Four Major CD-R Discs Makers to Fight Philips for Patent Licensing Negotiation.

  Following the complaint filed with the Fair Trade Commission (FTC) against Philips’ successive violation of the Fair Trade Law in early June, the four major Taiwanese CD-R disks makers, RITEK Corporation (錸德), CMC Magnetics (中環), Prodisc Technology Inc. (精碟), and Daxon Technology Inc. (達信) filed application for concerted actions with the FTC for approval.  The four CD-R discs makers plan to collectively have a renegotiation for reasonable licensing agreement with Philips.

 

  The four makers indicated that Philips, equipped by its dominant position in the CD-R technology market, has been imposing strict requirements and restrictions on Taiwanese CD-R discs makers for patent licensing and asking for unreasonable royalty calculated at 45% of the net sale price.  Any Taiwanese CD-R maker alone is incapable of confronting and rivaling Philips for negotiation on an equal basis.  With such disproportionate royalty burden, Taiwanese CD-R discs makers fail to compete, on an equal basis, with other CD-R discs suppliers in China and India which are without such burden.

 

  The four makers also expressed that Philips agreed to a royalty rate of USD 0.025 since October 2005 given to the EU suppliers without notifying Taiwanese makers, which presents discriminatory treatment to Taiwanese CD-R makers.  The four makers will request for a renegotiation with Philips for reasonable and equal licensing agreements. (2006.6)

/CCS