NYSCEF DOC. NO. 75 RECEIVED NYSCEF: 02/03/2017 Kusmin, Ben From: Sent: To: Subject: Attachments: Tony Piotrowski <TPiotrowski@mpegla.com> Wednesday, November 11, 2015 2:52 AM Tony Piotrowski FW: RE: ATSC - Notice of Termination FINAL DRAFT ATSC AGREEMENTS.msg From: 홍종필 [mailto:j.p.hong@samsung.com] Sent: Thursday, November 05, 2015 8:57 PM To: Tony Piotrowski Subject: RE: RE: ATSC - Notice of Termination Tony, Thank you for your call and below email. We have carefully reviewed MPEG LA s position but strongly disagree. Samsung has fully complied with the terms under AAL, LAA, PPL and all other related agreements and effectively terminated these agreements through the notice of termination letters of October 5, 2015. Section 7.2 of AAL clearly states that a licensor may terminate (1) AAL, (2) the right of the Licensing Administrator to grant sublicenses and (3) LAA at any time with a thirty day written notice (the termination of all of which are grouped together and defined in the same section as Termination ). There is nothing in Section 7.2 that restricts a party from terminating before January 1, 2017. The only time/date restriction is found in subsection 7.2.1 which states that there is no Right of Termination for five years after the first PPL. Subsection 7.2.1 then goes on to specify apportionment of revenues when there is Termination after that 5 year period. Any plain reading of these provisions makes it abundantly clear that a licensor has the Right of Termination (which by definition includes termination of (1) AAL, (2) the right to sublicense, and (3) LAA) any time after the 5 year period with a 30 day written notice. Furthermore, discussions in 2007 relating to the voluntary termination provisions clearly support Samsung s position. As shown in your attachment (email correspondence between Larry Horn and licensors), it is correct that the early termination issue was raised and discussed. However, MPEG LA s conclusion that licensors agreed to a 10 year term until January 1, 2017 without right of termination is simply incorrect. Before the final version, draft AALs included a date/time restriction language as found in the LAA: At any time after January 1, 2017. When licensors raised the early termination issue as evidenced in the correspondence referenced in your email, the AAL was amended to delete the date/time language and adding subsection 7.2.1 to address Right of Termination after a five year period. CEO of MPEG LA, Larry Horn, explains in the attached email that the changes in section 7.2 were made to provide an early right of termination with penalty on the part of Licensors starting in year 6. Finally, with respect to section 2.13 of AAL, as we have effectively terminated all relevant licensor agreements, we are no longer required to be a licensee. Even if we assume for the sake of argument that the relevant licensor agreements have not been terminated, we do not believe that section 2.13 applies here because there are no remaining patents that arguably may read on Samsung s product or activities and, to the extent any such patents exist, those patents are invalid. Accordingly, Samsung has fully complied with and effectively terminated AAL, LAA, PPL and all other related agreements. Please kindly confirm the termination of these agreements and let us know if you have any questions. From: Tony Piotrowski [mailto:tpiotrowski@mpegla.com] Sent: Wednesday, November 04, 2015 2:20 AM 1
NYSCEF To: DOC. Hong NO. 75 RECEIVED NYSCEF: 02/03/2017 Subject: RE: Re: RE: RE: ATSC - Notice of Termination As we discussed last night, MPEG LA does not consider the terminations of the ATSC agreements requested by Samsung on October 5, 2015 as valid or effective. We believe Samsung should continue to uphold and abide by its obligations under the AAL, LAA, PPL and any and all other related agreements until at least January 1, 2017 and that the failure to do so would be a breach of those agreements. More specifically, Section 2.2 of the AAL requires that the parties enter into the LAA with MPEG LA. Section 11.2.1 of the LAA then provides that "[a]t any time after January 1, 2017, each Licensor shall have the right upon thirty (30) days' written notice to all other Licensors and the Licensing Administrator, to terminate with respect to itself all, but not less than all, of the following: (i) this Agreement; (ii) the right of the Licensing Administrator to grant additional sublicenses under its license or sublicense to the Licensing Administrator granted pursuant to Section 2.3 of the Agreement Among Licensors; and (iii) the Agreement Among Licensors." (emphasis added). This provision makes it unambiguously clear that a Licensor may not terminate any of the AAL, the LAA, or its grant of a license to MPEG LA prior to January 1, 2017. Section 7.2 of the AAL similarly provides that "[s]ubject to the conditions set forth in this Section 7.2, each Party shall have the right... to terminate with respect to itself all but not less than all of the following: (1) this Agreement, (2) the right of the Licensing Administrator to grant additional sublicenses under its license or sublicense granted by such terminating Party pursuant to Section 2.3 of this Agreement; and (3) the ATSC Licensing Administrator Agreement entered into pursuant to Section 2.2 of this Agreement []." The provisions of Section 7.2.1 are not to the contrary they simply provide what would happen if such termination were to