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Apex is being sued

For all those with apex players this might be of interest. Just last week Apex Digital would begin an investigation into its royalty payments for the patent of mpeg2 usage in their dvd players...

MPEG LA Sues Apex Digital Posted Friday, 9 August, 2002

"MPEG LA, LLC, which licenses a portfolio of patents that are essential to use of the MPEG-2 digital video compression standard, has sued Apex Digital, Inc. ("Apex Digital"), a manufacturer and supplier of DVD players, for breach of its contractual obligations under the MPEG-2 Patent Portfolio License ("Contract") that Apex Digital entered into with MPEG LA.

Apex Digital has failed to pay millions of dollars in royalties for its products as required by the Contract. The lawsuit brought in U.S. District Court in Colorado seeks monetary damages including interest, an accounting of all Apex products on which royalties are payable, and an audit of Apex Digital's books and records. In addition to Apex Digital's failure to pay royalties on MPEG-2 products that it has reported to MPEG LA, Apex's royalty reports are not consistent with published reports regarding its product sales. The lawsuit seeks an injunction against Apex Digital from using MPEG-2 patents in its products until Apex Digital pays all royalties that it owes to MPEG LA. An MPEG-2 decoder is necessary for DVD playback; therefore any product with DVD playback capability includes an MPEG-2 decoder and is required to be licensed under patents in the MPEG-2 Patent Portfolio License.

MPEG LA Chief Executive Officer Baryn S. Futa said: "Apex's disregard for its contractual obligations is unfair to MPEG LA's other licensees, accounting for most of the DVD player sales in today's world market, who are meeting their licensing obligations and paying their rightful share of reasonable royalties. Apex apparently believes it is not subject to the same rules. Apex has chosen instead to sign the license agreement but not meet its obligations to pay for use of the technology provided, thereby exposing unsuspecting customers to liability for Apex's unlicensed products. But, Apex must be held to its contractual obligations. It must either compete fairly or stop using the technology. Others who pursue the path of unfair competition should understand that MPEG LA will not stand idly by while companies flaunt their failure to meet contractual obligations. In bringing this lawsuit, MPEG LA stands by its customers who are meeting theirs.""

Any opions on this and the possible future of Apex Digital?

ps...Sorry couldn't sleep, and this was interesting

-=Morphine=-