Consequence of severe penalty rendered by Fair Trade Commission? Koninklijke Philips N. V. terminates CD-R license agreement with Ritek Corporation

E010118X4 Feb. 2001（E18）

Source:Commercial Times, 1/18/2001

             Liberty Times, 1/19/2001 

Translated by Corrina Wu

 

    Koninklijke Philips N.V. (“Philips”) announced in its patent website, at the same day when it was punished by the Fair Trade Commission (“FTC”) with a fine of NT$8,000,000, that it will terminate the CD-R license agreement entered into between Ritek Corporation (“Ritek”) and it. In this regard, Ritek declared that this is a consequence of the FTC’s ruling (which determines that Philips is fined with NT$8,000,000, Sony with NT$4,000,000 and Taiyo Yuden with NT$2,000,000, due to violation of the Fair Trade Law related to concerted action constituted by their joint license of their CD-R related patents.) In order to enter into license agreements with Philips, Sony and Taiyo Yuden separately, it must terminate the previous agreement with Philips. This might bring impact on Ritek’s own products and OEM orders.  There is a likelihood that the CD-R products manufactured by Ritek after termination of the agreement will be accused of infringement by Philips at any time. Taiwan’s CD-R disc industry is standing in an inferior position in terms of technology. The issue relating to huge royalty has existed for a long time. Philips’ decision to terminate the license agreement with Ritek reflects its firm attitude toward collection of royalty from the licensee in Taiwan.
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