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Kiss goodbye to cheapo DVDs

Philips gets tough with licence flouts

Computer stores could see their supply of cheap DVD-ROM drives dry up following a row over patents.

Electronics giant Philips has asked European customs officials to seize DVD players from factories that do not pay the Dutch manufacturer royalties. Many of these players will be made in cheap labour countries and then be rebranded by household-name firms.

Philips owns several key DVD patents, but has claimed an increasing number of companies are using its technology without paying for the privilege.

"The manufacturers are our target; they should be paying royalties if they are using our patents," said Gerard Smelt, of Philips standards and licensing.

"These companies are not playing by the rules. We just want to make sure everyone is on a level playing field," added Smelt.

Many low-cost players come from factories inside China, where labour costs are low.

Philips' website lists only three Chinese manufacturers that have taken out licences with Philips: Teac, ATL Electronics and Tohei Corporation. There are many others, among them those Philips is targeting.

But Smelt refused to name China as the worst offender and said there are manufacturers failing to pay royalties in most countries where DVD-ROM drives and players are manufactured. These include Singapore, Taiwan, Korea, Turkey and parts of Eastern Europe.

Smelt said that there had been one case of a big-name player flouting the licensing rules, but that there was a greater probability that low-cost manufacturers were not paying.

Philips is hoping that European Union Customs Authorities will impound the drives under European Union Council Regulation 3295-94 passed on 22 December 1994. This allows companies to take legal action against the infringement of intellectual property rights.

He added that as the economies of developing countries start to rely less on cheap labour and begin to seek foreign investment, those countries took the payment of patents more seriously.

Philips controls around 238 patents on DVD-ROM drives, many on firmware and laser components.


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