| PARIS — Seven leading electronics companies who hold essential intellectual property rights for the MPEG-2 video compression standard have filed suit in Duesseldorf, Germany, against Sagem Societe d'Applications Generales d'Electricite et de Mecanique S.A. for infringing 11 patents, according to MPEG LA, the Denver-based licensing agency for MPEG-2 patent portfolio. Among the plaintiffs are Matsushita Electric Industrial Co. Ltd., Mitsubishi Electric Corp., Koninklijke Philips Electronics N.V., Sony Corp., Thomson Licensing S.A., Victor Co. of Japan, Ltd. and another unidentified company. MPEG-2 digital video compression is widely used in digital television broadcasting via cable, satellite and terrestrial as well as DVD. Sagem is one of the leading set-top box suppliers for terrestrial, satellite and cable digital TVs along with ADSL TVs According to the complaint, Sagem has been and marketing set-top boxes that use patent-protected MPEG-2 methods without licensing them from the individual patent holders or a portfolio license that includes patents offered by MPEG LA. A spokeswoman at Sagem, based here, said the company is still studying details of the lawsuit and declined to comment further. Sagem "sticks out" among set-top vendors as the only set-top vendor refusing to license, said Larry Horn, vice president of licensing and business development at MPEG LA. The group said essential MPEG-2 patent holders and MPEG LA have each for almost seven years separately offered a license to Sagem. In the absence of litigation, Sagem "has ignored its duties in regard to the responsible use of intellectual property," MPEG LA said. MPEG-2 IP holders previously filed similar suits against Dell Computer and the former Compaq Computer Corp. for patent infringement. Both suits resulted in the settlements, with both Compaq — since merged with Hewlett Packard — and Dell becoming MPEG-2 licensees. The suit against Sagem seeks unspecified monetary damages and an injunction prohibiting Sagem S.A. from using MPEG-2 patents in its products and from offering, marketing or importing them. The plaintiffs reportedly chose the German court based on its reputation as a tough enforcer of IP rights. The case is also relevant to the German court since Sagem claims to be expanding into Germany with the growing sales of its digital video broadcast-terrestrial products. According to a German-based legal expert working for the plaintiffs, a schedule for the first hearing is expected to be set in the next six to eight weeks. A decision by the German court is expected by mid-2005. | 
