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Nissim Brings Legal Action To Halt Sales Of ClearPlay’s DVD Players And Filters

Boca Raton, FL – June 11, 2007 – Nissim Corp. today commenced legal proceedings in the United States District Court for the Southern District of Florida to halt the sale of a new ClearPlay DVD Player and the distribution of related ClearPlay Filters.   

The current litigation re-opens a patent infringement suit originally filed by Nissim in 2004 regarding a prior DVD player, the ClearPlay-enabled RCA DRC232N.  Following extensive pretrial litigation and claim construction proceedings, partial summary judgment of infringement was entered in favor of Nissim on all but two elements of the thirty-six asserted patent claims.  The action was subsequently resolved by a settlement agreement under which Nissim granted ClearPlay a limited conditional license to sell certain players that adopt the CustomPlay Objectionable Content Specifications. The CustomPlay Specifications, developed by Nissim’s subsidiary CustomPlay LLC, comprise a detailed set of standards for coding objectionable content in movies.   

The new ClearPlay DVD Player, model CP007-USB, and the ClearPlay Filters used by the player are not in compliance with the CustomPlay Specifications and are not covered by the Nissim license.  Nissim has thus re-opened the prior patent infringement case in order to enforce the settlement agreement against ClearPlay and has requested that the court prohibit the continued sale of the non-compliant ClearPlay DVD Players and the distribution of the non-compliant ClearPlay Filters.  

In addition to failing to comply with the requirements of the settlement agreement with Nissim, the ClearPlay DVD Player does not operate as advertised.  Specifically, the player fails to provide any filtering whatsoever of entire categories and levels of explicitness of content which the menu screen of the player leads consumers to believe can be filtered.  The player also does not filter the same objectionable content consistently across different movies and within a single movie.  As a result, the new ClearPlay DVD Player is deficient and inconsistent with the quality standard CustomPlay has established..

In the case of the earlier infringing player, ClearPlay had knowledge of the fact that the RCA DRC232N DVD player was excluded from the scope of the manufacturer’s (Thomson’s) license agreement with Nissim.  Nonetheless, ClearPlay failed to disclose the issue to the appropriate personnel at Thomson and Wal-Mart.  When Nissim immediately brought suit to stop the infringement, Thomson ceased producing the ClearPlay-enabled player, and Wal-Mart ceased selling it.  Similarly, ClearPlay knew or should have known that the ClearPlay DVD Player was excluded from the scope of the limited conditional license granted by Nissim.

Accordingly, Nissim is providing formal notice to all retailers and other third parties that the ClearPlay DVD Player is not licensed and therefore that any sales and offers to sell the ClearPlay DVD Player and any similarly non-compliant devices constitute infringements of the Nissim patents.  Nissim is demanding all retailers to immediately remove these infringing products from their stores and to cease and desist from marketing these infringing products.  Under United States law, all sellers of unlicensed goods may be held liable as direct patent infringers.

Nissim has also provided notice to cable and satellite operators that ClearPlay does not hold a license from Nissim permitting cable and satellite implementations of objectionable content control.  Nissim has not licensed its video server and set-top systems and methods which are covered by, for example, U.S. Patents 5,696,869 and 5,717,814, to any entities, reserving these implementations exclusively for Nissim’s subsidiary CustomPlay LLC.