Duplicate Royalty Policy(1)
Access Advance and its HEVC Advance Licensors have agreed to address and resolve the issue of duplicate royalties that may arise with certain HEVC Advance Licensees due to multiple program licenses, such as exists with the HEVC Advance and MPEG LA HEVC licensing programs. This obligation is included in the HEVC Advance Agreement Among Licensors.(2)
In the event a Licensor would receive duplicate royalties from a Licensee in respect of one of more Patent(s) that:
- are included in the HEVC Advance Patent Portfolio and are also included in the patent list of another patent licensing pool, or joint licensing program, which pool or program expressly encompasses the HEVC Standard and includes an overlap in the scope of the license grants under the pool or program, as applicable;
then, upon request by Licensee(3), or at Licensor’s election, the Licensor shall reimburse(4) one of the following amounts attributable to the duplicate royalty payment:
- the net distribution(5) the Licensor received from Access Advance, or
- the net distribution the Licensor received from another pool or joint licensing program, or
- any other amount agreed to between the Licensor and Licensee.(6)
Access Advance has agreed to use reasonable efforts to comply in a timely manner with requests made by a Licensor to provide reimbursement through a deduction or credit made by Access Advance to the Licensee’s royalty invoice, subject to agreement on any necessary requirements and sharing of information as Access Advance may require from the Licensor and Licensee. In the absence of such agreement, then the Licensor and Licensee must handle this matter directly between themselves.
(1) This policy does not modify or otherwise impact Licensee’s obligation to remit all royalties due under the HEVC Advance PPL in full and without deduction unless specifically reflected in an invoice provided by Access Advance to Licensee. Access Advance reserves the right to modify and/or terminate this policy, in whole or in part, at any time and for any period without prior notice at its sole discretion.
(2) The Licensor is solely responsible to assure compliance with its obligations under this policy.
(3) If a Licensee directly contacts Access Advance concerning duplicate royalty payments, Access Advance will refer the request to the applicable Licensor(s).
(4) To the extent any Licensee information is required, any duplicate reimbursement shall be subjected to receipt of such required information. Requests for reimbursement must be made by the Licensee prior to invoice issuance by Access Advance for any applicable sales/reporting period, unless otherwise agreed by Access Advance at its sole discretion.
(5) In the case of the HEVC Advance Patent Pool, duplicate royalties are that portion of actual net royalty collections apportioned and distributed to all Licensors based on their respective patent portfolios which relate to those Licensor patents in multiple programs which grant rights to the same products or services as described in the first bullet in the Policy Statement above, and expressly exclude all fees and other allocations/deductions made by Access Advance prior to apportionment and distribution of net royalty collections to all Licensors based on their respective patent portfolios.
(6) The maximum amount of royalties that Access Advance will deduct or credit for any Licensee on any invoice covering any sales/reporting period is the applicable Licensor’s portion of actual net royalty collections as described in (5) above for each such sales/reporting period.
Duplicate Royalty Implementation Process
Access Advance and its HEVC Advance Licensors have issued the Duplicate Royalty Policy to address and resolve the issue of duplicate royalties that may arise with certain HEVC Advance Licensees due to multiple program licenses, such as exists with the HEVC Advance and MPEG LA HEVC licensing programs. The Access Advance process to implement this Duplicate Royalty Policy is as follows:
Step 1: The Licensee makes a written request for reimbursement of duplicate royalties to the applicable Licensor(s) and/or Access Advance (in which case Access Advance will forward the request to the applicable Licensor(s)), or the Licensor makes a written request to Access Advance for reimbursement of duplicate royalties to designated Licensees. Access Advance will only act on a request by a Licensor to provide reimbursement to a Licensee providing the Licensee has agreed.
Step 2: Each applicable Licensor will then confirm that a duplicate royalty situation exists. The Licensor will then decide the basis upon which a reimbursement will be made. That is, each Licensor will decide whether to return (a) the duplicate amount (net distribution) received by the Licensor from Access Advance, (b) the duplicate amount (net distribution) received by the Licensor from another patent pool or joint licensing program, or (c) some other amount as the Licensor and Licensee may agree.
Step 3: The Licensor will then decide whether to provide the duplicate royalty reimbursement to the Licensee either (a) directly, (b) through another patent pool or joint licensing program, or (c) through Access Advance and advise the Licensee and Access Advance of said decision.
Step 4: If the Licensor decides to provide the reimbursement through Access Advance, then the Licensor will advise Access Advance of its Step 2 decision. Access Advance will thereupon advise the Licensee and take such reasonable and necessary steps to determine the applicable amount to be reimbursed pursuant to the Licensor’s decision. This would include, as required, contacting the Licensor and/or Licensee and obtaining such information necessary to determine the amount of reimbursement.
Step 5: Access Advance will thereupon make any necessary invoice adjustments and issue such adjusted invoice to the Licensee.
Note 1: No Deductions Unless Authorized.
Licensees may not take any deduction to invoices unless specifically authorized by Access Advance (in which case the deduction will be reflected in the invoice provided by Access Advance). Any instruction relating to duplicate royalty payments that involve the HEVC Advance Patent Pool must be made by the Licensor to Access Advance, which will then advise the Licensee and make appropriate invoice adjustments.
Note 2: Royalties for On-going Sales
Reimbursement of duplicate royalties for on-going sales will normally be made via a credit to royalties due in the current sales/reporting period provided Access Advance has received all necessary information on a timely basis prior to scheduled invoice issuance. Otherwise, reimbursement will be made via a credit to royalties due in the subsequent sales/reporting period. For instance, if a Licensee makes a written request for reimbursement of duplicate royalties in the first quarter of 2020, and Licensor authorizes the return of duplicate royalty payments to such Licensee by Access Advance but all necessary information is not available on a timely basis, then for the Licensee’s first quarter royalty report Access Advance will determine the duplicate royalty amount (per the Licensor’s instructions) for the first quarter and provide a credit on the invoice for Licensee’s subsequent second quarter royalty report.
Note 3: Royalties for Past Sales (Prior to PPL Effectivity)
Reimbursement of duplicate royalties in relation to a Licensee’s past sales will be handled on a case-by-case basis, normally with a deduction in the initial invoice covering the past sales period and not as a credit against future invoices as described in Note 2 above.
Note 4: Requests Must Be Made in Advance
Access Advance will not act on requests for reimbursement by a Licensee after invoice issuance by Access Advance for any applicable sales/reporting period, unless otherwise agreed to by Access Advance in its sole discretion.
Note 5: Limitation on Reimbursement Amount
The maximum amount of royalties that Access Advance will deduct or credit for any Licensee on any invoice covering any sales/reporting period is the applicable Licensor’s portion of actual net royalty collections the Licensor would receive from Licensee’s royalty payments to Access Advance for such sales/reporting period.
Note 6: Right to Modify/Terminate
The provisions of the Duplicate Royalty Policy shall also apply as applicable to this Duplicate Royalty Implementation Process, including the right to modify and/or terminate the Duplicate Royalty Policy and this Implementation Process, in whole or in part, at any time and for any period without prior notice at the sole discretion of Access Advance.