Case 5:16-cv-00349 Document 4-1 Filed 01/21/16 Page 1 of 6
`Case 5:16—cv—OO349 Document 4-1 Filed 01/21/16 Page 1 of 6
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`EXHIBIT A
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`EXHIBIT A
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`Case 5:16-cv-00349 Document 4-1 Filed 01/21/16 Page 2 of 6
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`Keith A. Rutherford
`713-632-8636
`Email : KRutherford@BlankRome.com
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`December 22, 2015
`
`VL4 E-MAIL Kramer@,yahoo-inc.com
`AND FEDERAL EXPRESS
`Mr. Kevin Kramer
`General Counsel
`Yahoo!
`701 First Avenue
`Sunnyvale, CA 94089
`
`RE: Yahoo! and Kudelski's Intellectual Property
`
`Dear Mr. Kramer:
`
`I represent Kudelski SA ("Kudelski") in support of its patent licensing efforts. For more
`than a year-and-a-half Kudelski has attempted to discuss with Yahoo! issues regarding the
`relevance of Kudelski' s patent portfolio to various Yahoo! interactive services and platforms.
`I will first summarize the past discussions as I understand them, so that we are on the same
`page. The discussions began in May 2014 and continued through September 2015 when
`Yahoo! summarily rejected Kudelski's most recent licensing proposal.
`
`As you know, the parties initially explored the potential for a friendly and collaborative IP
`relationship. The general framework that was contemplated at that time involved cross(cid:173)
`licensing the companies' respective patent portfolios, providing a combination of balancing
`payment to Kudelski along with a set of Yahoo! Patents. Indeed, between October 2014 and
`March 2015 the parties discussed a list of Yahoo! patents that could be assigned to Kudelski in
`exchange for a license to Kudelski ' s patent portfolio. During the same time period,
`complimentary discussions between the parties included the potential for joint IP development
`and a product partnership.
`
`The parties met on March 9, 2015 to formally review (1) six approved Yahoo! patents from
`the original patent list that were potentially available in a value exchange; (2) five additional
`Yahoo! patent families of interest to Kudelski; (3) a set of representative Kudelski claim chart
`mappings against Yahoo! ' s streaming video service, video advertising functionality, and
`Yahoo! ' s Connected TV platform; and (4) a proposed deal structure. The deal structure
`proposed in March contemplated a 7-year patent peace cross-license in exchange for a $5
`Million Dollar balancing payment to Kudelski, which could be satisfied either entirely with
`Yahoo! patents, or a combination of Yahoo! patents and a cash payment.
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`Case 5:16-cv-00349 Document 4-1 Filed 01/21/16 Page 3 of 6
`Mr. Kevin Kramer
`December 22, 2015
`Page 2
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`Yahoo! formally responded to the March proposal in May 2015 asserting non-infringement
`and invalidity. Yahoo! also identified a set of "conditional access" patents it contended were
`relevant to Kudelski's CAS business. At that meeting you took the position that a balancing
`payment of $15 Million Dollars was due to Yahoo! in exchange for a perpetual, global cross(cid:173)
`license and an assignment of eight Yahoo! patents to Kudelski.
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`On June 2, 2015 the parties met to address Yahoo!' s response. At that meeting Kudelski
`rebutted Yahoo!'s non-infringement and invalidity contentions in detail, and also addressed the
`inapplicability of Yahoo! ' s "conditional access" patents to its CAS business. Despite the
`changing tenor of the discussions, in an effort to reach a reasonable consensus on a license,
`Kudelski simplified its licensing proposal to contemplate a 5-year patent peace cross-license in
`exchange for a set of 15 Yahoo! patent families valued at $5M.
`
`The parties next met on July 10, 2015. At that meeting Yahoo! provided more detailed
`invalidity claim charts for each of the asserted Kudelski patents and shared (but did not provide)
`a revenue model it contended supported a license value much lower than the $5M proposed by
`Kudelski. Since exchanging patents for a license appeared to be untenable for Yahoo! , Kudelski
`updated its license proposal in a term sheet exchanged on August 7, 2015. The August 2015
`proposal simply contemplated an 8-year license to Kudelski's patents with a 5-year mutual
`covenant not to sue in exchange for a one-time payment to Kudelski of $3M. On September
`10, 2015 Yahoo! formally rejected Kudelski's latest proposal, without any counter proposal.
`The parties have not exchanged any further license proposals.
`
`Since the parties have been unable to reach consensus around a license to Kudelski' s patents
`and the discussions have now reached an impasse, Kudelski hereby formally provides Yahoo!
