Petteri Pyyny
20 Jan 2005 14:02
Group of Chinese DVD player manufacturers have filed a class action against the western consortium, 3C DVD Patent Group, who own most of the patents related to the DVD technology. The Chinese manufacturers behind the case include Wuxi Multimedia and Orient Power (Wuxi) Digital Technology.
Patent issues have been a hot topic during the last couple of years; the big fight was launched by Philips back in 2002 when it took the matters to courts in the U.S. and in the European Union, threatening to ban imports of unlicensed DVD players from China. Chinese manufacturers, such as Apex, had already managed to take lion's share of global DVD player markets, but refused to pay licensing fees for western patent owners that include Philips, Sony and Pioneer.
Eventually, most Chinese manufacturers and the 3C alliance forked a deal under which manufacturers pay a fixed fee of $20 (appx. €15.4) for each sold DVD player. But as DVD players' prices have plummeted, the fixed fee is now almost half of the average wholesale price for basic DVD players.
Companies behind the lawsuit that was filed in the US District Court in the Southern District of California, accuse 3C alliance for price-fixing, unlawful tying of essential and non-essential patents together, group boycott and conspiracy to monopolize. According to the Chinese companies, typically U.S. patent licensing fees for other products are between 3 and 5 percent of the item's wholesale price, compared to the 50 percent for DVD players.
Frustration of Chinese and Taiwanese companies has also sparked several emerging competitors to the DVD format. Most important one seems to be the Taiwanese FVD that seems to gain momentum in Asia as manufacturers become unwilling to pay royalty fees, at least for the players sold in their home markets.
Source: Digitimes