DVD Playback Technology License Agreement

Exhibit 10.1


Confidential

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN REPLACED BY [*].


DVD PLAYBACK TECHNOLOGY LICENSE AGREEMENT


This DVD Playback Technology License Agreement (" Agreement" ) is entered into and effective as of the latter of the two signature dates below (" Effective Date" ) by and between MICROSOFT CORPORATION (" Microsoft" ), a Washington corporation located at One Microsoft Way, Redmond, WA 98052 (including its majority owned subsidiaries, successors and assigns) and INTERVIDEO, INC. (" INTERVIDEO" ), a Delaware corporation located at 46430 Fremont Boulevard, Fremont, CA 94538 (including its wholly-owned subsidiaries, successors and assigns). In this Agreement, Microsoft and INTERVIDEO may be referred to individually as a " Party" and collectively as the " Parties" .


Recitals

A. WHEREAS, INTERVIDEO, among other things, develops MPEG-1/MPEG-2 decode technology for use in the Microsoft Windows platform and other systems (" MPEG-1/MPEG-2 Decode Technology" );

B. WHEREAS, Microsoft desires to license such MPEG-1/MPEG-2 Decode Technology for use in Microsoft products and to interoperate with Microsoft products and INTERVIDEO is willing to license Microsoft the INTERVIDEO MPEG-1/MPEG-2 Decode Technology on the terms set forth herein; and

C. WHEREAS, Microsoft further desires, and INTERVIDEO is willing to provide, technical support to Microsoft for such MPEG-1/MPEG-2 Decode Technology under the terms and conditions of this Agreement.


NOW THEREFORE for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

Agreement

1. DEFINITIONS

1.1" INTERVIDEO MPEG-1/MPEG-2 Decode Technology" means, subject to Section 2.4, the software-based implementation of MPEG-1/MPEG-2 Decode Technology [*] developed by or for INTERVIDEO and distributed by or for INTERVIDEO as initially delivered to Microsoft under Section 3.1 and as further described in Exhibit A.


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1.2" Term" means the period of time commencing on the Effective Date and ending on May 30, 2012. 1.3" Updates" means any bug fixes or error corrections to the INTERVIDEO MPEG-1/MPEG-2 Decode Technology created by INTERVIDEO and released during the Term of this Agreement.

2. LICENSE GRANT; OWNERSHIP

2.1 License to Microsoft . Subject to Section 4.2, INTERVIDEO hereby grants to Microsoft under INTERVIDEO' s rights the following perpetual, non-exclusive, irrevocable (except as provided in Section 11.2), [*] worldwide right and license to:

(a) To use, copy and create derivative works of the INTERVIDEO MPEG-1/MPEG-2 Decode Technology;

(b) publicly perform or display, import, broadcast, transmit, offer to sell, sell, have sold, rent, lease, lend, transfer or otherwise distribute or have distributed the INTERVIDEO MPEG-1/MPEG-2 Decode Technology;

(c) Sublicense the rights set forth in Sections 2.1(b) to third parties in connection with the licensing of the Microsoft product that includes the INTERVIDEO MPEG-1/MPEG-2 Decode Technology.

2.2 Limitation [*] . For a period of [*] from the Effective Date of this Agreement, Microsoft shall not license, disclose or provide the [*] for the INTERVIDEO MPEG-1/MPEG-2 Decode Technology to any of the following entities or any of their affiliates [*]. Notwithstanding the above, during this [*] period, Microsoft may disclose the [*] in accordance with a judicial or other governmental order, provided that Microsoft either (i) gives INTERVIDEO reasonable notice prior to such disclosure to allow INTERVIDEO a reasonable opportunity to seek a protective order or equivalent, or (ii) obtains written assurance from the applicable judicial or governmental entity that it will afford the [*] the highest level of protection afforded under applicable law or regulation.

2.3 No Obligation . Nothing herein shall be construed as requiring Microsoft to exercise the rights granted herein. 2.4

Third Party Licensed Technology . Microsoft acknowledges and agrees that the INTERVIDEO MPEG-1/MPEG-2 Decode Technology licensed to Microsoft hereunder by INTERVIDEO includes or implements certain technology standards,


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and, as a result, the INTERVIDEO MPEG-1/MPEG-2 Decode Technology may, absent a license, infringe on intellectual property rights claimed to be held and/or administered by MPEG-LA, DVD Copy Control Association, Dolby Laboratories, Nissim Corporation, Thomson Multimedia, and Fraunhofer IIS, respectively (" Third Party IP Holders" ) and other third parties. For the purposes of this Agreement, the intellectual property rights described above and administered by such Third Party IP Holders with respect to the DVD Specification, MPEG-1 ISO/IEC 11172, MPEG-2 ISO/IEC 13818, ATSC (American Television Systems Committee), ISDB (Integrated Services Digital Broadcasting), DVB (Digital Video Broadcasting) HD-DVD and/or Blu-Ray Disc standards shall be referred to as " Third Party Licensed Technology" . The parties agree that, as between them, INTERVIDEO shall not be responsible for obtaining or paying for licenses from any third party, including the Third Party IP Holders, that may own or administer intellectual property rights that would, absent a license, be infringed by the INTERVIDEO MPEG-1/MPEG-2 Decode Technology. In addition, INTERVIDEO may give notices to Microsoft pursuant to its agreements with Third Party IP Holders.

2.5 Updates . Within 90 days of Microsoft' s written request, such request to be made no more frequently than once per calendar year, INTERVIDEO shall make the then current Updates developed by or for INTERVIDEO during the Term available to Microsoft, free of charge.

