ContentGuard, Inc. Marks Its Spin-off From Xerox With Microsoft Alliance And XrML Standards Initiative.

PALO AlTO, Calif.--(BUSINESS WIRE)--April 27, 2000

Microsoft collaborates with ContentGuard, Inc. and Xerox on rights

management; Industry leaders announce support for XrML standard

ContentGuard, Inc., the catalyst for the revolution in e-content, marked its launch as an independent company today. Microsoft Corporation (NASDAQ:MSFT) and Xerox Corporation (NYSE:XRX) will collaborate with ContentGuard Inc. on key digital rights management (DRM) technologies. Through this work, the three companies will improve the distribution of premium digital content, including eBooks, documents, music and video, over the Internet, while protecting against unauthorized usage or redistribution. Microsoft has also joined Xerox as a shareholder in ContentGuard, Inc.

To accelerate market growth, ContentGuard is announcing the royalty-free licensing of its eXtensible rights Markup Language (XrML). This initiative has already received support from 20 industry leaders, including Adobe Systems, Inc., Barnes & Noble, Glassbook, Inc., Hewlett Packard Company, Lightning Printing, Inc., Microsoft, Preview Systems, Reciprocal, Inc., Softlock.com, Inc., Time Warner Trade Publishing, Thomson Publishing and Xerox.

"We believe that rights management will become a ubiquitous element of all content exchange, whether for secure e-commerce or for ensuring the persistent protection of high-value sensitive information," said Ranjit Singh, president and COO, ContentGuard, Inc.

ContentGuard, Inc., formerly an operating unit of Xerox, offers technology, products and services that manage and protect high-value digital content. Based on pioneering research from Xerox' Palo Alto Research Center (PARC), the ContentGuard solutions offer content owners more control and flexibility over the distribution and use of their content.

"Content wants to be free, but content creators want to get paid," said Dick Brass, vice president of Technology Development at Microsoft and co-chairman of ContentGuard, Inc. "ContentGuard's approach to DRM will give consumers greater choices and options for how they purchase and enjoy digital content, while also giving content creators a powerful set of tools for protecting and distributing their works."

ContentGuard and Reciprocal, Inc. offer the electronic Publishing Clearing Service (ePCS) to customers in the publishing industry, including Aberdeen Group, Bell & Howell Information and Learning, and Bedford, Freeman and Worth Publishing. ContentGuard, Inc.'s agreement with Microsoft ensures it an immediate presence in the eBook space. The company will expand into other digital content areas, including rich media and corporate information.

"We have enjoyed our partnership with ContentGuard, Inc. and we endorse and support the XrML standards drive," said John Schwarz, president and chief executive officer of Reciprocal. "We're thrilled to see other industry leaders responding favorably to this important initiative that will facilitate the management of rights across multiple DRM formats. The XrML standard complements Reciprocal's back-office DRM services and together we'll play a significant role in reducing barriers to entry for content owners. This will translate into better user experiences and help accelerate the growth of the digital content market."

XrML Open Industry Standard

XrML is a specification for the association of rights (such as access fees and usage conditions) with content. By licensing XrML on a royalty-free basis, ContentGuard, Inc. is promoting the seamless interoperability of digital rights specifications across authors, artists, publishers, distributors and retailers. XrML allows content owners unique flexibility in terms of business model and usage options and has been enhanced based on contributions from partners, including Microsoft. Microsoft has added support for ContentGuard's innovative XrML in the upcoming release of its DRM technology for eBooks and will add additional support for XrML in future implementations of its DRM technology for digital media.

"The DRM industry has seen some fundamental developments over the last year," said Kent Allen, senior e-commerce analyst at Aberdeen Group, Inc. "However, until recently, the attention paid to the Internet as a premium content distribution channel was largely focused on early adopters in the digital music industry. The announcements ContentGuard is making today should help zero-in attention on the high end content publishing market, where opportunities exist to leverage the Internet as a delivery mechanism -- and in doing so, create much needed revenue streams. DRM is positioned to become a fundamental element of the e-commerce platforms being developed throughout the industry."

"As the Internet becomes a delivery medium for high-value content, an open, extensible language for expressing rights and permissions will be crucial in creating interoperability across the industry," said Joe Eschbach, vice president, Adobe Systems Inc. "By making XrML freely available, ContentGuard, Inc. is establishing its interest in promoting open standards to ensure that publishers can feel confident in the safety of their DRM investments and take advantage of the speed and efficiency of conducting business over the Internet."

Detailed information about XrML, the full list of XrML supporters and their comments on this initiative, can be found at the XrML website - www.xrml.org.

About ContentGuard, Inc ContentGuard, Inc. is led by co-chairman and CEO, Michael Miron, and President and COO, Ranjit Singh. The company is headquartered in McLean, Virginia, with operations in Palo Alto, California and El Segundo, California.

NOTE TO EDITORS: For more information about ContentGuard, Inc, please visit our website at http://www.contentguard.com.

XEROX(R), The Document Company(R) and the digital X(R) are trademarks of XEROX CORPORATION. Microsoft(R) is a trademark of Microsoft Corp. ContentGuard, XrML, and eXtensible Rights Markup Language are trademarks of ContentGuard Holdings, Inc. All other company and product trademarks are the property of their respective owners.