FYI a follow up on articles regarding Ampex and Patent enforcement.
And this from the "Chairman's Letter" in the 2003 annual report
Snip..." The greatest contributor to Ampex's 17.2% increase in overall
revenues and to the improved operating profits in 2003 was income from
licensing portfolio of digital imaging patents. As I forecasted in last
year's letter, royalty income improved significantly, rising to $10.1
million from $4.0 million in the previous year. Some of the increase
resulted from payments by licensees that were actually due to us in
periods, but ongoing royalties are now running at a rate significantly
greater than in 2002. Encouragingly, substantially all of our
come from digital video recorders and camcorders rather than from
products that are now largely obsolete.
As discussed in previous annual reports, licensing income has tended
volatile and difficult to forecast. In 2003 our royalty income was
generated by digital videotape recorders and camcorders. Starting two
ago we have been moving aggressively to broaden the base of royalties
include additional areas of consumer electronics where we believe our
patented technology is being used. These markets include DVD recorders
players, digital still cameras and digital television receivers, each
which represents large future market opportunities.
I am pleased to report that, after the year end, we negotiated our
license for DVD recorders, which we expect to sign shortly. This new
licensee, a multi-billion dollar manufacturer of consumer electronic
products based in Japan, has informed us that they expect to begin
production later this year of certain new products that will use our
patents. Since these products have not yet been marketed, it is not
to forecast the revenue impact on Ampex this year, but is an
developments in the DVD market may be moving favorably for us.
At the end of 2002, we had notified 17 manufacturers of digital still
cameras of their potential infringement of our patents and, as of
believe we have put substantially all major manufacturers on notice.We
currently in advanced negotiations for our first patent license in the
digital still camera field with one of the largest manufacturers in
market, but we are at present far apart on financial terms. While we
arrive at a satisfactory agreement it is reasonably likely that, as I
mentioned in last year's letter, litigation will become necessary. We
of course, announce developments in this situation as they occur.
There are several negotiations under way with other potential
just digital still cameras but also other products that we believe to
infringing our patents. It is too early to say what impact, if any,
negotiations will have in 2004. However, Ampex has been in the
business for more than 30 years and our patent portfolio is the result
substantial and forward-looking investments in research and
digital imaging technology over many years. An expanded licensing
has the potential to produce a dramatic change in Ampex's financial
and our strategy is to pursue these opportunities aggressively.
As we have said in previous letters, our preference is to avoid the
substantial expenses that patent lawsuits involve. However, if we do
litigate, our recent financial performance has substantially improved
ability to do so. The management team has done an excellent job of cash
generation and our liquid resources should be more than adequate for
litigation costs that can currently be foreseen." Snip....
Clearly Ampex is now in the patent enforcement business. 'Nuff said on
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