Digital technology company Digimarc Corporation announced that it has modified its patent licensing agreement with The Nielsen Company and that the two companies are launching two joint ventures. One will deal with tracking royalties for copyright holders and the other is for joint development of enhanced television offerings.
Digimarc and Nielsen have working together on technology ventures for nearly two years under an agreement singed October 1, 2007. That agreement is superseded by the new deal to create the two joint ventures.
“Under the terms of the Patent License Agreement, dated as of June 11, 2009, between Digimarc and Nielsen, Nielsen agrees to pay the following fees to Digimarc: $2.0 million for the remainder of 2009; $3.6 million in 2010; $4.0 million in each of 2011, 2012 and 2103; and $1.15 million in 2014, and Digimarc grants to Nielsen a non-exclusive license to Digimarc patents for use within Nielsen’s business. The License Agreement will commence on July 1, 2009 and continue until the expiration of the last to expire of the patents licensed under the License Agreement unless earlier terminated in accordance with the termination provisions of the License Agreement,” Digimarc said in an SEC filing.
The first of the two new joint ventures will “engage in the joint development of copyright filtering solutions, royalty/audit for online video and audio rights organizations, guilds or other organizations involved in reconciliation of royalties, residuals and other payments, and other related products.” It will be owned 51% by Digimarc and 49% by Nielsen.
“Digimarc will provide technical and development services within the scope of Joint Venture I’s business for the following periods in the following minimum amounts: $1.13 million for the remainder of 2009; $2.80 million in 2010; and $2.74 million in 2011, subject to adjustment for any development service fees paid to Digimarc by Joint Venture II, as defined below. Nielsen will provide, pursuant to a license, access to data services, including syndicated research and meta-data, and a license to Nielsen patents and technology for use in Joint Venture I’s business, each at no cost to the Joint Venture. The initial cash contribution of each of the members to Joint Venture I shall be an aggregate of $3,900,000 paid in quarterly installments from July 2009 through October 2011,” the SEC filing explained.
The second joint venture will “engage in the joint development of certain enhanced television offerings, and other related products.” Its ownership is the reverse, 51% by Nielsen and 49% by Digimarc.
“Any amounts paid to Digimarc for services rendered to Joint Venture II will be deducted from the minimum service fees that Joint Venture I is required to pay, but in no event will Digimarc receive less than approximately $6.7 million in the aggregate for development services rendered to Joint Venture I and Joint Venture II between now and December 31, 2011. In the aggregate, the License Agreement and the Joint Venture Agreements provide Digimarc with revenues comparable to those under the Prior Agreement. Nielsen will provide, pursuant to the terms of a license, access to data services, including syndicated research and meta-data, and a license to Nielsen patents and technology for use in Joint Venture II’s business, each at no cost to Joint Venture II. Nielsen may also provide technical and development services to Joint Venture II at rates to be agreed upon between the members. The initial cash contribution of each of the members to the Joint Venture shall be an aggregate of $2,800,000 paid in quarterly installments from July 2009 through October 2011,” the SEC filing stated.
“These joint ventures with Digimarc will provide tremendous opportunities for us to deliver innovative transaction-based solutions for new media businesses, including mobile. By combining Nielsen’s first-class market intelligence – particularly our analysis of video consumption across TV, Internet and mobile – with Digimarc’s rich patent portfolio, we are uniquely positioned to drive exciting new ways to engage consumers through digital entertainment and transactions,” said Itzhak Fisher, head of Nielsen’s global product leadership organization in a joint press release with Digimarc.
“With Nielsen’s unparalleled data and other technical and marketing assets available to the joint ventures, we have an unprecedented opportunity to advance our strategic vision for the future and build shareholder value,” said Digimarc CEO Bruce Davis.
