By Junko Yoshida ,
LAS VEGAS -- As the global DVD market skyrockets, the DVD Forum will begin this year to aggressive enforce licenses and collect royalties.
That's according to Koji Hase, chairman of the DVD Forum and vice president of Toshiba Corp., who spoke at the 2001 International Consumer Electronics Show earlier this week.
"It's time to start collecting money," Hase said, so that the owners of essential patents for the DVD standard can recoup their research and development investment.
Spelling out the DVD Forum's strict policing activities, Hase warned, "We're prepared to stop imports of unlicensed DVD players and bring lawsuits to those who are shipping DVD players without a licensing agreement."
The move is already causing uproar among system OEMs in China and in Taiwan that have been producing DVD players without a license.
At a time when DVD system manufacturers face tough price competition around the world, the DVD Forum's move will put manufacturers without intellectual property (IP) at a disadvantage, and could deepen the disparity between the IP haves and have-nots.
The overall royalties could be could be taxing for a DVD player manufacturer, reaching as high as 10 percent of a player's hardware cost, according to Hase.
A manufacturer could owe royalty payments to two separate DVD patent pool organizations, and to MPEG LA, Dolby Laboratories, and a few other individual companies.
Since the DVD Forum failed to form a one-stop shop for IP licensing, two competing patent pooling organizations are independently carrying out licensing programs and collecting royalties.
One group called 6C is composed of six companies -- Toshiba Corp; Matsushita Electric Industrial Co. Ltd.; Victor Co. of Japan (JVC); Mitsubishi Electric Corp.; Hitachi Ltd. (stock: HIT) and Time Warner Inc. (stock: TWX) -- and alone is asking for 4 percent royalties per a hardware unit, according to Hase.
A separate DVD patent pool, called 3C -- comprising Royal Philips Electronics; Sony Corp. (stock: SNE) and Pioneer Corp. (stock: PIO) -- is demanding 3.5 percent royalties per a hardware unit.
In addition, MPEG LA is seeking royalties from manufacturers using patents related to MPEG-2 video, while Dolby is after those who implement Dolby Digital in their DVD players.
Both Thomson and DiscoVision own patents involving optical disc technology, and each is looking to collect separate royalties.
There is also a licensing fee for a copy protection system used within a DVD player.
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