefore instructed to communicate DCI's refusal to permit use of the StEM in that fashion. -3-
4 6. Compliance Test Entities a. License Renewals: Mr. Hanniball noted for the Committee that pursuant to the three outstanding license agreements, renewals were due for the upcoming year on a series of dates beginning with CineCert on June 3, 2010, Keio University on July 3, 2010 and MIC on July 15, The Committee discussed these renewals at length. The ultimate consensus was that although it appeared clear MIC would never actually be technologically capable of performing testing, and Keio University had apparently only one client for testing equipment, invoices should be sent by Mr. Hanniball to all three licensed test entities for renewal amounts in the amounts originally set as annual licensing fees to preserve DCI's rights. Payment terms would be pursuant to the license agreements. The Committee unanimously approved Mr. Hanniball to proceed in that fashion. Counsel was asked to review the CineCert invoice and any other communications with CineCert prior to transmission by Mr. Hanniball to CineCert. b. CTP Update Policy Statement Mr. Hanniball noted that, as had been mentioned previously in the meeting by Mr. Kisor, this statement was under review and would be re-circulated. 7. DCI Financial Status & Budget Mr. Hanniball noted that the Bank of America account had been closed and successfully transferred to another financial institution not charging annual fees. With respect to current cash flow, Mr. Hanniball noted that without a cash call the organization would be in the red at some point during July on current cash flow projections. The Committee unanimously authorized Mr. Hanniball to send invoices for the cash call in the amount of $30,000 per member studio as soon as possible. It was the further view of the Committee that this should include the roadmap previously discussed and distributed highlighting future plans for DCI. Mr. Hanniball noted for the Committee that the 2009 tax returns for DCI had been completed by DCI's outside accountant. 8. New Business Members of the Committee returned to prior discussion concerning potentially listing equipment as compliant on the website which had passed all aspects of the CTP, except for receiving a certificate of compliance from NIST, an outside government agency. Mr. Hanniball confirmed for the Committee that any such website announcement would make clear that the listing of particular equipment as otherwise compliant was subject to receipt of appropriate certification from NIST of compliance with FIPS in its current form. Various members then brought to the floor a potential issue concerning a recent announcement by Barco about digital cinema compliance by Barco equipment. The members expressed their concern about statements by CineCert quoted in the Barco press release. The matter -4-
5 was discussed at some length, and the members acknowledged that the actual statement attributed to Mr. Hurst were technically correct. There was some discussion of amending the current CineCert license to prohibit public statements, something that the current license arguably does not give DCI the authority to do. After further discussion, Mr. Hanniball was asked by the Committee to communicate privately with Mr. Hurst to express DCI's concerns about statements attributed to Mr. Hurst concerning successful completion of the CTP. Mr. Hanniball was also instructed to review the license to see whether any leverage or ability currently exists to moderate statements made by CineCert concerning the testing process. 9. Adjournment The meeting adjourned at 3:00 p.m. (PDT). -5-
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