Chinese set-top box makers, MPEG LA face off over patent fees

-- Chinese makers of digital set-top boxes are on a collision course with MPEG-2 patent owners over unpaid royalties, setting the stage for what will likely be intense haggling in coming months.

As Chinese set-top box makers ramp up production, the MPEG Licensing Agency is warning them either to pay $2.50 per set-top box or face legal action. Chinese companies are cringing at that number, saying it will wipe out most of their profit. They are countering with offers as low as 30 cents per box.

MPEG LA isn't in the mood to dicker. "We do not make concessions to one part of the world vs. another, especially because products find themselves all over the world and coming from all kinds of places," said Larry Horn, president of MPEG LA.

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