`notice of infringement of the following U.S. patents that pertain to particular aspects of
`Yahoo! ' s interactive video and gaming services, Yahoo! 's interactive advertising functionality,
`and Yahoo! 's Connected TV platform:
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`U.S. Patent No. 5,566,287 entitled Method for Asynchronously Maintaining an
`Image on a Display Device owned by OpenTV, Inc., specifically at least claim
`nos. 1, 9, 10 and 16 are infringed by the view framework employed by the
`Yahoo! Connected TV platform (Kudelski specifically provided evidence of
`infringement of claim 1 in prior discussions);
`
`U.S. Patent No. 5,761,606 entitled Media Online Services Access Via Address
`Embedded in Video or Audio Program owned by OpenTV, Inc., specifically at
`least claim nos. 1-3, 6-11 , 13-14, and 17 are infringed by the interactive video
`advertising functionality employed by Yahoo! ' s streaming video delivery
`services available through yahoo.com and Yahoo! branded mobile applications
`available on Android or iOS devices and smart TV platforms, including but not
`limited to Yahoo!' s Connected TV platform (Kudelski specifically identified
`claim 1 as being infringed in prior discussions);
`
`U.S. Patent No. 5,778,181 entitled Enhanced Video Programming System and
`Method for Incorporating and Displaying Retrieved Internet Information
`Segments owned by OpenTV, Inc., and specifically at least claim nos. 1-3, 5-6,
`12-13, 15, and 21-22 are infringed by the interactive video advertising
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`Case 5:16-cv-00349 Document 4-1 Filed 01/21/16 Page 4 of 6
`Mr. Kevin Kramer
`December 22, 2015
`Page 3
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`functionality employed by Yahoo!'s streaming video delivery services available
`through yahoo.com and Yahoo! branded mobile applications available on
`Android or iOS devices and smart TV platforms, including but not limited to
`Yahoo!'s Connected TV platform (Kudelski specifically identified claim 1 as
`being infringed in prior discussions);
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`•
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`U.S. Patent No. 5,828,370 entitled Video Delivery System and Method for
`Displaying Indexing Slider Bar on the Subscriber Video Screen owned by
`OpenTV, Inc., specifically at least claim nos. 1-2, 10-13, 15, 22-24, and 26 are
`infringed by the slider bar functionality employed by Yahoo! ' s streaming video
`delivery services available through yahoo.com and Yahoo! branded mobile
`applications available on Android or iOS devices and smart TV platforms,
`including but not limited to Yahoo!'s Connected TV platform (Kudelski
`specifically provided evidence of infringement of claim 26 in prior discussions);
`
`U.S. Patent N'J. 5,903 ,264 entitled Video Delivery System and Method for
`Displaying an Indexing Slider Bar owned by OpenTV, Inc., and specifically at
`least claim nos. 1-2, 10-13, 15, 22-24, and 26 are infringed by the slider bar
`functionality employed by Yahoo!'s streaming video delivery services available
`through yahoo.com and Yahoo! branded mobile applications available on
`Android or iOS devices and smart TV platforms, including but not limited to
`Yahoo! ' s Connected TV platform (Kudelski specifically provided evidence of
`infringement of claim 26 in prior discussions);
`
`U.S. Patent No. 6,018,768 entitled Enhanced Video Programming System and
`Method for Incorporating and Displaying Retrieved Integrated Internet
`Information Segments owned by OpenTV, Inc., specifically at least claim nos.
`1 and 3 are infringed by the interactive video advertising functionality employed
`by Yahoo!'s streaming video delivery services available through yahoo.com and
`Yahoo! branded mobile applications available on Android or iOS devices and
`smart TV platforms, including but not limited to Yahoo! 's Connected TV
`platform (Kudelski specifically provided evidence of infringement of claim 1 in
`prior discussions);
`
`U.S. Patent No. 6,141,002 entitled System and Method for Downloading and
`Rendering Glyphs in a Set Top Box owned by Open TV, Inc., specifically at least
`claim nos. 14, 17-18, 21-22, 36-37 and 40 are infringed by the display of close
`captioning in applications running in the Yahoo! Connected TV platform
`(Kudelski specifically provided evidence of infringement of claim 36 in prior
`discussions);
`
`U.S. Patent No. 6,148,081 entitled Security Model for Interactive Television
`Applications owned by OpenTV, Inc., specifically at least claim nos. 1 and 6 are
`infringed by the security model employed by the Yahoo! Connected TV
`platform (Kudelski specifically provided evidence of infringement of claim 1 in
`prior discussions);
`
`U.S. Patent No. 6,233 ,736 entitled Media Online Service Access System and
`Method owned by OpenTV, Inc., specifically at least claim nos. 1-3, and 7-12
`are infringed by the interactive video advertising functionality employed by
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`

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`Case 5:16-cv-00349 Document 4-1 Filed 01/21/16 Page 5 of 6
`Mr. Kevin Kramer
`December 22, 2015
`Page 4
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`•
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`Yahoo!'s streaming video delivery services available through yahoo.com and
`Yahoo! branded mobile applications available on Android or iOS devices and
`smart TV platforms, including but not limited to Yahoo!'s Connected TV
`platform (Kudelski specifically provided evidence of infringement of claim 8 in
`prior discussions);
`
`U.S. Patent No. 6,758,754 entitled System and Method for Interactive Gameplay
`Scheduled Based on Real-Life Events owned by OpenTV, Inc., specifically at
`least claim nos. 1-2, 4, 6-8, 11-15, 18-19, 22-24, 27, 29 and 31 are infringed by
`the fantasy gaming functionality employed by Yahoo! ' s fantasy sports gaming
`services available through yahoo.com and Yahoo! branded mobile applications
`available on Android or iOS devices and smart TV platforms, including but not
`limited to Yahoo!'s Connected TV platform (the ' 754 Patent has not been
`previously presented or identified as being infringed);
`
`U.S. Patent No. 7,028,327 entitled Using The Electronic Program Guide To
`Synchronize Interactivity With Broadcast Programs owned by Open TV, Inc.,
`specifically at least claim nos. 13-15, 17-19, 22, 29-30 and 36 ae infringed by
`the interactive video advertising functionality employed by Yahoo!' s streaming
`video delivery services available through yahoo.com and Yahoo! branded
`mobile applications available on Android or iOS devices and smart TV
`platforms, including but not limited to Yahoo!'s Connected TV platform
`(Kudelski specifically provided evidence of infringement of claim 13 in prior
`discussions);
`
`U.S. Patent No. 7,055,169 entitled Supporting Common Interactive Television
`Functionality Through Presentation Engine Syntax owned by OpenTV, Inc.,
`specifically at least claim nos. 1-2 and 22-23 are infringed by the adaptive
`streaming and resource management functionality employed by Yahoo! ' s
`(Kudelski specifically provided evidence of
`Connected TV platform
`infringement of claim 1 in prior discussions);
`
`U.S. Patent No. 7,243,139 entitled Enhanced Video Programming System and
`Method for Incorporating and Displaying Retrieved Integrated Internet
`Information Segments owned by OpenTV, Inc., specifically at least claim nos.