occur, but do not provide the right to terminate prematurely. By its terms, Samsung cannot terminate the AAL unless it also terminates the LAA, which it may not do until January 1, 2017. Accordingly, Samsung remains bound by these agreements irrespective of its October 5, 2015 notices. Section 2.13 of the AAL, meanwhile, provides that each ATSC Licensor must also be an ATSC Licensee. Thus, because Samsung is committed to remaining a Licensor until at least January 1, 2017, it is not free to terminate the PPL before that date, and remains bound to its obligations under the PPL. As you know, at the time MPEG LA negotiated the terms of the AAL, LAA, and the PPL with the original group of ATSC Licensors, including Samsung, in 2007, there was much discussion about the operation of the voluntary termination provisions. In addition to the clear language of the agreements referenced above, there was no ambiguity whatsoever that Licensors were committing to participate in the ATSC program as both Licensors and Licensees without right of termination before January 1, 2017. Samsung was fully aware of this fact. For example, attached is correspondence at the time of the formation of the ATSC pool that clearly states the obligation. Samsung was copied on this e mail and at no time did Samsung object. Accordingly, Samsung should continue to file timely ATSC royalty reports, make timely royalty payments, and comply with any and all other obligations under the PPL; and to the extent Samsung does otherwise, it does so at its own risk. For its part, MPEG LA will continue to grant additional sublicenses under its license or sublicense granted by Samsung pursuant to Section 2.3 of the Agreement Among Licensors, and of course, reserves any and all rights both at law and in equity. Tony From: Tony Piotrowski Sent: Wednesday, October 28, 2015 12:25 PM To: Hong; ContractAdministrator; Larry Horn; Tracy Edwards; Jack Kail; Richard Lewis; Hwi-Jae Cho; Cc: 김태형 ; Seungpyo Shin Subject: RE: Re: RE: RE: ATSC - Notice of Termination 2
NYSCEF DOC. NO. 75 RECEIVED NYSCEF: 02/03/2017 The date of your letter is not in compliance with the termination provisions of the LAA or the PPL. Tony Sent: Tuesday, October 20, 2015 8:17 PM To: Tony Piotrowski; ContractAdministrator; Larry Horn; Tracy Edwards; Jack Kail; Richard Lewis; Hwi-Jae Cho; Cc: Hong; 김태형 ; Seungpyo Shin Subject: Fwd: Re: RE: RE: ATSC - Notice of Termination Hi Tony, I don't understand what you mean by Samsung not being in compliance with the PPL. Could you kindly further explain/clarify. Thank you. ------- Original Message ------- Sender : Tony Piotrowski<TPiotrowski@mpegla.com> Date : 2015-10-21 00:52 (GMT+09:00) Title : RE: RE: ATSC - Notice of Termination Thanks, for your email. What you propose is not in compliance with the PPL, however, and we must also reserve all rights. Tony Sent: Thursday, October 15, 2015 7:59 PM To: Tony Piotrowski; ContractAdministrator; Larry Horn; Tracy Edwards; Jack Kail; Richard Lewis; Hwi-Jae Cho; Cc: 김태형 ; Seungpyo Shin Subject: Re: RE: ATSC - Notice of Termination Dear Tony, Thank you for confirming receipt of the termination letters. Samsung s position with respect to the ATSC Essential Patents is well supported. The fact that the ATSC Essential Patents are either invalid and/or not infringed means that our obligations actually ceased before the termination of 3
NYSCEF PPL. DOC. However, NO. 75in order to avoid unnecessary disputes and legal expenses, Samsung will RECEIVED make a payment NYSCEF: for 02/03/2017 royalties due as of the date of our notice of termination letters (October 5, 2015) in a timely manner. Notwithstanding the foregoing, Samsung reserves all of its rights. ------- Original Message ------- Sender : Tony Piotrowski<TPiotrowski@mpegla.com> Date : 2015-10-13 03:28 (GMT+09:00) Title : RE: ATSC - Notice of Termination On behalf of Licensing Administrator MPEG LA, we acknowledge receipt of your letters: Notice of Termination for ATSC Agreement Among Licensors_20151005_2 and Notice of Termination for ATSC patent portfolio_20151005_2 letters dated October 5, 2015. We don t see the relevance of your comments under the PPL or otherwise regarding Samsung s unsupported belief that some of the ATSC Essential Patents may be invalid, and we disagree with them. In any event, we trust that Samsung will fully comply with all obligations under the ATSC PPL including payment of all royalties due for the manufacture or sale of ATSC products as required by such agreement through its valid termination as may be applicable. If Samsung intends to manufacture or sell ATSC products at any point after a valid termination, we believe that Samsung will again greatly benefit from the coverage offered by the ATSC PPL. Tony Piotrowski General Counsel MPEG LA Sent: Monday, October 05, 2015 5:57 AM To: ContractAdministrator; Larry Horn; Tony Piotrowski; Tracy Edwards; Jack Kail; Richard Lewis; Hwi-Jae Cho; Cc: 김태형 ; Seungpyo Shin; Hong Subject: ATSC - Notice of Termination Dear ATSC contract administrator and licensors, Attached is a copy of 1) Notice of Termination of ATSC Portfolio License and 2) Notice of Termination of ATSC Agreement Among Licensors that we sent out via Federal Express today. Please let us know if you have any questions. 4
NYSCEF Jong DOC. P. Hong NO. 75 RECEIVED NYSCEF: 02/03/2017 Assistant General Counsel Intellectual Property Center Samsung Electronics Co., Ltd. Work) +82-31-277-7230 Mobile) +82-10-5027-0298 5