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 Chilling Effects Clearinghouse > Patent > Notices > Early MP3 Patent Enforcement (NoticeID 464, Printer-friendly version

Early MP3 Patent Enforcement

September 01, 1998


Sender Information:
Fraunhofer IIS-A, Audio & Multimedia
Sent by: [Private]

Recipient Information:
[MP3 software developers]

Sent via:

Dear Ladies and Gentlemen,

As you may know, both the Fraunhofer Institute and THOMSON have done important work to develop MPEG Layer-3 audio compression (before and after it became part of the MPEG standards). This work has resulted in many inventions and several patents, covering the MPEG Layer-3 standard.

From your publications and your web-site we learn that you distribute and/or sell decoders and/or encoders that use the MPEG Layer-3 standard.

Our files do not show that you have a valid license agreement with us. This means that the products infringe the patent rights of Fraunhofer and THOMSON.

To make, sell and/or distribute products using the standard and thus our patents, you need to obtain a license under these patents from us.

In the past, we have licensed several companies under different models for different products, e.g.:
- Software encoder licenses against a per unit royalty starting at $ 25,00 and decreasing for high volumes; and
- Pay-audio licenses against a royalty of $ 0,01 per song or 1 % of the selling price.

At least the Software encoder license seems to apply to your products and we would appreciate if you could send us some more details about your activities, in order to discuss what would be the right royalty structure for your company.

In view of the above, we urge you to contact [Private] (mailto:[private] and [Private](mailto:[private] in order to start the discussion of the license or licenses needed.

We look forward to hearing from you soon.

Best regards,
- [Private]

Fraunhofer IIS-A, Audio & Multimedia
email: [private]
phone: +49 [private]
fax: +49 [private]

FAQ: Questions and Answers

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Question: If abstract ideas and mental processes cannot be patented, how can software based on a mathematical algorithm receive patent protection?

Answer: For years, software was considered outside the scope of patent protection to the extent based on mathematical algorithms, as mathematics is the basic working tool of contemporary science and technology and algorithms can be natural laws. In 1981, the Supreme Court held that software-related inventions are not per se to be excluded from patent protection simply because the process of performing the program's function may involve underlying mathematical algorithms. Software uses a non-physical process by operating electronically through the utilization of a mathematical equation (algorithm) to control the output of the computer program. Mathematical algorithms have a functional application in computer programs, and thus can be protected under the Patent Act. To use an example from physics, electricity was not patentable, but the way in which electricity transmits information may be patentable.

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Question: What can be patented?

Answer: [not yet answered]

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Question: What is a patent?

Answer: A patent is a form of intellectual property. A U.S. patent is a right granted by the United States Patent and Trademark Office to an inventor to exclude others from making, using, selling, offering for sale, or importing an invention for a limited time. In the U.S., Patent law is driven by the language of the Patent Act, 35 U.S.C.

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Question: What is the purpose behind the patent law?

Answer: The origin of U.S. patent law can be found in the United States Constitution, Article I, Section 8, Clause 8, which provides that: "Congress shall have the power

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Question: What does it mean to obtain a license for a patent?

Answer: A license, in its simplest terms, is a promise by the patent owner (the licensor) not to sue the licensee for exercising one of the patent owner's rights. Patent laws grant the patent owner rights to exclude others from making, using, or selling the patented invention. Using a contract called a "license," a patent owner may choose to allow one or more others to make, use and/or sell the invention, usually in exchange for payment. As long as the licensee abides by the terms of the license contract, a patent owner cannot sue the licensee for infringement. Patent infringement cases are often settled by the accused infringer entering into a license agreement with the patent owner and promising to pay the patent owner royalties.

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Question: What does it mean to "infringe" a patent?

Answer: If you are accused of patent infringement, you are accused of having made, sold or offered for sale an invention described in one of the claims of a valid patent, without the patent owner's authorization. To determine if infringement has occurred, a court will look at the patent's claims, interpret them, and compare them to your device, process, method etc. Infringement occurs if your accused item performs each of the elements of any of the claims. Note that you may be liable for inducing infringement or contributing to infringement, even if you did not directly infringe a patent, if you encourage or assist someone else to infringe a patent.

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Question: Who may own patents?

Answer: The presumptive owner of an invention is the human inventor(s). The inventor may transfer ownership to anyone (including a corporation). Employees often assign the rights to their invention to their employers as part of their employment contracts.

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Question: How long is a patent's term?

Answer: For patents filed on June 8, 1995 or later, the protection lasts for 20 years from the date the patent application is filed. For patents filed prior to June 8, 1995, the term is 17 years from the date of issuance or 20 years from the date of application, whichever is longer.

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Question: What are the consequences of being found to have committed patent infringement?

Answer: A patent owner may recover money damages in the form of a "reasonable royalty," which is the amount the patent holder could have earned in licensing the patented technology. Under certain circumstances, the patent owner may recover lost profits as an alternative measure of damages. The money damages amount may be tripled if the infringement is found to be "willful." The patent owner may also be entitled to enjoin further use and sale of the patented invention.

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Question: Does it matter if infringement is accidental or innocent?

Answer: It does not matter for liability purposes that a patented infringer was unaware of the patented technology when infringement occurred. However, willful or intentional infringement may carry a higher monetary penalty than innocent infringement.

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Question: Can software technology be protected by patent law?

Answer: Yes. Software technology development is highly incremental in nature and, as a result, truly unique designs, methods or approaches are rare. In addition, prior art with respect to software technology is not centralized or even easily discovered. However, patents can and do often issue on software-based technology that is not, in fact, novel. Computer technologies can be patented as processes (software), machines, even articles of manufacture (the CD containing the software, for example).

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Question: What are patent "claims"?

Answer: A patent consists of an abstract, a description of the invention, disclosures of prior art, drawings, and one or more claims. The claims are the only truly enforceable part of a utility patent, and they define the property right owned by the patent holder. They are written in technical language, and must embody subject matter that is within the scope of patent law, is novel and is not obvious. The more broadly written the claims, the less likely they are to avoid rejection or invalidation on the grounds of obviousness or anticipation by prior technology. The more narrowly written, the less likely a competing technology or device infringes the claims. To infringe a patent, one must practice every element of a claim. If you do not practice one or more of the elements of a claim, then you do not infringe that claim.

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Question: What are the defenses to patent infringement?

Answer: There are two basic lines of defense: non-infringement and invalidity.

Non-infringement: To infringe a patent, one must practice every element of a claim. If you do not practice one or more of the elements of a claim, then you do not infringe that claim. This determination often rests on how a court interprets the language of the claims you are accused of infringing.

Invalidity: Only a valid patent can be enforced. Issued patents are presumed valid, but this presumption can be overcome if prior art exists that demonstrates an invention was not novel or that it was obvious at the time the patent application was filed. Especially in the case of software and Internet business method patents, articles disclosing or describing the patented inventions may exist in trade publications that would not have been found by the patent examiner and would not have been part of the prosecution file of an issued patent on file with the USPTO. The patent holder's failure to name all inventors may also invalidate a patent.

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