`1-12, 14-20, 22-24, and 26-29 are infringed by the interactive video advertising
`functionality employed by Yahoo! ' s streaming video delivery services available
`through yahoo.com and Yahoo! branded mobile applications available on
`Android or iOS devices and smart TV platforms, including but not limited to
`Yahoo! 's Connected TV platform (the ' 139 Patent has not been previously
`presented or identified as being infringed);
`
`U.S. Patent No. 7,409,437 entitled Enhanced Video Programming System and
`Method for Incorporating and Displaying Retrieved Internet Information
`Segments owned by OpenTV, Inc., specifically at least claim no. 4 is infringed
`by the interactive video advertising functionality employed by Yahoo! ' s
`streaming video delivery services available through yahoo.com and Yahoo!
`branded mobile applications available on Android or iOS devices and smart TV
`platforms, including but not limited to Yahoo! 's Connected TV platform
`(Kudelski specifically identified claim 4 as being infringed in prior discussions);
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`

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`Case 5:16-cv-00349 Document 4-1 Filed 01/21/16 Page 6 of 6
`Mr. Kevin Kramer
`December 22, 2015
`Page 5
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`U.S. Patent No. 7,444,656 entitled Post Production Visual Enhancement
`Rendering owned by OpenTV, Inc., specifically at least claim nos. I, 27, and
`40-42 are infringed by the interactive video advertising functionality employed
`by Yahoo! ' s streaming video delivery services available through yahoo.com and
`Yahoo! branded mobile applications available on Android or iOS devices and
`smart TV platforms, including but not limited to Yahoo! ' s Connected TV
`platform (Kudelski specifically identified claim 1 as being infringed in prior
`discussions);
`
`U.S. Patent No. 7,752,642 entitled Post Production Visual Alterations owned by
`OpenTV, Inc. , specifically at least claim nos. 1, and 8-9 are infringed by the
`interactive video advertising functionality employed by Yahoo! ' s streaming
`video delivery services available through yahoo.com and Yahoo! branded
`mobile applications available on Android or iOS devices and smart TV
`platforms, including but not limited to Yahoo!'s Connected TV platform
`(Kudelski specifically identified claim 1 as being infringed in prior discussions);
`and
`
`U.S. Patent No. 7,900,229 entitled Convergence of Interactive Television and
`Wireless Technologies owned by OpenTV, Inc., specifically at least claim nos.
`1-10, 12-17, 19-20, and 22-32 are infringed by Yahoo! delivering targeted
`content to subscribers in connection with streaming video delivery services
`available through yahoo.com and Yahoo! branded mobile applications available
`on Android or iOS devices and smart TV platforms, including but not limited to
`Yahoo! 's Connected TV platform (Kudelski specifically provided evidence of
`infringement of claim 1 in prior discussions).
`
`Many of Yahoo!' s marquee peers have already licensed Kudelski ' s patents, including
`Google, Disney, Netflix, Bloomberg and Vevo. And, as you know, Kudelski is currently
`litigating against AOL. Like these companies, Yahoo! also requires a license to Kudelski 's
`patents and Kudelski remains committed to enforcing its intellectual property rights. To that
`end, Kudelski is willing to license Yahoo! on the terms stated in the September 2015 proposal
`for a limited time. With numerous others in the industry acknowledging the value of the
`Kudelski portfolio and with Kudelski' s identification of, and evidence of, infringement of
`numerous Kudelski patents by Yahoo! We encourage Yahoo! to reconsider its decision to end
`what appeared early on to be productive discussions. Please let me know by Friday, January
`22, 2016 whether Yahoo! is willing to resolve this matter amicably.