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The so-called DIRECT coding mode plays an important role in the RD performance of predictive video coding such as the H.264/AVC and MPEG-4 standards because there is typically a large probability that the DIRECT mode is selected in B-slices by the rate-distortion optimization (RDO) process. Although the current H.264/AVC DIRECT coding procedure exploits the motion vectors (MV) obtained from the reference frames in a rather effective way, it may still be improved by considering better motion information such as motion data derived by the side information (SI) creation process typical of distributed video coding. Therefore, this paper proposes an improved DIRECT coding mode for B-slices by efficiently exploiting some motion side information available at both the encoder and decoder. Experimental results show that the proposed improved DIRECT coding mode provides up to 8% bitrate saving or 0.46 dB PSNR improvement.