Patent Licensing Overview and FAQs

What is a patent?
A patent is a kind of intellectual property. Other types of protected intellectual property
include copyrights, service marks, and trademarks. Many major brand names are protected
under trademark. Patents are awarded by the U.S. government via the U.S. Patent and
Trademark office (www.uspto.gov). Patents protect different types of inventions, including
physical devices, pharmaceutical drugs, and production methodologies. All patents comprise
patent claims, which define the scope of the invention. The descriptions and examples you
also find in patents usually do not limit the scope of the invention. A patent covering a
method describes a process, or series of steps, that performs a defined function or
accomplishes a particular result.

What are some examples of patents that I might have heard of?
If you have used an iPhone, you probably used the “pinch to zoom” and “swipe to scroll”
feature. These operational methods are covered under Apple’s US patent number 7,479,949.
Other cell phone companies probably cannot use these methods in their cell phone operation
without a license from Apple.

What are some other examples of patents that I might have heard of?
Next time you open a PDF file, or other file format affiliated with Adobe Systems Inc., look
in Help:About section and you will see an extensive list of Adobe patents. The PDF system
is essentially a writer/reader system that is a printer driver and a JPG viewer. PDF is one of
the key document formats for the planet, and it is extensively protected by patents.

What is Kideo?
Kideo is PixFusion’s consumer facing brand which sells personalized children’s
entertainment DVD’s. Over the years, Kideo has invested millions of dollars in its
Personalized Entertainment platform and has sold hundreds of thousands of DVD’s for
children in conjunction with world-class characters including Spider-ManTM, Dora the
ExplorerTM, and others.

What’s this letter in my inbox?
If you have received a letter from PixFusion, it might say that you have a product or
promotion that is relevant to the PixFusion patent library. This letter begins a discussion
about the nature of your product or promotion and its relevancy to the PixFusion patent
portfolio.

What is covered by the PixFusion Patents?
The PixFusion patent library (US 5,623,587, 6,351,265, and a related pending application
soon to be issued) includes claims directed to methods for producing composite images.

How much would a license cost me?
PixFusion will discuss your planned promotion or application with you, try to understand its
scale and scope, and then roughly estimate the commercial value of your promotion. We can
then determine a reasonable royalty rate.

How much would a license cost me if a court gets involved?
If a court gets involved, the court can compensate a patent owner based on the owner's lost
profits or the reasonable royalty the owner would have received through arms-length
bargaining. Damages may be recovered for acts occurring up to six years before filing a
legal action. In certain cases, a court can increase damages by up to three times the amount
found or assessed. In exceptional cases, a court may award attorney fees. In some cases, a
court may enter an injunction preventing others from practicing the patent.

What if I don’t get a license and do the campaign anyway?
You are exposing yourself to a potentially significant liability. The liability occurs at the
time of the infringement.

A lot of people seem to be doing this, and some of them do not seem to have PixFusion licenses.
Does this diminish the PixFusion patents in any way?
No. Many satellite and cable companies have been providing Digital Video Recorders
(DVR’s) to their customers. Certain cable companies secured patent licenses from TiVo, the
holder of the key DVR patents. Dish Network elected not to get a patent license and recently
was forced to pay licenses and damages to TiVo of $400 million plus attorney’s fees.

Does anyone else have a PixFusion patent license?
Yes. Many companies have PixFusion licenses. Some companies sought out the license, and
some companies took the license after a patent action by PixFusion. Prominent licensees
include OfficeMax (ElfYourself), JibJab, HSBC, Jam Media (children’s entertainment
broadcast on Comcast’s Sprout channel), and others.

Why didn’t my digital agency tell me about this?
PixFusion regularly gets inquiries from both large and small companies looking for patent
licenses for a particular promotion. It is possible that your digital agency is not aware of
patent licensing issues. It is also possible that your digital agency has received a notice of
potential infringement from a prior campaign.

What’s PixFusion’s track record in enforcing its patents?
PixFusion has prevailed in every enforcement action it has taken to date.

Can PixFusion deliver a turnkey digital media promotion for me?
Yes. PixFusion has designed digital promotions for large and small companies.

I want to do a Personalized Entertainment promotion, but I like working with my current digital
media agency. If I want a PixFusion patent license, can I still use my digital agency?
Of course. While we are available to provide a turnkey promotion for you, we understand
that you might want to work with an existing vendor. Give us a call, and we will sort it out.
Or send us an email at Inquiries@PixFusion.com.