Amsterdam, The Netherlands, and Palo Alto, Calif., March 2, 2004 – Philips (NYSE:PHG) and HP (NYSE:HPQ) today announced their joint development of a new copy protection technology designed to enable direct recording of “Broadcast Flag” content from digital television signals. The innovative technology is designed to enable protected digital recordings of digital broadcast television according to the rules adopted by the U.S. Federal Communication Commission (FCC) in its recent Broadcast Flag (1) ruling.

Through the FCC ruling, broadcasters may in the future have the opportunity to include additional information called a “Broadcast Flag” in their transmissions, to protect the content from indiscriminate retransmission over the Internet. The Philips and HP technology has been submitted in the first round of filings to the FCC, in order to be among the first technologies approved for the recording of content marked with the Broadcast Flag. Furthermore, it is designed to enable protected direct digital recordings for copy-once in unidirectional digital cable products (2) on new discs for DVD+R, DVD+RW, and DVD+R Double Layer.

A key element of the new Philips/HP technology is that the new discs are expected to be used in both future products that meet the Broadcast Flag content protection requirements, as well as in today’s DVD players and DVD+R/+RW recorders (3). These new discs may be used to record all broadcast flag modes. The discs are designed to use the same manufacturing technology in use today so the cost to manufacture the discs is expected to remain the same. Designed to be used with the DVD+RW/ +RW format. The technology can be applied to other recording formats. The security elements in the system are designed to be renewable, helping ensure long-term effectiveness and robustness.

“By implementing this system we once again underline the inherent flexibility of DVD+R/+RW as the only DVD recording format that fully meets the needs of both industry and consumers”, says Cesar Vohringer, Chief Technology Officer, Philips Consumer Electronics. “With this technology we help protect the rights of the content owners and help provide the consumer with a safe choice that should help ensure the DVD recording experience both today and in the years to come.”

“This technology is another example of HP’s commitment to protecting digital content. HP is working with both consumers and our industry partners to provide avenues for consumers to lawfully record and interact with digital content -- while still maintaining an overall positive digital experience,” says Vikki Pachera, Vice President, Alliances and Business Development, HP.

Philips and HP’s new technology already has generated support from a variety of industry leaders and DVD+R/+RW partners, including drive, software, independent software vendors and chipmakers. It’s robust cryptographic protection and competitive license conditions offer unique benefits to both the electronics and content industries.

For more information, please contact:

Philips Consumer Electronics
Jeannet Harpe
Tel +31 40 27 35677
jeannet.harpe@philips.com

HP
Heather Schroeder
Tel: +1 480-459-5711
heather.schroeder@hp.com

(1) Scheduled to be introduced in July 2005
(2) Subject to approval by CableLabs. as a one generation copy protection technology for unidirectional cable products
(3) Protected recordings will play only on DVD-players that are enabled with this technology. Non-protected recordings will play on enabled and legacy DVD-players.