6C Group including Hitachi delivered the ultimatum; Chinese DVD manufacturers face patent litigation

According to the media in Mainland China, the Ministry of Information Industry had urgently negotiated with CAIA (中國電子音像工業協會) for the matter that the DVD players made in China were seized by European Union, and the 6C Group (including Hitachi, Panasonic, Mitsubishi Electric, Time Warner, Toshiba and JVC) delivered the ultimatum to over 100 manufacturers of DVD players.  It is reported that the 6C Group will file a lawsuit with the court if the Chinese manufacturers didn’t come to an agreement on the rate of patent royalties.

The Chinese manufacturers reflected that patent royalties should be shared together by the manufacturers of chips and key components, and it was unreasonable to collect royalties from the end manufacturers of players only. The crux of the problem about breakdown of negotiations was that the Chinese manufacturers couldn’t accept 6C’s demand for US$20 as the royalty for each DVD player of which retail price is about US$90.

Source: Economic Daily News 03/16/2002