NEC announces Signafy -- new venture company to market multimedia watermarking solutions.

MELVILLE, N.Y.--(BUSINESS WIRE)--April 28, 1997--NEC USA, Inc. (NEC) has announced its establishment of Signafy(TM), Inc., a new venture company that will market its digital watermarking software technology for use in protecting copyrights of multimedia and DVD (digital versatile disk) content.

NEC's digital watermarking, also referred to as digital fingerprinting, technology enables a user to permanently imbed an invisible identification code in multimedia works. Use of this breakthrough technology is expected to deter copyright piracy of still images, video and audio files transmitted over the Internet, intranets, digital satellite and digital cable.

"NEC is one of the pioneers in the development of digital watermarking, and Signafy intends to be the market leader in multimedia content security solutions," stated Dr. James Philbin, NEC Research Institute director of Advanced Computer Projects and Signafy acting president.

Signafy will operate as a venture start-up, where management and employees will have significant equity capital in the company. The new company will pursue an aggressive schedule of engineering, marketing and sales initiatives in advance of some significant product introductions and partnership announcements over the next six months. Signafy will also collaborate closely with NEC Corporation on DVD watermarking efforts to promote the new technology.

Background

The increasing use of multimedia data across the Internet and other digital media, has led to serious concerns over data copyright protection. Conventional cryptographic systems, once decrypted, offer no way to track reproduction of data, and therefore provide little protection against data piracy. This can result in significant losses for multimedia-based businesses, and has become a considerable impediment to the development of this new market. Digital watermarking is considered a highly effective means of protecting such copyrights.

In 1996, NEC Research Institute, a subsidiary of NEC USA based in Princeton, NJ, announced its development of a robust digital watermarking technique that places a watermark in perceptually significant components of a signal. This makes the removal of the watermark virtually impossible. Furthermore, because the watermark is inserted into the spectral components of the data, there is no loss of quality or distortion of the signal during digital-to-analog and analog-to-digital conversions, resampling, and requantization that includes printing and compression and rotation, translation, cropping, and scaling. The technology avoids these distortions by using techniques analogous to spread spectrum communications.

Because the same technology can be applied to all three media (audio, still image and video) with only minor modifications, Signafy believes it is especially appropriate for multimedia products. Ideally suitable for multimedia applications, Signafy will develop this technology as a standard for MPEG watermarking, for application in such areas as software and digital movies, and for digital satellite and digital cable transmissions.

NEC USA, Inc., a subsidiary of NEC Corporation, is a holding company for NEC's high technology affiliates in North America, that include NEC Research Institute (basic research), NEC America (telecommunications), NEC Electronics (semiconductor and electron devices) and NEC Technologies (computer peripherals). Together, these affiliates employ over 7,000 people and generate revenues in excess of $5 billion .

Signafy is a trademark of Signafy, Inc.

CONTACT: NEC USA, Inc. OR NEC Corporation (Tokyo)

Lourdes Cogswell Aston Bridgman

516/753-7045 81-3-3798-6511

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