A patent for television set top boxes used in sending and/or receiving digital audio and video data, which has implications for networking, i.e. teleconferencing and Internet, as well as satellite tv, wireless cable, video games and security systems, plus personal and professional computers, has been assigned exclusively to InnovaCom, Inc. (OTC BB: MPEG), designer and developer of MPEG-2 single chip encoding integrated circuits, by its founder and chairman, Mark C. Koz.

The company said the patent, issued July 1, 1997, was originally issued to Koz, who filed the patent in 1992, prior to the founding of the company.

International patent applications have been filed and currently are pending. Koz has assigned the patent to InnovaCom in exchange for one million shares of restricted common stock, valued at $3 million, supplementing his existing block of controlling shares, which are subject to volume controls and SEC reporting under Rule 144. The company believes it has negotiated this agreement in terms that are favorable to its shareholders.

"The patent, No. 5,644,355, which is titled 'Adaptive Video Subscriber System', is enforceable on all digital video set top boxes produced using multiple compression standards, including those designed for cable television decoding and for reception of DVB television signals. Because our set top box patent was designed for multiple video compression standards it represents the next generation of set top boxes in the digital age. We believe the patent will generate substantial revenues because of its exclusivity," Rand Shrader, InnovaCom's chief operating officer said. "We expect to aggressively protect the company's rights under the patent."

During the past year InnovaCom has completed marketing agreements with or designed MPEG-2 product configurations for several companies which could participate in the benefits of the set top box patent protection. They are:

- Sun Microsystems -- Design of an MPEG-2 encoding board for its UltraSPARC workstation.

- ESS Technology -- Joint development of MPEG-2 encoders for DVD authoring systems and set-top boxes.

- Digital Equipment Corporation -- Cross licensing agreement to develop and share program interfaces for MPEG-2 encoding on Windows and Windows NT.

- Mitsubishi -- Joint development of a DVD-R recording system.

- Litton's Fibercom Division -- Integration of InnovaCom's DV 2100 MPEG-2 board in its CAMVision-2 network video delivery system.

InnovaCom's single-chip MPEG-2 encoder is scheduled for shipment the first quarter of 1998 and will be used in satellite, cable, broadcast and consumer applications.

InnovaCom, a diversified company, also owns Sierra Vista Entertainment, an independent film production company in Los Angeles involved in content acquisition in addition to its library of in-house film titles.

InnovaCom is located at 2855 Kifer Road, Suite 100, Santa Clara, Calif. 95051. Telephone is 408/727-2447 (CHIP) and Fax is 408/727-6625. InnovaCom Investor Relations contact is Ben Gibson at 888/464-6734.