Time Warner Becomes a Strategic Investor in ContentGuard

BETHESDA, MD., April 5, 2004 — ContentGuard, a leading provider of Digital Rights Management (DRM) technology, today announced that Time Warner Inc. (NYSE:TWX) has become a strategic investor, joining existing long-term strategic investor Microsoft Corp. (NASDAQ: MSFT), which has increased its investment. Time Warner, Microsoft and ContentGuard purchased substantially all of the ownership held by Xerox Corporation (NYSE: XRX), which was the source of ContentGuard’s original technology. Xerox will retain a small equity interest in the company.

Working in equal collaboration, Time Warner and Microsoft expect to closely work with ContentGuard to further develop ContentGuard’s rich portfolio of intellectual property and promote continued development and innovation in the areas of digital distribution and DRM.

“This is a significant milestone, not only for ContentGuard but for the digital content distribution market in general,” said Michael Miron, CEO of ContentGuard. “Together with Microsoft’s, Time Warner’s input into our company’s direction will accelerate the pace of development for the new standards and technologies that we champion. This is vital to the market’s ability to act on the potential of digital content and give more choice and value to customers.”

“Today’s announcement marks an important step in our work on DRM, as well as in our collaboration with Microsoft on this key initiative,” said Ron Grant, senior vice president at Time Warner. “With its portfolio of fundamental technologies, ContentGuard is helping to create standards for use in DRM solutions. Together with ContentGuard and Microsoft, among other partners, we will continue to work toward the day when we can successfully protect content and offer consumers exciting new digital media products and services.”

“ContentGuard’s strong technology portfolio will play an important role in enabling the use of DRM solutions that make sense for producers and consumers of digital content,” said Marshall Phelps, deputy general counsel and vice president of intellectual property for Microsoft. “We are pleased to reaffirm our commitment to ContentGuard, and we welcome Time Warner’s collaboration in this effort.”

About ContentGuard

ContentGuard, Inc. is an inventor of technologies for digital rights management and the persistent, authorized use of any digital resource. It is expanding the market for digital content by developing new technologies and tools, and driving the adoption of industry standards. ContentGuard licenses patented technologies, which cover broad, fundamental elements of digital rights management and distributed authorization.

ContentGuard’s portfolio of DRM patents originated at Xerox’s Palo Alto Research Center (PARC). Technologies developed by ContentGuard include XrML (eXtensible rights Markup Language), which is now the basis of the International Organization for Standardization (ISO) approved MPEG REL, the standard rights expression language for assigning usage rights and conditions to any digital object. Launched in April 2000, ContentGuard conducts its operations in Bethesda, MD, and El Segundo, CA. The company is owned by Time Warner, Inc. (NYSE: TWX), and Microsoft Corporation (NASDAQ: MSFT) with Xerox Corporation holding a small equity interest. For more information, please visit www.contentguard.com . For details about ContentGuard technology visit www.contentguard.com .

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