SUNNYVALE, CA (October 22, 1998)-In what is believed to be an industry
first, the U.S. House of Representatives and the U.S. Senate recently passed
the Digital Millenium Copyright Act recognizing Macrovision’s (NASDAQ:
MVSN) copy protection technology as an industry standard. The legislation,
now awaiting President Clinton’s signature, requires that new VCRs be
specifically designed to prevent unauthorized copying of pre-recorded media
and pay-per-view programs encoded with Macrovision’s copy protection
technology. The legislation will also make it a criminal offense to
advertise, import, produce, or distribute devices designed to circumvent
Macrovision’s technology.

“We are very pleased that the legislation recognizes our copy-protection
technology as the industry standard for digital-to-analog copy protection
across a variety of media, including the DVD format and other new digital
media, cable/telco/satellite digitally delivered pay-per-view programming,
and analog VHS and 8mm formats,” said John Ryan, chairman and CEO of
Macrovision Corporation. “The reduced exposure to illicit copying ensured
by this legislation will encourage motion picture studios and other content
providers to make more programming available on the new digital formats,
benefiting both consumers and the consumer electronics industry alike.”

Prior to the legislation, there had been no legal requirement for
manufacturers to make their VCRs respond to any type of copy protection
technology. In addition, it had not been illegal to manufacture or sell
“black boxes”-devices whose sole purpose was to circumvent copy protection
technology. The new legislation clearly outlaws the production, marketing,
distribution, and sales of these circumvention devices, and provides for
criminal penalties for violating the anti-circumvention elements of the
bill.

“This landmark legislation represents one of the few times the hardware and
software industries have come together to support efforts designed to help
ensure proper use of copyrighted material,” said Ryan. “The motion picture,
consumer electronics and computer industries deserve a great deal of credit
for crafting legislation that represents an excellent balance between video
rights owners’ need to protect their valuable properties and the equally
important need of manufacturers to develop and market new technologies that
provide ever better picture quality and functionality for consumers.”

The text of the legislative record indicates that Macrovision’s technology
has been rigorously tested by TV and VCR manufacturers to help ensure
compatibility on original program playback. “We are committed to work
closely with consumer electronics manufacturers to ensure our technology
continues to be compatible with new products entering the market,” added
Ryan.