DVD licensing group adds audio player, recorder patents

DVD6C said it will offer one-stop shopping for companies looking to license technologies held by member companies concerning both hardware and disk media for the DVD-Audio, DVD-RAM, DVD-RW and DVD-R formats.

The six founding members of DVD6C — AOL Time Warner, Hitachi, Matsushita Electric Industrial, Mitsubishi Electric, Toshiba and Victor Company of Japan — started licensing read-only DVD-related patents in June 1999. IBM joined the organization this past June.

For recordable hardware, the licensing royalty charge will be 4 percent of the net selling price or $6, whichever is greater. For recording disks, the charge will be 4 percent of the net selling price or 7.5 cents per disk, whichever is greater.

A nother DVD patent-licensing group, consisting of Pioneer Corp., Royal Philips Electronics and Sony Corp., started licensing the patents they hold for recordable formats in August.

Currently, DVD recorders and recordable drives are supplied by Japanese and European companies. But apparently the licensing systems being prepared by the two patent-holding groups for recordable products will cause royalty prices to rise 10 times higher than the players themselves. Suppliers seem intent on entering the market at an early stage, ahead of companies from other regions, especially from China.

DVD6C, together with so-called 3C group, have been in negotiations with Chinese industry organizations over the payment of DVD patent royalties. In October, both groups announced that they have reached agreement on patent royalty payments with major Chinese companies.

DVD6C has drawn up licensing contracts with about 50 Chinese DVD player manufacturers. Under the agreements, those manufacturers have agree d to pay royalties for players destined to be exported.

The Philips-Pioneer-Sony group has also reached an agreement with the Chinese Audio Industry Association regarding the payment of royalties for players marked for export.

Both groups have agreed that DVD players sold in China will be exempt from the royalty agreement through the end of this year.