Macrovision Files Patent Infringement Lawsuit Against 321 Studios.

Entertainment Editors/Business Editors

SANTA CLARA, Calif.--(BUSINESS WIRE)--Jan. 7, 2004

Macrovision Corporation (Nasdaq:MVSN) announced today that it has sued 321 Studios LLC ("321"), charging that 321's "DVD X Copy" family of DVD disk cloning software products infringes Macrovision's patented copy protection technology and also violates the Digital Millennium Copyright Act ("DMCA").

"321 infringes Macrovision's intellectual property by offering products that enable users to make unauthorized copies that contain our patented process and sometimes illegally bypass our copy protection system," said Macrovision CEO Bill Krepick. "It is ironic that 321 Studios itself employs a sophisticated mechanism to prevent people from making illegal copies of its software, while at the same selling products that aid in the theft of the intellectual property created by moviemakers. This lawsuit is based on a fundamental cornerstone of the American economic system -- protection of intellectual capital. Macrovision is asking the court to order an immediate halt to sales of 321's products."

321 makes and sells DVD-copying software products capable of activating Macrovision's patented Analog Copy Protection ("ACP") process without license or authorization from Macrovision. In these cases, 321's products allow users to make new unlicensed DVD disc copies that contain Macrovision's patented ACP; on playback, such discs trigger the patented ACP methods within licensed DVD players. In addition, depending on the particular product and version used, 321's DVD-copying products can either prompt users to disable ACP or automatically disable ACP without prompting the user. The suit charges that 321 therefore violates both Macrovision's patents and the DMCA, which prohibits bypassing of copy protection mechanisms. The DMCA specifically recognizes Macrovision technology as a broadly adopted copy protection system that cannot legally be bypassed.

Macrovision holds all rights, title and interest in and to a number of U.S. Patents that cover the Macrovision ACP methods and apparatus, including U.S. Patent No. 4,631,603 "Method and apparatus for processing a video signal so as to prohibit the making of acceptable video tape recordings thereof" and U.S. Patent No. 4,819,098 "Method and apparatus for clustering modifications made to a video signal to inhibit the making of acceptable videotape recordings."

About ACP

Macrovision's ACP is a technological measure that effectively protects rights of copyright owners to control whether an end-user can reproduce and/or distribute unauthorized copies of their copyrighted works, or portions thereof. In order to protect their copyrighted works on DVDs, the Hollywood Studios and other rights owners have adopted Macrovision's ACP process for DVDs since DVD's inception in 1997. The ACP process has also been licensed to and incorporated by virtually all DVD player manufacturers. The ACP process in licensed DVD players is triggered by ACP copy protection "trigger bits" that are incorporated in the DVDs. These modifications introduce specific changes to the video signal that are designed to be invisible during playback on ordinary TV sets but to profoundly degrade or prevent unauthorized copies. Macrovision's copy protection technology is applicable to VHS recorders, DVD recorders, digital video recorders (DVRs), set-top boxes and other devices.

For over 15 years, Macrovision has been the trusted partner in copy protection and rights management for the entertainment industry. Macrovision has worked in partnership with the leading content companies and consumer electronic and PC manufacturers worldwide to develop and deploy technologies that serve the interests of both the rights holders and consumers, delivering solutions which provide an optimum balance between effectiveness and playability.

About Macrovision

Macrovision Corporation develops copy protection, digital rights management and electronic licensing technologies that enable content owners and software publishers to securely and flexibly distribute their products to their customers. Macrovision has its corporate headquarters in Santa Clara, California, with international offices in London, Frankfurt, Tel Aviv, Tokyo, Hong Kong, Taipei and Seoul. For more information about Macrovision Corporation and its products, please visit www.macrovision.com.