2.6 Retention of Rights . Subject to the license granted to Microsoft, INTERVIDEO retains all right, title, and interests in and to the INTERVIDEO MPEG-1/MPEG-2 Decode Technology. All other rights not granted by INTERVIDEO to Microsoft in Section 2.1 hereof are reserved to INTERVIDEO and no implied licenses are granted hereunder to Microsoft. Microsoft retains all right, title and interest in and to any derivative technology created by or for Microsoft to the INTERVIDEO MPEG-1/MPEG-2 Decode Technology, subject to INTERVIDEO' s ownership of the underlying INTERVIDEO MPEG-1/MPEG-2 Decode Technology. Microsoft shall not take or permit to be taken any action that would result in the INTERVIDEO MPEG-1/MPEG-2 Decode Technology or any part thereof entering the public domain, becoming subject to any open source licensing arrangement, or subject to an Excluded License. 3. DELIVERY; ACCEPTANCE; TECHNICAL SUPPORT 3.1 Delivery of INTERVIDEO MPEG-1/MPEG-2 Decode Technology . Within five (5) days of the Effective Date, provided that Microsoft has paid to INTERVIDEO the amounts set forth in Section 4.1(a), INTERVIDEO shall deliver the INTERVIDEO MPEG-1/MPEG-2 Decode Technology as described in Exhibit A to Microsoft in a form and format specified therein.

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3.2 Acceptance of INTERVIDEO MPEG-1/MPEG-2 Decode Technology . Microsoft shall evaluate the INTERVIDEO MPEG-1/MPEG-2 Decode Technology for its material conformance with the definition of INTERVIDEO MPEG-1/MPEG-2 Decode Technology listed in Section 1.1 herein and inclusion of the components listed in Exhibit A attached hereto and shall submit a written (including without limitation by email) acceptance or rejection to INTERVIDEO within thirty days (30) days after receipt of the INTERVIDEO MPEG-1/MPEG-2 Decode Technology. If Microsoft does not provide such acceptance or rejection within such timeframe, the INTERVIDEO MPEG-1/MPEG-2 Decode Technology will be deemed accepted. In the event Microsoft identifies a material deficiency or significant error in the INTERVIDEO MPEG-1/MPEG-2 Decode Technology prior to acceptance, INTERVIDEO shall correct such material deficiency or significant error as soon as practicable. If the INTERVIDEO MPEG-1/MPEG-2 Decode Technology has not been accepted by Microsoft within ninety (90) days of the Effective Date as a result of INTERVIDEO' s inability to correct a material deficiency or significant error, then unless Microsoft pays to INTERVIDEO the amount set forth in Section 4.1(b), this Agreement shall automatically terminate as provided in Section 11.2(a).

3.3 Support Services . INTERVIDEO shall make INTERVIDEO MPEG-1/MPEG-2 Decode Technology support services available to Microsoft during the Term of the Agreement in accordance with Exhibit C attached hereto. The first 72 man-hours of support services provided to Microsoft within 1 year hereof (" Base Support Services" ) shall be provided at no charge to Microsoft. For any additional support services (" Additional Support Services" ), INTERVIDEO shall make support services available to Microsoft within one year from the Effective Date of the Agreement in accordance with Exhibit C attached hereto at a rate of [*] dollars per hour (US$[*]). Following one year from the Effective Date, INTERVIDEO shall have no further support obligations or liability with respect to the INTERVIDEO MPEG-1/MPEG-2 Decode Technology. Without limiting the foregoing, following one year from the Effective Date, upon Microsoft' s written request to INTERVIDEO and at INTERVIDEO' s sole discretion, INTERVIDEO may provide additional technical support services to Microsoft with respect to the INTERVIDEO MPEG-1/MPEG-2 Decode Technology. Such additional services, if any, shall be subject to the payment of additional fees pursuant to a separate written agreement as mutually agreed by the Parties.

3.4

Additional Support Services Payment . INTERVIDEO shall invoice Microsoft for such Additional Support Services fees via the MS Invoice online tool, in accordance with the then-current requirements set forth at http://invoice.microsoft.com . Without limitation, INTERVIDEO' s invoices shall set forth all amounts due from Microsoft to INTERVIDEO, and shall


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contain sufficient detail to allow Microsoft to determine the accuracy of the amount(s) billed. Payment of an invoice without asserting a dispute is not a waiver of any claim or right. Upon receipt of an invoice from INTERVIDEO, Microsoft shall pay such invoice on either of the following payment terms: (a) net sixty (60) days with no discount on the invoiced amount; or (b) net ten (10) days less a two percent (2%) discount on the invoiced amount. If Microsoft reasonably disputes an invoice, it shall pay such invoice without prejudice to seek a refund for any amounts later found to be not due and payable provided it notifies INTERVIDEO of the disputed amount at the time of payment. INTERVIDEO shall have no obligation to provide any Additional Support Services if Microsoft fails to pay for such services in accordance with the foregoing. 3.5 Improvements to Technologies . During the Term, each Party may, but is not obligated to, provide the other with suggestions, comments, feedback, and/or input regarding the other Party' s products or services (collectively, " Product Input" ). Each grants the other under all of their respective intellectual property and proprietary rights, the following worldwide, non-exclusive, perpetual, irrevocable, royalty free, fully paid up rights: (a) to make, use, copy, modify, and create derivative works of the Product Input, (b) to publicly perform or display, import, broadcast, transmit, distribute, license, offer to sell, and sell, rent, lease or lend copies of the Product Input (and derivative works thereof), (c) solely with respect to each Party' s copyright and trade secret rights, to sublicense to third parties the foregoing rights, including the right to sublicense to furt ...